FinancialEmbracer Group

Q3 Interim Report: FY 2025/26

21 pages~13 min full read

Open the PDF Cite

Key insights

6 takeaways · ~2 min read

01
Embracer Group reported Q3 FY 2025/26 net sales of SEK 5,176 million, a 26% year-over-year decline driven by a lighter release schedule and the divestment of the Easybrain mobile unit.See it on page 8
02
The company achieved an adjusted EBIT of SEK 528 million and maintains a robust net cash position of SEK 2,866 million as of December 31, 2025.See it on page 15
03
Management is shifting its capital expenditure strategy to prioritize high-return core IPs, with a long-term goal of increasing allocation from 20% to 80%.See it on page 19
04
Across 101 active projects, the company is currently realizing a weighted average return on investment of 1.8x.See it on page 9
05
The full-year EBIT forecast has been revised to at least SEK 750 million to account for the spin-off of the Coffee Stain Group.See it on page 17
06
Core franchises including Kingdom Come: Deliverance, Tomb Raider, and Dead Island provided stable performance, with upcoming releases including Ride 6, REANIMAL, and the Gothic 1 Remake.See it on page 10

Read the full report

Summary

Embracer Group’s Q3 FY 2025/26 interim report highlights a period of strategic restructuring and operational refinement, characterized by a shift toward core intellectual property and the divestment of non-strategic assets. The company reported net sales of SEK 5,176 million, representing a 26% year-over-year decline, alongside an adjusted EBIT of SEK 528 million. While organic growth was impacted by a lighter release schedule and the divestment of the Easybrain mobile unit, the company’s core PC and console franchises, including Kingdom Come: Deliverance, Tomb Raider, and Dead Island, provided stable performance.

The company’s financial position remains robust, with a net cash position of SEK 2,866 million as of December 31, 2025. Free cash flow for the quarter was impacted by working capital timing, though trailing twelve-month figures reflect the benefits of recent divestments and a disciplined approach to capital allocation. Investment in game development remains a primary focus, with a weighted average return on investment of 1.8x across 101 projects. Management is actively pivoting its capital expenditure strategy, aiming to increase the allocation toward high-return core IPs from 20% to 80% over time.

Looking ahead, Embracer has adjusted its full-year EBIT forecast to at least SEK 750 million, a revision that accounts for the spin-off of the Coffee Stain Group. The company’s forward-looking strategy centers on operational discipline, including the reduction of operating and capital expenditures, and a commitment to an "IP-first" model. The upcoming release pipeline remains active, featuring titles such as Ride 6, REANIMAL, and the Gothic 1 Remake, as the organization continues to integrate artificial intelligence into its development processes to drive future efficiency and creative output.