Stillfront Interim Report: Third Quarter 2021

Key insights

6 takeaways

01
Stillfront reported a 28% year-over-year increase in net revenue to 1,311 MSEK for Q3 2021, supported by a strong adjusted EBIT of 433 MSEK and a 33% margin.See it on page 5
02
User acquisition (UA) spending increased by 95% compared to the prior year as the company prepared for seasonally stronger quarters and stabilized mobile advertising markets.See it on page 4
03
The company maintained a healthy balance sheet with a 1.2x leverage ratio, remaining below its 1.5x target following a directed share issuance and 486 MSEK in operational cash flow.See it on page 12
04
While total organic bookings saw a slight decline due to post-pandemic normalization, organic ARPDAU grew by 13%, indicating effective monetization across the portfolio.See it on page 4
05
The active portfolio reached 62 million monthly active users and 12 million daily active users, managed across a global network of 21 studios.See it on page 9
06
Management projects Q4 2021 net revenue between 1,350 and 1,500 MSEK, anticipating a return to organic growth driven by a record-high pipeline of new titles and soft-launches.See it on page 16

Summary

Stillfront’s third-quarter 2021 interim report highlights a period of robust financial expansion and operational scaling, characterized by a 28% year-over-year increase in net revenue to 1,311 MSEK. This growth was primarily driven by the integration of acquired studios and strong organic performance from key titles such as War & Peace, BitLife, and Conflict of Nations. Despite a slight decline in organic bookings—attributed to the normalization of pandemic-era engagement levels and specific deferral effects from the previous year—the company maintained a strong adjusted EBIT of 433 MSEK, representing a 33% margin.

The company’s operational strategy centers on a diversified portfolio of free-to-play games across strategy, simulation, RPG, and casual genres. During this period, Stillfront significantly ramped up user acquisition (UA) spending by 95% compared to the prior year, reflecting a strategic preparation for seasonally stronger quarters as the mobile advertising market stabilized. The active portfolio reached 62 million monthly active users and 12 million daily active users, supported by a global network of 21 studios. While ARPDAU experienced a decline due to shifts in product mix, organic ARPDAU increased by 13%, signaling effective monetization efforts across the group.

Financially, the company remains highly cash-generative, reporting 486 MSEK in cash flow from operations for the quarter. A directed share issuance bolstered the balance sheet, resulting in a leverage ratio of 1.2x, which sits below the company’s 1.5x target. Looking ahead, management maintains a positive outlook, providing fourth-quarter guidance for net revenue between 1,350 and 1,500 MSEK. The company expects to return to organic growth in the latter part of the year, supported by a record-high pipeline of new titles and soft-launches, including the release of DogLife and the expansion of publishing divisions for titles like War Alliance.