Source: Inderes

Starbreeze will publish its Q1’26 report on Tuesday, May 12, 2026. We expect a significant year-on-year decline in both revenue and profitability, primarily driven by the wind-down of the KRAFTON work-for-hire partnership and ongoing engagement challenges for PAYDAY 3 ("PD3"). While the company has recently announced strategic partnerships deals across VR transmedia adaptations, and Roblox, we view the near-term financial impact as limited. In the report, we will be looking for qualitative commentary on these new partnerships, as well as updates on execution and the outlook for stabilizing PD3's performance and the path toward cash flow positivity, as Starbreeze navigates a period of reduced visibility in its work-for-hire pipeline.

Revenue expected to decline significantly following the conclusion of KRAFTON partnership

We estimate Q1 revenue at 32 MSEK, representing a 53% decrease compared to the previous year (Q1'25: 68 MSEK). The primary driver for this sharp contraction is the exit of the KRAFTON work-for-hire engagement, which contributed some 18 MSEK in the comparison period. We also expect continued pressure on the PAYDAY franchise (Q1'26e: 27 MSEK vs. Q1'25: 45 MSEK), with recent PD3 content drops and gameplay improvements generating a muted engagement response. While PAYDAY 2 (“PD2”) has shown strong resilience during recent quarters, delivering ~15 MSEK per quarter following the introduction of a subscription model, PD3's performance has been concerningly weak. Following a disappointing Q4 where PD3 generated only 8 MSEK despite a major progression system overhaul, we believe revenue will remain at low levels (Q1’26e: 12 MSEK) amid muted player engagement during the quarter. We also anticipate that a stronger Swedish krona against the USD and EUR will act as a headwind for the top line during the quarter.

Profitability pressured by lower revenue and front-loaded amortization

We expect Q1 EBIT to come in at -34 MSEK (Q1'25 adj. EBIT: 1 MSEK). The deterioration is expected to be mainly a function of the significantly lower revenue base and a slowly adjusting cost structure following initiated rightsizing measures in Q4, particularly within the Special Operations segment. The full effect of these actions is likely to materialize from Q2 onwards. We also expect profitability to be weighed down by elevated PD3 amortization (Q1'26e: 28 MSEK), albeit stepping down sequentially. On this basis, we estimate that EBITDA will dip marginally into negative territory at -2 MSEK.

Focus on the cash flow trajectory, execution, and strategic IP expansion

Our primary focus point in the Q1 report is the company's progress toward its goal of achieving cash-flow positivity in 2026. With the cash balance standing at 103 MSEK at the end of 2025 and the KRAFTON revenue stream now absent, we believe the margin for error has narrowed, considering the cash burn profile of operations (after investments in game development). Given the current state of PD3, we saw work-for-hire projects as an important element in improving cash flows, and with the initiated rightsizing measures taken in Q4, we believe a new work-for-hire project is not on the near horizon. This, in turn, puts higher pressure on overall franchise execution to strengthen cash flows. 

We view the recently announced partnerships with VICE Studios for transmedia adaptations and with Fast Travel Games for the VR title PAYDAY: Aces High as important strategic steps for the franchise. In addition, we think that the newly announced partnership with Gamefam to develop a second PAYDAY game on Roblox fits within the same narrative of broadening the IP's reach across formats and audiences, and it could serve as a long-term funnel-building effort for the broader PAYDAY franchise. While we do not expect any of these initiatives to materially alter the financial profile in 2026, we think they signal a deliberate effort to leverage PAYDAY's brand equity across new formats. That said, the near-term investment case remains heavily dependent on a PAYDAY turnaround, and we remain cautious until there is tangible evidence that the increased update cadence for PD3 is translating into improved player sentiment and sustained monetization.