Embracer Group FY2025 Q1 Earnings Release

APRIL –JUNE 2025
Q1
FY 2025/26
EMBRACER GROUP
INTERIM REPORT

Disclaimer
Q1 INTERIM REPORT FY 2025/26
2
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What we cover today
Q1 INTERIM REPORT FY 2025/26
Highlights
Operating segments
 PC/Console Games
 Mobile Games
 Entertainment & Services
Financial performance
Looking ahead
Q&A

Highlights from Q1
Q1 INTERIM REPORT FY 2025/26
Source: as of June 30, 2025| 1 Excludes discontinued operations (Asmodee)
Net sales |Q1
SEK 3,355 m
-31% YoY (-2% organic)
Adjusted EBIT |Q1
SEK 75 m
(SEK 579 m)
or SEK 250 m excl. divested assets
Free cash flow 1|TTM
SEK 1,248 m
(SEK -196 m)
Coffee Stain Group on track
for separate listing in 2025
Transition year focused on operational and strategic execution
4

Operating segments
1.

Net sales impacted by divestments of Gearbox and Saber
 No major new releases within PC/Console, and some
softness in the back catalog performance impacting
Adjusted EBIT margin
 The team behind Kingdom Come: Deliverance II are
focused on expanding the game’s reach with major new
content drops
 Mixed reception for Killing Floor 3 in early Q2, with
encouraging early engagement and feedback for
Titan Quest II.
5%
8%
21%
34%
3%
– 5%
5%
15% 25%
35%
45%
55% 0
1,000
2,000 3,000
4,000
Q1 Q2 Q3Q4 Q1
FY 24/25 FY 25/26
Source: as of June 30, 2025
PC/Console Games |Q1
SEK 1,641 m
Growth: -38% | Organic growth: -22%
SEK m
Net sales Back catalog
Net sales New releases
Net sales Other
Adjusted EBIT
COMMENTS PERFORMANCE
RELEASES AFTER THE QUARTER-END
6

The value of completed games
amounted to approximately SEK
210 million in Q1
 The weighted average ROI of all
titles remained stable at 2.1x
 Our core IP had 3.1x ROI vs non –
core at 1.6x, which continues to
inform our strategy ahead.
0.0x 2.0x 4.0x
6.0x 8.0x
10.0x 12.0x 14.0x
0 4812 1620 2428 3236
7 Source: as of June 30, 2025
PC/Console Games | ROI
COMMENTS
1.0x in break even
ROI (CONTRIBUTION/INVESTMENT)
2.1x in average
> 50.0 x
Times
Quarters since release Dataset 2016 -2025
No. Projects 103
Investments SEK 10.2 bn
Contribution SEK 21.2bn
Net Sales SEK 30.2 bn
Based on reported numbers until June 30, 2025 |Sample includes projects with sales and/or investments above SEK 40 millions
ROI = Contribution / Investment | Contribution = Gross Profit less marketing expenses from release to June 30, 2025
Investment = Capitalized Development Expenses including follow -on investment |Projects released by divested companies are excluded

8 For latest release dates please refer to above mentioned publishers | * Also includes titles from the Entertainment & Services segment
PC/Console |Pipeline details
Selected upcoming releases
 Metal Eden |2 Sep. 2025
 Fellowship |2025
 Tides of Tomorrow |24 Feb. 2026
 MARVEL 1943: Rise of Hydra | Early 2026
 Screamer |2026
 Gothic 1 Remake |Early 2026
 REANIMAL |Q1, 2026
Still to be dated
 SpongeBob SquarePants: Titans of the Tide
 Satisfactory (console)
 Deep Rock Galactic: Rogue Core
 Thief VR: Legacy of Shadow
 Wreckreation
 Darksiders 4
 Tomb Raider (major next release)
 And more…
39 Announced titles to -date
*

Organic growth amounted to -5% in the first quarter
without a contribution from Easybrain(divested in Jan -25)
 Reduced organic growth was driven by increased
competition for CrazyLabs’ hybrid casual games and a
slower back catalog performance and decreased UAC
 Glow Fashion Idol continues to grow and is expected to
continue to scale in upcoming quarters
 The top -5 revenue generating titles in the quarter were:
Glow Fashion Idol, Coffee Mania, Bus Frenzy -Traffic Jam,
Alien Invasion, and Party In My Dorm .
Source: as of June 30, 2025
Mobile Games |Q1
37%
28% 24%
10% 11%
0% 10%
20% 3 0%
4 0% 50%
60%
70%
80%
90%
100% 0
500
1,000 1,500
2,000
Q1 Q2 Q3Q4 Q1
FY 24/25 FY 25/26
SEK 520 m
Growth:-63% | Organic growth: -5%
SEK m
N et sales DECA Net sales Easybrain Adjusted EBIT
COMMENTS PERFORMANCE
9

Strong organic growth driven by PLAION’s partner
business, through back catalog sales and the
strengthening of its global partner business footprint
 The Adjusted EBIT improvement was mainly driven by a
higher Y -o -Y contribution from Middle -earth Enterprises
licensing revenue
 Middle -earth Enterprises has a growing business
development pipeline across different product verticals.
Source: as of June 30, 2025
Entertainment & Services |Q1
-2% 2%
9%
2% 3%
– 20 %
0%
20% 4 0%
60%
80%
100% 0
1,000
2,000 3,000
4,000
Q1 Q2 Q3Q4 Q1
FY 24/25 FY 25/26
SEK 1,193 m
Growth:41% | Organic growth: 52%
SEK m
Net sales Adjusted EBIT
COMMENTS PERFORMANCE
© & TM MEE lic.
10

Financial performance
2.

