Starbreeze

Fourth quarter 2024

• Net sales amounted to SEK 46.4 million (69.2).
  PAYDAY 2 accounted for SEK 10.3 million (18.3).
  PAYDAY 3 accounted for SEK 14.7 million (36.2).
  Third-party publishing accounted for SEK 15.4 million (14.1).
  Work-for-hire accounted for SEK 5.0 million (0).
• EBITDA* amounted to SEK 19.7 million (-20.6).
• Cash flow from operating activities amounted to SEK -0.3 million (62.7).
• Depreciation, amortization and impairment amounted to SEK 71.6 million (74.4).
• Profit/loss before taxes amounted to SEK -49.0 million (-91.5).
• Basic and diluted earnings per share amounted to
  SEK -0.03 (-0.06).

Full-year 2024

• Net sales amounted to SEK 185.9 million (633.5).
  PAYDAY 2 accounted for SEK 41.8 million (139.1).
  PAYDAY 3 accounted for SEK 82.9 million (477.0).
  Third-party publishing accounted for SEK 47.7 million (14.9).
  Work-for-hire accounted for SEK 6.3 million (0).
• EBITDA* amounted to SEK 97.6 million (439.3), including items affecting comparability of SEK 18.8 million.
• Cash flow from operating activities amounted to SEK 64.9 million (114.6).
• Depreciation, amortization and impairment amounted to SEK 298.8 million (249.0).
• Profit/loss before taxes amounted to SEK -199.1 million (207.7).
• Basic and diluted earnings per share amounted to SEK -0.13 (0.19).
• Cash and cash equivalents amounted to SEK 191.9 million (347.8).
• In line with the company's dividend policy, the Board of Directors proposes that no dividend is paid for the 2024 financial year.

Significant events during the quarter

• October 14, announcement that Roboquest will be launching on PlayStation® 4 and 5 in the first half of 2025. Read more here.
• October 30, Part 2 of the Anniversary Update for PAYDAY® 3 was released with server browser, VoIP, UI update and more. A Year 1 Edition with all the content from the first year was released at the same time. Read more here.
• November 27, Roboquest celebrated its anniversary with “The Endless Update”, a major new update to the hit game. Read more here.
• December 5, Starbreeze announced a work-for-hire agreement with South Korean KRAFTON, Inc to bring the PAYDAY® experience to KRAFTON's game “PUBG: Battlegrounds”. Read more here.
• December 10, a new free heist “First World Bank” was released for PAYDAY® 3. Read more here.
• December 12, relaunch of “Notoriety” as an officially licensed PAYDAY® experience on Roblox. Read more here.

CEO’s message
A More Multifaceted Starbreeze

During the fourth quarter, we continued to work on developing and strengthening the most important brands we work on. PAYDAY is and remains the basis of our strategy, operations and our most important asset. Together with our Dungeons & Dragons® project 'Baxter', third party publishing and our licensing and franchising business, we continue to deliver on our strategy. That is, to diversify our business, optimally utilize resources, capitalize on the strength of our own brand and not least to broaden our target groups and increase our reach.

In the quarter, we announced our collaboration with KRAFTON, Inc. to take PAYDAY to the ever-popular global hit 'PUBG: Battlegrounds' ("PUBG") through a work-for-hire deal. We also launched new content for PAYDAY 3, revealed that our blockbuster Roboquest is coming to PlayStation®4 and 5 in the first half of the year, and relaunched the Roblox game 'Notoriety' as an officially licensed PAYDAY experience.

RESULTS AND FINANCIAL POSITION
During the fourth quarter, we generated revenue from a number of sources; sales of PAYDAY 3 and associated content packages, continued stable demand for PAYDAY 2, third-party publishing where Roboquest continues to contribute strongly to turnover, and the first revenues from our work-for-hire deal. A project that started on a smaller scale, growing to full production in the first quarter of 2025. Compared to the same quarter last year, we have a more balanced and broader revenue mix, which lowers our risk profile and contributes to a more stable basis for growth going forward.

