Remedy Entmt Oyj

Ladies and gentlemen, dear Remedy investors, welcome to the webcast for Remedy's Q1 Business Review of 2026. My name is Alpo Kilpinen from Remedy's Investor Relations. Joining with me today are Remedy's new CEO, Jean-Charles Goreshon, also known as JC, and then our CFO, Santu Kalliampää. JC will briefly introduce himself and then guide us through the quarter. Santu will then do a deeper dive on the financials of the quarter. We'll then look at the outlook for the year, and then we'll end with the Q&A session at the end of the webcast. If you have any questions already, leave those at the text box below the webcast. But without further ado, JC, please, the stage is yours.

All right, thank you, Appo. And hello, everyone. Welcome to Remedy Q1 2026 Business Review. I guess I need to start by saying a few words about myself. So let me start with I think something that really defines me is my past as a software engineer. I think that's really what shapes how I think about games, how I think about running studios, companies like Remedy, and how I approach game development in general. Over the past 25 years, I've had the chance to work on games across many roles, on all platforms really, and across North America, Asia, and Europe, so quite global. That has given me a good overview of our craft, and now I have the immense privilege of bringing that experience to Remedy, one of the boldest, most original studios in gaming, with some of the best talents in the industry. which is excellent. What Remedy has achieved is rare. Over more than three decades, the studio has built a voice unlike any other, supported by a strong and engaged community, which is extremely rare, as I said, and a great asset now and for the future. More broadly, in our industry today, I think the creative craft is under real pressure. Games with a genuine soul, games that take risks, that have a point of view, are getting harder to find. And those are exactly the games that Remedy makes. My mission is not to change what Remedy is. My mission is to protect and grow that soul, and to help this studio grow without losing what makes it Remedy. All right, enough of me. Let's go through our business performance together. Q1, 2026 was a good start to what I believe is going to be a very exciting and pivotal year for Remedy. Revenue increased, driven by game sales and royalties that nearly doubled for the comparison period. EBITDA came in ahead of the same comp period at 2.9 million euros, and EBIT was positive at 1 million. Operating cash flow was on a healthy level, so good signals as we start that year. And a good share of that performance is being driven by our back catalog, which continues to find its audience. That is very encouraging, especially as we are building the self-publishing muscle at Remedy. We have a number of exciting projects in development, but the most immediate focus for Remedy, the one closest to our players' hands with a 2026 launch, is Control Resonant, obviously. So let's cover that. Our goal with Control Resonant is to deliver a great melee action RPG, a game that honors the Control universe, but also expands it, and that players will truly appreciate, because in the end, that is what really only matters. We're doing that for players and our fan base. A lot of interest was captured with our December 2025 announcement, and the leading indicators are on track. Looking ahead, we will ramp up the marketing campaign leading up to release and we expect the momentum to significantly intensify. We have an ambitious global campaign and a sizable marketing budget for execution. The reception has been incredible so far. We're extremely happy about traction. During Q1, we released two new trailers. The first was our gameplay reveal trailer, featured in the PlayStation State of Play. As you know, one of the highest profile venues in the industry for a reveal like this one. And putting our gameplay in front of that audience, in front of you all, for the first time, was a very important moment for us and for the game at Remedy. The second was produced with our long-term partner NVIDIA. This partnership shines a spotlight on the technical ambition behind Control Resonant. And of course, on our very own Northlight, our proprietary engine, which is what allows us to push the game's performance and cutting-edge graphics. Extremely important for Remedy Games, as you know. Beyond the Trailer, we released a developer diary for our community called Beyond the Oldest House. This is the kind of content that really matters, we believe, to our most dedicated fans. Direct access to the people making the game, our dev team, speaking in their own voices, speaking honestly about what they are building. Remedy's community has always liked authenticity, and I think that's really what we've been doing here and what we want to keep doing. We also hosted an exclusive showcase for media and creators. We had over 70 outlets that attended, generating more than 140 articles and around 2 billion impressions across global