Paradox Interactive FY2022 Earnings Release

Feb, 2023 *Please note that this is a translation for information purposes only –
in case of any discrepancies between this version and the Swedish,
the Swedish version shall prevail .

YEAR – END REPORT
JANUAR Y – DECEMBER 2022

YEAR -END REPORT , JANUARY – DECEMBER 2022 2

YEAR -END REPORT
JANUARY – DECEMBER 2022
FOURTH QUARTER
• Revenues amounted to MSEK 580.0 (MSEK 390.5),
an increase by 49 % compared to the same period
last year.
• Operating profit amounted to MSEK 244.5 (MSEK
148.1), an increase by 65 %.
• Profit after financial items amounted to MSEK
244.2 (MSEK 147.5), and profit after tax amounted
to MSEK 194.2 (MSEK 115.9).
• Cash flow from operating activities amounted to
MSEK 344.2 (MSEK 269.2), and cash flow from
investing activities amounted to MSEK -251.7
(MSEK -213.7).
• By the end of the period cash amounted to MSEK
747.5 (MS EK 599.7).
• Earnings per share before and after dilution
amounted to SEK 1.84 (SEK 1.10).
• Revenues in the quarter are mainly attributable to
Cities: Skylines, Crusader Kings III, Hearts of Iron
IV, Stellaris, and Victoria 3.
IMPORTANT EVENTS FOURTH QUARTER
• Victoria 3, developed by Paradox Development
Studio, was released.
• Airport Simulator, developed by Playrion Game
Studio, was released for iOS and Android.
• Stardeus, developed by Kodo Linija, was released
in Early Access.
• New downloadable content for the following
games was released during the quarter; Undead
and Future Tech for Prison Architect, Shattered
Hope for Surviving the Aftermath and Financial
Districts for Cities: Skylines.
• New ports of downloadable content were released
during the quarter; N orthern Lords Flavor Pack for
Crusader Kings III.
• The Board proposes a dividend of SEK 2.00 (SEK
1.00) per share.

FULL YEAR 2022
• Revenues amounted to MSEK 1,972.9 (MSEK
1,447.5), an increase by 36 % compared to the
same period last year.
• Operating profit amounted to MSEK 887.1 (MSEK
307.5), an increase by 189 %.
• Profit after financial items amounted to MSEK
884.4 (MSEK 303.9), and profit after tax amounted
to MSEK 708.7 (MSEK 247.8).
• Earnings per share before dilution amounted to
SEK 6.71 (SEK 2.35) and af ter dilution SEK 6.70
(SEK 2.34).

* Pages 15 and 19 have been updated 19 April 2023, in connection
to the publication of the annual report for 2022.

YEAR -END REPORT , JANUARY – DECEMBER 2022 3
COMMENTS FROM THE CEO
FULL THROTTLE INTO THE NEXT CHAPTER
It’s safe to say we entered 2022 with challenges
ahead of us. In the same period last year, our main
issues were having a consistently high game quality,
a high release cadence and cost control , areas that
are the core of every well -functioning gaming
company.
At the end of the year, we can see that our efforts
have given us a very nice return. We have had good
quality in ou r releases, we have continued to work
hard to keep a good release cadence and also made
important efficiency improvements. Our efforts to
improve will continue as it is a work without a real
end, but a profit before tax of SEK 8 84 million for the
full year speaks for itself, we are on the right track. At
the same time, it is important not to forget that our
results were given a strong boost by a weak SEK, but
ultimately this year’s results would not have been
possible without the entire organi sation’s s olid
teamwork.

If we look more closely at the fourth quarter, we can
sum it up as a good end to a good year with revenues
of SEK 580 million and SEK 244 million in profit
before tax; it provides plenty of fuel for the coming
years when we will continue to develop, grow, and
reach new heights.

The quarter certainly featured exciting releases such
as Paradox Arc’s Early Access game Stardeus, the
mobile game Airport Simulator: First Class, and a
number of DLCs. However, the main event of the year
and quarter is Victoria 3, which has become an
important component in our game portfolio and
which, despite high expectations from both us and
our fans, has managed to reach its goals. In
connection to the release, we also start to amortise
Victoria 3’s development cost according to a
degressive model, which increases the cost of goods
sold.

