MTG reports record Q1 with 14% pro forma growth and 25% adjusted EBITDA margin

Q1 net sales rose 24% year over year to SEK 3,159 million, or 37% in constant currencies, with pro forma sales up 14% and organic sales up 12%. Adjusted EBITDA increased 30% to SEK 802 million, lifting the margin to 25% from 24%, while reported EBITDA reached SEK 754 million and EBIT SEK 371 million. The only notable drag was SEK 49 million of adjustments tied to M&A transaction costs and option revaluations.

Analysis

The key signal here is not simply top-line acceleration, but that growth is being achieved while keeping paid traffic intensity flat as a share of revenue. That suggests the company is still extracting incremental scale from its existing user base and channel mix, which is usually the cleanest setup for operating leverage in consumer internet: if acquisition efficiency holds, EBITDA can compound faster than sales for several quarters. The immediate beneficiaries are the company’s media and affiliate partners tied to volume-based traffic, while smaller competitors with weaker conversion economics are likely to feel pressure first, because they have to bid harder for the same audience without the benefit of scale.

The second-order risk is that this type of growth can be more cyclical than it looks. If management is leaning on paid user acquisition to defend share, a modest auction inflation or algorithm change can compress margins quickly, and the gap between revenue growth and cash conversion can widen within one or two quarters. M&A-related adjustments also matter: the market may be underestimating how much future earnings quality depends on integration discipline, especially if recent dealmaking creates option-related overhangs or distracts from core monetization.

The contrarian view is that the market may be pricing this as a “steady compounder” when it is really a mix of organic growth plus acquisition-driven scale. If the next 1-2 quarters show the same spend ratio but slower margin expansion, the multiple should de-rate before the growth narrative does. Conversely, if management demonstrates that pro forma growth is becoming more organic over the next 3-6 months, there is room for a rerating because the EBITDA margin profile would likely be more durable than headline growth suggests.

Key Decisions for Investors

• If liquid, build a starter long in the shares over the next 1-2 sessions on any post-print fade; target a 6-10% upside over 1-2 quarters if the company can sustain growth without further spend inflation.
• If you have a way to express the view via peers, run a pair trade long the highest-quality operator in the category versus the most acquisition-dependent competitor; the setup favors the name with the cleanest organic growth and lowest paid-traffic dependence over the next 3-6 months.
• Use a tight stop if UA spend as a percentage of revenue starts moving above the current level by ~100-200 bps in the next quarter; that would imply the growth profile is becoming less efficient and the margin story is likely peaking.
• For event-driven accounts, consider a call spread over the next 2-3 months rather than outright equity: it captures rerating potential if integration risk stays contained, while limiting downside if M&A costs remain a drag.