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FRACTL — Fractal Gaming AB News Story

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Sweden's Fractal Gaming Q2 revenue falls 65% on weak demand, posts net loss

Sweden's Fractal Gaming Q2 revenue falls 65% on weak demand, posts net loss


Overview

  • Sweden-based PC gaming hardware firm's Q2 revenue fell 65.3% yr/yr amid weak market conditions

  • Company posted negative adjusted EBITDA and net loss for the quarter

  • Cost-cutting program to reduce workforce by 20% in 2026 to boost profitability


Outlook

  • Company expects underlying demand to remain subdued but to gradually improve

  • Fractal sees additional restructuring costs of SEK 6–9 mln in H2 2026

  • Company expects fixed operating cost base in 2027 to be about 20% lower than in 2025


Result Drivers

  • WEAK MARKET & DRAM PRICES - Co said persistent weak market conditions and higher DRAM prices, driven by AI and data center investments, reduced end-consumer demand

  • INVENTORY ADJUSTMENTS - Partners reduced purchases to adjust inventory, causing reported end-customer sales to exceed sell-in by over 60%

  • COST CUTTING - Cost-cutting program and structural changes began to improve cash flow and are expected to enhance profitability, per CEO Jonas Holst


Company press release: ID:nMFN94CXZv


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 Revenue

SEK 74.70 mln

Q2 Loss Per Share

SEK 0.80

Q2 Adjusted EBITDA

-SEK 20.30 mln

Q2 Adjusted EBIT

-SEK 28.10 mln

Q2 EBIT

-SEK 31.20 mln

Q2 EBITDA

-SEK 23.40 mln

Q2 EBITDA Margin

-31.30%

Q2 EBIT Margin

-41.80%


Analyst Coverage

  • The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the computer hardware peer group is "buy."

  • Wall Street's median 12-month price target for Fractal Gaming Group AB is SEK13.50, about 7.3% below its August 18 closing price of SEK14.56

  • The stock recently traded at 31 times the next 12-month earnings vs. a P/E of 11 three months ago


Reuters Recommended Reads

  • Aug 19 - Sweden's EG7 Q2 revenue rises 25% on game launches

  • Aug 17 - Sweden's Kjell Group Q2 sales rise on improved inventory availability

  • Aug 19 - Norway's Xplora misses Q2 revenue estimates on soft consumer demand


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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