Q3 2022 Earnings Call

Stillfront Group AB demonstrated significant financial resilience during the third quarter of 2022, reporting a 36 percent year-over-year revenue increase and achieving an adjusted EBIT margin of 29 percent. This performance was underpinned by a strategic combination of acquisitions, favorable foreign exchange effects, and 1.4 percent organic growth, which notably outperformed a broader global mobile gaming market currently facing post-pandemic contraction. The company’s operational cash flow reached a milestone of over SEK 2 billion on a last-twelve-months basis, supported by a diversified portfolio that has expanded to 77 active games.

The organizational strategy centers on a disciplined capital allocation model that prioritizes high-performing studios and dynamic user acquisition spending. While certain subsidiaries like Storm8 and KIXEYE have faced efficiency challenges or market softening, these are offset by the success of strategy titles and the integration of high-growth assets like Jawaker. The "Stillops" platform serves as a critical driver for synergy, facilitating the transition of acquired entities toward higher-margin, first-party game development. This portfolio-wide approach ensures that overall profitability remains stable even as individual studios experience natural fluctuations in performance.

Looking ahead, the pipeline remains robust with 50 new products in development and a high conversion rate for recent launches. Management anticipates continued acceleration in organic growth through the remainder of 2022 and into 2023, bolstered by a strong liquidity position and SEK 2.2 billion in unutilized credit. By focusing on live operations and regional expansion for long-term assets, the group aims to maintain a consistent EBITDA margin between 35 and 40 percent, reinforcing its position as a consolidated leader in the global gaming industry.