media. which we believe are good numbers at this stage of the campaign. And more importantly, the coverage was not just broad and just volume, it was also quality. And it was positive, which obviously for us is very encouraging and kind of how we want to lend the product. Outlets like Edge, Polygon, Gaming Bible, IGN, just to name a few. I don't want to hurt anyone in the process. But I've all come away from their previews with a clear message, to be clear. This was an hands-off preview. But still very encouraging. And people really said, this is a Remedy game that takes risks and has its own identity. And that's always what we want to make at Remedy. And you'll see that more and more as I talk strategy moving forward, it's very, very important that these games feel Remedy and are more Remedy than ever. There are, of course, fair questions being raised. Action RPG is a new genre for Remedy, and the press, the fans, are right to scrutinize how the gameplay holds up. We welcome that scrutiny, but we are also confident that as players and press get their hands on the game, they will see how serious we are about earning our place in the action RPG space. I have the chance to play the game daily and I can tell you that it's coming very well together. I'm very happy. Beyond the press, the broader signals heading into launch are healthy. Sentiment among fans and content creators has held up globally, which is great to see. That audience is sizable. The Control Universe has been played by close to 20 million people over its lifetime. We are also making a deliberate push beyond our traditional strongholds, the US and Europe, This time around, Asia and Latin America are real priorities for this launch, and we have invested in localization at a level we have never done before. Our thinking here is simple. Remedy's voice deserves to reach further, and we are giving it the means to do so. All right, so turning over to our games currently in market, Alan Wake 2 became available on Amazon's Luna service during Q1 alongside Alan Wake Remastered, generating a platform deal royalty. The game also continued to perform across other platforms throughout the quarter, and Centu will explain a bit more how that impacted Q1 positively. Very happy to announce that the game has passed 6 million benchmark in lifetime copies sold. Control retained its solid sales momentum in Q1. In fact, Control actually sold better than the comparison period driven by promotions and added visibility from Control Resonant, obviously. This is a dynamic we plan for at attractive price points. Control is a great vehicle for new players to enter the world of Control ahead of the sequel. Alright, FBC Firebreak. The last major update, Open House, was released in March and the game has moved to maintenance mode after that. The game will remain online and a Friends Pass feature was introduced to support the player base. It is very important for us at Remedy to let players enjoy the game for as long as they can and as long as they want. The game remains available on PlayStation Plus, on Xbox Game Pass, and can be purchased on PC and console platforms. All right, our development pipeline has three active projects. Control Resonant, obviously in full production. We already discussed about this one at length. Max Payne, one and two remake, is also in full production in partnership with our beloved partner, Rockstar Games. And you know how close to our heart is Max Payne. So something that we're putting a lot of effort on also. And we have a new project currently in proof of concept, which unfortunately I cannot tell much more about today. So building on what I shared earlier, three areas where we are sharpening our focus. One, focus on core strength. Remedy is exceptional at building single player narrative experiences on core platforms. This is what we do best, and we need to double down on that expertise. We cannot take it for granted, not our craft and certainly not our players. This does not mean we stand still. We will innovate and we will explore new ways of reaching players when the case is right. But every step beyond our core has to build on what we already do best. Franchise expansion as the second pillar. Today, we tend to think about our games one after another. I want us to evolve that mindset, managing more franchises. I think our IPs today can really give a lot more than what they already do. We need to think as long-term strategies that let us be bolder, to connect the dots further within and between our worlds. That is something very important to me for the future of Remedy. And three, self-publishing. I think this is a unique opportunity to hone the old chain. No one can really speak about Remedy games better than Remedy. I want our publishing voice to be as unique and distinctive as our games themselves. It's a chance to be heard like never before. And we are not going to play safe. You will see that with the Control Resonance campaign. With that, I will hand over to Sentu to walk you through the Q1 financial results.

