Stillfront Q3 2024 Interim Report

Key insights

6 takeaways

01
Stillfront reported Q3 2024 net revenue of 1,595 MSEK, a 4.6% year-over-year decrease, while organic revenue declined by 0.8%.See it on page 2
02
The company is launching a reorganization program targeting 200–250 MSEK in annualized cost savings by the end of 2025.See it on page 12
03
Free cash flow grew 49% year-over-year to 298 MSEK, supporting the initiation of a 40 MSEK share repurchase program.See it on page 11
04
Gross profit margin improved by 2.0 percentage points to 80%, primarily driven by a strategic shift toward Direct-to-Consumer (DTC) channels.See it on page 2
05
Average Revenue Per Daily Active User (ARPDAU) increased by 14% year-over-year, offsetting declines in total active user counts.See it on page 5
06
Adjusted EBITDAC margin remained stable at 24%, despite a 3.2 percentage point increase in user acquisition costs compared to the previous year.See it on page 4

Summary

Stillfront’s Q3 2024 interim report details a period of strategic transition characterized by a focus on margin improvement and operational efficiency despite a slight decline in top-line performance. The company reported net revenue of 1,595 MSEK, representing a 4.6% year-over-year decrease, with organic revenue down by 0.8%. Despite the revenue contraction, the gross profit margin improved by 2.0 percentage points to 80%, largely driven by a successful shift toward Direct-to-Consumer (DTC) channels. Adjusted EBITDAC margin remained stable at 24%, though this was tempered by a 3.2 percentage point increase in user acquisition costs (UAC) compared to the previous year.

Operational performance metrics reflected a portfolio shift toward higher-value users. While total monthly and daily active users declined due to seasonal effects and strategic portfolio adjustments, Average Revenue Per Daily Active User (ARPDAU) grew by 14% year-over-year, signaling effective monetization through live operations. The company’s free cash flow showed significant strength, rising 49% year-over-year to 298 MSEK. This liquidity, supported by a robust balance sheet, has enabled the initiation of a 40 MSEK share repurchase program intended to cover future earnout obligations.

Looking ahead, the company is accelerating a reorganization program aimed at achieving 200–250 MSEK in annualized cost savings by the end of 2025. Current efforts include moving underperforming titles to lower-cost operational models and expanding DTC solutions to larger casual game franchises. Management anticipates increased user acquisition spending in the fourth quarter to capitalize on seasonal upticks in player activity, though they remain mindful of potential market volatility surrounding the U.S. elections. The company plans to provide further strategic updates during a Capital Markets Day scheduled for February 2025.