Good morning, welcome to the Stillfront Q1 presentation. I am Alexis Bonte, the CEO of Stillfront, and I'm joined today by our CFO, Emily Villatte. Before we get into the quarter itself, let me start with a brief reminder of who we are and how we are building the business. Stillfront is a global gaming company focused on forging gaming's next forever game franchises, one community at a time. Today, we reach around 36 million players every month, and our strategy is centered around seven key franchises, where we focus our resources on the games with the highest long-term potential. Our key franchises have strong player communities and predictable cash flows. By concentrating capital, talent, and product development behind them, we are building a more resilient and scalable business over time.
As we summarize the first quarter of 2026, we delivered a stable start to the year with flat organic growth while continuing to see strong performance in our key franchises. Our key franchises grew organically by 12%, highlighting the strength of the portfolio and the progress we are making in scaling our most important assets. This is a clear validation that our strategy to focus on our seven key franchises is yielding results with superior growth to the market. Growth was supported by several of our key franchises, with the Big Farm franchise delivering an exceptional organic growth of 88% following the continuing scaling of our new game, Big Farm: Homestead, and the broader strength of the franchise.
At the same time, we increased user acquisition spend to capture attractive growth opportunities, which supported scaling in key game franchises such as BIG but also Supremacy, and that impacted profitability in the quarter. Adjusted EBITDA amounted to SEK 311 million , corresponding to a margin of 23%, and that reflects both higher UA investments as well as FX headwinds. Finally, we also strengthened our financial platform through a SEK 1 billion refinancing transaction, which was settled on April 27th. This improved our debt maturity profile, pushing maturities beyond the period of our announce. Next, I would like to zoom in a bit on BIG and walk you through development in a little more detail.
During the quarter, we continued to build the early momentum and encouraging signs that we saw in Big Farm: Homestead following the launch at the end of Q4 2025, in December, to be precise. At the beginning of Q1, Homestead entered the global launch and became our most successful new game launch to date. By applying the lessons learned from Sunshine Island, both what worked well and what could have been done better, we are able to scale and monetize the game effectively. This demonstrates our ability to develop and scale new games within our key franchises. We also continued to see strong growth in Sunshine Island during the quarter. Together, Sunshine Island and Big Farm: Homestead drove organic growth of 88% in the franchise. The quarter also reflected increased user acquisition investments with higher spend supporting the scaling of both titles.
This had a negative impact on profitability in the quarter, we view it as a value-creating investment in line with our investment criteria. That said, we do not expect the same pace of sequential growth to continue quarter after quarter. If we look at Sunshine Island, growth will gradually stabilize after the initial launch phase. We also see normal patterns where Q4 and Q1 tend to be particularly strong, while Q2 is usually slower. We're very happy with the performance of the Big franchise and we are seeing excellent results there. Going over our other key franchises, starting with Supremacy, revenue amounted to SEK 247 million. That corresponded to also a good organic growth of 15%.
The quarter benefited from strong live operations execution from the team and also favorable marketing conditions, including a higher engagement linked to geopolitical events. Looking ahead, of course, one of the key milestones for the franchise is a planned global launch of Supremacy: Warhammer 40,000. In Jawaker, revenue came in at SEK 190 million with organic growth of 1%. Growth was held back by a more challenging environment in the Middle East, but the franchise continues to hold a strong long-term position supported by a loyal and engaged player community. In BIG, revenues reached SEK 178 million. As I already said, that corresponds to an organic growth of 88%. Performance was driven by continued momentum in Sunshine Island and the successful scaling of Big Farm: Homestead following its global launch earlier this quarter.
The focus here remains on scaling the current portfolio while continuing to invest in new game development. If we now look at Empire, revenue comes in at SEK 97 million with organic growth of 1%. Content updates and in-game events help stabilize the revenue trend versus recent quarters, while the franchise continued to deliver strong profitability despite ongoing investments in a new game for the franchise. For BitLife, revenue was SEK 95 million with organic growth of - 19%. The decline was mainly driven by a more disciplined UA approach and, but we continued to strengthen the product during the quarter through web shop enhancements, tutorial improvement and broader onboarding up. We really think that we have the possibility to get this franchise back to growth over the medium term.
For Albion, revenue was SEK 81 million, corresponding to organic growth of - 4%. The game continues to benefit from an established and engaged player base. During the quarter, the main focus was on preparing the Xbox Series X and S launch, including a big graphical overhaul and all of that happened in April 21st of this quarter. In Board, revenues amounted to SEK 68 million with organic growth of 20%, 22%. Strong performance. The franchise continues to perform well, supported by ongoing product improvements and healthy player engagement. Finally, other games generated revenue of SEK 377 million. That corresponds to an organic decline of 21%. While this portfolio is still weighted on top-line development, the pace of decline has moderated sequentially, and other games continue to drive significant cash flow for durable business.
