Qiiwi Games AB (publ)

Då hälsar vi alla välkomna till Kiwi Games presentation av det andra kvartalet 2025. Vi kör först en genomgång av kvartal två. Går igenom lite information utifrån vd-ordet och de resultaten vi har nått upp till under det andra kvartalet och väsentliga händelser. Efter det så kör vi en a Q&A question time where it is possible to ask questions. And you can already start sending that in to the Zoom client in the Q&A function there. Let's get started. Then we look at the second quarter. Generally speaking, Det har varit ett kvartal som ytterligare präglat oss med AI extremt mycket. Vi känner verkligen att det som AI-muskler och olika AI-tjänster hjälper oss verkligen att som ett litet team fortsätta att tänka och bygga stort framöver. And during the second quarter, we also informed about further optimizations and cost savings based on this insight about what we see AI can do for us. And we have also seen that long before. But we really see that it is starting to come to its right now and is escalating more and more and how much we can actually use it in our business. So that's why we decided that further and reduce staff capacity by 50% and completely dismantle our subsidiary in Cyprus, which we have had since 2018. These cost savings and optimizations are estimated to give about 450,000 SEK in savings per month, but probably more since we have identified additional things under Q2 and Q3 that will give additional cost savings. So this is another important step for us to get much closer to an Upbreak e-mail result on a monthly basis. We will talk more about how AI helps us further in our business during the presentation here. Let's take a closer look at turnover The result shows a decrease in revenues compared to the previous year. Our revenues fell to 3.3 million SEK compared to 5.4 million SEK. The big reason for this is that titles that under the comparison period performed at significantly higher levels than what they do today. It is above all Extreme Makeover and Midsummer Murders that had a good period during the comparison period. But we haven't worked with those titles at all in the last period, which means that Daily active players, DAO in those games are decreasing and so are the revenues Another thing that affects the turnover, if you look at the comparison with Q1, we also lost turnover there compared to Q2, if you look sequentially. During Q1, we had our global launch of Backpacker Go, which started at the end of December 2024 and continued into Q1. We saw very good upscaling results during January, which then where we then during February and March had to hold back in the global launch when we encountered problems in scaling the game further in the global launch that then took place. But that of course led to a lot of revenue during January, which then decreased during February and March, so the entrance to Q2 was significant. on a lower level than the amount we get from our gaming portfolio. But what is positive is that we, from April to July, have been able to stabilize and marginally increase the amount month to month under Q2. mainly driven by Backpacker Go and Worthington, which have had better results on marketing and better sales, but at a lower total marketing level. We will come to the marketing slide here in a moment. The three biggest games are Backpacker Go, which is still in first place with 44%, Wordington with 24% and Extreme Makeover with 9%. If we look at the EBITDA result, it is somewhat improved compared to the same period last year. an EBITDA result of minus 1.8 million SEK. Here we expect to see an improved EBITDA result in the coming quarter when we get the effect of the cost savings. The optimization and cost savings started during Q2, so we first see the effect during Q3, but especially during Q4 and then full effect from the end of Q4. If we look a little more at marketing and user acquisition, UA, it was also on significantly lower levels than the comparison period. and also significantly lower than Q1 2025, which we talked about a little earlier. And of course it affects the turnover that we generate if we market our games and have the opportunity to market at higher levels, then we often see a omsättningsökning, men har vi inte den möjligheten utan måste marknadsföra spelen på lägre nivåer för att få den ROAS-nivån vi vill ha, vilket är att få tillbaka pengarna på 180 dagar, då blir det lägre UA-investeringar, vilket också påverkar omsättningen. Men vi minskar de UA-investeringarna med cirka 55% jämfört med Q2-2024 and about 48% compared to Q1-2025. In a way, it is a picture of a decrease in revenues compared to these periods. It is important to emphasize that we have been very, and we are, careful with EU investments. We make EU investments only if we really see that we can reach 100% ROI in 180 days. And during the second quarter, we have seen an improved cast of UA-investments for those games that were marketable, and that is mainly Backpacker Go, which has held the majority of the UA-investments during the period. So hopefully in the future, with more optimizations in Backpacker Go, is that we will be able to increase the UAE investments and continue to maintain this good drop in marketing that we have seen