All right. Thank you, JC. And good afternoon also on my behalf. Let's start reviewing the financials from the revenue. So in Q1 2026, our revenue was 13.1 million euros, which is 2% lower than in the comparison period. Game sales and royalties almost doubled from the comparison period, being 5 million for the first quarter. This was driven by the royalties from Alan Wake 2, which include also the one-time royalty accrual from the game becoming available in Amazon Luna. Also, control game sales performed well in Q1 and partly drove the game sales and royalties above previous year. Q1 2026 also includes revenue accruals from FPC, Firebreaks, subscription service deals, which we didn't have last year, Q1. Development fees, they decreased from the comparison period and still made over half of the total revenue for Q1 3026. Development fees were for the projects Max Payne 102 Remake and Control Resonant. Revenue was impacted negatively by weak USD rate. With the FX neutral revenue, we would have had a growth of 0.2%. Then looking at the longer perspective, the share of game sales and royalties of the total revenue has started to increase during 2025. Alan Wake 2 started accruing royalties in the end of 2024, and as said during the first quarter, 2026, control game sales and sales related to our older game titles were on a higher level than in Q1 2025. And FPC Firebreak started accruing revenue from Q2 2025 onwards. Development fees have remained roughly on a similar range for the last four quarters, but there has been also variation between the quarters due to the development milestones of Control, Resonant and Max Payne 102 Remake. Then I'm moving on to profitability. So the operating profit in Q1 2026 was 1.0 million euros positive, being 0.3 million less than in the comparison period. This decrease is mainly due to higher depreciations and investments to self-publishing in Q1 2026. EBITDA improved from the comparison period and was 2.9 million euros positive. growth from the comparison period is largely due to the decrease of external development expenses. Then let's look at the costs in more detail for transparency. So unnetted external development and personal expenses in total decreased by 11% from 11.5 million in Q1 2025 to 10.3 million euros in Q1 2026. External work expenses were 1.9 million euros in Q1 2026, being 44% lower than in the comparison period. This was driven by lower external development needs in the game projects. The unnetted personal expenses were 8.4 million euros in Q1 2026, increasing by 3% from the comparison period. This growth matches the growth of average number of personnel during the reporting period, which also increased by 3%. The amount of capitalized development expenses at 3 million euros was on a similar level than in the previous year. The amount of capitalization is higher than in the previous quarters, mainly due to increased efforts on control resonance. In Q1 2026 depreciation expenses in total were 1.9 million of which 1.2 million euros were related to game projects. These included Alan Wake 2 and FPC Firebreak depreciations. Q1 depreciations are on a lower level than in the previous quarter and this is due to the depreciations following the level of game sales of the games which we are depreciating. Currently, a major part of Remedy's intangible assets is from capitalized development costs of Control Resonant. Also, the remaining capitalization of Control's publishing and distribution rights has been mainly allocated to Control Resonant. Once the game is launched later this year, the depreciations related to Control Resonant will start, which will impact the quarterly depreciation levels. So at the end of Q1 2026 our total cash level was 34 million euros, including 14.4 million euros in cash and 19.6 million euros in short-term cash management investments. During Q1 2026 the cash flow from operations was 8.3 million euros positive, Besides the cash flow from operations, our cash position was affected by a €3.2 million negative cash flow related to investments and €0.3 million negative cash flow from financing. Cash flow from investments that includes payments related to capitalized development costs and machine acquisitions. Cash flow from financing includes IFRS lease liability payments. The cash position improved in relation to both the comparison period Q1 2025 as well as to what the situation was at the end of year 2025. Then if you look at the cash flow from operations closer, there has been variation in timing of payments from quarter to quarter. Q1 2026 cash flow from operations was 14.9 million euros higher than in the comparison period. Our outflowing operative payments were 23% higher than in the comparison period. Due to timing of sales payments, we at the same time received significantly more inflowing sales payments than a year ago. Timing of development fee payments are agreement-based and there is difference compared to revenue accruals. Royalty and game sales related payments follow the revenue accruals with delay. So in overall, year 2026 started with profitable quarter for us, with both EBIT and EBITDA being positive. This is, of course, ahead of marketing ramp-up and related spend to support the launch of Control Resonance during 2026. And now JC will continue with Outlook.