Now we'll switch over to Emily for more on financials.
Thank you, Alexis, good morning, everyone. Great to be here. All right, let's talk through our group financial results for the first quarter. We reported net revenues of SEK 1, 333 million for the quarter, representing flash organic growth. Given the double-digit decline we saw in 2025, this is a material improvement. As Alexis noted, this was driven by strong performance in our key franchises, which grew organically by 12%, offset of course, by the decline of 21% in our other games portfolio. On an absolute basis, net revenue was down 14% year-on-year, and this was due to heavy negative impact from FX that impacted by 10 percentage points as well as the divestment of the narrative portfolio, which you will recall took place at the end of Q4 of 2025. The impact from the narrative portfolio divestment will of course carry through the year.
Now, while organic growth was flat, our strategic focus on our direct-to-consumer channel keeps yielding very solid results, and our gross margin did increase by 3 percentage points year-on-year, reaching a strong 84%. DTC revenue accounted for 44% of our bookings, which is a proper step up from the 36% of bookings that we saw last year. As you know, this is strengthening not just our margins, but also our direct engagement with our loyal player base. Moving on to UA. User acquisition spend for the quarter was SEK 447 million, which is on par with last year. As a percentage of revenue, of course, UA spend was 34%, which is up from the 29% we saw in Q1 of 2025.
This unusually high UA percentage was primarily driven by the growth opportunities that Alexis has mentioned, mainly in the Big franchise, but also within the Supremacy franchise. The UA marketing deployed for the new game, Big Farm: Homestead, if you look at that specifically, represented 6% of total group revenues. If we were to adjust for the UA spend on this new game launch, the group deployed 28% of net revenues in UAC, excluding what we spent on Big Farm: Homestead, which is more in line with previous quarters. Moving to profitability, our adjusted EBITDA was SEK 311 million in the quarter, compared to SEK 402 million last year. This decline reflects our active UAC investments as well as FX headwinds, which were quite heavy and impacted EBITDA by approximately SEK 50 million.
Our adjusted EBITDA margin as a result of this declined to 23% in Q1 of 2026. Moving on to cash flows. We reported SEK 167 million in cash flow from operations for the quarter, and I will note that this period was impacted by tax payments of SEK 93 million and a negative movement in working capital of SEK 94 million, both of which were influenced by timing effects. Cash flow from investing activities was a negative SEK 118 million, and this primarily reflects our continued investment in product development, in other words, our games. Cash flow from financing activities of negative SEK 113 million in the quarter were mainly driven by debt repayment and share buybacks.
Free cash flow, as you have noted, no doubt, for the quarter declined to SEK 44 million, which was heavily impacted by the higher level of UA investments, but also FX headwinds coupled with timing effects from tax payments and working capital. On an LTM basis, which I think is a more relevant way to look at our cash flows instead of the quarterly free cash flows, which are often impacted by working capital fluctuations, we generated SEK 772 million in free cash flows on an LTM basis. If we break this down, we can see that SEK 567 million went towards earn-out cash payments, minority buyout, and the divestment of the narrative portfolio. SEK 240 million was directed towards deleveraging, and additionally, we completed SEK 280 million worth of share buybacks.
To summarize our cash flow, I would say that our underlying cash-generating ability and capacity remains very healthy. Turning now to our financial position. We ended the first quarter 2026 with total net debt of some SEK 5.2 billion, including all earn-outs, which is a significant SEK 500 million reduction from the SEK 5.7 billion in total net debt we had in the same quarter last year. This, of course, is in line with our commitment to settle our earn-out debts and lowering our debts as a whole. In terms of our net debt, including next 12-month cash burnouts, it remains stable at SEK 4.4 billion.
Due to our active investments to drive growth as well as heavy impact from FX, our EBITDA declined on an LTM basis. Our leverage ratio was 2.2x in Q1 of 2026. I note that the leverage ratio would have been around 2x if FX rates had been stable. During the quarter, you will have noted that we successfully concluded a SEK 1 billion bond refinancing exercise. Settlement occurred on April 27th. The prospectus for the new bond will be published on our website any day now. Do keep an eye out for that. By refinancing our bond to now mature in April 2030, we are improving our debt maturity profile. Importantly, this pushes all of our bond maturities beyond the period of the earn out obligations that conclude mid-2027.
