Stillfront Group generated 1.671 billion SEK ($153.929 million) in revenue in the third quarter of 2023, representing a 7% decline from 1.787 billion SEK ($164.615 million) in the third quarter of 2022, according to the company’s latest quarterly report.

EBITDA also saw a significant decline, falling 14% from 660 million SEK ($60.798 million) to 556 million SEK ($51.218 million) over the same period. However, the adjusted EBITDA margin fell just 1%, from 7% in Q3 2022 to 6% in Q3 2023.

Q3 also saw user acquisition hit 429 million SEK ($39.519 million), representing 26% of net revenue for the quarter. This increase was driven by a strong soft-launch portfolio, with more games added to the pipeline towards the end of the quarter.

“Stillfront’s net revenue declined by 7%year-over-year in the third quarter to 1,671 MSEK, while adjusted EBITDAC declined by 1% to 409 MSEK,” said Stillfront CEO Jörgen Larsson. “Our adjusted EBITDAC margin amounted to 25%, up by 1.5 percentage points year-over-year, despite a lower revenue base.”

A positive outlook?

The weaker topline performance for the quarter is attributed to a one off event related to Sandbox Interactive’s Albion Online. The game experienced an increase in bots which negatively impacted the gameplay experience for legitimate players and numerous DDoS attacks against server infrastructure. Both of these issues have since been addressed, but amounted to around 80 million SEK ($7.369 million) in damages.

The company also saw a 10% year-on-year decline in organic net revenue, with Stillfront outgrowing the underlying market by double digits. Again, this was impacted by issues regarding Albion Online and delays in game development.

Going forward, the company has several games slated for release in the fourth quarter, including games from developers 6waves, Game Labs, and Everguild. However, the overall outlook in the short term is mixed. Discussing the prospects for the fourth quarter, Larsson stated “We expect a significant sequential organic growth improvement in the fourth quarter but given the impact from Albion Online and the lower runrate towards the end of the third quarter, we now find it less likely than previously to return to organic growth before year-end.”

We listed Stillfront as one of the top 50 mobile game makers of 2023.