during the second quarter. And here is also Worthington, a game title that performs very well, but to low levels that we also hope to be able to increase. We also looked a bit closer at what it is that has made us able to get so much better results during Q2. AI is an important part of it, because AI has helped us a lot and we have got a very good workflow on how we can work with AI-generated advertising material, both statics, i.e. images, but also video-related material. Because when we carry out marketing and UA, it is an update of the advertising material that we use in our campaigns that is very important, that you reach an update frequency that is high, that the advertising material that it will not be saturated, that it will not be recurring for those who get an announcement presented to them in order to reach a wider mass to continue and then also maintain low costs per installation. AI in the future will definitely speed up our ability to bring out our ads to significantly higher levels than before, if you look at video-related material, where we can generate with different AI models and different services, very good animated animated advertising material based on how our characters look in our games and simply elaborate in completely new ways than what we have been able to do before. So this is something we will continue to focus on during Q3 and in the future regarding the marketing strategy. If we take a look at ARPDAU, which is the average income per active player per day in our game portfolio, we still have a high level in ARPDAU historically. We have increased by 18% compared to last year, and it is mainly Backpacker Go that we have in our portfolio that drives a higher level. ARPDAU, en spelportföljens snitt. Och det är ju ett boardgame som vi fortsatt under Q3 här har viktiga goals for further identifying value-making efforts for Backpacker Go, which hopefully can further increase ARPDAO in a total way in the game and thus also improve the possibility of marketing the game on more markets and on a larger scale. Let's look at some financial results. In the chart, the turnover is about 3.3 million SEK. The turnover result EBITDA is minus 1.8. The turnover result EBIT is minus 2.7. The result after tax is also minus 2.7. The result per share is minus 0.3 SEK. And at the beginning of the period, we had liquidity of about 14.8 million SEK. Let's move on to New Games and I hand over the floor to Daniel Svensson.

Thank you Erik. My name is Daniel. I am the co-founder and head of the New Games team. As you can see here in the lower edge, we have our MVP process. It's a methodology we use in the development of our new games. And within the new game team, we have evaluated several new game ideas during the period. We have taken five games to market test. Market test means that we test the game with purchased players and evaluate the key numbers and potential. As you can see here, four ideas did not meet our expectations and have been terminated and are in the post-mortem stage on the far right. In the post-mortem stage, we analyze and collect important insights about what did not work, what we learned, and take it on to future projects. One of the games is still in market research. The main focus of the test has been to evaluate ZenThema in combination with WordPuzzle. ZenThema is a relaxing gaming experience that is popular right now and we wanted to get our own insights into how Kiwi games work with that game format. And in the current situation, we are at the end of this phase with this test. It should also be mentioned that we have tested a new trivia game early in the second quarter. It did not reach the results we wanted to see. That the game project ends early is... a natural part of the process. It is important to be able to quickly measure the potential level of ideas. And two new processes that we are using that will help us in the future are something we call the Kiwi Template. It is a framework that will make it possible for us to quickly plug in game ideas in a more finished and game-friendly environment. This means that we can both shorten the time from the idea that it reaches the players and at the same time give the players a more uniform and rich experience, even early in the development phase. Try to suck out factors that are the game for the sake of the players to like it, but it should be a good early experience to be able to see the potential. Another step we are taking to further strengthen our process is to continuously evaluate how AI can be used to make the creation more efficient. Already now, we can test prototypes very quickly to test our theses and come up with ideas. The work methodology we have with MVP, Kiwi Template, AI, gives us the opportunity to do the work that is required to find the gold coin in the future. And even if the ambition is that all the projects we run will be successful, the reality is that most ideas die early. Men med vår systematiska process vill vi skapa en trygghet i att vi tidigt ska kunna identifiera vilka idéer som har potential och därigenom kunna fokusera våra resurser på det som har störst chans att lyckas. Och det var status för New Games och hur vi arbetar. Så skickar vi ordet till dig igen Erik.