Thank you, Sentu. All right. Our outlook for 2026 is unchanged. We expect our four-year revenue in EBITDA to increase from the previous year. And then handing it to Apo for Q&A.

Thank you, JC. Thank you, Santo. Let's move on now to the Q&A. I said before, leave any questions you have in the text box below the webcast. We already have a couple good questions in the pipeline, so let's begin with those. JC, the first question is related to you. What are the short-term goals from the new CEO, and will those goals affect how Remedy operates?

Yeah, good question. I mean, so I've been here for a few months, you know, and I spent a lot of that time listening and getting to understand, you know, people, the studio where we're at. And honestly, the priorities, you know, are very clear. Today, it's to execute on Control Resonance. We can have all the strategies in the world. If we don't make an incredible game, what's the point? So I think to me today, it's really to give the studio the support, the direction, the inspiration to really get Control Resonant across the finish line in the best possible way. Now, it is of course the biggest one, but we have other great games in the pipeline, which also needs and deserves attention and support. So this is very much the focus right now. The strategy pillars I talked about will surely get into it, get into that vision, but today let's focus on product execution.

Excellent. Thank you, JC. The next question is on Control Resonant. Can you give more color on the leading indicators that you're tracking on the game?

So unfortunately, right now, we cannot yet. Of course, we're still being, you know, a lot of that is happening behind closed doors. And we apologize. I know, you know, both press and players are anxious to hear and learn more about the game and trust us, it's going to come. but today I can't say a lot more. What I can say, as I said in the presentation, we're happy about how it's tracking. We're getting the momentum we want to gain. We're getting the traction. The game is landing the right way. The message, what we're hearing back, is very much in line with what was planned. So happy about that. Apologies that I can't go much deeper into details, into numbers, but that's what I can say today.

Very good. Next question is on China and broader Asia. Is there a local partner model with a distribution arrangement, and how does the economic split compare to core markets?

So, good question. You know I spend quite a bit of time in Asia myself, so that allows me also to hopefully get a bit better understanding of that region, even though you can't make any generalities and it's a daunting market, but also a very attractive one. We're going to have a local strategy. We're going to have a local partner. I can't announce any of that just yet or have any more details, but there is a strategy around how to approach China specifically. I think, for me, what's most important today is how do we position the product to be a success with Chinese gamers. I think Action RPG is something that resonates well in China. And I believe, Chinese gamers will hope, Chinese gamers will appreciate Control Resonance, and we're going to do everything on the way to get there. It's tough to say how much this is going to play in economics of the game, but what I can tell you is we're going to push really hard. Also on the localization front, I touched on it earlier, it's pretty much the biggest localization investment Remedy has ever made. And, you know, we're very happy to tell Chinese gamers that the game, and, you know, in China, but across the world, Chinese speakers, that the game will be both, you know, kind of text and audio localized, which I think will be great.

Super. Thank you. Next question is to Santo. With Control Resonant nearing completion, how should we think about the development feed trajectory through the rest of 2026?

Yes, so the general rule regarding the development fees is that they follow the agreed milestones of the game development and the contracts. And a good assumption regarding, for example, control resonant is that the development fees will continue to accrue as long as the development of the game takes.

Excellent. Continuing with the finance question, Santtu, Are there still some B2B payments accrued for the coming quarters in relation to FPC Firebreak?

Yeah, I think we have said earlier that the B2B deal accruals continue as long as the B2B deals regarding the game being in the subscription services continue. So it's based on that. We have also said that the major part of the cash flow impacts from these accrued deals for FPC Firebreak, that's already in our balance sheet. Excellent.

Then back to JC. I would like to hear more about the social media marketing efforts in China and how big of a share of the Control Resonance sales do you see coming from Asia?

I think I've kind of already answered this one and the last one. Not much more to say that we're going to be present. We are present and we're going to intensify presence, you know, on the Chinese social media and in general, you know, kind of, you know, try to create our voice, getting a share of voice in China.

Very good. Next question on Control Resonance budget. Ahead of Control Resonance launch, does the estimated development budget of approximately 50 million euros still hold?

So, you know, I'm not going to... This is Santu looking at me and saying, don't say it. You know, it's... What I can tell on the budget, you know, is the team has done and the studio has done excellent work to stay on track. has done excellent work to build a AAA game on a relatively short or small budget. And that's something we've seen from Remedy before. That's something we'll see again from Remedy because, honestly, there's something pretty incredible about the way the games are being built at Remedy, the way they've been thought through and managed. So it's not always been the case, I know that. We've had some hiccups in the past, but I can tell you that the team has done incredible work on Control Resonance.

Very good. Next question then is in relation to Remedy's headcount. Remedy's headcount is increasing. This seems to be counter to what is happening in many other game studios. What is the thinking behind the increase?

