Stillfront Group (SF) Q4 2024 earnings summary

Executive summary

• Net revenue in Q4 2024 was 1,660 MSEK, down 5% organically year-over-year, with gross profit margin improving to 79% due to higher DTC channel share.

• Adjusted EBITDAC reached 410 MSEK in Q4, up 12% year-over-year, with margin rising to 25% from 21% last year, driven by lower fixed and product development costs.

• Free cash flow for 2024 was 1,050 MSEK, with Q4 free cash flow up 170% year-over-year to 342 MSEK.

• Major organizational restructuring reduced management layers, consolidated studios, and focused on 10 key game franchises across three business areas.

• A non-cash goodwill impairment of 6,867 MSEK was recognized, mainly related to the North America segment.

Financial highlights

• Gross profit margin improved to 79%, up 1 percentage point year-over-year.

• Adjusted EBITDAC margin increased to 25% in Q4 2024, up from 21% in Q4 2023.

• Q4 cash flow from operations was SEK 491 million, with a 170% year-on-year increase.

• Leverage ratio at year-end was 1.84x, with cash and unused credit facilities totaling 2,181 MSEK.

• Investments in product development were SEK 138 million (8.3% of net revenues) in Q4.

Outlook and guidance

• Bookings at the start of 2025 remain below prior year levels, with risk of accelerated organic decline in Q1 2025, but gradual improvement is expected from Q2 and positive organic growth targeted in the second half.

• Annual run-rate savings of SEK 200-250 million expected by end of Q4 2025 from operational efficiencies.

• Europe expected to remain stable; North America is a turnaround case with new leadership; MENA/APAC to continue strong growth.