However, the launch of Victoria 3 is not the final verse
on a major change, rather it is the beginning of a new
intense chapter in Paradox’s history. During 2022, we
have focused on finding our way back to and
strengthening our core business with a focus on our
live games. Now, we aim to expand our core as we
get ready to release more new games from our
pipeline, thereby strengthening our long -term abi lity
to grow revenue and strengthen cash flow. It also
means that we enter a more normal state for
Paradox, where we may have a higher volatility
between quarters.

LET’S GO
The feeling that exists throughout the company is
that we are amped up and ready to run at full speed
into 2023 . In the coming year, our focus is to continue
to increase the cadence of downloadable content
and build on our recurring revenue, while working
hard to deliver the games in our pipeline. Let’s go .

Fredrik Wester, CEO

YEAR -END REPORT , JANUARY – DECEMBER 2022 4
PARADOX INTERACTIVE
AT A GLANCE
Paradox Interactive is one of the premier developers and publishers of strategy and management games for PC
and consoles. By developing long -lived games with downloadable content, renewing its game portfolio with
engaging games and having a close relationship to its players, the company creates the strategy and management
segments’ best gaming experiences.
The group today consists of publishing business and nine studios in six countries that develop gaming experiences
for the company’s over five million monthly active players. Amongst its most important active games are Cities:
Skylines, Hearts of Iron IV, Cr usader Kings III, Europa Universalis IV, Victoria 3, Stellaris, Surviving Mars, Surviving the
Aftermath and Prison Architect.
Paradox strives for a healthy profit margin, a stable operating cash flow and strong growth. Thus, enabling stable
operations and continuous investments in the company’s future.

5 +
Million MAU

11
Active games
45 %
R12 profit margin

15
Games in pipeline
Rolling 12 month revenues and operating profit

Quarterly revenues and operating profit
0
500
1 000
1 500
2 000
2 500
Rolling 12 months revenue Rolling 12 months operating profit -100
0
100
200
300
400
500
600
700
Revenues Operating profit

YEAR -END REPORT , JANUARY – DECEMBER 2022 5
RELEASE S IN THE PERIOD

VICTORIA 3
Release date : 25 October 2022
Plat forms : PC
• Description : Paradox Development Studio invites you to build your ideal society in
the tumult of the exciting and transformative 19th century. Balance the competing
interests in your society and earn your place in the sun in Victoria 3, one of the most
anticipated games in Paradox’s history. Lead dozens of world nations from 1836 –
1936. Agrarian or Industrial, Traditional or Radical, Peaceful or Expansionist , the
choice is yours.
Publisher : Paradox Interactive
Developer : Paradox Development Studio

AIRPORT SIMULATOR: FIRST CLASS
Release date: 12 October 2022
Platforms: iOS, Android
Description: Airport Simulator: First Class allows players to build, develop, and
manage the operations of an entire airport, placing everything from security
checkpoints to coffee shops, maintaining contracts and schedules with airlines, and
optimizing passenger satisfaction from arrival to departure. From initial planning
and construction through upgrades and additions, players’ airports can grow into
massive international hubs, where passengers’ needs and flight schedules grow ever
more detailed and complex.
Publisher: Playrion Game Studio
Developer : Playrion Game Studio

YEAR -END REPORT , JANUARY – DECEMBER 2022 6
RELEASE S IN THE PERIOD

CITIES : SKYLINES – FINANCIAL DISTRICTS
Release date : 15 November 2022
Plat forms : PC, PLAYSTATION 4, XBOX ONE
Description : Boost the economy of your City with a financial district, and use your
funds to invest in the best industries for your population. Financial Districts is a mini –
expansion from Colossal Order that adds the feature “Investments” and more than a
hundred assets to the game.
Publisher: Para dox Interactive
Developer : Colossal Order

CRUSADER KINGS III: CONSOLE EDITION – NORTHERN LORDS
Release date : 17 November 2022
Plat forms : XBOX SERIES X|S, PLAYSTATION 5
Description: The drama of the Viking Age comes to vivid life in Northern Lords . In the
Flavo ur Pack , players will experience the Viking life of roaming adventurers, new
character traits and exciting events that will challenge all who wish to dine at Odin’s
table.
Publisher : Paradox Interactive
Developer : Paradox Development Studio and Lab42

YEAR -END REPORT , JANUARY – DECEMBER 2022 7
RELEASE S IN THE PERIOD

SURVIVING THE AFTERMATH: SHATTERED HOPE
Release date : 3 November 2022
Plat forms : PC, PLAYSTATION 4, XBOX ONE, NINTENDO SWITCH
Description : The Moon is shattered. Broken. Lost in the vast space above planet
Earth. What was once a beacon of hope in the sky has now left survivors to deal with
a new, catastrophic void in “Shattered Hope”, the new Expansion for Surviving the
Aftermath. Use the Moon’s fragments to your advantage and make sure to keep your
hopes up (literally!) to survive.
Publisher : Paradox Interactive
Developer : Iceflake Studios

