Paradox Interactive FY2023 Q1 Earnings Release

Apr, 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 .

INTERIM REPORT
JANUAR Y – MAR CH 202 3

INTERIM REPORT , JANUARY – MARCH 2023 2

INTERIM REPORT
JANUARY – MARCH 2023
FIRST QUARTER
• Revenues amounted to MSEK 482 .8 (MSEK 476 .1),
an increase by 1 % compared to the same period
last year.
• Operating profit amounted to MSEK 155.7 (MSEK
208.5 ), a decrease by 25 %.
• Profit after financial items amounted to MSEK
157.1 (MSEK 207.7 ), and profit after tax amounted
to MSEK 123.7 (MSEK 168.5 ).
• Cash flow from o perating activities amounted to
MSEK 244. 6 (MSEK 236.4 ), and cash flow from
investing activities amounted to MSEK -170 .1
(MSEK -157 .4).
• By the end of the period cash amounted to MSEK
812 .7 (MSEK 671.2 ).
• Earnings per share before dilution amounted to
SEK 1. 17 (SEK 1. 60) and after dilution SEK 1. 16
(SEK 1. 59).
• Revenues in the quarter are mainly attributable to
Cities: Skylines, Crusader Kings III, Hearts of Iron
IV, Stellaris, and Victoria 3.
IMPORTANT EVENTS FIRST QUARTER
• Surviving the Abyss developed by Rocket Flair
Studios was released in Early Access and Knight s of
Pen and Paper 3 developed by Kyy Games was
released to PC . Both games were published by
Paradox Arc.
• Cities: Skylines – Remastered was released to
Playstation 5 and Xbox Series X|S .
• New downloadable content for the following
games was released during the quarter; Jungle
Pack for Prison Architect, First Contact for Stellaris ,
The Wolf Wars for Across the Obelisk and Rebirth
for Surviving the Aftermath .
• New ports of downloadable content were released
during the quarter; Overlord for Stellaris: Console
Edition.
• Paradox Announcement Show was held , and three
new games were announced ; Cities: Skylines II
developed by Colossal O rder, Life By You
developed by Paradox Tectonic and The
Lamplighters League developed by Harebrained
Schemes.
• Age of Wonders 4 , a new game developed by
Triumph Studios , was announced in the quarter.

INTERIM REPORT , JANUARY – MARCH 2023 3
COMMENTS BY THE CEO
WARM -UP FOR AN INTENSE YEAR
2023 is a year of enthusiasm and anticipation for us
at Paradox. In the first quarter, we announced a
number of exciting titles from our pipeline that are to
be released this year. To say the least, there is a lot
for both Parad ox and our players to look forward to.
2023 is also a year when we return to a more normal
state for Paradox, where there will be significant
variations between quarters in terms of releases. This
is apparent in the first quarter, which is in the lower
end of the spectrum . We had fewer major releases of
downloadable content, which combined with
amortisations for two experimental titles and that we
took more development projects as direct costs
resulted in a lower result , when compared to
quarters with large r releases. Although we have
added a lot of great content to the game catalogue,
this emphasises the importance of continuing
working on our release cadence for new content for
active games.
Our long -term effort consists of building a strong
game portfolio, brick by brick. And some of our work
was showcased when we unveiled games and
downloadable content from our pipeline. We are
proud to have presented a long -awaited sequel to
our most popular game, Cities: Skyl ines II, as well as
having invested in new titles such as Life by You. We
also hope that Triumph Studios’ 4X game Age of
Wonders 4 and Harebrained Schemes ’ turn -based
strategy game The Lamplighters League will
strengthen our strategy portfolio.
In the quar ter, Paradox Arc also unveiled some of its
titles, including Surviving the Abyss, Mechabellum
and most notably Wolf Wars, Across the Obelisk’s first
DLC. This is a milestone for Arc, as it is the first
downloadable content to be released for one of their
titles.
In the longer term, we are aiming higher across the
board, and this was just the start of an intense year.
Now it’s time to pick up the pace and we are ready to
take on the challenges ahead . In many ways it is a
whole new journey with the goal of r eaching new
heights.
Fredrik Wester, CEO

