Stillfront Q2 2024 Interim Report

Key insights

6 takeaways

01
Stillfront reported Q2 2024 net revenue of 1,744 MSEK, a 3.8% year-over-year decrease, while achieving an adjusted EBITDAC margin of 29%.See it on page 2
02
Free cash flow surged 97% quarter-over-quarter to 272 MSEK, driven by operational efficiencies and reduced user acquisition spending.See it on page 9
03
Gross margins reached 80% for the quarter, supported by a strategic shift toward Direct-to-Consumer (DTC) channels.See it on page 5
04
Active user metrics declined by 10% as the company deliberately prioritized higher-value users, resulting in significant growth in average revenue per daily active user (ARPDAU).See it on page 6
05
The company initiated an 80 MSEK share repurchase program to cover future earnout provisions, signaling confidence in its cash flow and balance sheet.See it on page 11
06
Management anticipates seasonal softness in Q3 2024 followed by a planned reacceleration of marketing investment and title scaling in Q4.See it on page 12

Summary

Stillfront’s second-quarter 2024 interim report details a period of disciplined financial management characterized by strong profitability despite a slight decline in top-line revenue. Net revenue for the quarter reached 1,744 MSEK, representing a 3.8% year-over-year decrease. However, the company achieved an adjusted EBITDAC margin of 29%, an 8-percentage-point increase quarter-over-quarter, largely driven by reduced user acquisition costs and improved operational efficiencies. Free cash flow saw a significant boost, rising 97% quarter-over-quarter to 272 MSEK.

The company’s strategic focus on Direct-to-Consumer (DTC) channels has successfully supported gross margin expansion, which reached 80% for the quarter. While active user metrics, including monthly and daily active users, declined by 10% due to a deliberate reduction in user acquisition spend and a strategic shift toward higher-value users, average revenue per daily active user (ARPDAU) showed significant growth. Performance varied by segment; the Strategy portfolio experienced lower bookings due to reduced marketing spend, while the Sunshine Island title continued to scale effectively. Jawaker maintained strong, high-profitability performance, and the company’s overall cash position remains robust.

Looking ahead, the company anticipates continued seasonal softness in the third quarter before a planned reacceleration of marketing investment and title scaling in the fourth quarter. Management remains committed to ongoing profitability-enhancing measures, including efforts to lower the cost base and improve operational transparency. To support its capital structure, the company has initiated a share repurchase program of up to 80 MSEK, intended to cover future earnout provisions, reflecting confidence in its underlying cash flow generation and balance sheet stability.