PRISON ARCHITECT: UNDEAD
Release date : 11 October 2022
Platforms: PC, PLAYSTATION 4, XBOX ONE, NINTENDO SWITCH
Description : Undead brings a whole new scenario to Prison Architect: one where the
only objective is to survive. Save your inmates and fight off the undead attacks in
this new, spooky expansion .
Publisher : Paradox Interactive
Developer : Double Eleven

YEAR -END REPORT , JANUARY – DECEMBER 2022 8
RELEASE S IN THE PERIOD

PRISON ARCHITECT: FUTURE TECH PACK
Release date : 22 November 2022
Plat forms : PC, PLAYSTATION 4, XBOX ONE, NINTENDO SWITCH
Description : Finally, the day has come! Thanks to our cutting -edge tools, and
advanced robotics we have built the perfect correctional facility. No more outbreaks,
no more fights: everything will be in order. I just have to push this button and let
technology run its c ourse.
Publisher : Paradox Interactive
Developer : Double Eleven

STARDEUS
Release date : 12 Oc tober 2022
Platforms : PC
Description : Stardeus is a deep colony sim set on a broken starship manned by
drones and hibernating human survivors. As the AI, have your drones repair your
ship, save your crew, and travel the stars in this beautiful simulation.
Publisher : Paradox Arc
Developer : Kodo Lin ija

YEAR -END REPORT , JANUARY – DECEMBER 2022 9
FINANCIAL OVERVIEW
REVENUE AND PROFIT FOURTH QUARTER
Revenues amounted to MSEK 580.0 (MSEK 390.5), an
increase by 49 % compared to the same period last
year. Victoria 3, developed by Paradox Development
Studio, was released. Airport Simulator, developed by
Playrion Game Studio, was released for iOS and
Andro id. Stardeus, developed by Kodo Linija, was
released in Early Access. New downloadable content
for the following games was released during the
quarter; Undead and Future Tech for Prison Architect,
Shattered Hope for Surviving the Aftermath and
Financial Di stricts for Cities: Skylines. New ports of
downloadable content were released during the
quarter; Northern Lords Flavor Pack for Crusader Kings
III. Revenues in the quarter are mainly attributable to
Cities: Skylines, Crusader Kings III, Hearts of Iron IV,
Stellaris, and Victoria 3.
Cost of goods sold amounted to MSEK 2 53.2 (MSEK
196.4), attributable to game development,
development support, operation and maintenance of
games, costs of licenses, brands, and similar rights, as
well as royalties to developmen t studios and external
rights holders.
Amortisation of released games amounted to MSEK
118.9 (MSEK 60.2). The amortisations have increased
as a result of new games released. The write -downs for
the period in cost of goods sold amount to MSEK 0.0
(MSEK 26.2 ). Write -downs in the comparison period
refers to games not yet announced where
development has been cancelled.

Amortisations of licenses, brands, and similar rights
amounts to MSEK 22.6 (MSEK 20.6).
In addition to depreciation, amortisation and write –
downs within the item, a total of MSEK 1 03.9 (MSEK
82.1) was expensed regarding non -capitalised
development costs, development support, operation
and maintenance of games, and royalties. Non –
capitalised d evelopment costs have increased
compared with the comparison period as the
capitalisation of the group’s externally developed
games starts in a later development phase than the
previous period. This is the result of a changed
assessment regarding activabil ity that was introduced
in 2021 for new games. The changed assessment has
had no impact on the comparative figures. Costs for
development support, operation and maintenance of
games are lower than the comparison period. Cost of
royalties is higher compared to the same period last
year.
Selling expenses for the period amounted to MSEK 45.2
(MSEK 43.6 ). Work with increasing efficiency within the
marketing organi sation has led to a general underlying
cost reduction within the item . At the same time, costs
have increased as a result of more game releases
compared to the same period last year.
Administrative expenses for the period amounted to
MSEK 22.8 (MSEK 21.8 ). Costs for administration are
generally unchanged over time and are relatively
unaffected by other operations, this quarter as well.
0
20
40
60
80
100
120
140
160
Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022
Write-downs 0
50
100
150
200
250
300
350
400
Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022
COGS Selling expenses Administrative expenses

