Embracer Group FY2025 Q2 Earnings Release

JULY –SEPTEMBER 2025
Q2
FY 2025/26
EMBRACER GROUP
INTERIM REPORT

Disclaimer
Q2 INTERIM REPORT FY 2025/26
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2

What we cover today
Q2 INTERIM REPORT FY 2025/26
Highlights
Operating segments
 PC/Console Games
 Mobile Games
 Entertainment & Services
Financial performance
Looking ahead
Q&A
3

Highlights from Q2
Q2 INTERIM REPORT FY 2025/26
Source: as of September 30, 2025| 1 Excludes discontinued operations (Asmodee)
Net sales |Q2
SEK 3,850 m
-19% YoY (6% organic)
Adjusted EBIT |Q2
SEK 109 m
(SEK 513 m)
or
SEK 247 m excl. divested assets
Free cash flow 1|TTM
SEK 1,292 m
(SEK -524 m)
Coffee Stain Group –
Capital Markets Event 17 Nov. ahead of spin -off The Lord of the Rings and
Kingdom Come: Deliverance exceeded expectations Strategic actions, share
buybacks, and a shift to a more cohesive, IP -first organization
4

Operating segments
1.

8%
21%
34%
3% 3%
0%
5% 10%
15% 20%
25%
3 0% 35%
4 0% 0
1,000
2,000 3,000
4,000
Q2 Q3Q4 Q1Q2
FY 24/25 FY 25/26
Organic growth amounted to -4% Y- o-Y
 Weak performance for Killing Floor 3 and some small- and
mid -sized new releases
 Adjusted EBIT decreased Y -o -Y, primarily driven by the
negative net sales growth and increased D&A
 KCD2 solid quarter, with the 2
nd DLC, Legacy of the Forge
released in Q2
 Fellowship had a positive initial reception in early Q3.
Source: as of September 30, 2025
PC/Console Games |Q2
SEK 1,853 m
Growth: -13% | Organic growth: -4%
SEK m
Net sales Back catalog
Net sales New releases
Net sales Other
Adjusted EBIT
COMMENTS PERFORMANCE
RELEASED AFTER THE QUARTER -END
6

The value of completed games
amounted to approximately SEK
1,156 million in Q2
 The weighted average ROI of all
titles decreased to 1.9x
7
Source: as of September 30, 2025
PC/Console Games |ROI
COMMENTS
1.0x in break even
ROI (CONTRIBUTION/INVESTMENT)
1.9x in average
Times
Quarters since release
Based on reported numbers until September 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 September 30, 2025
Investment = Capitalized Development Expenses including follow -on investment |Projects released by divested companies are excluded
0x2x 4x
6x 8x
10x 12x 14x
0 4812 1620 2428 3236
> 50.0 x
Dataset 2016-2025
No. Projects 111
Investments SEK 11.4 bn
Contribution SEK 22.0bn
Net Sales SEK 31.2 bn

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
 SpongeBob SquarePants: Titans of the Tide |18 Nov. 2025
 Thief VR: Legacy of Shadow | 4 Dec. 2025
 Deus Ex Remastered |5 Feb. 2026
 Tides of Tomorrow |24 Feb. 2026
 Gothic 1 Remake |Q1, CY 2026
 REANIMAL |Q1, CY 2026
 Screamer |CY 2026
Still to be dated
 Warhammer 40000: Dawn of War IV
 Darksiders 4
 Tomb Raider (major next release)
 The Eternal Life of Goldman
 Deep Rock Galactic: Rogue Core
 MARVEL 1943: Rise of Hydra
 And more…
32 Announced titles to -date
*

Organic growth amounted to 1% Y -o -Y
 The lower Adjusted EBIT and profitability explained by the
divestment of Easybrain and a different product mix
 CrazyLabs successfully scaled new hybrid casual game,
Flop House while Glow: Fashion Idol did not scale as
expected due to temporary issues
 Top -5 titles
1: Glow Fashion Idol, Coffee Mania, Alien
Invasion, Party in My Dorm and Bus Frenzy -Traffic Jam.
Source: as of September 30, 2025 | 1Top-5 revenue generating titles in the quarter
Mobile Games |Q2
28%
24%
10% 11% 12%
0%
10%
20% 3 0%
4 0%
50%
60% 0
500
1,000 1,500
2,000
Q2 Q3Q4 Q1Q2
FY 24/25 FY 25/26
SEK 535 m
Growth:-61% | Organic growth: 1%
SEK m
Net salesDECA Net sales Easybrain Adjusted EBIT
COMMENTS PERFORMANCE
9