Ja, tack så mycket. Vi går vidare till Live Operations, and then we'll hand it over to Marcus Dahle.

Thank you very much. I'm Marcus Dahle, co-founder and CTO at TV Games. During the second quarter, we decided to move Backpacker Go to the business area we call LiveOps. This is because we now consider that we have the majority of the functions that are required in place. And for the work that is currently being done in the game, it is mostly based on a live operations location, where we add more events, cities and other functions and balances to stabilize and increase the revenue. We launched during the period the function that we call star destinations. where teams can compete against each other in unique special destinations such as Titanic, Easter Island, Moon, Madmera, and the team that comes out on top gets the title Lord of the Thieves and owns it until the next round at the same destination. This function has been very popular among our most engaged teams and players and gives us insights into which functions are most worth developing in the future. Under the second quarter and the beginning of the third quarter, we have also optimized the launch of cities with AI and have now reached a point where we can launch a new city with a click. This is something we will continue to build on even more and try to shorten the process further where we see that it is possible. And it is also something we will try to work on in other game titles where we see that it can work well. and release content on a much faster schedule. During the period, we also launched an update to Masterchef, where we, with relatively small labor costs, have now turned that game into a pure match-three game, like Xtreme Makeover. Masterchef is a very strong brand and it drives a lot of organic downloads from the stores when seasons around the world start over in different timetables around the world. The goal with the shift was to see if we can get some form of improvement of retention in Masterchef, which in that case can give significant revenue to the live operations portfolio, then retention in Den föregående versionen var på en väldigt låg nivå. Vi fortsätter nu att övervaka de nyckeltalen efter uppdateringen och förbättra och balansera spelet där vi ser att det finns möjlighet. Vi fortsätter att försöka trycka upp retention till en nivå där vi ser att det kan fungera väl. Under det enda kvartalet har vi även fortsatt att hålla fokus mot Wording Town, Xtreme och Midsommar. Vi har lanserat ett antal uppdateringar, nya nivåer och sett till att spelen fungerar såväl som den ska. Men det var allt för LiveOps denna gång. Tillbaka till Erik.

Tackar. Moving on to the next slide, which is a little summary of the presentation and summary of the situation we are in. And now with the latest effects of optimization and cost savings, we are a small team at Kiwi. But on a daily basis, we strive to maximize the effects we can get by utilizing AI services within our work process, which is extremely exciting. For example, here we have AI agents, something that could be seen as being used instead for employees in companies and also with us, where we have AI agents that we ourselves configure how they should work and what they should do. som helt enkelt sköter arbetsuppgifter utifrån de behov vi har som rör både återkommande arbete för våra spel, det kan vara innehållsskapande, det kan vara development of new functions in our games. It can also be the development of prototypes for new games, where we want an AI agent to develop and test word games and come up with new concepts for word games or word puzzles or question and answer games or different types of game genres. This is an extremely large focus right now, to really set our workflow and how we can really maximize AI use. i vårt kretslopp, i vårt workflow fullt ut så vi kan få in det i återkommande processer och verkligen göra att vi tjänar tid och kan lägga vår tid på det som är värdeskapande betydligt mer än vad vi har kunnat innan. Väldigt spännande utveckling hos oss här under Q2 och det kommer bli We are on the right track to reach a positive cash flow with these additional costs savings. During Q2, we managed to stabilize and marginally increase the revenues from April month to month. In the report it is written from April to July. It is a positive signal that the live operations portfolio can be stabilized and marginally increased from the decrease in turnover between Q1 and Q2. So we continue to work with The work that we have done here and can also further incorporate AI workflow in other games like Backpacker Go, so we can create more life in the game portfolio in titles that have previously been very time-consuming to create content for. So that's something we're also going to focus on. Vi avslutar med att