Nitro Games Oyj

Hello. Hello. Good morning. Good morning. Guten Morgen. Good morning. Good morning. And greetings from Nitro Games Studio here in Finland. It's us again.

Us again. So I'm Antti, CSO co-founder and board member here in Nitro with my beautiful co-founder Jus.

Yes, I'm Jus Setahtinen, the CEO and the other co-founder here in Nitro Games. And we're here again to deliver you guys a webcast

But still, I think we progressed with our business very nicely during the first half and summer time.

Yeah, definitely. And how things roll in Nitro. Essentially, it's a powerhouse that never sleeps, even though some people might be on holidays. There was tons of things happening throughout the summer. So good stuff. And let's move forward. For those of you who might be here for the first time, as a quick recap, we're Nitro Games. We're a Finnish powerhouse for action and shooter games.

One of the oldest gaming companies in Finland and living through our values and vision on a multi-platform action shooter power.

Good. And the team that we have, we have a global team. So we're roughly 50 people in Finland and give or take another 50-ish around the world. And the around the world part is our partner studios, contractors, freelancers, Nitro people living abroad and everything in between.

Building the model for more than 10 years and working with these studios.

Yeah.

projects all the way from the early stuff into the latest projects and model is there and processes are working and social dynamics between the people and teams are very solid yeah and that's our secret sauce when it comes to scaling up and down depending on the amount of activity here in Nitro and I think that's also one of the reasons now when we look at things post

because we have always been in the sort of hybrid mode already.

And also it applies into the, as we are going forward with our strategy, we are going into the bigger and bigger projects that is also element how we can tackle the potential resourcing challenges and we can kind of answer the need of the bigger project by utilizing our network. And we are very capable and professional on scaling the teams when the time is right and the project is needing the bigger or smaller.

Yeah, indeed. And during the first half of the year, we again saw Nitro becoming so much more powerful and stronger by getting some good senior super talent into the team without growing the actual internal headcount of the team. So that's a good sort of evidence of the recent ways of how these things work. And then H1 in a nutshell has been well in line with our theme for the year, which has been stable growth. And with that, we mean that we definitely want to focus on seeking growth, which again has materialized now during the first and the second quarter revenues again, but especially in focusing on the bottom line profitability and make sure that things stay stable and that we don't need to go and chase for external funding, for example. And still gaming market is in a recovery state.

hang over as they call it. It's now seems to be going a little bit away and stability is the kind of very important for companies to go through these times. And I think we have succeeded very well on that.

like making new deals is slow and getting positive movement forward seems to be slow and a lot of companies we see around us are still struggling with something but we have been fortunate enough to keep things stable here inside Nitro so that's of course very good and reflects on the numbers of course if we look at things on a little bit more detailed level in terms of what actually happened let's start with the games

nitro invests are in our game products and it might be good to remind that we have a new side of our business so games business where we invest and uh and look for the scalable revenue sources holistic scenarios one will and then for the b2b service business where the business is that more stable and uh and we get lots of learnings and natural

And partners, of course. In terms of the games business, the focus topic for the first half of the year has very much been on Autogun Heroes. Like we said earlier, we have kept our Nerf Super Blast more on the back burner, and we have been actively maintaining the game and so on, but we haven't actively invested in the game. And overall, during the first half of the year, the investments in our games portfolio When it comes to our gaming portfolio, the plan this year has been to commercialize the items we have there. As a result, we signed Autogun Heroes with Supersonic from Unity, who are now the publishing partner. We started the collaboration with them and already got the game live through their accounts during the second quarter. During the summer, we've been pushing out quite a few updates to the game. We've been optimizing the performance and have been able to carve out some solid improvements in the game performance. And Supersonic has been doing the same thing on the US side. But we still have work to be done on that one. as well as we seek scalability with the game.

Also we've been looking for ways to utilize our existing IP portfolio and there are some smaller cases that we have done with the old IPs and going forward looking to continue that track also.

