Stillfront Group: Interim Report Q2 2023

Key insights

7 takeaways

01
Stillfront Group achieved record-high profitability in Q2 2023 with an adjusted EBITDAC of 516 million SEK and an adjusted EBITDA of 708 million SEK.See it on page 2
02
The adjusted EBITDAC margin expanded to 28 percent, up from 22 percent year-over-year, driven by improved gross margins and reduced product development capitalization.See it on page 4
03
Monetization efficiency improved significantly, with a 17 percent increase in average revenue per daily active user (ARPDAU) despite a year-over-year decline in organic revenue.See it on page 7
04
The company generated 363 million SEK in free cash flow during the quarter and approximately 1 billion SEK over the trailing 12 months.See it on page 8
05
Revenue remains geographically diversified, led by North America at 41 percent, followed by Asia at 27 percent and Europe at 26 percent.See it on page 2
06
Key growth drivers included the Albion Online franchise following the Albion East launch, alongside consistent performance from Ludo Club, BitLife, and Jawaker.See it on page 5
07
User acquisition costs decreased by 2 percentage points year-over-year, while the company maintains a stable balance sheet with leverage within established targets.See it on page 3

Summary

Stillfront Group’s second quarter 2023 interim report highlights a period of record-high profitability and robust cash generation, driven by increased operational efficiency and disciplined cost management. Despite a year-over-year organic revenue decline, the company achieved an all-time high adjusted EBITDAC of 516 million SEK and an adjusted EBITDA of 708 million SEK. The adjusted EBITDAC margin expanded significantly to 28 percent, up from 22 percent in the same period the previous year, supported by a 2.5 percentage point improvement in gross margins and reduced capitalization of product development.

The company maintains a global operational footprint, with revenue distributed across North America (41 percent), Asia (27 percent), Europe (26 percent), and other regions. Performance was bolstered by key franchises, including Albion Online, which saw significant growth following the launch of Albion East, alongside strong contributions from the Ludo Club, BitLife, and Jawaker titles. While user acquisition costs decreased by 2 percentage points year-over-year, the company successfully improved monetization, evidenced by a 17 percent increase in average revenue per daily active user (ARPDAU).

Financial health remains a core focus, with the company reporting 363 million SEK in free cash flow for the quarter and approximately 1 billion SEK over the last 12 months. The balance sheet reflects a well-balanced maturity profile with leverage remaining within established targets. Looking ahead, the company anticipates typical seasonal patterns for the third quarter and expects to benefit from a stronger underlying market in the second half of the year, supported by a pipeline of new products entering soft-launch and ongoing efforts to leverage cross-studio synergies.