Story
Modern Times Group Beats Q2 EBITDA Forecasts on Gaming Strength
Summary
The mobile gaming company reported a 10% year-over-year increase in adjusted EBITDA, exceeding analyst expectations, though net sales fell slightly short of consensus.
Modern Times Group (MTG) reported second-quarter earnings that surpassed analyst expectations on profitability, driven by strong performance in its gaming portfolio, even as revenue came in slightly below consensus estimates. The Sweden-based mobile gaming company also initiated a new share buyback program and provided its full-year financial outlook.
Quarterly Performance Breakdown
MTG's adjusted EBITDA for the second quarter rose 10% year-over-year to SEK 707 million, exceeding the SEK 665.88 million consensus forecast from four analysts, according to Investing.com. However, net sales of SEK 2.97 billion, a 2% increase from the prior year, narrowly missed the expected SEK 2.99 billion.
The company reported a net income of SEK 99 million for the quarter, which translates to earnings per share of SEK 0.83.
Growth Drivers and Investments
Growth was supported by both of the company's gaming divisions. The Midcore District's revenue was primarily driven by its flagship title, *RAID: Shadow Legends*, which posted a 9% year-over-year pro forma revenue increase.
AdThe Casual District delivered a 29% year-over-year revenue increase in constant currencies. This growth was fueled by the successful scaling of titles including *Crossword Go*, *Tile Match*, and *Cryptogram*.
To support this growth and new content, MTG increased its user acquisition spending by 15% year-over-year in constant currencies, with higher marketing investments across both districts.
Outlook and Shareholder Returns
Looking ahead to the full year 2026, MTG projects pro forma revenue growth to be between 5% and 8%. The company also expects its group adjusted EBITDA margin to land in the range of 22% to 24%.
Following approval at its annual general meeting in May, MTG has launched a SEK 500 million share buyback program, signaling a move to return capital to shareholders. The company also anticipates its unlevered cash conversion will remain "materially above its medium-term guidance."
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