Remedy Q3'25 preview: Q3 figures largely known following profit warning

Translation: Original published in Finnish on 10/23/2025 at 6:30 am EEST.

Source: Inderes

'Remedy will report its Q3 results on Wednesday, October 29, at 9.00 am EET. Due to the profit warning and the write-down of FBC: Firebreak's development expenses, the Q3 figures are already largely known. Thus, in the report, we will pay close attention to the company's comments regarding the future of the game and seek more detailed insight into what "balancing" investments to the game practically means. In our update following the profit warning, we already assumed that Remedy would wind down the game during 2026. We are also interested in an update on the Control 2 and Max Payne projects, as they are key drivers of Remedy's investment case in the coming years. Additionally, Remedy announced a change in CEO on Wednesday, so any further information regarding this topic will be of interest on earnings day.

Revenue decreased significantly in Q3 from strong comparison quarter

According to preliminary data, Remedy's Q3 revenue was 12.2 MEUR, representing a 32% decrease from the comparison period, which included an exceptionally high amount of development fees due to the Annapurna agreement for Control 2. We assumed development fees of 8.0 MEUR and royalties (mainly AW2) of 1.5 MEUR for Q3. We estimate that 2.7 MEUR of revenue came from the sales of own games (FBC: Firebreak and Control), with Firebreak's sales being particularly disappointing. We estimate that the B2B agreements with Sony and Microsoft generated most of the game's revenue during the quarter.

EBITDA was slightly positive, but the write-down pushed EBIT sharply into the red

Based on preliminary data, EBITDA was 0.7 MEUR in Q3 and the write-down of FCB: Firebreak's development costs (-14.9 MEUR) pushed EBIT into the red at -16.4 MEUR. Based on the EBITDA development, the operating cost structure has otherwise developed roughly in line with our expectations during the quarter. All in all, the growth of Remedy's cost structure has clearly calmed down over the past year or so, thanks to the ramp-up of the multi-project model. In our estimates, we assume that Remedy will adjust its cost structure to reflect the weak performance of FBC: Firebreak. This inevitably means a reduction in the game team, and we expect Remedy's headcount to decrease in the coming quarters.

Already looking ahead to the releases of Max Payne and Control 2

In its lowered outlook following the profit warning, Remedy now estimates that revenue will grow from the previous year and EBIT will be negative and decline from the previous year. Previously, the company still guided for a positive EBIT for this year. Our forecast for this year expects revenue of 58.7 MEUR (+16%) and EBIT of -14.0 MEUR. We estimate EBITDA to be positive at 12.2 MEUR, and development will be supported in Q4, for example, by Alan Wake 2 being the PlayStation Plus monthly game in October. We estimate that the key major game releases for Remedy's investment story (Max Payne and especially Control 2) will be released in 2026 and 2027. We see a good probability of success for both games, and if this materializes, the stock has significant potential from current levels. Following the profit warning, sentiment towards the stock may remain sour in the short term, but we expect the news flow to improve over the next year.