I mean, good segue from what we just, the previous question. Let me answer it by telling you again that this studio has made incredible games on a relatively small team size and a relatively small budget size. I think that happened because it's a studio that has its own engine, that has its own tools and ways of building it, which I've seen for the past two months and I understand why they were able to pull it off that way. I think also one thing you can see about Remedy is Remedy has always been smart of not going too fast too quickly, which you've seen in other parts of the industry, unfortunately. And when you get to that, then that's when you take the risk of potentially having to downsize. What I can say today from the size of the team, the size of Remedy and the games we're making, I think we're pretty much right size for it.

Excellent. Next question again on organizational topics. As you've gotten to know the company, do you see areas in Remedy's operating model or organizational structure where changes may be needed?

I think you can always make improvements and we will make improvements. Yes, I've seen parts of Remedy which I think can be improved at many different levels. Today, what's really important is to keep a balance on what you can improve and when you do some of these improvements. As I said, right now, the studio is in full execution mode. You need to be cautious with that. You need to give the right support. And a lot of this is gradual anyway. So today it's more about protecting, supporting, making sure that we stay on the right tracks, but not necessarily disrupt any of that. But yes, there will be changes here or there, kind of internal cuisine type of thing, which will help, I think, the studio even perform better in the future.

Perfect. Next question is about the new project. Is there any information you can share about it? Will it be under the Remedy Connected universe or will it be a completely new title, a spin-off, anything that you can communicate at this point?

It's tough. I keep having to say that I can't say much. But unfortunately, no, I can't reveal anything about this new project except that it's going to be yet again an incredible Remedy game.

Very good. The next, Remedy has always been a contender for the Game of the Year in TGA. So he's winning Game of the Year with Control Resonant in your playbook.

It always is. This team, and I've seen it now, we know it from before, right? This team is always going for the highest possible quality. And I think Control Resonance is not different on that front. So we're going to push hard. I heard that this is going to be a pretty hard year. But I'm not sure exactly what's coming out this year. But there's going to be competition. But I think we'll be up there fighting for it.

Excellent. Then would you consider adding a preorder option for the games you publish?

So I can't say much, once again, on Control Resonance specifically. Me personally, I think pre-order is a good way to judge traction, to judge success of the game ahead of launch. So I think it's a good thing.

Super. Then I think the final question, might there be any collaboration with Epic Games to bring Jesse or Dylan Faden or maybe even Ahti the janitor to Fortnite to promote Control Resonant like what was done with Alan Wake 2?

I mean, we're big fans of Crossover. I think we've showed it in the past. I think it helps us expand our universe, our worlds. And that's something that I mentioned in some of the pillars in the presentation just now. And this is something we're going to keep doing because I believe strongly in our peace, in our worlds. And they should even get deeper and connect the dots more, as I said before. I can't, of course, say anything about whether we do something with Epic or, you know, Epic is a strong and close partner. So we're always talking, you know, to our partners about potential opportunities. And, you know, these are, again, you know, great opportunities to look into. Again, as I said, one filter we will, you know, I think use more and more is, is it building on a core strength? As I said as the first filter, first pillar, sorry, this is going to be something we do a lot. And I think you define the vision of a studio not by just saying yes, but also saying no, which is what we don't go after, what may not really help compound that culture and build on the core strength of Remedy. So this is the filter we'll be using moving forward on the crossover, et cetera. But so far, we've been really happy with it.

Very good. One final question came through. In what way do you think the rapid development of AI will impact Remedy's operations, perhaps regarding product price or game development costs?

So you're casually dropping an AI question at the end. Excellent. You know, of course, it's a big topic these days. We've had a clear stance as Remedy with AI. Today, we're not using Remedy with AI to create any user-facing content or in general. I would also say good luck trying to make Alan Wake with AI. I would love to see that happen, but I think that it's going to be very, very hard. So today, I would say it's a bit of a non-topic. Of course, we need to make sure this is framed. There is adoption here or there, happening in gaming in general. You can never really stop someone to tinker with it. But it's really important that we have a clear frame, and it's very important that this does not replace any parts of the creativity coming out in our games. And that's something that, to me, I'm going to be fearless about.

Thank you, JC. Very clear. Excellent. Thank you so much for the questions. Excellent questions once again. If there are any additional questions you didn't have the chance to present, feel free to send those over to the email address now visible on the screen. We'll be back next time with our healthier financial report. That will be on August 11th. But until then, bye-bye from us.