Embracer Posts First Positive Cash EBIT Quarter as Split Takes Shape

Embracer Group opened financial year 2026/27 with net sales of SEK 3,943 million, up 24% year over year, and Cash EBIT of SEK 47 million for the quarter ended 2026年6月30日 — a SEK 146 million swing from the SEK 99 million loss it posted a year earlier under the same measure. The first-quarter interim report, published 2026年8月13日, is the first to break the group into the two companies it intends to become: Fellowship Entertainment, the IP-led publisher it plans to spin off on Nasdaq Stockholm in calendar 2027, and the remaining Embracer business.

The top-line growth came almost entirely from the Embracer side. That segment grew net sales 48% to SEK 3,134 million, with organic growth of 63%, led by a 68% jump in PC/Console revenue to SEK 728 million and an 83% rise in its Entertainment & Services distribution business to SEK 1,768 million. THQ Nordic‘s Gothic 1 Remake, released 2026年6月5日, drove the PC/Console quarter: the report says it sold 500,000 copies in its first week and is already close to recouping its full development and marketing spend. New-release sales within PC/Console rose to SEK 310 million from SEK 69 million a year ago.

Fellowship Entertainment moved the other way, with net sales down 23% to SEK 810 million and Cash EBIT of SEK -32 million, against SEK 152 million in the year-ago quarter. The comparison is a hard one: last year’s quarter carried Kingdom Come: Deliverance II catalog sales off the back of its first expansion, while this quarter contained no new releases at all. Catalog sales across the segment fell 23% to SEK 494 million, with Kingdom Come: Deliverance II, Metro Exodus, Remnant II and Dead Island 2 among the top five catalog drivers.

What the Two Halves of Embracer Now Look Like

The new segment structure, effective 2026年4月1日, is the first clean look at how the breakup will divide the group. Fellowship Entertainment takes the IP-heavy publishing and development business (stewards of The Lord of the Rings, The Hobbit and Tomb Raider rights alongside Kingdom Come, Metro, Darksiders, Dead Island and Remnant) with 2,071 employees across its studios. It posted an 85% gross margin and SEK 159 million in Adjusted EBIT in the quarter, a 20% margin, even in a release-free period.

Embracer, the segment keeping the name, is the larger and more eclectic business: 2,869 people across PC/Console publishing, mobile, distribution, retro, film and collectibles, built around studios and catalogs including Gothic, REANIMAL, Wreckfest and CrazyLabs’ mobile hit Sled Surfers. It accounts for 79% of group net sales. Its Cash EBIT improved to SEK 136 million from SEK -193 million a year earlier, on what the report attributes to the stronger release slate, lower development spending, and profitability gains from divested assets.

The report also puts numbers to how much smaller the group has become. Total headcount stood at 4,991 at 2026年6月30日, down from 6,261 a year earlier, with 72 game development projects in progress against 106 a year ago. Items affecting comparability of SEK -66 million in the quarter were mainly tied to studio and team discontinuations and divestments within the Embracer segment. The report notes the Quantic Lab and 34 BigThings divestments closed in the period.

By the Numbers

• Net sales: SEK 3,943 million, up 24% (33% organic)
• Cash EBIT: SEK 47 million, vs. SEK -99 million in Q1 last year
• Adjusted EBIT: SEK 151 million, vs. SEK 18 million
• EBIT: SEK -79 million, vs. SEK -272 million
• Free cash flow after working capital: SEK 3 million, vs. SEK -383 million
• Net cash position: SEK 3.5 billion at 2026年6月30日
• Adjusted earnings per share: SEK 1.04, vs. SEK -0.84

Cash EBIT Arrives, and a Guidance Beat Against It

This is the first quarter Embracer has reported Cash EBIT as its headline profitability measure: a metric it announced at its full-year results in 2026年5月, which strips out capitalized development amortization and instead deducts actual cash spent on game investments and lease payments. The Q1 print matters partly because of what management said three months ago: at the 2026年5月20日 full-year report, CEO Phil Rogers guided for a negative Cash EBIT in Q1, “similar to Q1 last year.” The actual SEK 47 million positive result lands well ahead of that marker, and the report says free cash flow also came in ahead of internal expectations.

“In the first quarter, we delivered organic growth of 33% year-over-year, with positive Cash EBIT and free cash flow ahead of our expectations,” Rogers said in the report. “We remain on track to double Cash EBIT this financial year.”

That refers to the reiterated full-year forecast of at least SEK 1.0 billion in Cash EBIT for 2026/27, against SEK 511 million in the year just ended. The group expects earnings to be weighted toward Q3 and especially Q4, when Fellowship Entertainment’s release slate arrives. One change to that slate: Warhammer 40,000: Dawn of War IV has moved from Q2 to a 2026年12月3日 release in Q3. The year’s anchors, Metro 2039 from 4A Games and Tomb Raider: Legacy of Atlantis, are both slated for 2027年2月, with the report noting Metro 2039 reached one million wishlists faster than any title in the company’s history.

The Spin-Off Clock

The separation of Fellowship Entertainment, announced 2026年5月20日, is targeted for a Nasdaq Stockholm listing during calendar 2027, with a capital markets event ahead of it to lay out equity stories and financial frameworks for both companies. From FY 2027/28, the report says, Fellowship is expected to settle into releasing at least two major games with full economics per year, starting with the next Kingdom Come title from Warhorse Studios, Darksiders 4 from Gunfire Games, and the externally published Tomb Raider: Catalyst from Crystal Dynamics. Embracer, post-split, would pursue bolt-on acquisitions in its niche businesses: mobile, distribution, retro, film, remakes and remasters.

The balance sheet is being readied for it. The group ended the quarter with SEK 3.5 billion in net cash and SEK 6.4 billion in available funds. It paid out more than half of its remaining cash earnouts during the quarter, leaving SEK 0.2 billion in acquisition obligations spread over the next five years — a fraction of the SEK 2.1 billion contingent-consideration balance it carried a year ago. It also repurchased roughly SEK 100 million of its own shares by 2026年6月30日 under the SEK 750 million buyback program launched 2026年5月20日, which runs until no later than 2027年3月31日.

Near-term dates now on the calendar: the annual general meeting on 2026年9月24日, the Q2 report on 2026年11月12日, and Dawn of War IV on 2026年12月3日 — the first major release of the spin-off runway.