Financial development
FINANCIAL PERFORMANCE
Source: as of June 30, 2025| 1Excluding Items Affecting Comparability
NET SALES & GROSS MARGIN DEVELOPMENT | SEK million DEVELOPMENT OF MARKETING EXPENSES | SEK million
DEVELOPMENT OF OPERATING EXPENSES, NET | SEK million ADJUSTED EBIT | SEK million
12
4,894
3,355
80%
69%
– 5% 15%
35% 55% 75%
95% 115% 0
2,000 4,000
6,000 8,000
Q1 Q2 Q3Q4 Q1
FY 24/25 FY 25/26 504 222
167
110
14%
10%
0% 2% 4%
6% 8% 10% 12%
14% 16% 18% 0
200 400
600 800
1,000 1,200
Q1 Q2 Q3Q4 Q1
FY 24/25 FY 25/26
1,697
1,182
35% 35%
0% 10% 20%
3 0%
4 0% 50% 60% 70%
80%
90% 100% 0
500
1,000 1,500
2,000
Q1 Q2 Q3Q4 Q1
FY 24/25 FY 25/26
580
75 12%
2% 0% 5%
10% 15% 20% 25%
3 0%
35% 4 0% 0
500
1,000 1,500
Q1 Q2 Q3Q4 Q1
FY 24/25 FY 25/26
Net sales Gross profit % 1 Marketing, UAC Marketing as % of Net sales Marketing, non UAC
Operating Expenses (Excl. Marketing) 1 As % of sales Adjusted EBIT Adjusted EBIT %

Cash flow and net cash
FINANCIAL PERFORMANCE
Source: as of June 30, 2025
SEKmFY25/26
Q1 FY24/25
Q1 FY 25/26
Q1 TTM FY 24/25
Q1 TTM
Adjusted EBITDA 8001,530 6,023 8,055
Cash Tax 27-30 -648 -497
Other items –
106
-195 –
757 -1,207
Operating Cash flow 7211,305
4,618 6,351
Net investment in intangible assets -750 -998 -3,365 -5,949
Net investment in tangible assets -29 -54 -101 -187
Net investment in financial assets -10 -68 20-234
Net Investment -789 -1,120 -3,446 -6,370
Free Cash Flow before working capital -68 185
1,172 -19
Change in working capital –
155 -305 76-177
Free Cash Flow after working capital -223 -120 1,248 -196
Cash Flow from financing activities 164-2,751 -9,730 -342
Net cash flow from acquired/divested
companies/ Investments in other companies –
99 2,766 13,719 542
Cash effect IAC costs -56 -195 -259 -743
Cash Flow for the period -214 -300 4,945 –
739 SEKm June 30,
2025 June
30,
2024
Cash 6,8793,221
Current investments 00
Current liabilities to credit institutions –
1,479 -15,420
Current account credit facilities —
89
Non -current liabilities to credit institutions
-474 -1,987
Net Debt ( -) / Net Cash (+)
4,926
-14,275
 TTM Free Cash Flow after Working Capital significantly
improved versus comparable period
 Q1 Free cash flow after Working Capital decreased
versus previous year driven mainly by lower adjusted
EBITDA partly mitigated by lower Net Investments and
lower increase in Net Working Capital
 Available funds at 30
th of June 2025 amounted to
12.7bn SEK.
13

Transformationupdate
FINANCIAL PERFORMANCE
14 Source: as of June 30, 2025
In the past year, we’ve
advanced the group’s
transformation, with
Asmodee listed in
February
 Coffee Stain Group is
progressing well and is
set for a separate
listing this year,
supported by strong
IPs, active
communities, and
talented teams.
COMMENTS
ASMODEE
Spin -off completed
7 February 2025
COFFEE STAIN GROUP
Spin -off expected
Year -end 2025
FELLOWSHIP ENTERTAINMENT
Expected
Year-end 2025
|2025 |2024 |2026
1stSPIN -OFF
2nd SPIN -OFF
| 2016
BECOMES

Looking ahead
3.

Forecast
LOOKING AHEAD
Source: as of June 30, 2025
Our forecast reflects:
 Further release shifts of one or several of the more important releases currently scheduled for Q4
 Slower growth trajectory for Mobile
 Negative FX effects
 Lower catalog sales
This conservative view provides upside potential which we will work tirelessly to realize.
Coffee Stain Group performing in line with expectations, with an intact outlook.
We see no material changes to the management expectations for FY 2026/27 and FY 2027/28 .
OUR FORECAST
FOR FY 2025/26
SEK 1,000 million
We now expect our current financial year to deliver at least SEK 1.0 billion in Adjusted EBIT.
16

Keypriorities
LOOKING AHEAD
17
IP-led focus |We are doubling down on our greatest strength: empowering talented teams to deliver
unforgettable experiences based on globally loved IPs
1
Operational discipline |We are significantly rewiring the business to create one powerhouse unit
within PC/Console. Smarter collaboration, increased streamlining, shared services and with AI as an increasingly supportive force
Targeted cost initiatives|We focus on continuous improvement as well as targeted cost
initiatives relating to underperforming businesses, to free up capital to deploy with better returns
2
3

until ~10:00 CEST