YEAR -END REPORT , JANUARY – DECEMBER 2022 10
Other income amounted to MSEK 1.4 (MSEK 19.5 ), and
other expenses to MSEK -15.7 (MSEK -0.1 ). Other
income and other expenses consist primarily of
exchange rate effects on the group’s cash and cash
equivalents, operat ing receivables, and operating
liabilities during the quarter.
Operating profit amounted to MSEK 244 .5 (MSEK
148.1 ). Financial items amounted to MSEK -0.2 (MSEK –
0.6). Financial items primarily consist of interest on
lease liabilities and interest received on cash and cash
equivalents.
Profit after financial items amounted to MSEK 244 .2
(MSEK 147.5 ), and profit after tax amounted to MSEK
194.2 (MSEK 115.9 ).
FINANCIAL POSITION
Capitalised development amounted to MSEK 1,650.3
(MSEK 1,198.5 ) by the end of the period. The item
refers to both games that have not yet been released
and games that have been released and subsequently
amortised . The increase in the item is primarily
attributable to games that have not yet been released .

Licenses, brands, and similar rights amounted to MSEK
159.5 (MSEK 232.5).
Goodwill amounted to MSEK 22.4 (MSEK 20.6)
attributable to the acquisition of Iceflake Studios.
Right -of-use assets for offices amounted to MSEK 136.1
(MSEK 165.3).
Shares in asso ciates amount to MSEK 32.6 (MSEK 31.1)
by the end of the period, relating to 33 % of shares in
Seattle -based development studio Hardsuit Labs. The
shares are valued at the equity method.
Accounts receivable amounted to MSEK 259.9 (MSEK
133.8).
Cash and cash equivalents amounted to MSEK 747.5
(MSEK 599.7).
Shareholders’ equity amounts to MSEK 2,292.4 (MSEK
1,661.6), of which MSEK 708.7 (MSEK 247.8) consists of
accumulated profit for the y ear.
Long term lease liabilities amount to MSEK 104.9
(MSEK 134.4) consisting of liabilities for office
premises.
Deferred tax liabilities amount to MSEK 137.2 (MSEK
163.6 ), mainly relating to untaxed reserves and
intangible assets from acquisitions.
Sho rt term lease liabilities amount to MSEK 3 5.6 (MSEK
34. 5) consisting of short -term liabilities for office
premises.
Accrued expenses and prepaid income amounts to
MSEK 418.6 (MSEK 396.6 ) by the end of the period.
Accrued costs for variable remuneration to employees
have increased in relation to the comparison period
because of a higher overall profit. Prepaid revenue is
lower than the comparison perio d.
CASH FLOW FOURTH QUARTER
Cash flow from operating activities amounted to MSEK
344.2 (MSEK 269.2), primar ily attributable to the
operating profit. Cash flow from investing activities
amounted to MSEK -251.7 (MSEK -213.7), mainly
referring to investments in game development. Cash
flow from financing activities amounted to MSEK -8.8
(MSEK -8.6) relating mainly to amorti sation of lease
liabilities for office premises.
FULL YEAR SUMMARY
Revenues amounted to MSEK 1,972.9 (MSEK 1,447.5)
an increase by 36 % compared to the same period last
year. Cost of goods sold amounted to MSEK 862.6
(MSEK 881.0 ), primarily attributable to game
development, development support, operation and
maintenance of games, as well as royalties to third
parties. Write -downs within cost of goods sold
amounts to MSEK 0.0 (MSEK 236.3 ). Cost of royalties is
higher compared to the same period last year . 0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022
Thousands
Capitalised development costs

