Remedy Q2'25 preview: FBC: Firebreak release in focus

Translation: Original published in Finnish on 8/1/2025 at 7:00 am EEST.

Remedy will report its Q2 results on Tuesday, August 12, at 9:00 am EEST. We will review the report afresh in Remedy earnings live starting at 8:55 am (in Finnish). The Q2 report is shaping up to be very interesting, as the release of FBC: Firebreak (June 17) will be reflected in the numbers for the first two weeks. The game's launch did not get off to the desired start, which has clearly increased uncertainty regarding the game's future revenue development. We will therefore particularly monitor in the report the information disclosed about the game as well as Remedy's future plans regarding its development. We will also review our estimates in connection with the Q2 report based on the latest information. However, we are downgrading our recommendation for the stock to Accumulate (was Buy) and simultaneously revising the target price to EUR 18.0 (was EUR 20.0). We see FBC: Firebreak's weak performance weighing down the share's valuation in the short term. Relative to Remedy's longer-term potential, we still see the stock as interesting.

FBC: Firebreak release visible in revenue, but by how much?

We forecast Remedy's Q2 revenue to have grown by 65% to 17.1 MEUR, but visibility into revenue development is weak due to the release of FBC: Firebreak (June 17). Thus, the game's sales had time to impact the Q2 figures for about 2 weeks. In light of the game's initial reception and player statistics from the PC platform Steam, sales have been disappointing in the early stages, although there is no visibility for console platforms. Remedy stated on June 26 that over a million players had played the game, but presumably the majority of these have come through Game Pass and PS Plus services, where the game was available immediately on release day. We have assumed Remedy will receive a total of 10 MEUR from Sony and Microsoft for these during the first year, and we have allocated the sum evenly over the 12 months following the release. However, it is possible that revenue from these B2B agreements is weighted to some extent based on player numbers, resulting in Remedy recognizing more revenue closer to the release. Thus, overall, considerable uncertainty is associated with our forecast Q2 revenue from FBC: Firebreak (4.9 MEUR). We would like to remind that FBC: Firebreak is Remedy's first self-published game, meaning that all of the game's sales are reflected in the company's revenue. After that, the distribution costs charged by the platforms (our assumption is 25%) are deducted, and in addition, Remedy is responsible for the game's marketing expenses. The situation is different for other royalties (Q2’25e 2.7 MEUR), of which we forecast the majority to have come from Alan Wake 2. In these, the aforementioned expenses have already been paid by the publishing partner, and revenue comes to Remedy at a very high margin.

We estimate that development fees accounted for around 9.6 MEUR of revenue in Q2, which would mean somewhat lower revenue than in Q1 (10.7 MEUR). We estimate that most of these are from the Max Payne subcontracting project currently in production. Control 2, which entered full production in February, has also generated development fees (Annapurna finances 50% of the estimated production budget of around 50 MEUR).

We forecast that revenue growth will be visible in the earnings figures

We forecast Remedy's EBITDA to have increased in Q2 along with revenue growth to 4.1 MEUR (Q2'24: -2.4 MEUR). The evolution of Remedy's cost structure calmed down in 2024, as the investments in the implementation of the multi-project model were largely completed. With a predominantly fixed cost structure, the increase in revenue will therefore have a strong impact on profitability in the future. We also estimate the marketing investments made in FBC: Firebreak to have been fairly modest in connection with the release.

 (Earnings preview continues on page 4)