THIRD QUARTER
- Revenues amounted to MSEK 456 (MSEK 395), an increase of 15% compared to the same period last year.
- Operating profit amounted to MSEK 142 (MSEK 112), an increase of 27%.
- Profit after financial items amounted to MSEK 146 (MSEK 116), and profit after tax amounted to MSEK 127 (MSEK 93).
- Cash flow from operating activities amounted to MSEK 197 (MSEK 195), and cash flow from investing activities amounted to MSEK -160 (MSEK -182).
- Earnings per share before dilution amounted to SEK 1.21 (SEK 0.88) and after dilution to SEK 1.21 (SEK 0.88).
- Revenues for the quarter are primarily attributable to Age of Wonders 4, Cities: Skylines, Cities: Skylines II, Crusader Kings III, Hearts of Iron IV, Stellaris, Transport Fever 3 and Victoria 3.
FIRST NINE MONTHS
- Revenues amounted to MSEK 1,411 (MSEK 1,317), an increase of 7% compared to the same period last year.
- Operating profit amounted to MSEK 425 (MSEK 391), an increase of 9%.
- Profit after financial items amounted to MSEK 440 (MSEK 409), and profit after tax amounted to MSEK 362 (MSEK 327).
- Cash flow from operating activities amounted to MSEK 610 (MSEK 723), and cash flow from investing activities amounted to MSEK -450 (MSEK -607).
- Earnings per share before dilution amounted to SEK 3.43 (SEK 3.09) and after dilution to SEK 3.43 (SEK 3.09).
SIGNIFICANT EVENTS THIRD QUARTER
- The new game Transport Fever 3, developed by Urban Games, was released for PC and consoles.
- New downloadable content was released for games during the period: Feeding the Future to Surviving Mars: Relaunched and By God Alone to Crusader Kings III.
- Steam Summer Sale was held during the period, offering discounts across a large part of the game catalogue.
- During the quarter, 1,221,425 own shares were repurchased for a total amount of MSEK 178 as part of the company’s share repurchase program.
- The new games Afterworld, developed by Paradox Development Studio, and LEGO® Skylines, developed by Iceflake Studios, were announced.
- Paradox Interactive sold its subsidiary Playrion to Trophy Games. The sale resulted in a gain of MSEK 40, which was recognised in other operating income as part of operating profit.
COMMENTS BY THE CEO
The third quarter was marked by few releases that came late in the period. This means that it was above all sales from our wider catalogue that carried the quarter. That is how our third quarters often look. What matters is that we build games over time that players want to return to and that keep selling for many years. On that note, we announced two new games during the quarter and released one.
At Gamescom we carried out our largest marketing effort to date. We announced the grand strategy game Afterworld and the city builder LEGO® Skylines, and we opened the preorder campaign for Transport Fever 3.
Afterworld and LEGO® Skylines are both developed in house and were given a very warm reception by players. That is a good start, even if a great deal of work remains before the games are ready for release. These titles also show where we want to place the bulk of our resources: on our own games, in genres we know well, with teams that have worked closely with our players for a long time. That is where we have the best conditions for building games our fans want to return to for many years.
Transport Fever 3 released at the end of the quarter and sales are in line with our expectations. The reception has been good, and Urban Games has developed a game we are glad to publish.
The deal differs from how we usually work. We normally want to own the brands we publish and to enter the project earlier in development. For Transport Fever 3 we saw good reasons to make an exception. It is a good and engaging game with an audience that overlaps with our own. The capital is also tied up for a relatively short period, while we see the possibility of revenues over many years. We will continue to be selective with deals of this kind, but this one we look forward to developing together with Urban Games.
During the quarter we also sold the mobile games studio Playrion, which gave an additional contribution to the result. The sale follows the direction we have chosen for Paradox. We are concentrating our resources on the platforms, genres and franchises where we have the deepest knowledge and see the best opportunities over the long term. That also means we have to choose what not to do.
A period with more releases now lies ahead. The Crusader Kings III team, for example, is preparing for the year’s big release, Silk & Silver, following a strong launch of By God Alone in the quarter. We also announced expansion passes for Age of Wonders 4 and Cities: Skylines II during the quarter, with a great deal of content to come. For Cities: Skylines II these will be Iceflake Studios’ first paid expansions. We are happy that the game is now in a place where we can work with larger content additions. We look forward to putting them in players’ hands later this year