YEAR -END REPORT , JANUARY – DECEMBER 2022 11
Operating profit amounted to MSEK 887.1 (MSEK
307.5 ), a n increase by 189 %. Profit after financial
items amounted to MSEK 884,4 (MSEK 303.9 ), and
profit after tax amounted to MSEK 708.7 (MSEK 247.8 ).
Cash flow from operating activiti es amounted to MSEK
1,084.7 (MSEK 736.6 ). Cash flow from investing
activities amounted to MSEK -807.0 (MSEK -766.6 ).
Cash flow from financing activities amounted to MSEK
-141.0 (MSEK -139.6 ).
RELATED PARTY TRANSACTIONS
No transactions have taken place between the group
and related parties that have affected the group’s
position and results.
PARENT COMPANY FOURTH QUARTER
The parent company houses the publishing business.
Within the publishing business, the parent company
buys development services from bo th external and
wholly owned development studios and pays royalties
to these where applicable. The parent company also
provides administrative services to the subsidiaries. All
in all, this leads to the parent company’s turnover to a
large extent making up the group’s total turnover.
Parent company revenues for the quarter amounted to
MSEK 586.6 (MSEK 393.1 ). Operating profit amounted
to MSEK 144.5 (MSEK 142.9 ). Profit after financial items
amounted to MSEK 144.8 (MSEK 186.4 ). Profit after tax
amounted to M SEK 271.8 (MSEK 159.5 ).
ACCOUNTING PRINCIPLES
This interim report has been prepared in accordance
with IAS 34, Interim Financial Reporting as well as RFR
1 and the annual accounts act. The parent company
applies the Swedish Financial Reporting Board’s
reco mmendation RFR 2, accounting for legal entities.
Accounting principles and calculation bases are in
accordance with the principles applied in the
company’s most recent annual report. The carrying
amount of the Group’s long term financial instruments
valued at accrued acquisition value essentially
corresponds to its fair value as the interest rate is in
parity with current market interest rates. The carrying
amount of the Group’s short -term financial
instruments valued at accrued acquisition value
essentiall y corresponds to its fair value as the
discounting effect is not significant. Accounting
principles and calculation bases are in accordance
with the principles applied in the company’s most
recent annual report.
RISKS AND UNCERTAINTIES
Paradox is, like mo st companies, exposed to certain
risks in its operations. The risks and uncertainties are
described in the Annual Report for 2021, page 36. Risks
to be specifically mentioned includes a dependency on
key employees, dependency on a few sales partners,
delay s of game projects, low revenues from game
releases, and foreign currency. These risks and
uncertainties may have a direct or indirect impact on
the group’s financial position and results.
DIVIDEND PROPOSAL
The Board proposes a dividend to shareholders of SEK
2.00 per share. The Board proposes Monday , May 22,
202 3 as record date. If the meeting approves the
proposal, the dividend will be distributed by Euroclear
Sweden AB on Thursday May 25, 202 3.

YEAR -END REPORT , JANUARY – DECEMBER 2022 12
FINANCIAL CALENDAR
Annual report 2022
Interim report January -March 2023
Annual General Meeting 202 3
Interim report January -June 2023
Interim report January -September 2023
Year -end report 2023
2023 -04-19
2023 -04-28
2023 -05-17
2023 -07-28
2023 -10-27
2024 -02-06
CONTACT
Additional information about the company can be
found on the corporate website
www.paradoxinteractive.com. The company can be
contacted by e -mail, ir@paradoxinteractive.com, or by
post Paradox Interactive AB, Magnus Ladulåsgatan 4,
118 66, Stockholm, Sweden.
ASSURANCE BY THE BOARD OF DIRECTORS
The board of directors hereby provide an assurance
that the interim report provides a true and fair view of
the parent company’s and the group’s business,
positions, and earnings, and describe the significant
risks and uncertainties faced by the companies making
up the group.
Stockholm Februar y 7, 202 3

The B oard of Directors
This report has not been subject to review by the company’s
auditors.
This information is information that Paradox Interactive AB (publ) is
obliged to make public pursuant to the EU Market Abuse Regulation.
The information was submitted for publication 08:00 CET on 7
February 202 3.

YEAR -END REPORT , JANUARY – DECEMBER 2022 13
KEY FIGURES FOR THE GROUP

For definitions of key figures, see the annual report. 2022-10-01 2021-10-01 2022-01-01 2021-01-01
2022-12-31 2021-12-31 2022-12-31 2021-12-31
Revenues, KSEK 580,010 390,515 1,972,906 1,447,456
Operating profit, KSEK 244,456 148,116 887,146 307,453
Profit after financial items, KSEK 244,220 147,483 884,440 303,926
Profit after tax, KSEK 194,179 115,915 708,709 247,770
Operating margin 42% 38% 45% 21%
Profit margin 42% 38% 45% 21%
Equity/assets ratio 73% 66% 73% 66%
Equity per share before dilution, SEK 21.70 15.73 21.70 15.73
Equity per share after dilution, SEK 21.70 15.70 21.70 15.70
Earnings per share before dilution, SEK 1.84 1.10 6.71 2.35
Earnings per share after dilution, SEK 1.84 1.10 6.70 2.34
Number of shares by the end of the period before dilution 105,619,209 105,600,000 105,619,209 105,600,000
Number of shares by the end of the period after dilution 105,619,209 105,853,350 105,619,209 105,853,350
Average number of shares before dilution 105,619,209 105,600,000 105,609,605 105,600,000
Average number of shares after dilution 105,619,209 105,611,876 105,723,810 105,755,565
Average number of employees 656 723 672 716
Number of employees by the end of the period 656 721 656 721

