Embracer Group (EMBRAC) Q4 24/25 earnings summary

Executive summary

• Q4 net sales were SEK 5,386 million, with 19% organic growth driven by Kingdom Come: Deliverance II and strong mobile performance, despite a 6% year-over-year decline in headline sales.

• Adjusted EBIT for Q4 was SEK 1,077 million (20% margin), with free cash flow after working capital at SEK 956 million, reflecting significant improvement from the prior year.

• Major divestments (Easybrain, Saber, Gearbox) and the Asmodee spin-off were completed; Coffee Stain Group is planned for spin-off by end of 2025, with the group rebranding as Fellowship Entertainment.

• The group ended the quarter with a net cash position of SEK 5.4 billion and available funds of SEK 13.1 billion, supported by SEK 12.6 billion in net proceeds from the Easybrain divestment.

• Ongoing restructuring, cost control, and evaluation of further separations and M&A are aimed at building resilience and unlocking value.

Financial highlights

• Q4 adjusted EBIT margin was 20%, with gross margin at 74–80% for the quarter.

• Free cash flow after working capital was SEK 956 million in Q4, a significant improvement from SEK -272 million in the prior year.

• Net cash position at quarter-end was SEK 5.4 billion, with available funds exceeding SEK 13 billion.

• SEK 12.6 billion net proceeds from the Easybrain divestment were received in Q4.

• Full-year adjusted EBIT was SEK 3,344 million (margin 15%), down 33% year-over-year.

Outlook and guidance

• FY 2025/26 net sales are expected to be slightly above FY 2024/25, with EBITDAC and adjusted EBIT broadly in line.

• 76 game releases are planned for FY 2025/26, including two AAA titles: Killing Floor 3 (Q2) and Marvel 1943: Rise of Hydra (late FY); one AAA title delayed to FY 2026/27.

• Nine additional AAA games are slated for FY 2026/27 and FY 2027/28, indicating a higher release cadence.

• Q1 FY 2025/26 is expected to see stable adjusted EBIT in PC/Console, limited topline growth in Mobile, and no EBIT contribution from Entertainment & Services.