INTERIM REPORT , JANUARY – MARCH 2023 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, Crusader Kings III, Europa Universalis IV, Victoria 3, Stellaris, Surviving Mars 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
4 2 %
R12 profit margin

1 3
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

INTERIM REPORT , JANUARY – MARCH 2023 5
RELEASE S IN THE PERIOD

STELLARIS: FIRST CONTACT STORY PACK
Release date : 14 March 202 3
Plat forms : PC
Description : You are not alone! The galaxy is vast and full of wonders, but it’s also
full of alien empires you’re going to encounter, whether you’re ready or not. First
Contact offers a set of new orig ins and mechanics that give players the chance to tell
stories about their civilizations’ early encounters with visitors from the stars — ones
that may not have come in peace!
Publisher : Paradox Interactive
Developer : Paradox Development Studio

STELLARIS CONSOLE EDITION: OVERLORD
Release date: 8 March 2023
Platforms: PLAYSTATION 4, XBOX ONE
Description: Overlord grants access to new features designed to unlock the next
level of your empire. New mechanics provide many ways to specialize your vassa ls’
roles within your empire, bring new planets and subjects under your reign, and new
magnificent megastructures to project your power further, faster.
Publisher: Paradox Interactive
Developer: Paradox Development Studio and Tantalus Media (port)

INTERIM REPORT , JANUARY – MARCH 2023 6
RELEASES IN THE PERIOD

CITIES : SKYLINES REMASTERED
Release date: 15 February 2023
Platforms: PLAYSTATION 5, XBOX SERIES X|S
Description: Cities: Skylines is an award -winning management game with robust
mechanics and unique charm, now updated for next -generation consoles.
Publisher: Paradox Interactive
Developer: Colossal Order

PRISON ARCHITECT : JUNGLE PACK
Release date: 7 February 2023
Platforms: PC, PLAYSTATION 4, XBOX ONE
Description: Jungle Pack is an aesthetic pack that sets your compound in the deep
and lush tropical forest. Far from civilization, Wardens will need to manage their
inmates while dealing with the dangers of nature.
Publisher: Paradox Interactive
Developer: Double Eleven

INTERIM REPORT , JANUARY – MARCH 2023 7
RELEASES IN THE PERIOD

SURVIVING THE AFTERMATH: REBIRTH
Release date: 16 March 2023
Platforms: PC , PLAYSTATION 4, XBOX ONE
Description: For the longest time, you strived to survive the aftermath on planet
Earth. Now, thanks to your knowledge, skills, and leadership, you can finally look
forward to a new chapter for humankind. “Rebirth” is your mantra, your goal, the
dream that will make you overcome old and new challenges, for your survivors and
all humanity.
Publisher: Paradox Interactive
Developer: Iceflake Studios

SURVIVING THE ABYSS
Release date: 17 January 2023
Platforms: PC
Description: You have been tasked with managing a deep -sea science facility
working to perfect cloning. Explore the darkness and keep your crew alive in this
hardcore survival colony builder. And beware. The darkness hides untold horrors.
Publisher: Paradox Arc
Developer: Rocket Flair Studios

INTERIM REPORT , JANUARY – MARCH 2023 8
RELEASES IN THE PERIOD

ACROSS THE OBELISK: WOLF WARS
Release date: 30 March 2023
Platforms: PC
Description: Travel back ten years and live the tale of the legendary Wolf Wars seen
through the eyes of Magnus and Yogger with this new Story Pack, and unlock a new
character, pet and new skins along the way.
Publisher: Paradox Arc
Developer: Dreamsite Games

KNIGHTS OF PEN AND PAPER 3
Release date: 7 March 2023
Platforms: PC
Description: Enter the new and improved world of chivalry, class warfare and off –
beat pop references. Knights of Pen & Paper 3 is a true sequel to the turn -based,
retro style, pixel -art adventure full of danger and saving throws you hold so dear!
Publisher: Paradox Arc
Developer: Kyy Games

