Latest news with #LarsWingefors
Yahoo
23-05-2025
- Business
- Yahoo
Embracer Group AB (THQQF) Q4 2025 Earnings Call Highlights: Strong Financial Growth Amidst ...
Net Sales: SEK5.4 billion, representing a 19% organic growth. Profitability: SEK1.1 billion, a 44% growth on a pro forma basis. Free Cash Flow: Close to SEK1 billion for the quarter. Net Cash Position: SEK5.4 billion by the end of the quarter. Total Available Funds: SEK13 billion by the end of the quarter. PC/Console Net Sales: Approximately SEK3 billion with a profitability of 34%. Mobile Revenue: SEK900 million with an adjusted EBIT of SEK91 million. Operating Expenses: Decreased by more than SEK400 million compared to the same quarter last year. Adjusted EBIT: SEK1 billion, a 3% growth reported and 44% on a pro forma basis. Free Cash Flow Improvement: SEK1.4 billion for the full year, a major improvement from the previous year's negative SEK819 million. Reported EBIT: SEK4.3 billion, with a difference of SEK3.2 billion from adjusted EBIT due to items affecting comparability and historical acquisitions. Warning! GuruFocus has detected 3 Warning Signs with THQQF. Release Date: May 22, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Embracer Group AB (THQQF) reported stronger-than-expected financials with net sales growing 19% to SEK5.4 billion. The company achieved a 44% growth in profitability, driven by the success of Kingdom Come: Deliverance II. Embracer Group AB (THQQF) maintained a strong net cash position of SEK5.4 billion and total available funds of SEK13 billion. The company plans to release a diverse slate of games, including two AAA titles, with an expected completion value of SEK3.8 billion. The spin-off of Coffee Stain Group is expected to enhance shareholder value and allow for focused growth. The performance of some game releases, such as Tomb Raider Remastered and Hyper Light Breaker, did not meet expectations. The company's ROI chart showed a decline, with an average of 2 times, which is below the desired level of 3 or more. There is cautiousness in expectations for upcoming titles, with some games potentially contributing limited EBIT. The mobile market remains highly competitive, requiring constant strategic adjustments and investments. The company faces challenges with amortizations and investments in underperforming titles impacting profitability. Q: Apart from Kingdom Come: Deliverance II, how did the underlying margins in the PC console segment evolve this quarter? A: Lars Wingefors, CEO, explained that without Kingdom Come: Deliverance II, there was limited profitability in the PC console segment. The other releases did not significantly contribute and had a negative profit impact on adjusted EBIT. However, he expects mid-sized game releases to contribute more positively later in the financial year. Q: Regarding the cash position, what are the plans for utilizing the SEK5.4 billion cash, and how will it be split between Coffee Stain and Fellowship? A: Lars Wingefors, CEO, stated that the cash position provides options for value creation or capital return to shareholders. They are considering acquisitions, divestments, mergers, and potential spin-offs. Coffee Stain may not need a large cash reserve as they generate cash quarterly, leaving substantial cash for Fellowship and shareholders. Q: What is the strategy for increasing monetization at Coffee Stain, and is growth expected from new titles or existing IPs? A: Lars Wingefors, CEO, emphasized that Coffee Stain has potential to grow its core IPs, but he deferred to Anton Westberg, CEO of Coffee Stain, for specific strategies. He noted that Coffee Stain has a strong fan base and potential for growth through new content and plans. Q: With nine internally financed AAA games planned beyond '25-'26, are the release dates conservative, and what is the expected cadence of releases? A: Lars Wingefors, CEO, acknowledged that while plans are based on current management information, some titles may slip into following years. However, they expect more AAA releases in the coming years compared to previous years, with a stable cadence between years. Q: Regarding mobile user acquisition costs in Q4 and limited topline growth in Q1, is there a spillover effect from Q4 investments? A: Lars Wingefors, CEO, explained that mobile is complex, and while there is a spillover effect, the top line growth is muted. Profitability may improve when spending on certain titles is reduced due to competition, but the situation can change rapidly. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
22-05-2025
- Business
- Reuters
Embracer leans on back catalogue as game delays shake industry profits
