Stillfront Group AB ((SE:SF)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Stillfront Group AB presented a balanced mix of positive and negative developments. On the positive side, the company reported substantial growth in direct-to-consumer sales, successful cost-saving measures, and robust performance in the MENA and APAC regions. However, these achievements were counterbalanced by significant revenue declines in Europe and North America, as well as a decrease in adjusted EBITDAC. Despite these challenges, the company remains optimistic about future growth through new game launches and strategic restructuring.
Launch of Supremacy: Warhammer 40,000
Stillfront announced the launch of a new game in the Supremacy franchise, leveraging the popular Warhammer 40,000 IP. This strategic move is expected to drive growth by attracting a dedicated fan base and expanding the company’s gaming portfolio.
Direct-to-Consumer Growth
The company showcased significant growth in its direct-to-consumer (DTC) segment, with the DTC share increasing from 26% in 2023 to 39% in Q2 2025. This shift not only highlights improved margins but also underscores the company’s successful adaptation to changing market dynamics.
Free Cash Flow Achievement
For the third consecutive quarter, Stillfront reported an impressive LTM free cash flow of over SEK 1 billion. This achievement underscores the company’s strong cash generation capabilities and financial resilience.
Cost Savings Initiatives
Stillfront achieved SEK 225 million in annualized cost savings, with significant reductions in North America. These initiatives are part of the company’s broader strategy to enhance operational efficiency and improve profitability.
MENA and APAC Growth
The MENA and APAC regions experienced robust growth, with revenues increasing by more than 15% year-on-year. The strong adjusted EBITDAC margin of 55% in these regions highlights their strategic importance to Stillfront’s overall growth strategy.
Overall Revenue Decline
Despite positive developments, Stillfront faced a net revenue decline of 11.3% organically year-over-year. This decline was partly attributed to currency headwinds, which have impacted the company’s financial performance.
North America Revenue Drop
In North America, revenues fell by 18% year-on-year to SEK 309 million. This decline was influenced by restructuring efforts and the underperformance of legacy games, posing challenges for the company’s growth in this market.
European Market Challenges
The European market presented challenges with a 14.5% organic decline in net revenues year-on-year. This underperformance in certain segments highlights the need for strategic adjustments to regain market share.
Adjusted EBITDAC Decrease
Adjusted EBITDAC decreased from SEK 505 million in Q2 2024 to SEK 374 million in Q2 2025. This decline was partly due to foreign exchange headwinds, which have posed challenges to maintaining profitability.
Forward-Looking Guidance
During the earnings call, Stillfront’s leadership provided guidance on the company’s strategic initiatives and financial performance. The launch of Supremacy: Warhammer 40,000 and the growth in DTC share from 26% in 2023 to 39% in 2025 were highlighted as key drivers for future growth. However, the company also acknowledged challenges in the European and North American markets, with significant revenue declines. Despite these challenges, the company remains focused on strategic restructuring and cost-saving measures to enhance shareholder value.
In conclusion, Stillfront Group AB’s recent earnings call reflected a mixed sentiment, with notable achievements in direct-to-consumer growth and cost savings, countered by revenue declines in key markets. The company’s forward-looking guidance remains optimistic, with new game launches and strategic initiatives aimed at driving future growth. Investors will be keen to see how these strategies unfold in the coming quarters.