INTERIM REPORT , JANUARY – MARCH 2023 9
FINANCIAL OVERVIEW
REVENUE AND PROFIT FIRST QUARTER
Revenues amounted to MSEK 482.8 (MSEK 476.1), an
increase by 1 % compared to the same period last
year. Surviving the Abyss developed by Rocket Flair
Studios was released in Early Access and Knights of
Pen and Paper 3 developed by Kyy Games was
released to PC. Both games were published by Paradox
Arc. Cities: Skylines – Remastered was released to
Plays tation 5 and Xbox Series X|S. New downloadable
content for the following games was released during
the quarter; Jungle Pack for Prison Architect, First
Contact for Stellaris, The Wolf Wars for Across the
Obelisk and Rebirth for Surviving the Aftermath. Ne w
ports of downloadable content were released during
the quarter; Overlord for Stellaris: Console Edition.
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 263.1 (MSEK
214.7 ), attributable to game development,
development support, operation and maintenance of
games, costs of licenses, brands, and similar rights, as
well as royalties to development studios and external
rights holders.
Amortisation of released games amounted to MSEK
109.7 (MSEK 81.8 ). 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 9.6
(MSEK 0.0 ). Write -downs refers to games not yet
announced where development has been cancelled.

Amortisations of licenses, brands, and similar rights
amounts to MSEK 22. 2 (MSEK 2 1.0).
In addition to depreciation, amortisation and write –
downs within the item, a total of MSEK 1 12.5 (MSEK
103.9 ) was expensed regarding non -capitalised
development costs, development support, operation
and maintenance of games, and royalties. Non –
capitalised development costs have increased
compared with the comparison period as a result of a
greater number of games wher e capitalisation begins
in a later development phase compared to the
previous year . Costs for development support,
operation and maintenance of games are at level with
the comparison period. Cost of royalties is at level to
the same period last year.
Selli ng expenses for the period amounted to MSEK 47.9
(MSEK 41.8 ). 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.

Other income amounted to MSEK 6.8 (MSEK 10.7 ), and
other expenses to MSEK -0.2 (MSEK 0.0 ). Other income
and other expenses consist primarily of exchange rate
effects on the group’s cash and cash equivalents,
operating receivables, and operating liabilities during
the quarter. 0
20
40
60
80
100
120
140
160
Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023
Write-downs 0
50
100
150
200
250
300
350
400
Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023
COGS Selling expenses Administrative expenses

INTERIM REPORT , JANUARY – MARCH 2023 10
Operating profit amounted to MSEK 155 .7 (MSEK
208.5 ). Financial items amounted to MSEK 1.4 (MSEK
-0.8 ). Financial items primarily consist of interest on
lease liabilities and interest received on cash and cash
equivalents.
Profit after financial items amounted to MSEK 157 .1
(MSEK 207.7 ), and profit after tax amounted to MSEK
123.7 (MSEK 168.5 ).
FINANCIAL POS ITION
Capitalised development amounted to MSEK 1,698 .8
(MSEK 1,273.7 ) 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 primaril y
attributable to games that have not yet been released.

Licenses, brands, and similar rights amounted to MSEK
138 .7 (MSEK 2 13.8).
Goodwill amounted to MSEK 22. 7 (MSEK 20. 8)
attributable to the acquisition of Iceflake Studios.
Right -of-use assets for offices amounted to MSEK 13 0.2
(MSEK 1 56.7).
Shares in associates amount to MSEK 3 6.7 (MSEK 31.1)
by the end of the period, relating to 33 % of shares in
Seattle -based develop ment studio Hardsuit Labs. The
shares are valued at the equity method.
Accounts receivable amounted to MSEK 188 .7 (MSEK
112 .9).
Cash and cash equivalents amounted to MSEK 812 .7
(MSEK 671 .2).
Shareholders’ equity amounts to MSEK 2, 422 .6 (MSEK
1,834 .4), o f which MSEK 123 .7 (MSEK 168 .5) consists of
accumulated profit for the year.
Long term lease liabilities amount to MSEK 97.8 (MSEK
126 .3) consisting of liabilities for office premises.
Deferred tax liabilities amount to MSEK 130.6 (MSEK
160.6 ), mainly relating to untaxed reserves and
intangible assets from acquisitions.
Short term lease liabilities amount to MSEK 3 6.8 (MSEK
34. 4) consisting of short -term liabilities for office
premises.
Accrued expenses and prepaid income amounts to
MSEK 354.9 (MSEK 326.5 ) 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 period.
CASH FLOW FIRST QUARTER
Cash flow from operating activities amounted to MSEK
244. 6 (MSEK 236 .4), primarily attributable to the
operating profit. Cash flow from investing activities
amounted to MSEK -170 .1 (MSEK -157.4), mainly
referring to investments in game development. Cash
flow from financing activities amounted to MSEK -8.9
(MSEK -8.7) relating mainly to amorti sation of lease
liabilities for office premises.
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 FIRST QUARTER
The parent company houses the publishing business.
Within the publishing business, the parent company
buys development services fr om both 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 maki ng up the group’s total turnover .
Parent company revenues for the quarter amounted to
MSEK 482.7 (MSEK 478.0 ). Operating profit amounted
to MSEK 59.6 (MSEK 111.0 ). Profit after financial items 0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023
Thousands
Capitalised development costs

