Modern Times Group (MTG) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales were SEK 1,438 million, down 4% year-over-year and 2% in constant currencies, but up 1% sequentially; strong performance from Warhammer 40,000: Tacticus and Snowprint.

• Adjusted EBITDA was SEK 390 million, down 13% year-over-year, with a 27% margin.

• Free cash flow reached SEK 334 million, with a 70% cash conversion rate for the last twelve months.

• Increased user acquisition spend (up 17% sequentially) and new game launches, including Heroes of History, are expected to drive organic growth in Q4.

• New games now represent 16% of group revenues, with a robust pipeline and upcoming launches.

Financial highlights

• Q3 net sales: SEK 1,438 million, down 4% year-over-year, up 1% sequentially.

• Adjusted EBITDA: SEK 390 million, margin 27%, down from SEK 449 million in Q3 last year.

• Free cash flow: SEK 334 million; cash conversion: 70% (above long-term guidance of 50–60%).

• Net cash position remains strong, with SEK 3,197 million in cash and no external interest-bearing debt.

• CapEx significantly reduced year-over-year, reflecting more games in soft launch and the divestment of Kongregate.

Outlook and guidance

• Full-year 2024 guidance reiterated: net sales growth of 1–5% at constant currencies and adjusted EBITDA margin of 26–29%.

• Organic growth expected in Q4, supported by increased UA investments and new game launches.

• Long-term cash conversion guidance remains at 50–60%, though current levels are higher.

• SEK 400 million share buyback program running until April 2025.