Stillfront Q1 2024 Interim Report

Stillfront’s Q1 2024 interim report highlights a period of strategic investment and operational stabilization, characterized by a return to organic growth in bookings and a focus on scaling key titles. The company achieved 1,739 MSEK in net revenue, with organic bookings growing by 1 percent year-over-year. While gross profit improved by 2 percentage points to 80 percent, the adjusted EBITDAC margin settled at 21 percent, a 3-percentage-point decline from the previous year, primarily due to elevated user acquisition costs (UAC) associated with aggressive seasonal marketing pushes.

Performance across the company’s diverse portfolio was varied but generally positive. The Simulation, RPG, and Action segment saw significant momentum, led by the successful scaling of Sunshine Island, which nearly doubled its bookings quarter-over-quarter. Meanwhile, the Strategy segment maintained stable performance, bolstered by a 12-percentage-point increase in direct-to-consumer (DTC) bookings compared to the prior year. The Casual and Mashup segment also returned to growth, supported by strong ad bookings and the performance of the Jawaker franchise, which has maintained a 41 percent compound annual growth rate since its acquisition.

Methodologically, the report draws on internal financial data, including cash flow statements, net debt analysis, and user metrics such as monthly and daily active users (MAU/DAU) and average revenue per daily active user (ARPDAU). The company’s financial position remains robust, with 828 MSEK in free cash flow generated over the last 12 months. Looking ahead, management anticipates that UAC will decrease as a percentage of net revenue in the coming quarters, which is expected to drive margin expansion. To support its capital structure, the company has initiated a share repurchase program to address equity components of earnout provisions, signaling confidence in its ongoing cash flow generation and balance sheet health.