Embracer Group (EMBRAC) Q4 24/25 earnings summary

Executive summary

• Net sales for Q4 were SEK 5,386 million, with organic growth of 19% driven by Kingdom Come: Deliverance II and strong mobile performance; adjusted EBIT was SEK 1,077 million and free cash flow SEK 956 million.

• Full-year net sales reached SEK 22,370 million, with adjusted EBIT of SEK 3,344 million and a margin of 15%, reflecting declines due to divestments and restructuring.

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

• Announced the spin-off of Coffee Stain Group by end of 2025 and rebranding to Fellowship Entertainment, with ongoing evaluation of further separations and M&A.

• Major divestments (Easybrain, Saber, Gearbox) and the Asmodee spin-off were completed, with a focus on a streamlined operating structure.

Financial highlights

• Q4 adjusted EBIT margin was 20%, with gross margin at 74–80% and free cash flow after working capital at SEK 956 million, a significant improvement from negative SEK 272 million last year.

• Full-year adjusted EBIT margin was 15%, with cash flow from operating activities at SEK 3,492 million.

• SEK 12.6 billion net proceeds from the Easybrain divestment contributed to the net cash position.

• SEK 5 billion in external debt was repaid and SEK 4.7 billion equity contributed to Asmodee.

• Headcount reduced to 7,180 from 9,692 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 planned, including two AAA titles: Killing Floor 3 and Marvel 1943: Rise of Hydra.

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

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

• The first half of the year is anticipated to be slow for PC/Console, with the bulk of new releases and completion value in the second half.