Starbreeze (STAR) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 2024 were SEK 42.7 million, sharply down from SEK 494.4 million in Q3 2023, reflecting the prior year's PAYDAY 3 launch impact.

• Major updates and content releases for PAYDAY 3, including Operation Medic Bag, improved player sentiment and engagement.

• Project Baxter, a Dungeons & Dragons co-op game, is in full production for a 2026 release, leveraging lessons from PAYDAY 3 and ongoing partner discussions.

• Roboquest continues to outperform expectations, with a PlayStation launch planned for H1 2025.

• The company maintains a strong balance sheet with SEK 249.3 million in cash and low debt.

Financial highlights

• Q3 2024 net sales: SEK 42.7 million (Q3 2023: SEK 494.4 million); nine-month net sales: SEK 139.5 million (2023: SEK 564.3 million).

• Q3 2024 EBITDA: SEK 21.4 million (Q3 2023: SEK 441.8 million); nine-month EBITDA: SEK 78.0 million (2023: SEK 460.0 million, including SEK 20.9 million in items affecting comparability).

• Q3 2024 profit before tax: SEK -58.5 million (Q3 2023: SEK 299.8 million); nine-month profit before tax: SEK -150.1 million (2023: SEK 299.2 million).

• Cash and cash equivalents at quarter-end were SEK 249.3 million, down from SEK 312.9 million a year earlier.

• Cash flow from operations in Q3 2024: SEK -15.9 million (Q3 2023: SEK 11.1 million); nine-month cash flow: SEK 65.2 million (2023: SEK 51.9 million).

Outlook and guidance

• Investment in game development peaked in Q3 and is expected to decrease significantly going forward.

• Planned investments are fully funded by current cash reserves; Project Baxter is self-financed.

• Focus on self-publishing, franchise expansion, and diversifying revenue streams, with more content and updates planned for PAYDAY 3.

• Roboquest to launch on PlayStation 4 and 5 in H1 2025, expanding third-party publishing reach.

• No general increase in headcount expected, with hiring focused on specific competencies for Project Baxter.