Enad Global 7 Resets After Big Impairment Hit

Enad Global 7 AB ((SE:EG7)) has held its Q4 earnings call. Read on for the main highlights of the call.

Enad Global 7’s latest earnings call painted a cautiously balanced picture. Management highlighted robust momentum in key live games, solid cash generation and a cleaned-up balance sheet, yet these positives were weighed down by a massive impairment, FX-driven revenue pressure and delays that forced the company to withdraw its 2026 financial targets.

Q4 Performance: Solid Margin Amid Slight Revenue Slippage

Q4 net revenue came in at SEK 437 million, with management noting roughly a 4% revenue decline once currency swings are stripped out. Adjusted EBITDA reached SEK 80 million, translating to an 18.2% margin that shows the core operations remain profitable despite softer top-line trends.

Full-Year Results: Profitable but Below Ambitions

For the full year, Enad Global 7 reported net revenue of SEK 1.626 billion and adjusted EBITDA of SEK 254 million, yielding a 15.6% margin. Management described this margin as “a bit low” versus prior ambitions, reflecting a year marked by impairments and one-off charges that weighed on reported profitability.

Daybreak: Growth Engine in Local Currency

Daybreak delivered about 11% organic growth in local currency in Q4, while adjusted EBITDA surged 26% to SEK 33.4 million. With SEK 195 million in Q4 net revenue, Daybreak was the group’s largest contributor, and its live titles such as LOTRO, DDO and DC Universe Online all returned to growth.

Palia: Rapid Expansion Across Platforms

Palia emerged as a breakout performer, posting 146% year-over-year net revenue growth in Q4 and becoming Daybreak’s largest live-game revenue driver. Expansion to PlayStation and Xbox platforms helped push net revenue nearly 70% higher when comparing the second half of 2024 to the second half of 2025.

Fireshine: Digital Shift Gains Traction

Fireshine continued its transition to digital, delivering about 10% local currency net revenue growth in Q4 and SEK 16 million in adjusted EBITDA. Digital revenue reached GBP 11 million in 2025 from almost nothing five years ago, supported by a 2026 pipeline of about 10 titles, roughly half of which are expected to be digital.

Big Blue Bubble: Viral Boost Restores Momentum

Big Blue Bubble saw a sharp recovery late in the year, with monthly active users jumping 27% in December and net revenue rising 59% versus November. Monthly net revenue increased from CAD 2.1 million in November to CAD 3.3 million in December and a preliminary CAD 3.1 million in January, signaling renewed traction after earlier user declines.

Cash Flow Strength and Liquidity Cushion

Management emphasized that all business units are now cash-flow positive, helping drive operational cash flow to SEK 74 million in the quarter. The group ended the period with SEK 390 million in cash, net cash of SEK 43 million and an undrawn SEK 100 million revolving credit facility, underscoring a comfortable liquidity position.

Strategic Moves to Lift Future Profitability

The board has moved to accelerate contingent consideration payments, an action expected to improve annual cash generation by roughly USD 1–3 million. The company is also relocating development to lower-cost regions, which is anticipated to cut annual amortization charges by SEK 120 million and will be detailed further at a strategic update planned for 2027.

FX Headwinds and Revenue Pressure

Excluding currency effects, full-year net revenue slipped a modest 1.1%, but when reported in SEK, revenue declined roughly 5.1%. Management stressed that FX volatility significantly distorted the SEK figures, with Q4 alone suffering an unfavorable currency impact of about SEK 53 million on reported revenue.

Massive Non-Cash Impairment Hits Earnings

A headline item in the quarter was an impairment charge of SEK 2.51 billion, the bulk of which was not directly tied to current project performance. This non-cash write-down reflects restructuring and strategic recalibration across the portfolio, heavily depressing the income statement while setting up lower amortization costs going forward.

Piranha and MechWarrior: Revenue Drop and Write-Down

Piranha’s net revenue fell about 45% year-over-year, largely because the prior year benefitted from the release of MechWarrior Clans in Q4 2024 with no comparable launch in 2025. The underperformance of the Clans title prompted management to record a write-down, highlighting the risks associated with release-driven revenue spikes.

My Singing Monsters: Recovery Still Unproven

Despite December’s viral boost, Big Blue Bubble’s flagship My Singing Monsters endured a prolonged user decline during 2025 that eroded revenue and margins. Management views the recent upturn as encouraging but cautioned that it is too early to judge the sustainability of this rebound over the longer term.

Cold Iron Delay and Additional Funding Needs

Cold Iron’s major game, originally slated for 2025, has been pushed back to a Q3 2026 launch window, lowering expected 2025 contributions. To carry the project through to release, the company agreed to an additional developer advance of USD 4.5 million, a bet that the title will be a significant earnings driver once it finally ships.

Petrol and Group Profitability Drag

Petrol generated SEK 27 million in net revenue but reported negative EBITDA, partly due to a debt write-down weighing on results. Across the group, restructuring and impairment costs further dampened 2025 profitability, underlining the cost of reshaping the portfolio and balance sheet.

Withdrawal of 2026 Targets and Margin Concerns

Given pipeline delays such as Cold Iron’s slip, management retracted the 2026 targets announced at the 2023 Capital Markets Day, signaling increased uncertainty in near-term outlook. While adjusted EBITDA remained positive, the 15.6% full-year margin was acknowledged as softer than hoped, influenced by impairments and other one-off items.

Guidance and Outlook: Product Launches and Balance Sheet Reset

Looking ahead to 2026, Enad Global 7 is banking on product-driven growth, led by Cold Iron’s delayed title expected to launch in Q3 and “contribute significantly” to results. Management also highlighted a May expansion for Palia, a roughly 10-title slate at Fireshine, continuing momentum at Daybreak live games, the cash benefits from accelerated contingent payments and reduced amortization following the SEK 2.51 billion impairment.

Enad Global 7’s earnings call underscored a company in transition, with strong live-game momentum and improved cash generation offset by heavy write-downs, FX noise and pipeline delays. For investors, the story now hinges on execution: delivering on 2026 launches, lifting margins from current levels and proving that the reset balance sheet can support durable, product-led growth.