Yeah, for example, in the B2B service business, we just completed a small approach where we utilized one of our own back catalog IPs and so on. So these type of things happen from time to time. And in addition to these, we've been also busy with our games portfolio in terms of building growth and growth vectors also to other platforms. So that's something that we're working on in the background, that it's not just mobile games that you can expect from Nitro in our games business moving forward, but other platforms as well. And worth mentioning also the magic word AI.

I'm sure that applies to both of our businesses, the whole company we've been looking

And as a reminder, we have the project with Business Finland, which is this governmental support organization that has been supporting our actions on that front for roughly two years now already.

On the service business side, I think we are very happy with our great partners or clients. Definitely, yes. growing the projects and keeping the client happy and expanding the teams and everything goes as planned within those projects and clients and collaboration has been really good in a personal level and team levels and company levels. All the areas seems to be going really smoothly.

And I think this year Yeah, exactly. And to recap those things, concept phase uh early this year and then we push the pre-production so there's not much to share about that and we haven't announced it yet and uh all these things so but that's moving forward as well it's like a milestone And on the financial side, you've already seen the numbers, of course, but what's been happening sort of behind the scenes there is that we also started the loan payback with Nordisk Games, step-by-step payment plan. So we've now completed the first installments of those. Also during the first half of the year, as we limited our investments in our games portfolio, we did not capitalize any development costs. We want to see stable growth both in terms of top line and keeping focus on the bottom line. Then moving forward, what can you expect from us when it comes to our games portfolio and games business? Like I said, with Autogun Heroes, there's still so much to explore. We're very excited to see how things develop. And with that one, we have a step-by-step plan together with Supersonic, how we push forward with incremental improvements in the game towards scalability. years to come so that's that's a long-term play and that's contractually and business development was already figured out in a way which means that now we have a room to explore what more can we do with other heroes ip where do we take the game next so that's a hot topic now another platform so yeah or something like that yeah on top of that we are exploring the opportunities to expand our existing ip yeah portfolios and uh there are lots of interesting ips that we've been working during the

Also, we've been looking for some new third party games.

And those are things that we have a little bit different mindset than during the recent years. So we're not seeking to invest so much upfront into any third party things, but more like building the investment so that it goes nicely within our P&L, our own financial goals. And it seems that the world around

a buyer's market in so many ways and we will continue exploring the new platforms on top of the new platforms for us but the new platforms in general in the gaming and there are every now and then there are some interesting new players coming into the market and naturally the AI and all the workflows AI

we continue to yeah explore and practice and taking into the use the best solutions that there is on the market yeah service business side there again uh we see a lot of opportunities moving forward with both of our existing uh partnerships and accounts and projects so so that's of course something that we're seeking to continue and in addition to that uh one thing you can count on that nitro is always active in terms of business development seeking for new opportunities and the more we go forward living through our vision of really being the experts and focusing on excellence in the category of action and shooter games, the more interesting opportunities we have. So this is an area where I definitely think that we can also expect great things moving forward and that will then serve our strategy and vision for years to come as we move forward.

And not only the pure mobile on the market and our vision and the brand. Our PD team, they are delivering really good results on all that front.

And financially, we are not giving any financial guidance or make any forecasts or anything like that. But our focus this year is stable growth, like we have said, which means that we focus on making sure that we keep improving our P&L moving forward and also more and more managing our balance sheet reduce the debt that we have in our balance sheet while also we want to keep increasing our ability to invest because moving forward we're of course seeing more and more opportunities to invest in our games portfolio and basically build opportunities for success down the line in the long run as well exactly and overall how does this year so far tie in with our

the values and it seems that it's resonating very well on the market, especially on the B2B side of the business. The brand is very strong there and all of the operators within the action and shooter category. We are there where those games are discussed and where those projects are discussed. Yes.

