Embracer Group Q1 2024 Financial Results

Key insights

5 slides

Revenue decline

Embracer Group's total net revenue decreased by 24% year-over-year.

The company reported total net revenue of SEK 7.9 billion for the quarter ending June 30, 2024. Despite this decline, net losses narrowed to SEK 2.19 billion.

Corporate restructuring

The business split into three separate public companies remains on track.

The Asmodee spin-off is prioritized as the first stage of this restructuring. The 'Coffee Stain & Friends' listing is scheduled for 2025.

Like a company dividing into specialized departments to better focus on different areas.

Company Split. Embracer Group's plan to split into three separate public companies is progressing as scheduled.

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Summary

Embracer Group’s financial results for the first quarter of the 2024 fiscal year, ending June 30, 2024, reveal a period of significant revenue contraction alongside a strategic pivot toward long-term profitability. The company reported total net revenue of SEK 7.9 billion, representing a 24% year-over-year decline. Despite this, the firm successfully narrowed its net loss to SEK 2.19 billion, down from SEK 4.44 billion in the same period the previous year.

The decline was most pronounced in the PC and console segment, where revenue from new game releases plummeted 91% to SEK 146 million. This sharp drop is attributed to a lack of major new titles compared to the prior year, which featured the launch of Dead Island 2. Conversely, the company’s back catalog demonstrated resilience, growing 5% to SEK 1.66 billion. Across other segments, Tabletop Games remained the primary revenue driver at SEK 3 billion, followed by PC/Console Games at SEK 2.65 billion and Mobile Games at SEK 1.38 billion.

To improve future performance, Embracer is shifting its focus toward owned and controlled intellectual properties, which are expected to offer superior unit economics. The company is currently refining its capital allocation process to enhance return on investment for its upcoming pipeline, which includes titles such as Kingdom Come: Deliverance II, Titan Quest II, and various projects based on the Lord of the Rings franchise. Furthermore, the organization continues to progress with its planned corporate split into three distinct public entities, with the Asmodee spin-off prioritized as the first stage of this restructuring.