PAYDAY
PAYDAY 3
Close to the anniversary of PAYDAY 3's launch, a major update was released with new and requested functionality, including server browser, VoIP and a new user interface. In December it was followed by another heist for all players, this time the PAYDAY classic 'First World Bank'. At this time of writing, PAYDAY 3 is one of the games of the month on PlayStation®Plus, meaning that during February it will be available for anyone with a Plus subscription to download and play. The collaboration with PlayStation will contribute positively to PAYDAY's revenue in the first quarter of 2025, but most of all, it is an incredible opportunity to let millions of people try PAYDAY 3 as it is today, after 1.5 years of hard work to improve the game both functionally and content-wise.

COLLABORATION AND BRAND EXTENSION
During the quarter, PAYDAY as a brand strengthened its presence and visibility in other channels and took steps towards new game environments. Through a work-for-hire to bring PAYDAY to PUBG, we have a unique opportunity to introduce PAYDAY as a brand and experience to a wider global audience. PUBG is one of the few "evergreen" - ever-popular - gaming platforms in the world, and having the opportunity to create something that attracts both PAYDAY and PUBG fans is an incredibly inspiring opportunity.

During the quarter, the popular Roblox game 'Notoriety' was relaunched under the official PAYDAY banner. The game has built up a large audience over many years, and developer Evan Pickett at Moonstone Games has done a fantastic job of translating the soul of PAYDAY to a brand new platform. Through our presence on one of the world's largest gaming platforms, we also reach a completely new, and younger, audience that is schooled into the PAYDAY experience. Our philosophy is to continue to increase the reach and relevance of the brand through collaborations and creative partnerships combined with our own titles.

PROJECT BAXTER – DUNGEONS & DRAGONS®
Significant progress was made with Project Baxter during the quarter, and the team has ongoing playtests to fine-tune and iterate on the gameplay experience – all to create both a unique to Dungeons & Dragons® and a cooperative experience that puts player actions at the center. During and after the quarter, we have ongoing in-depth conversations and game tests with potential partners to maximize the project's commercial potential, and the response has been positive.

Third-party publishing is an important part of our strategy to spread risk and use our expertise as both developer and publisher. Roboquest continues to be at the center of this effort, where we are preparing for launch on PlayStation®4 and 5 in the first half of 2025. The game has continued to receive a very good reception on Steam and Xbox, and we are convinced that presence on Sony's platforms means great sales potential.

We are in ongoing discussions with developers of potential new third-party projects. The focus is on finding titles with clear commercial potential that are long gone, or fully developed, as a project. After the end of the quarter, we added ‘Unseen’ by Swedish developer The Gang to our portfolio of third-party games. 

ORGANIZATION
Our organization continues to develop and change in step with our projects. We will continue to hire specific expertise for our projects going forward. At the same time, like many of our industry colleagues, we are forced to adapt the organization to market realities and ensure that every krona is spent on the right thing – game development. The net change in the number of employees is single digits so far, but we have chosen to reduce the ambition for our own marketing department and implemented a skill shift in certain roles to strengthen the development organization. During the first quarter of 2025, we will move the head office in Stockholm to new premises that are better adapted to our operations and provides a fantastic opportunity to strengthen our culture and collaboration internally. At the end of the quarter, the number of employees amounted to 189.

CLOSING WORDS
2024 has been an intense but in many ways also successful year for Starbreeze. We have continued to strengthen the PAYDAY brand through collaborations and enhancements, while making great progress with Project Baxter and establishing a strong foundation for our third-party publishing.

With a balanced risk profile, strong cash position and several ongoing projects approaching important milestones, we look forward to 2025. Our vision to be a leading multi-title studio is more realistic than ever, and we are well positioned to continue building value for our players and owners.

MATS JUHL, acting CEO