Embracer Group Q1 Interim Report: FY 2025/26

Key insights

7 takeaways

01
Embracer Group reported net sales of SEK 3,355 million, a 31% year-over-year decline driven primarily by the divestment of major assets including Gearbox and Saber.See it on page 6
02
The company maintains a strong liquidity position with SEK 4,926 million in net cash and total available funds of SEK 12.7 billion.See it on page 13
03
The Entertainment & Services segment grew by 41%, bolstered by licensing revenue from Middle-earth Enterprises and strong partner business performance.See it on page 10
04
Net sales in the PC/Console segment fell 38% due to a quiet release schedule, while the Mobile segment dropped 63% following the divestment of Easybrain and increased competition.See it on page 6
05
Management projects an Adjusted EBIT of at least SEK 1.0 billion for the remainder of the fiscal year, citing conservative expectations for mobile growth and potential release shifts.See it on page 16
06
The separation of the Coffee Stain Group remains on track for a public listing by the end of 2025 as part of the company's broader transition to a leaner, IP-led business model.See it on page 14
07
Future operational strategy focuses on cost-reduction initiatives, the integration of AI-supported workflows, and the development of a pipeline including Marvel 1943: Rise of Hydra and the Gothic 1 Remake.See it on page 17

Summary

The Embracer Group Q1 interim report for the 2025/26 fiscal year details a period of strategic transition characterized by significant divestments and a focus on operational restructuring. The company reported net sales of SEK 3,355 million, representing a 31% year-over-year decline, largely attributed to the divestment of major assets such as Gearbox and Saber. Adjusted EBIT for the quarter reached SEK 75 million. The report highlights a shift toward a leaner, IP-led business model, with management emphasizing the ongoing separation of the Coffee Stain Group, which remains on track for a public listing by the end of 2025.

Performance across segments was mixed. The PC/Console segment faced a quiet release schedule, resulting in a 38% decline in net sales, though the company maintains a robust pipeline of upcoming titles, including Marvel 1943: Rise of Hydra and the Gothic 1 Remake. The Mobile segment experienced a 63% decline in net sales, impacted by the divestment of Easybrain and increased market competition. Conversely, the Entertainment & Services segment demonstrated resilience, achieving 41% growth driven by strong performance in the partner business and licensing revenue from Middle-earth Enterprises.

Financial discipline remains a core priority, with the company reporting a net cash position of SEK 4,926 million and available funds totaling SEK 12.7 billion. Despite these liquidity levels, management issued a conservative forecast for the remainder of the fiscal year, projecting at least SEK 1.0 billion in Adjusted EBIT. This outlook accounts for potential release shifts, slower mobile growth, and unfavorable foreign exchange effects. Moving forward, the company is prioritizing operational streamlining, the integration of AI-supported workflows, and targeted cost initiatives to improve capital allocation and return on investment across its core intellectual properties.