In This Article:
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Net Revenue: SEK1,744 million, down 4% year-over-year.
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Gross Profit Margin: Increased by 2 percentage points to 80%.
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EBITDAC Margin: 29%, up 8% quarter-over-quarter and 0.5 percentage points year-over-year.
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Free Cash Flow: SEK272 million, nearly doubled from the previous quarter.
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User Acquisition Cost (UAC): Normalized at 26%, down from previous quarters.
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Staff Costs: Reduced by 12% compared to last year.
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Direct-to-Consumer (DTC) Channel Revenue: Increased to 33% from 29% last quarter.
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Strategy Product Area Bookings: Decreased by approximately SEK99 million.
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Sim RPG Product Area Revenue: Sunshine Island revenues up by 10%.
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Cash Flow from Operations: SEK434 million.
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Investment in CapEx: SEK152 million, 8.7% of net revenues.
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Leverage Ratio: Ended the quarter at 2.15, below financial target at 1.93 excluding earnouts.
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Cash Position: SEK895 million with SEK1.5 billion of unutilized facilities.
Release Date: July 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Stillfront Group AB (STLFF) reported strong margin development in Q2, with an EBITDAC margin of 29%, marking the highest margins in three years.
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The company achieved a significant increase in free cash flow, amounting to SEK272 million, nearly doubling from the previous quarter.
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Gross profit improved by 2 percentage points to 80%, driven by a focus on direct-to-consumer channels, which increased to 33% from 29% last year.
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The company successfully reduced staff costs by 12%, contributing to improved margins and operational efficiency.
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Stillfront Group AB (STLFF) announced a share buyback program, intending to purchase up to SEK80 million of shares, reflecting confidence in its financial position.
Negative Points
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Net revenues were down by 4% compared to the previous year, indicating challenges in maintaining top-line growth.
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The strategy segment experienced a clear slowdown in June, with bookings dropping by approximately SEK99 million.
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User acquisition costs remain high, with a significant portion of cash flow allocated to UA, impacting overall profitability.
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Monthly active users (MAU) and daily active users (DAU) saw a decline, reflecting challenges in user engagement and retention.
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The company faced a negative net working capital effect due to a reduction in liabilities, impacting cash flow from operations.
Q & A Highlights
Q: Can you elaborate on the decline in the strategy segment, especially given the record levels of user acquisition (UA) in previous quarters? A: Andreas Uddman, CFO, explained that the decline was primarily due to lower activity levels in Supremacy during June, influenced by seasonal factors. Despite low UA levels, Empire performed steadily, contributing positively to margins.