Modern Times Group (MTG) Q2 2026 earnings summary

Executive summary

• Achieved strong Q2 and H1 2026 results with 6% organic revenue growth, 24% adjusted EBITDA margin, and high cash generation, reflecting effective portfolio and district strategy.

• Growth was driven by RAID: Shadow Legends (up 9% YoY) and PlaySimple, with significant contributions from both Midcore and Casual segments.

• Direct-to-consumer revenues accounted for 38–40% of group revenues, with rapid AI adoption and D2C initiatives advancing strategic priorities.

• Completed all major M&A-related commitments, including Plarium earn-out and Snowprint stake acquisition, enhancing financial flexibility.

• Preparatory work for a potential PlaySimple IPO in India is ongoing.

Financial highlights

• Q2 net sales reached SEK 2,965 million (~$312 million), up 6% year-over-year in constant currencies; all growth organic.

• Adjusted EBITDA of SEK 707 million (~$74 million), up 10% year-over-year, with a 24% margin in Q2 and 25% YTD.

• Unlevered free cash flow of SEK 474 million (~$50 million) in Q2, with 81% cash conversion on a rolling 12-month basis.

• User acquisition spend was SEK 1,163 million, representing 39% of revenue, up 15% year-over-year.

• Adjusted net income just under SEK 1.8 billion on a rolling 12-month basis; adjusted EPS SEK 14.72.

Outlook and guidance

• Full-year 2026 outlook reiterated, with pro forma revenue growth expected at 5–8% and adjusted EBITDA margin at 22–24%.

• Medium-term guidance targets annual gross revenue growth of 3–7%, adjusted EBITDA margin above 24%, and unlevered cash conversion above 60%.

• Expect tougher year-over-year comps in H2 for both Casual and Midcore segments, with Q3 being the most challenging for Midcore.

• Several new games in the pipeline for H2, with a major Plarium title expected in early 2027.

• Continued focus on D2C initiatives and a share buyback program, which is 25% larger than last year.