Stillfront Q2 2019 Interim Report

Key insights

7 takeaways

01
Stillfront Group achieved a 46% year-over-year revenue increase in Q2 2019, reaching 480 million SEK.See it on page 9
02
The company reached its long-term financial goal of an adjusted EBIT margin exceeding 30% on a last-twelve-months basis.See it on page 8
03
The group finalized the acquisition of Kixeye to expand its free-to-play intellectual property and cross-platform capabilities.See it on page 7
04
To fund the Kixeye acquisition and future growth, the company executed a 500 million SEK share issue and a 500 million SEK bond issuance.See it on page 10
05
Average deposits per monthly paying user reached record levels despite a slight sequential decline in monthly active users to 5.9 million.See it on page 6
06
User acquisition costs were maintained at a disciplined 21% of net revenue throughout the quarter.See it on page 8
07
The company’s primary revenue streams are geographically diversified across the United States, Germany, the MENA region, France, and the UK.See it on page 2

Summary

Stillfront Group’s second-quarter 2019 interim report highlights a period of robust financial expansion and strategic consolidation within the free-to-play online strategy gaming sector. The company achieved a 46% year-over-year revenue increase, reaching 480 million SEK, while successfully hitting its long-term financial objective of an adjusted EBIT margin exceeding 30% on a last-twelve-months basis. This performance was supported by effective live operations, which improved monetization across the portfolio, and a disciplined approach to user acquisition costs, which remained at 21% of net revenue.

The group’s operational success is underpinned by a diversified portfolio of strategy games, including the Empire brand, Big brand, and various core products. While the company reported 5.9 million monthly active users and 1.3 million daily active users, it noted a slight sequential decline in user activity following a high-spend, high-launch first quarter. Despite this, the average deposits per monthly paying user reached record levels, demonstrating the efficacy of the group’s focus on long-lifecycle games and loyal user retention.

Geographically, the group maintains a global footprint, with primary revenue streams originating from the United States, Germany, the MENA region, France, and the UK. During the second quarter, the company finalized the acquisition of Kixeye, a move intended to bolster its position in the free-to-play market through complementary intellectual property and cross-platform expertise. To support this acquisition and future growth, the group successfully executed a 500 million SEK share issue and a 500 million SEK bond issuance. These financial maneuvers, combined with strong operational cash flow, have positioned the company to maintain its strategy of combining organic growth with targeted mergers and acquisitions.