May 22 (Reuters) - Tomb Raider owner Embracer ( opens new tab is leaning on its back catalogue to maintain cash flow while fewer AAA games are being released, but this is not a long-term shift, CEO Lars Wingefors said on Thursday. As game development becomes slower, riskier and more expensive, studios are facing growing pressure to justify their budgets for major releases in a market where consumer sentiment and profitability are wearing thin. "I think it's more important than ever to make sure the game is polished because it's very hard to repair a buggy or unfinished product," Wingefors told Reuters. French peer Ubisoft ( opens new tab showed a similar approach with its newest Assassin's Creed game, which debuted with positive reviews on Steam after being delayed twice. Gaming groups thrived during COVID lockdowns, but delays and weak demand have hit Embracer's new titles, pushing it to lean on older games seen as a safer bet amid faltering blockbusters. It has sold studios to cut costs and manage debt in recent years, and is now splitting into three listed companies. On Thursday, it forecast slight revenue growth and broadly unchanged earnings for its fiscal 2025/26, and said that realistically, at least one of its nine AAA game releases slated for the following two financial years would be pushed back, without specifying titles. Studios are pouring time and money into increasingly complex games, but returns are hit-or-miss and long delays mean many will not see cash back until much later. On top of it, fewer games break through and slower cash generation strains studios, which has made older titles a more attractive and dependable revenue stream for some. Ubisoft recently delayed key titles and pushed profitability expectations to 2026, underscoring sector challenges in converting content into cash. It told Reuters it planned to be more selective and turn blockbusters into "evergreen" franchises that generate steady revenue long after launch. "We will still look to create some new IPs, but will be more discerning in favour of gameplay breakthroughs based on disruptive or emerging technologies," Ubisoft said. Wingefors also said that tools like AI could boost efficiency over time in minor titles, with the industry rapidly adopting them to improve energy gains and technology sales. ($1 = 9.5615 Swedish crowns)
CNA
22-05-2025
- Business
- CNA
Embracer leans on back catalogue as game delays shake industry profits
Tomb Raider owner Embracer is leaning on its back catalogue to maintain cash flow while fewer AAA games are being released, but this is not a long-term shift, CEO Lars Wingefors said on Thursday. As game development becomes slower, riskier and more expensive, studios are facing growing pressure to justify their budgets for major releases in a market where consumer sentiment and profitability are wearing thin. "I think it's more important than ever to make sure the game is polished because it's very hard to repair a buggy or unfinished product," Wingefors told Reuters. French peer Ubisoft showed a similar approach with its newest Assassin's Creed game, which debuted with positive reviews on Steam after being delayed twice. Gaming groups thrived during COVID lockdowns, but delays and weak demand have hit Embracer's new titles, pushing it to lean on older games seen as a safer bet amid faltering blockbusters. It has sold studios to cut costs and manage debt in recent years, and is now splitting into three listed companies. On Thursday, it forecast slight revenue growth and broadly unchanged earnings for its fiscal 2025/26, and said that realistically, at least one of its nine AAA game releases slated for the following two financial years would be pushed back, without specifying titles. GAME DELAYS SHAKE INDUSTRY PROFITS Studios are pouring time and money into increasingly complex games, but returns are hit-or-miss and long delays mean many will not see cash back until much later. On top of it, fewer games break through and slower cash generation strains studios, which has made older titles a more attractive and dependable revenue stream for some. Ubisoft recently delayed key titles and pushed profitability expectations to 2026, underscoring sector challenges in converting content into cash. It told Reuters it planned to be more selective and turn blockbusters into "evergreen" franchises that generate steady revenue long after launch. "We will still look to create some new IPs, but will be more discerning in favour of gameplay breakthroughs based on disruptive or emerging technologies," Ubisoft said. Wingefors also said that tools like AI could boost efficiency over time in minor titles, with the industry rapidly adopting them to improve energy gains and technology sales.