And if last year was all about steering our investing phase into turning it into towards profitability. And we reached the bank even in Q4. This year is all about building on top of that with stable growth. So making sure that we take positive movement with the offline while we focus on the profitability. And that's why we talk so much about commercialization and how can we make money with things that we already have and stuff like that. And moving forward, of course, so on and then this wouldn't be a webcast if it wasn't financials our first half was again you know obviously better than previous because we've seen record revenues while of course also focusing on the bottom line during the first half of the year there wasn't anything super surprising going on with the financials it's been well within our plans as we've been focusing on making sure that we no capitalized development costs either so all in all pretty pretty solid and uh on the balance sheet side uh we were able to start production of debt in our balance sheet uh and do it in a way that we still protect our cash flow so we landed with uh 3.1 million euros uh cash position at the end of the first half of the year so all in all very well in line with our plans yeah

and that's the sort of operative update from us and our quick peek into the financials and uh before we take questions maybe what mentioning where we're headed next after we wrap up this webcast largest european gaming event yes gamescom annual event and meeting existing clients existing partners lots of new ones international friends it's going to be

the big week that kind of kicks off the autumn season gaming industry so to speak and then everybody started to talk about those topics that we discussed while on there yeah it's gonna be busy week we have a nice nice handful of people with with nitro t-shirts and hoodies headed there and our gamescom is like i think it's more than 300 000 people yeah attending so yes uh and let's see if we have any questions here uh i checked out the email and this time we had none surprising yeah yeah uh this first question when and will we see a new strategic partner for nitro i think this is of course something that when it comes to anything happening in the You never know. So things happen when they happen. And then we, of course, communicate about those. But I think what is sort of clear with Nitro is that the whole point behind the And that means that any sort of more strategic collaboration might happen down the line at some point. But we focus on making sure that the business side makes sense first and then projects and years go by and then we'll see how things play out. Also new games or is it just a lot of heroes now? Definitely.

few last year we've been more picky about old games also portfolio be very selective way to invest and how much and looking for those real real real real good opportunities from them yeah from from our whole games yeah but in nitro uh sort of playing around with new things uh we often call it our

Yes, yes. And during the second half, I think it's pretty certain that we will try out some things with all the heroes in very initial stages and see how those play out. Like you said, we're looking into few interesting opportunities on the third party game side as well. And if things click, then something might come out of that. Then, where is it? When will Supersonic do what they signed for more UA and sharing for overall nice report. Thank you. So with Supersonic, like I said, we have a step-by-step plan. The focus on both sides is very much in the long run. We see great potential in Otogan Heroes and obviously the partnership with Supersonic because they're one of the giants when it comes to this.

And the plan is also very much in line with them.

Yeah.

We are synchronizing the plan like a biweekly status and it's very much in line.

So what you can expect now during the second half of the year is that we continue doing exactly that. We continue pushing out improvements and getting closer and closer to the magical moment of scalability. And after that, we seek to work together for years to come on the game. Then what else? How do you plan to balance new investment with profitability? That's a good one. And that's something that we've been looking into quite a lot during P&L and cash flow, of course, as well. And that's something that like I said earlier on this webcast, you shouldn't expect us to put

Yeah, yeah. It's more than money.

Yeah, yeah. That's actually a very, very good point to make because we see so much more interesting cases where people approach Nitro not with that, hey, I need money, but I need this and that talent or help from you or the expertise. Good point. Then, then, then, then, then, any chance for NERF or is it done? Is the next question here? We kept it very much in low investment maintenance mode. Now during the second half of the year, we seek to figure out what's the best way forward with that game in the long run. We're looking into opportunities to commercialize on the game in one way or another and things like that. And also discussing with the IP holder about the topic. Yeah, yeah. figure it out one way or another. I think that's it. There's quite a bit of questions that repeat what has already been asked. What should we look out for in H2? Stable growth. That's what we're seeking out to do. So we're not seeking to do anything dramatic or in a way that would be somehow jeopardizing our plan. Of course, dramatic upsides are something that by nature we of course always raise it with anything.

And of course we are continuing with our

I think that's a wrap we are done here so we will close this one and go prepare for our journey to Germany to Cologne for Gamescom and we will see you again the latest in October when we put out the Q3 report and do the webcast and also this week Friday on presenting of the Pro Hearing 7 so you can also tune in there

Wonderful.

Yes. Awesome. Thank you so much. Have a good one. Bye bye.