helt enkelt betona att det är en väldigt spännande framtid, där det finns goda möjligheter att ta stora kliv snabbt. Med de orden så tänkte jag att vi går över till Q&A-frågestund och se vad vi har fått in för frågor. Ja. Nu ska jag se här. Vi har fått in en fråga här ifrån en användare här. Förväntar ni er att ArpDAO ska fortsätta falla? Jämför man med Q1 till Q2 så följer ArpDAO ett down a bit, but it is still in Q2 at high levels historically. And what we see so far, we don't see that the trend continues to fall more, but rather that it is on its way up again towards the level of Q1, so we do not expect that Alkdalen will fall more and with further improvements in for example Backpacker Go, but also in other games, we expect it to remain stable at high levels. Then it also depends on where in the world we do our UA and where we buy in traffic from, because it differs a lot from how much we get per player in different areas of the world. For example, a player in the USA can get significantly more revenue per announcement than a player who comes from Mexico, for example. It's probably cheaper to buy players in Mexico than in the US, so it's a bit of a parallel. But it can affect ARPDAUN a lot if we, for example, would get a lot of players in a country with lower ARPDAUN. But our plan from now on is that we continue to market our games on the markets we have done before. And it's mainly Tyret markets. som det handlar om. Sen har vi en fråga här också från samma användare. Kommer det kosta er en massa pengar att lägga ner Sypenbolaget? Den korta svaren på den frågan är att nej, det kommer inte kosta oss mycket pengar. En fråga från Mats, can you expect that the UA investments will be unchanged in Q3, given that you think EBITDA will be improved? Yes, as long as we don't have any new games that we want to launch and test, and that come relatively far in our MVP process, where we want to, for example, do some larger market share tests or even start a global launch for a game. Now there is no game in our MVP process that has come so far, but we have killed four game prototypes and have one in the marketing test. So no game has come so far that it is in the process of starting a global launch, so marketing levels will remain at similar levels as under Q2. That is a correct understanding. If it opens up opportunities for us to market some games a bit more, based on the ROAs and dropouts we want, which is to reach 100% ROI in 180 days, then we will increase the market share for those games. But yes, you can expect a similar level of market share as under Q2, even in Q3. I have a question from... Stenblok. Ja, men det är väl någonting som vi I have to admit that the past few years have been too bad. There are several areas to be seen more in. Regarding investment meetings, gaming meetings. Sometimes we are invited to different meetings. Often you are invited if you have a mission analysis from something. analysis houses that have meetings, but we don't have that. But sometimes we are invited to various such meetings anyway, which is positive, and then we usually often say yes to it. But yes, we will think about it, to try to be more visible on the stock market and also in investor meetings. Framöver. Sen har vi en fråga från Christian Östman. Med UA på så här låga nivåer som det här kvartalet, tror han att det krävs nya spel för att nå lönsamhet. Och där kan man enkelt säga att utifrån den analys och prognos som vi själva har, så är det inget nytt that we will be able to reach a positive cash flow and break even level. As long as we can see this stabilization of the live operations portfolio, and hopefully also increase it a bit, to keep up with the trend we have seen during Q2, then it should be enough. And if we manage to find a new game that we can launch and create a profitable growth, because it is a bonus to it. So in this calculation we have, there is no new game that is included to achieve profitability. On the other hand, to achieve strong growth and revenue growth and also improved profitability, unfortunately, there are new, better games that we certainly need. And that's what we're working very much with right now, which is the main focus. Det var alla frågor vi hade här. Tackar för ni som var här och lyssnade in. Vi har ingenting mer här och nu men vi tar med oss frågorna som har kommit in och vi ser fram emot Q3 och övriga delen av året här med alla spännande saker som vi har och framförallt kring hur vi kan implementera AI ytterligare i vårt workflow nu som ett litet team. Så ja, spännande framtid här. Jag tror jag glömde säga vem jag var, men det kanske ni vet. Men Erik Dahlrenberg, också medgrundare till Kiwi Games, vd på bolaget. Så yes, med de orden så avslutar vi denna webcast och webinar. Tack så mycket. Ha det bra.

Tackar.