The Star
22-05-2025
- Business
- The Star
Embracer leans on back catalogue as game delays shake industry profits
(Reuters) - Tomb Raider owner Embracer is leaning on its back catalogue to maintain cash flow while fewer AAA games are being released, but this is not a long-term shift, CEO Lars Wingefors said on Thursday. As game development becomes slower, riskier and more expensive, studios are facing growing pressure to justify their budgets for major releases in a market where consumer sentiment and profitability are wearing thin. "I think it's more important than ever to make sure the game is polished because it's very hard to repair a buggy or unfinished product," Wingefors told Reuters. French peer Ubisoft showed a similar approach with its newest Assassin's Creed game, which debuted with positive reviews on Steam after being delayed twice. Gaming groups thrived during COVID lockdowns, but delays and weak demand have hit Embracer's new titles, pushing it to lean on older games seen as a safer bet amid faltering blockbusters. It has sold studios to cut costs and manage debt in recent years, and is now splitting into three listed companies. On Thursday, it forecast slight revenue growth and broadly unchanged earnings for its fiscal 2025/26, and said that realistically, at least one of its nine AAA game releases slated for the following two financial years would be pushed back, without specifying titles. GAME DELAYS SHAKE INDUSTRY PROFITS Studios are pouring time and money into increasingly complex games, but returns are hit-or-miss and long delays mean many will not see cash back until much later. On top of it, fewer games break through and slower cash generation strains studios, which has made older titles a more attractive and dependable revenue stream for some. Ubisoft recently delayed key titles and pushed profitability expectations to 2026, underscoring sector challenges in converting content into cash. It told Reuters it planned to be more selective and turn blockbusters into "evergreen" franchises that generate steady revenue long after launch. "We will still look to create some new IPs, but will be more discerning in favour of gameplay breakthroughs based on disruptive or emerging technologies," Ubisoft said. Wingefors also said that tools like AI could boost efficiency over time in minor titles, with the industry rapidly adopting them to improve energy gains and technology sales. ($1 = 9.5615 Swedish crowns) (Reporting by Jesus Calero and Vera Dvorakova in Gdansk, additional reporting by Greta Rosen Fondahn and Leo Marchandon, editing by Milla Nissi-Prussak)
Yahoo
14-02-2025
- Business
- Yahoo
Embracer Group AB (THQQF) Q3 2025 Earnings Call Highlights: Navigating Growth and Challenges
Net Sales: SEK7.4 billion, representing a 3% shortfall versus the same period last year. Organic Growth: 7% driven by entertainment and services, and improved mobile growth. Adjusted EBIT: Close to SEK1.2 billion, a decline of 11% year-over-year. Free Cash Flow: SEK900 million in the quarter. Pro Forma Net Cash Position: SEK5 billion at the end of the quarter. PC Console Segment: 21% adjusted EBIT margin with a 17% year-over-year increase in EBIT. Mobile Games Segment: 3% organic growth with a 24% adjusted EBIT margin. Entertainment & Services Segment: 19% organic growth with a 9% adjusted EBIT margin. Marketing Expenses: Increased to 14% of net sales due to higher user acquisition costs. Net Debt: SEK3.2 billion at the end of December. Available Liquidity: SEK12.7 billion, including SEK7 billion in cash as of February 7th. Warning! GuruFocus has detected 6 Warning Signs with THQQF. Release Date: February 13, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Embracer Group AB (THQQF) reported a solid organic growth of 7% with net sales of SEK7.4 billion. The release of Kingdom Come: Deliverance II was a major success, selling over 1 million copies in the first 24 hours and approaching 2 million. The company achieved a strong financial position with a pro forma net cash position of around SEK5 billion. The PC console segment showed a 21% adjusted EBIT margin despite limited new releases. The Entertainment & Services segment experienced a 19% organic growth, driven by successful releases from partners. The organic growth in mobile games was limited to 3%, recovering from a previous decline. The adjusted EBIT margin for mobile games decreased to 24% due to higher user acquisition costs. The ROI chart remains low at 2.1, indicating room for improvement in investment returns. The PC console segment experienced a decline in organic growth by 1% due to fewer new releases. The company faces challenges in maintaining profitability amidst high user acquisition costs and a competitive market. Q: How has the release of Kingdom Come: Deliverance II compared to expectations, and what learnings can be taken from its success? A: Lars Wingefors, CEO, stated that Kingdom Come: Deliverance II exceeded both internal and personal expectations, highlighting its high quality and unique nature. The success is attributed to allowing Warhorse Studios the time and creative freedom to develop the game without interference. This approach is seen as a model for other studios within Embracer Group. Q: Can you provide more details about the upcoming AAA projects scheduled for the next few years? A: Lars Wingefors mentioned that there are two major AAA titles planned for release next year, with budgets potentially at or above the level of Kingdom Come: Deliverance II. These projects are expected to be significant in terms of investment and quality. Q: Are you satisfied with the current structure of the group, including studios and cost structure? A: Lars Wingefors expressed that while significant progress has been made in restructuring and improving efficiency, there is always more work to be done. The focus remains on maintaining the right IPs and operational efficiency to succeed in a challenging market. Q: What is the strategy for the mobile business following the divestment of Easybrain? A: Lars Wingefors emphasized the strength of the remaining mobile businesses, CrazyLabs and DECA, highlighting their potential for growth and capital deployment. The focus will be on leveraging synergies and exploring accretive opportunities in the mobile sector. Q: How do you view the potential for future spin-offs, particularly regarding Coffee Stain & Friends and Middle-earth & Friends? A: Lars Wingefors indicated that both entities have the scale and potential to be successful as publicly listed companies. While there are always alternative strategies, the current plan is to proceed with the spin-offs as scheduled. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