INTERIM REPORT , JANUARY – MARCH 2023 11
amounted to MSEK 61.3 (MSEK 111.0 ). Profit after tax
amounted t o MSEK 48.6 (MSEK 88.6 ).
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
rec ommendation 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
value d 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 essentia lly 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 most companies, exposed to certain
risks in its operations. The risks and uncertainties are
described in the Annual Report for 202 2, page 3 1. Risks
to be specifically mentioned includes a dependency on
key employees, dependency on a few sales partners ,
delays 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 .

INTERIM REPORT , JANUARY – MARCH 2023 12
FINANCIAL CALENDA R
Annual General Meeting 2023
Interim report January -June 2023
Interim report January -September 2023
Year -end report 2023
2023 -05-17
2023 -07-27
2023 -10-26
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 April 27 202 3

The Board 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 CE ST on 27
April 2023

INTERIM REPORT , JANUARY – MARCH 2023 13
KEY FIGURES FOR THE GROUP

For definitions of key figures, see the annual report. 2023-01-01 2022-01-01 2022-01-01
2023-03-31 2022-03-31 2022-12-31
Revenues, KSEK 482 777 476 096 1 972 906
Operating profit, KSEK 155 699 208 451 887 146
Profit after financial items, KSEK 157 138 207 675 884 440
Profit after tax, KSEK 123 711 168 543 708 709
Operating margin 32% 44% 45%
Profit margin 33% 44% 45%
Equity/assets ratio 75% 70% 73%
Equity per share before dilution, SEK 22,94 17,37 21,70
Equity per share after dilution, SEK 22,76 17,33 21,70
Earnings per share before dilution, SEK 1,17 1,60 6,71
Earnings per share after dilution, SEK 1,16 1,59 6,70
Number of shares by the end of the period before dilution 105 619 209 105 600 000 105 619 209
Number of shares by the end of the period after dilution 106 424 759 105 853 350 105 619 209
Average number of shares before dilution 105 619 209 105 600 000 105 609 605
Average number of shares after dilution 105 870 901 105 841 474 105 723 810
Average number of employees 665 710 672
Number of employees by the end of the period 674 692 656

INTERIM REPORT , JANUARY – MARCH 2023 14
GROUP INCOME STATEMENT ( K SEK)

OTHER COMPREHENSIVE INCOME (KSEK)