Our RCF has also been right-sized from SEK 2.5 billion to SEK 2 billion in light of reduced financing needs. The RCF has also been extended to 2028. This combined really creates a stronger financial foundation for continued disciplined execution of our strategy with selective investments in our key franchises. Now handing back to Alexis to wrap up.
Thank you very much, Emily. As we look ahead, we continue into 2026 with a clear focus on execution and incremental improvements across the business. A key priority remains our continued focus on our key franchises, where we are concentrating capital, talent, and product development to drive scalable growth and long-term value creation. At the same time, we're maintaining a disciplined approach to portfolio engagement, continuously evaluating performance and taking actions where needed. In parallel, the strategic review continues, and we remain committed to take action to enhance long-term shareholder value. We also now have a newly composed board in place, adding further experience as we move forward, and an AGM is coming up on May the 13th. Pending approval from the SFSA, we will also see our 2030 corporate bond admitted for trading shortly.
One exciting event that happened on April 21, as I said, was the Albion launch on Xbox Series X and S, and we look forward to monitoring the development of how that will perform in Q2. I want to thank our shareholders for their continued trust and support as we approach the rest of 2026 with both discipline and ambition. The strategy is working, and we are continuing its implementation as we move towards the year. Now let's open up for questions. Thank you very much.
The next question comes from Rasmus Engberg from Kepler Cheuvreux. Please go ahead.
Yeah. Sorry, good morning. Thanks for taking my question. What given the impact in this quarter of the increased UA spend, do you have an outlook for EBITDAC or cash flow for the year that we can keep in mind?
Emily, why don't you take that question?
Yes, sure. Thank you for your question, Rasmus. We're not guiding specifically on cash flows or EBITDAC, but what I would note and reiterate, as we said during the call, is that particularly this quarter, we had some timing effects on our free cash flows. I tend to look at the LTM free cash flows as a more relevant benchmark for how we're faring when it comes to free cash flow generation. Clearly, the EBITDAC margin was a little bit lower this quarter compared to Q4 or previous quarters. When it comes to UA spend, which Alexis also noted during the call, the winter months are typically more favorable for deploying UA spend.
We have the combination of a new games launch where we have had a successful, a very successful launch, and we have been able to deploy UA in an effective way. When we head into the summer months, it is a regular seasonal effect of typically spending a little bit less on UA. Those would be the typical seasonal patterns that we would see. Higher UA spend in combination with game launches and the winter months, typically seasonally less UA as a percentage of revenue during the summer months.
If maybe I can just add a little bit of gaming color, as well to what you just said, Emily. I think it's important to note that the success of the Big Farm: Homestead launch has really outstripped what we saw with Sunshine Island, and we wanna make sure we capitalize on that opportunity. As you know, it's difficult to launch new games in this market and then even more difficult to launch new games successfully. Now, this is the second game in a row that we launched successfully, and we're seeing even better, you know, better results from this new launch. That being said, we're being very disciplined about the UA, how we spend that UA and the returns of that UA, with existing games and also with new game launches.
This is all kind of, you know, pointing in the right direction.
Okay, thank you. Can you also help us a little bit with the performance of Jawaker? How did it perform during Q1 and how is it doing now with the continued war ongoing?
Yeah, I'll start with that, and Emily, if you want to build on that afterwards, please do so. Basically, as you saw, you know, Jawaker growth has slowed down in the quarter to 1% from its usual double-digit growth in previous quarters. That was impacted by two main events. The first event obviously is the war that has had a slight impact to mostly to ARPDAU, to the amount of money that people spend on the game for obvious reasons. We see a lot of resilience as we saw in the communities. The other thing that has impacted is also Ramadan. Ramadan was earlier this year.
It fell into this, into Q1. Ramadan is usually a period where there is less use of Jawaker. That's the kind of two main things. We're seeing Jawaker as being very resilient. Obviously, you know, we hope that the conflict will end soon, but we have no control over that. We are definitely seeing a strong resilience in Jawaker. Emily, I don't know if you want to add anything to that.
I think that's very comprehensive. Perhaps the only nuance is that the biggest impact on Jawaker was the war in the Middle East. We had Ramadan, and it was a slightly slower start to the quarter. The main impact, Middle East and Ramadan, and this remains a fantastic asset with incredibly engaged user base. We're very positive about Jawaker.
Okay. Thank you.
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Thank you very much for your time. We at Stillfront are excited about the future. We are obviously very happy to see the performance of our key franchises that have grown by 12% year-over-year. We're also happy that we've returned to stable organic growth. We continue to implement our strategy, and we thank you for your time.