Paradox Interactive AB (publ)

Hello everyone and welcome to the Q4 and year end report from Paradox Interactive with me, Fred. And I'm Alex. Welcome everyone. Welcome. So we're going to guide you through the numbers and some of the releases and some of the comments as well. I'll just warn you a bit up front. We also made an acquisition. Today it came through, Hemimont Games. And we're not going to talk about Hemimont Games in this stream. So if you want to have more information about that, you will have to follow our newsletter or our postings in the future. So we will hopefully announce something that we have going on together. With that said, let's dig into the report. That's me, as always. Good talk. Very good. So Q4 has been a great quarter for us. So we're ending the year confident about what's to come. We have many strong releases. So we release basically DLCs for all our major franchises except for Europa Universalis 4 in this quarter, which shows both on the top line and on the bottom line. We also have a number of good marketing activities. We changed some in the pricing structure, and we've done a lot of good jobs all across the company, which led to this result. And last but not least is also the exchange tailwinds from currency gains from a weaker Krona in this quarter. But also... This shows as well that the difference between the quarters is quite big. So we had a great EBIT result now because we had no write-offs at all. And we take more and more costs up front as well. So hopefully in the future, we're going to avoid these big changes and you're going to see a more consistent result on the bottom line. So at least that's our goal. But if you summarize the year, the good underlying sales, a lot of the usual suspects are known IP and are known gamers. We've had some write downs. Most notably is Life by You, but we've had a couple of other games as well. Some delays, Prison Architect 2, Bloodlines 2, both delayed. And we are continuing the work. We've worked a lot with that in the past two, three years to make risk-taking, make it easier to oversee and manage risk when we manage the projects. We won't have to close down projects that has cost more than 20, 25 million dollars to make. So the same with all third-party development is going through a different pipeline today with more quality control and direct access to our teams. I'll comment a bit on Heimermont. So I said I'm not going to answer any questions. But we've been working with Heimermont since 2017 on the game Surviving Mars when we first signed up with them. It's a very good strategic fit for us. So they make management games just like we do as well with games like Cities Skylines, Prison Architect and Surviving Mars. And obviously they share a lot of our nerdiness and culture. They find in Paradox as well. And we have found during these eight years that we work together that we really have a good working relationship with this studio. And we're super happy to welcome them on board. It will be a wholly owned subsidiary. They're situated in Sofia in Bulgaria. And it's just over 50 people in the studio at the moment. And if you look at their games, Alien Stranded Dawn with Frontier, Surviving Mars with us. They've also worked in the Tropical franchise a couple of years back. And they also released Jagged Alliance 3 recently. to critical acclaim, all of these games. So it's one of few studios that is 100% independent, and they basically made quality games for over 20 years in a row. Super happy to have them on board. Yeah, very exciting. Very exciting. If you look at the releases, I said that we released for all major franchises except for Europa Inversalis 4. We did Hearts of Iron. We did Stellaris and Stellaris for console as well. Not least, but not last. Can't forget about the console players. Victoria 3, Crusader Kings and console for Crusader Kings, Millennia and Age of Wonders on the strategy side, as well as our first content creator packs for Cities Skylines 2, no? Nope. Yes. Yes. Cities Skylines 2. And for Cities Skylines as well. So, busy quarter to say the least. And like we're going to see in the numbers, it shows there as well. We also released from Paradox Arc, Tlatoani in early access and Space Trash Scavenger in a 1.0 version. So, if you haven't checked them out, you really should. Cool. So, it's time for your show, Alex. Thank you.

Down to the numbers. Let's dig into them. Right. So... Top line revenues, 709 million coming in Q4 of 2024 compared to 996 million of Q4 2023. So, of course, a very tough quarter to compare with because back in Q4 2023, we released especially City Skylines 2 with a very big impact on top line. We also released Lamplighters, which was a failure financially, but it helped pushing up the top line. But so 709 million without coming out with any new games. I'm pretty sure it's a record in terms of revenue for a quarter when we haven't released any new games.

It's also worth noting that we don't have any Game Pass money, for example, in this quarter or anything else. So everything here is basically underlying sales. It's very organic. It's a very organic number.