Organic growth of 25% Y -o -Y, primarily driven by PLAION
Partners
 Adjusted EBIT improvement Y -o -Y was driven by Middle –
earth Enterprises, through a mix of licensing revenue
streams including merchandising
 After the quarter, Middle -earth Enterprises entered into a
strategic agreement with Asmodee Group regarding
Tabletop Games.
Source: as of September 30, 2025
Entertainment & Services |Q2
2%
9%
2% 3% 3%
0%
5%
10% 15%
20%
25%
3 0% 0
1,000
2,000 3,000
4,000
Q2 Q3Q4 Q1Q2
FY 24/25 FY 25/26
SEK 1,462 m
Growth:17% | Organic growth: 25% SEK m
Net sales Adjusted EBIT
COMMENTS PERFORMANCE
Magic The Gathering: Tales of Middle -earth, © & TM Mee under lic. to Wizards of the Coast
10

Financial performance
2.
Hobbiton Movie Set © & TM Mee under lic. to Rings Scenic Tours and Wingnut Film Productions

4,7263,850
73% 67%
0% 10%
20% 3 0% 4 0% 50%
60% 70% 80% 0
2,000 4,000
6,000 8,000
Q2 Q3Q4 Q1Q2
FY 24/25 FY 25/26
Financial development
FINANCIAL PERFORMANCE |Q2 FY 2025/26
Source: as of September 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
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 %
591 241
179
165
16%
11%
0% 2% 4%
6%
8% 10% 12% 14%
16% 18% 20% 0
200 400
600 800
1,000 1,200
Q2 Q3Q4 Q1Q2
FY 24/25 FY 25/26
1,390
1,210
29% 31%
0% 10% 20%
3 0% 4 0%
50%
60% 70%
80% 90% 100% 0
500
1,000 1,500
Q2 Q3Q4 Q1Q2
FY 24/25 FY 25/26
512
109 11%
3% 0% 5%
10%
15%
20%
25% 0
500
1,000 1,500
Q2 Q3Q4 Q1Q2
FY 24/25 FY 25/26

Cash flow and net cash
FINANCIAL PERFORMANCE |Q2 FY 2025/26
Source: as of September 30, 2025
SEKm FY25/26
Q2 FY24/25
Q2 FY 25/26
Q2 TTM FY 24/25
Q2 TTM
Adjusted EBITDA 9951,270
5,708 7,153
Cash Tax -290 -370 -568 -657
Other items –
57
-3 –
811 -899
Operating Cash flow 608897
4,329 5,597
Net investment in intangible assets -838 -895 -3,308 -4,977
Net investment in tangible assets -15 -27 -89 -145
Net investment in financial assets –52 72-225
Net Investment -853 -974 -3,325 -5,347
Free Cash Flow before working capital
-245 -77
1,004 250
Change in working capital –
103 -315 288 -774
Free Cash Flow after working capital -348 -392 1,292 -524
Cash Flow from financing activities -180 -169 -9,744 -2,304
Net cash flow from acquired/divested
companies/ Investments in other companies –
165 1,635 11,887 2,293
Cash effect IAC costs -42 -97 -204 -705
Cash Flow for the period -734 -977 3,234 –
1,240 SEKm Sept. 30,
2025 Sept.
30,
2024
Cash 6,1274,052
Current investments —
Current liabilities to credit institutions –
989 -10,964
Current account credit facilities —
116
Non -current liabilities to credit institutions
-901 -6,189
Net Cash(+) / Net Debt (- )
4,237
-13,217
 TTM Free Cash Flow after Working Capital improved
versus comparable period
 Q2 Free cash flow after Working Capital improved
versus previous year driven mainly by lower capex and
working capital despite a lower adjusted EBITDA.
 Cash Flow from financing activities includes -72mSEK
related to the repurchase of own shares
 Available funds at 30
th ofSeptember 2025 amounted to
11.9bn SEK.
13

Looking ahead
3.
Hobbiton Movie Set © & TM Mee under lic. to Rings Scenic Tours and Wingnut Film Productions

Forecast
FINANCIAL PERFORMANCE |Q2 FY 2025/26
Source: as of June 30, 2025
Our forecast reflects:
 Q3 is expected to be somewhat stronger than in Q2, primarily driven by a
stronger seasonal performance within Entertainment & Services offset by a
continued limited profitability within PC/Console
 Our impactful mid-sized PC/Console releases this year, including REANIMAL
and Gothic 1 Remake, are weighted towards Q4.
FY 2025/26 Adjusted EBIT forecast
SEK 1,000 million
For our current full financial year 2025/26 we reiterate an adjusted EBIT forecast
of at least
SEK 1 billion , including the financial contribution from Coffee Stain .
15

CAPITAL MARKETS EVENT
16
NEXT
LISTING
Monday 17 November 2025, starting 13:00 CET
Expected December 2025
NASDAQ FIRST NORTH
PREMIER GROWTH MARKET

Closing remarks
LOOKING AHEAD
17
Committed to build a more cohesive organization, strengthening
profitability and unlocking long -term value
Continue to refine our structure, aim to talk to our growth opportunities
and exact capital allocation strategy in due course
3 key priorities remain:
investing in our core IPs, operational discipline,
and targeted cost initiatives

until ~10:00 CET