Source: Inderes

Starbreeze will release its Q2 report on Tuesday, August 19. We expect revenue to remain broadly stable compared to Q1, but significantly higher year-on-year, driven by contributions from the KRAFTON partnership and the acquisition of full publishing rights for PAYDAY 3 (PD3). These factors should also lift game-related revenue. Lower amortization levels and a generally lighter cost base are expected to support a notable improvement in EBIT. We expect cash flow to benefit both from improved profitability and delayed Q1 payments from game sales, which instead were received in Q2. With the vertical slice of Project Baxter completed in late May, we will be watching the Q2 report for updates on potential partnerships and overall development progress. We are also looking for greater clarity on PD3’s future trajectory/roadmap, particularly now that Starbreeze holds full publishing rights to the title.

We expect Q2 revenue to be fairly stable compared to the previous quarter

During the quarter, Starbreeze released new PD3 content and updates, though these had a limited impact on player activity. The company also launched the third-party published title Out of Sight, which received a modest commercial reception but generally positive reviews, and expanded Roboquest to PS4/PS5.

We estimate Q2 revenue at 65 MSEK, which is roughly in line with the previous quarter, but at the same time over 60% higher than a year ago. Key drivers include revenue streams from the KRAFTON partnership (Q2’25e: 16 MSEK) and full PD3 publishing rights, enabling Starbreeze to retain all related game revenue. PD3 revenue is expected to be stable quarter-on-quarter, with the absence of the Q1 PlayStation Plus boost offset by the full retention of PD3 sales. We also expect PD2 revenue to be steady at 11 MSEK (Q1’25: 12 MSEK), while third-party publishing revenue is expected to accelerate notably q/q to 10 MSEK (Q1’25: 3 MSEK) following the Roboquest platform expansion to PS5/4 in late May.

Revenue growth and a lighter cost base are expected to improve EBIT

We expect the combination of higher year-on-year revenue, a significantly reduced amortization (as the heaviest D&A period related to PD3 is behind), and a somewhat lighter cost base in general to result in a notable y/y EBIT improvement to 9 MSEK (Q2’24: -71 MSEK, Q1’25 adj. 1 MSEK). Regarding cash flow, the company experienced a delay in Q1 from game-related sales due to the negotiations with PLAION, which weighed on free cash flow in Q1. These claims have been received during Q2 (~62 MSEK), which together with expected profitability improvement is expected to contribute positively to cash flow. In addition, Starbreeze will receive proceeds of 33 MSEK from the directed share issue to Embracer that was carried out during Q2. Of these, around 29 MSEK will be used to finance the acquisition of full publishing right of PD3 from PLAION.

Updates on Project Baxter status and clearer communication on PD3’s future in focus

Our FY2025 revenue estimates remain unchanged at 254 MSEK (FY24: 186 MSEK) with an adjusted EBIT estimate of 19 MSEK (Adj EBIT FY24e: -229 MSEK). Most of the growth comes from the KRAFTON partnership (FY25e: 65 MSEK) and higher PD3 revenue from full publishing control, partly offset by lower third-party publishing revenue. We maintain a cautious view on a major PD3 player resurgence given current sentiment but see upside potential from owning the PAYDAY IP outright, provided the company delivers a clear roadmap and tangible progress. We will also be looking for updates on Project Baxter (based on the Dungeons & Dragons IP), which remains the company’s next major milestone ahead of its planned 2026 launch. Key points of interest include management commentary on the completed vertical slice (finished in late May), its reception, and any developments in potential partnerships.