Beyond Frames

First quarter, January 1 –  March 31, 2024

• Sales amounted to 59,615 (17,275) kSEK, an increase of 245% compared to Q1 2023.              
• Operating profit before depreciation and amortization and shares in associated companies' earnings (EBITDA) amounted to 8,010 (-249) kSEK
• Profit after financial items amounted to 666 (-3,423) kSEK
• EBITDA per share amounted to 0.47 (-0.01) SEK
• Profit per share after financial items amounted to SEK 0.04 (-0.20) SEK
• Cash and cash equivalents at the end of the quarter amounted to 20,139 (17,893) kSEK. This compares to 21,820 kSEK at the end of the previous quarter.
• Equity attributable to the parent company's shareholders in the Group amounted to 82,708 kSEK at the end of the quarter, corresponding to 4.82 SEK per share, compared with 85,807 kSEK, corresponding to 5.00 SEK per share at the end of the corresponding quarter last year.

Comparative figures refer to the corresponding period of the previous year unless otherwise stated.
 

CEO comments

Over 1 million units sold and counting: Beyond’s diverse portfolio strategy continues to meet market needs, delivering growth and profitability

Beyond Frames Entertainment started the year strong with a 245% increase in revenue year over year, positive EBITDA, and positive net profit for the quarter.

Our thesis has always been that by meeting the content needs of XR’s ecosystem of players, studios, and distributors, we could help bolster the category and be a leading player in the industry for our efforts. The strategy to meet this goal was to develop and maintain a diversified portfolio of best-in-class titles and return an equally diverse mix of B2C and B2B revenues we could then use to re-invest and scale. 

Q1 2024 represents a validation of this diversification effort as unit sales of our publishing title, Ghosts of Tabor, and co-funding revenues from our studios’ project milestone deliveries were both significant contributors to this quarter’s record-breaking numbers.

Most importantly, the first quarter of 2024 marked our passing of over 1 million units of games sold. Our ability to spread joy through immersive entertainment is our reason for being, and we’re incredibly thankful for the players who’ve gone out of their way to share their time and attention with us. We look forward to continuing to serve players and our partners as we march toward our goal of being one of the greatest providers of immersive entertainment in the world.

Publishing portfolio delivers once again

The successful re-launch of Ghosts of Tabor onto the main Meta Quest store significantly contributed to this quarter’s gross revenue. The game launched at a higher price point of USD 24.99 compared to its early access price of USD 19.99. Additionally, the game launched with limited-time special editions, driving up the average revenue per customer. While we’re not yet sharing specifics about DLC performance, current attach rates for Ghosts of Tabor DLC align with some of the best-performing live service games for PC and console.

Toy Monsters, a mixed reality tower-defense game, launched after the quarter on the Meta Quest store. The game has been well-received by players who’ve given the title a rating of 4.8 out of 5. Sales for this title are meeting our expectations, and we anticipate a positive ROI over the term from this investment. 

Looking forward, we have two new titles by Combat Waffle Studios signed with our publishing label. Their next two titles, GRIM, a VR multiplayer, base-building crafting survival game reminiscent of the popular PC game Rust, and Silent North, a VR take on the popular multiplayer survival horror game, Day Z, are well into production. While we do not have firm launch dates for these games, we anticipate both will be available for purchase by H1 2025.

Between our active scouting efforts and healthy drip of inbound leads, we expect to announce more publishing titles after the summer.

Cortopia is still hard at work on their 3 unannounced titles. In the first quarter, we secured an additional USD 2.5 million in project funding for our unnamed title tied to a big Hollywood intellectual property. Subject to fluctuations in USD/SEK conversion, this brings the external project funding for the 3 titles currently in production to a total of SEK 58.4 million, of which a majority is scheduled to be paid between 2024 and early 2026.

We are preparing to finish production on one of our unannounced titles, and our goal is to spin up pre-production efforts on a new project. Similar to our current studio pipeline financing strategy, our goal would be to spread the risk of this new game by working with production partners to secure project funding in exchange for a share of future revenues.
 

Strengthened operations

After the quarter, we introduced Beyond Frames’ new CFO, Emma Partin. Emma brings with her 15 years of extensive experience in management consulting from Deloitte, where she was instrumental in guiding international companies through Finance strategies and transformation programs, IPOs preparations, mergers and acquisitions, and post-merger integration. Her contribution will undoubtedly accelerate company efforts toward our ambitious goals.

XR market continues to grow

Meta’s Reality Labs segment posted a 30% YoY revenue increase for Q1. Furthermore, they’ve reiterated their intentions to continue spending heavily in the category, communicating an expectation that their operating losses will increase as they work to scale the segment.

Meta also announced their intentions to open their operating system to other headset manufacturers, opening the door to exciting possibilities for new hardware and new audiences for our games.

As for Apple, it was reported recently that over half of Fortune 100 companies have adopted the Apple Vision Pro. Given Apple’s enterprise positioning for this first foray into the category, we feel this is a promising sign of their continued investment in the platform.

Piper Sandler, a well-known investment bank that regularly researches the consumer behaviors of United States-based teenagers, noted a 2% increase in teenage ownership of VR hardware from 31% in the fall of 2023 to 33% in 2024. Additionally, weekly usage of VR devices among teens increased by 3%. These metrics have grown steadily over the years.
 

A full pipeline and exciting new opportunities

We currently have 6 games in production slated for future release—3 games from Cortopia, 1 game by Odd Raven, and 2 more from our publishing label. With this stacked lineup, we have our resources nearly 100% allocated on these fully funded projects through H1 2026.

Due to our growing reputation in our category, we’ve become a preferred partner for studios, some of which are now coming to us exclusively for publishing support, distributors considering us for higher project funding, and promotional partners interested in working with us to expand our reach and marketing capabilities. These deals present tremendous opportunities, and we are looking at ways to take advantage of them to supercharge our future growth and profitability.

Thanks to our players, staff, partners, and stakeholders for your continued support.

Ace St. Germain, CEO Beyond Frames Entertainment AB (publ)