YEAR -END REPORT , JANUARY – DECEMBER 2022 14
GROUP INCOME STATEMENT ( K SEK)

OTHER COMPREHENSIVE INCOME (KSEK)

2022-10-01 2021-10-01 2022-01-01 2021-01-01
2022-12-31 2021-12-31 2022-12-31 2021-12-31
Revenues 580,010 390,515 1,972,906 1,447,456
Cost of goods sold -253,231 -196,403 -862,629 -880,971
Gross profit 326,779 194,112 1,110,277 566,485
Selling expenses -45,196 -43,626 -170,490 -192,867
Administrative expenses -22,814 -21,779 -91,618 -102,899
Other income 1,385 19,524 56,635 40,841
Other expenses -15,697 -115 -17,658 -4,107
Operating profit 244,456 148,116 887,146 307,453
Financial income 2,425 289 3,952 545
Financial expense -2,660 -922 -6,658 -4,072
Profit after financial items 244,220 147,483 884,440 303,926
Tax -50,042 -31,568 -175,731 -56,157
Profit for the period 194,179 115,915 708,709 247,770
Profit for the period is attributable to the shareholders of the parent company.
Earnings per share before dilution, SEK 1.84 1.10 6.71 2.35
Earnings per share after dilution, SEK 1.84 1.10 6.70 2.34 2022-10-01 2021-10-01 2022-01-01 2021-01-01
2022-12-31 2021-12-31 2022-12-31 2021-12-31
Profit for the period 194,179 115,915 708,709 247,770
Other comprehensive income
Items that may be reclassified to profit or loss
Translation differences -2,315 2,483 20,780 9,185
Other comprehensive income -2,315 2,483 20,780 9,185
Total comprehensive income for the period 191,864 118,398 729,489 256,955
Profit for the period is attributable to the shareholders of the parent company.

YEAR -END REPORT , JANUARY – DECEMBER 2022 15
GROUP BALANCE SHEET (KSEK)

2022-12-31 2021-12-31
ASSETS
Non-current assets
Capitalised development 1,650,275 1,198,502
Licenses, brands and similar rights 159,501 232,480
Goodwill 22,415 20,600
Property and equipment 17,561 22,021
Right-of-use assets 136,118 165,272
Investments in associates 32,555 31,082
Other long term assets 18,695 18,589
Total non-current assets 2,037,120 1,688,546
Current assets
Accounts receivable 259,948 133,780
Tax assets 709 19,821
Other receivables 34,769 24,534
Prepaid expenses and accrued revenue 61,376 56,287
Cash and cash equivalents 747,506 599,724
Total current assets 1,104,307 834,147
TOTAL ASSETS 3,141,427 2,522,693 EQUITY AND LIABILITIES
Equity
Share capital 528 528
Other capital contributed 29,542 27,994
Reserves 25,176 4,397
Retained earnings 1,528,422 1,380,874
Profit for the period 708,709 247,770
Total equity 2,292,377 1,661,563
Long term liabilities
Lease liabilities 104,845 134,438
Deferred tax liabilities 137,220 163,606
Other liabilities – 422
Total long term liabilities 242,065 298,466
Current liabilities
Accounts payable 52,487 97,016
Current tax liabilities 66,529 6,278
Lease liabilities 35,616 34,536
Other liabilities 33,725 28,283
Accrued expenses and prepaid revenues 418,628 396,550
Total current liabilities 606,985 562,663
TOTAL EQUITY AND LIABILITIES 3,141,427 2,522,693

YEAR -END REPORT , JANUARY – DECEMBER 2022 16
CHANGE IN GROUP EQUITY (KSEK)

