<a id="bm-comp-bd6d9eea-a50e-401c-9254-ce991d09e1bb" name="bm-comp-bd6d9eea-a50e-401c-9254-ce991d09e1bb" class="BMCustomAnchor"></a><table><tr><td bm-component-id="bd6d9eea-a50e-401c-9254-ce991d09e1bb" style="vertical-align: top; width:100.000000%;"><ul><li>Adj. EBIT -29% vs FactSet consensus; FX adj sales -11% y-o-y</li><li>Estimates to come down 8-10% on slower growth</li><li>Share has underperformed into numbers, trade at 5-4x EBIT '25e-'27e</li></ul></td></tr></table><a id="bm-comp-5c9fd1db-b9b6-485b-baf3-ebbaa5401a28" name="bm-comp-5c9fd1db-b9b6-485b-baf3-ebbaa5401a28" class="BMCustomAnchor"></a><table><tr><td bm-component-id="5c9fd1db-b9b6-485b-baf3-ebbaa5401a28" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Q2 results</h3><p>Sales SEK 232m (-5% vs ABGSCe 245m and -8% vs cons 252m), where currency adjusted growth was -11% y-o-y (vs ABGSCe -5%) and -2% q-o-q. Adj. EBIT was 16m (-28% vs ABGSCe 22m and -29% vs cons 22m) for 6.8% margin (8.8%), and net profit 7m (-67% vs ABGSCe 21m and -67% vs cons 21m). LTM FCF has held up better than EBIT and was 136m (vs 95m adj. EBIT). Gross margin continued to improve to 70% (68%), driven by G5 Store, but is still not enough to offset the top-line trend. However, efforts ongoing to bring third-party games for distribution in G5 Store, which could contribute to accelerating top-line growth.</p><h3 class="bm-h3">Preliminary estimate changes</h3><p>We expect that FactSet consensus will cut its adj. EBIT estimates by 8-10% on '25e-'27e on the back of slower sales growth in Q2. That being said, we still believe organic growth could turn positive from Q4'25 if the global launch of Twilight Land or third-party games on G5 Store are successful.</p><h3 class="bm-h3">Final thoughts</h3><p>The report was weaker than expected, primarily driven by weaker sales. The growth trend remains negative, but improved somewhat q-o-q adjusted for FX. And with new game releases finally expected to arrive near-term, we could see further acceleration in H2. Moreover, management will hopefully talk more about buybacks on the call at 8.45 CET (<a data-bm-trackable="false" href="https://us06web.zoom.us/j/81702440968" target="_blank">link</a>), given its strong cash position and FCF. Lastly, the share has been weak into numbers (-14% L3M vs OMXSGI +4%) and trade at 5-4x EV/adj. EBIT on our un-updated '25e-'27e.</p><table id="bm-img-3f5e7324-2e91-4d2d-bfa6-235e2e0971ee" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">Deviation table</td></tr><tr><td><img bm-img-encrypt="3f5e7324-2e91-4d2d-bfa6-235e2e0971ee" bm-img-original-height="679" bm-img-original-width="855" bm-img-svg="image:image_upload/89501_cb46ce7f-4d2f-4956-801c-003d2d325ec3.svg" bm-img-width-hint="100%" id="bm-id-3f5e7324-2e91-4d2d-bfa6-235e2e0971ee" src="https://abgsc.bluematrix.com/images/image_upload/89501_cb46ce7f-4d2f-4956-801c-003d2d325ec3_733.png" svg="/nas/web/clients/abgsc/images/image_upload/89501_cb46ce7f-4d2f-4956-801c-003d2d325ec3.svg" width="727" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier, company data, FactSet</td></tr></table></td></tr></table>