Starbreeze's Q3 revenue came in slightly above our estimates, while the clear EBITDA beat came largely from higher capitalized development costs. The bigger news came after the quarter, as a free weekend in November drove the largest surge in PAYDAY 3 player activity since its launch month, which we view as the most promising signal in a long time, although we believe it is still too early to draw conclusions. We have raised our revenue estimates, but Q3 revealed a higher development spend than we had assumed, and we have also reviewed our amortization assumptions, which together lowered our 2027-28 EBIT estimates. With the cash balance down to 36 MSEK and no financing measures communicated, funding remains the key near-term question, and the proof that ultimately matters for the investment case, i.e., sustained monetization and a funded path to positive cash flow, is still missing. We reiterate our Reduce recommendation and target price of SEK 0.08.

EBITDA beat was largely capitalized

Starbreeze reported Q3 revenue of 33 MSEK (Q3'25: 58 MSEK), slightly above our estimate, as both PAYDAY titles came in modestly ahead of our expectations, with the franchise now carrying practically all of group revenue. PAYDAY 3 improved sequentially to 14.5 MSEK (Q2'26: 11 MSEK), despite the company delisting all paid heist DLC ahead of folding the heists into the base game, while PAYDAY 2 (16.6 MSEK) out-earned its successor for the fourth consecutive quarter. EBITDA came in at 17 MSEK, clearly above our 10.5 MSEK estimate, but most of the beat stemmed from capitalized development costs some 9 MSEK above our expectations rather than a lower-than-expected underlying cost base, making the quality of the beat modest, in our view.

Revenue up, EBIT down as development costs catch up

PAYDAY 3 engagement improved modestly in Q3, while the free weekend in early November triggered a considerably stronger response, with player activity so far holding well above the levels seen since the launch period. Reflecting the stronger PAYDAY momentum, we have raised our 2026-2028 revenue estimates by 4-6%, and our 2026 adjusted EBIT estimate improves to -105 MSEK (was -123 MSEK). However, we have lowered our 2027-2028 EBIT estimates to -36 MSEK and -12 MSEK (was -8 and +7 MSEK), as the company amortizes its development spend faster than we previously assumed and invests more than we expected. The revision does not reflect a weaker business than we thought but rather shows that Starbreeze is currently spending more on keeping PAYDAY 3 alive than the games generate.

Financing question moves to the forefront

The Q3 report reinforces that Starbreeze's defining transition is increasingly becoming a question of funding as much as of franchise execution. Free cash flow remained negative and the cash balance declined to 36 MSEK (Q2'26: 52 MSEK), leaving a thin buffer relative to the company's investment needs. The report provided no assessment of liquidity or funding options and no reference to the 2026 positive cash flow target, which we consider effectively out of reach, and we view a capital raise as increasingly likely in the near term, which would, in our view, likely be priced at a discount. While we see the PD3 engagement rebound and the capital-light IP-expansion strategy as steps in the right direction, the payoff must ultimately show up in sustained core-game monetization and cash flow, which we have not yet seen. We acknowledge that the case remains highly binary, and should the engagement recovery prove durable and translate into sustained monetization, the low valuation (2026e EV: ~124 MSEK) leaves room for meaningful upside. However, until we see a funded path to cash flow positivity and evidence that the larger player base can be monetized more effectively, we remain cautious on the case.