Share capital
Other
contributed
capital Reserves
Retained
earnings Total equity
At the beginning of the period 2022-01-01 528 27,994 4,397 1,628,644 1,661,563
Profit for the period 708,709 708,709
Other comprehensive income
Translation difference 20,780 20,780
Total other comprehensive income – – 20,780 – 20,780
Total comprehensive income – – 20,780 708,709 729,489
Transactions with owners
Premiums when redeeming warrants 0 3,362 – – 3,362
Re-purchase warrants – -1,814 – – -1,814
Share-based payments staff – – – 5,378 5,378
Dividends – – – -105,600 -105,600
Total transactions with owners 0 1,548 – -100,222 -98,674
AT THE END OF THE PERIOD 2022-12-31 528 29,542 25,176 2,237,131 2,292,377 Share capital
Other
contributed
capital Reserves
Retained
earnings Total equity
At the beginning of the period 2021-01-01 528 27,994 -4,788 1,484,423 1,508,158
Profit for the period – – 247,770 247,770
Other comprehensive income
Translation difference – – 9,185 – 9,185
Total other comprehensive income – – 9,185 – 9,185
Total comprehensive income – – 9,185 247,770 256,955
Transactions with owners
Share-based payments staff – – – 2,051 2,051
Dividends – – – -105,600 -105,600
Total transactions with owners – – – -103,549 -103,549
AT THE END OF THE PERIOD 2021-12-31 528 27,994 4,397 1,628,644 1,661,563

YEAR -END REPORT , JANUARY – DECEMBER 2022 17
GROUP CASH FLOW STATEMENT (KSEK)

2022-10-01 2021-10-01 2022-01-01 2021-01-01
2022-12-31 2021-12-31 2022-12-31 2021-12-31
Cash flow from operations
Operating profit 244,456 148,116 887,146 307,453
Adjustment of depreciation, amortisation and write-downs 153,078 117,348 473,498 589,855
Other adjustments 40 -4,010 4,362 -4,235
Interest received 2,425 289 3,952 545
Interest paid -2,660 -922 -6,658 -4,072
Tax paid -60,289 -27,242 -126,703 -150,200
Cash flow before changes in working capital 337,049 233,579 1,235,598 739,346
Changes in working capital
Change in current receivables -69,157 -5,282 -141,060 42,441
Change in current liabilities 76,324 40,905 -9,799 -45,202
Cash flow from current operations 344,215 269,203 1,084,740 736,586
Investing activities
Investments in capitalised development -250,678 -193,262 -793,771 -744,313
Investments in licenses, brands and similar rights – -3,235 – -3,235
Investments in equipment -1,008 172 -2,119 -1,694
Investments in subsidiaries – – -11,055 –
Investments in other financial assets – -17,333 -25 -17,333
Cash flow from investing activities -251,685 -213,657 -806,969 -766,574
Financing activities
Amortisation of lease liability -8,801 -8,643 -35,371 -33,994
Paid dividend – – -105,600 -105,600
Cash flow from financing activities -8,801 -8,643 -140,971 -139,594
Cash flow for the period 83,729 46,902 136,800 -169,582
Cash and cash equivalents at the beginning of the period 665,922 552,307 599,724 767,561
Exchange rate effect -2,145 515 10,981 1,746
Cash and cash equivalents at the end of the period 747,506 599,724 747,506 599,724

YEAR -END REPORT , JANUARY – DECEMBER 2022 18
PARENT COMPANY INCOME STATEMENT (KSEK)

2022-10-01 2021-10-01 2022-01-01 2021-01-01
2022-12-31 2021-12-31 2022-12-31 2021-12-31
Revenues 586,555 393,102 1,992,191 1,446,878
Cost of goods sold -360,403 -201,724 -1,276,664 -873,604
Gross profit 226,153 191,378 715,528 573,274
Selling expenses -43,582 -40,962 -163,264 -180,473
Administrative expenses -22,842 -21,973 -91,873 -104,349
Other income 384 14,481 54,248 34,487
Other expenses -15,657 – -17,060 -4,262
Operating profit 144,456 142,924 497,578 318,678
Profit from shares in subsidiaries – 43,143 – 43,143
Financial income 1,702 341 1,952 341
Financial expense -1,312 -5 -2,391 -157
Profit after financial items 144,847 186,402 497,140 362,004
Year-end appropriations 200,000 7,500 200,000 68,100
Income tax expense -73,062 -34,408 -145,215 -83,065
Profit for the year and total income for the year 271,785 159,495 551,925 347,039

YEAR -END REPORT , JANUARY – DECEMBER 2022 19
PARENT COMPANY BALANCE SHEET (KSEK)

2022-12-31 2021-12-31
ASSETS
Non-current assets
Capitalised development 1,408,095 1,185,934
Licenses, brands and similar rights 37,495 63,625
Property and equipment 10,116 14,242
Shares in subsidiaries 305,812 305,812
Investments in associates 16,766 16,766
Other long term assets 17,393 17,393
Total non-current assets 1,795,677 1,603,772
Current assets
Accounts receivable 255,031 130,840
Receivables from group companies 79,656 35,176
Tax assets – 19,821
Other receivables 28,163 18,668
Prepaid expenses and accrued revenues 59,969 55,335
Cash and cash equivalents 448,013 469,881
Total current assets 870,832 729,720
TOTAL ASSETS 2,666,508 2,333,492 EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital 528 528
Capitalised development reserve 1,408,095 1,185,934
Non-restricted equity
Share premium reserve 29,542 27,994
Retained earnings -237,669 -262,325
Profit for the period 551,925 347,039
Total equity 1,752,422 1,299,171
Untaxed reserves 485,000 555,000
Long term liabilities
Other liabilities – 422
Total long term liabilities – 422
Current liabilities
Accounts payable 45,619 87,113
Liabilities to group companies 28,016 21,409
Current tax liabilities 4,352 –
Other liabilities 4,339 13,740
Accrued expenses and prepaid revenues 346,760 356,637
Total current liabilities 429,086 478,899
TOTAL EQUITY AND LIABILITIES 2,666,508 2,333,492

YEAR -END REPORT , JANUARY – DECEMBER 2022 20
NOTES (KSEK)
NOTE 1 . SEGMENT REPORTING
Group Management has determined the operating segments based on the information processed by the CEO and which is the basis f or making
strategic decisions. The operations consist of one segment.
Group revenue from clients based on where the distributor is located is divided into the following geographical areas;

During the quarter and the 12-month period respectively, MSEK 412 .8 (MSEK 281.7 ) and MSEK 1,240.6 (MSEK 952.6 ) respectively of the group’s
revenue came from one and the same customer.
Group revenue divided into m ajor product categories;

Prepaid revenue amounted to MSEK 264.2 (MSEK 291.8 ) at the end of the period. Of these, MSEK 235.3 is expected to be reported as revenue
during the next 12 -month period, and MSEK 28.9 within 24 month s.
The revenues for the quarter and the 12-month period respectively include MSEK 42.6 (MSEK 9.3) and MSEK 185.1 (MSEK 10 1.6), respectively,
which were included in prepaid revenue at the beginning of the period.

NOTE 2 . DEPRECIATIONS, AMORTISATIONS AND WRITE -DOWNS BREAKDOWN PER FUNCTION
2022-10-01 2021-10-01 2022-01-01 2021-01-01
2022-12-31 2021-12-31 2022-12-31 2021-12-31
USA 472,202 345,281 1,679,021 1,219,196
Sweden 9,339 2,167 21,318 16,846
Rest of Europe 88,626 34,567 234,297 176,402
Rest of the World 9,843 8,501 38,269 35,012
Total 580,010 390,515 1,972,906 1,447,456 2022-10-01 2021-10-01 2022-01-01 2021-01-01
2022-12-31 2021-12-31 2022-12-31 2021-12-31
PC 505,162 334,717 1,678,253 1,187,471
Console 55,937 42,037 218,810 189,593
Mobile 13,636 11,120 41,766 53,681
Other 5,276 2,641 34,076 16,712
Total 580,010 390,515 1,972,906 1,447,456 2022-10-01 2021-10-01 2022-01-01 2021-01-01
2022-12-31 2021-12-31 2022-12-31 2021-12-31
Cost of goods sold 149,379 114,298 460,407 577,219
Selling expenses 1,695 1,144 4,506 4,779
Administrative expenses 2,004 1,906 8,585 7,857
Total 153,078 117,348 473,498 589,855

YEAR -END REPORT , JANUARY – DECEMBER 2022 21
ABOUT PARADOX INTERACTIVE
Paradox Interactive is one of the premier developers and publishers of strategy and
management ga mes for PC and consoles. The players are located all over the world
but some of the biggest markets are North America, Western Europe, Scandinavia
and Asia.
The game portfolio consists of popular franchises such as Stellaris, Europa
Universalis, Hearts of Iron, Crusader Kings, Cities: Skylines, Prison Architect, the
Surviving games, Age of Wonders and Victoria. Paradox Interactive also owns the
World of Darkness brand catalogue.
Paradox Interactive’s headquarters is on Södermalm in St ockholm and is listed on
Nasdaq First North Premier Growth Market.