2023-01-01 2022-01-01 2022-01-01
2023-03-31 2022-03-31 2022-12-31
Revenues 482 777 476 096 1 972 906
Cost of goods sold -263 072 -214 704 -862 629
Gross profit 219 706 261 392 1 110 277
Selling expenses -47 855 -41 804 -170 490
Administrative expenses -22 838 -21 807 -91 618
Other income 6 842 10 704 56 635
Other expenses -155 -34 -17 658
Operating profit 155 699 208 451 887 146
Financial income 4 466 86 3 952
Financial expense -3 027 -862 -6 658
Profit after financial items 157 138 207 675 884 440
Tax -33 427 -39 132 -175 731
Profit for the period 123 711 168 543 708 709
Profit for the period is attributable to the shareholders of the parent company.
Earnings per share before dilution, SEK 1,17 1,60 6,71
Earnings per share after dilution, SEK 1,16 1,59 6,70 2023-01-01 2022-01-01 2022-01-01
2023-03-31 2022-03-31 2022-12-31
Profit for the period 123 711 168 543 708 709
Other comprehensive income
Items that may be reclassified to profit or loss
Translation differences 4 737 3 292 20 780
Other comprehensive income 4 737 3 292 20 780
Total comprehensive income for the period 128 449 171 835 729 489
Profit for the period is attributable to the shareholders of the parent company.

INTERIM REPORT , JANUARY – MARCH 2023 15
GROUP BALANCE SHEET (KSEK)

2023-03-31 2022-03-31 2022-12-31
ASSETS
Non-current assets
Capitalised development 1 698 824 1 273 733 1 650 275
Licenses, brands and similar rights 138 666 213 819 159 501
Goodwill 22 713 20 824 22 415
Property and equipment 16 942 20 507 17 561
Right-of-use assets 130 156 156 738 136 118
Investments in associates 36 708 31 082 32 555
Other long term assets 18 712 18 602 18 695
Total non-current assets 2 062 720 1 735 305 2 037 120
Current assets
Accounts receivable 188 651 112 876 259 948
Tax assets 36 953 – 709
Other receivables 43 967 58 219 34 769
Prepaid expenses and accrued revenue 69 452 56 013 61 376
Cash and cash equivalents 812 708 671 219 747 506
Total current assets 1 151 731 898 327 1 104 307
TOTAL ASSETS 3 214 451 2 633 632 3 141 427 EQUITY AND LIABILITIES
Equity
Share capital 528 528 528
Other capital contributed 29 542 27 994 29 542
Reserves 29 914 7 688 25 176
Retained earnings 2 238 926 1 629 602 1 528 422
Profit for the period 123 711 168 543 708 709
Total equity 2 422 621 1 834 356 2 292 377
Long term liabilities
Lease liabilities 97 794 126 273 104 845
Deferred tax liabilities 130 640 160 607 137 220
Other liabilities – 422 –
Total long term liabilities 228 434 287 301 242 065
Current liabilities
Accounts payable 52 779 68 152 52 487
Current tax liabilities 83 300 28 207 66 529
Lease liabilities 36 751 34 372 35 616
Other liabilities 35 688 54 768 33 725
Accrued expenses and prepaid revenues 354 877 326 475 418 628
Total current liabilities 563 395 511 974 606 985
TOTAL EQUITY AND LIABILITIES 3 214 451 2 633 632 3 141 427

INTERIM REPORT , JANUARY – MARCH 2023 16
CHANGE IN GROUP EQUITY (KSEK)

Share capital
Other
contributed
capital Reserves
Retained
earnings Total equity
At the beginning of the period 2023-01-01 528 29 542 25 176 2 237 131 2 292 377
Profit for the period 123 711 123 711
Other comprehensive income
Translation difference 4 737 4 737
Total other comprehensive income – – 4 737 – 4 737
Total comprehensive income – – 4 737 123 711 128 449
Transactions with owners
Share-based payments staff – – – 1 795 1 795
Total transactions with owners – – – 1 795 1 795
AT THE END OF THE PERIOD 2023-03-31 528 29 542 29 914 2 362 637 2 422 621 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 – – 168 543 168 543
Other comprehensive income
Translation difference – – 3 292 – 3 292
Total other comprehensive income – – 3 292 – 3 292
Total comprehensive income – – 3 292 168 543 171 835
Transactions with owners
Share-based payments staff – – – 958 958
Total transactions with owners – – – 958 958
AT THE END OF THE PERIOD 2022-03-31 528 27 994 7 688 1 798 145 1 834 356

INTERIM REPORT , JANUARY – MARCH 2023 17
GROUP CASH FLOW STATEMENT (KSEK)

2023-01-01 2022-01-01 2022-01-01
2023-03-31 2022-03-31 2022-12-31
Cash flow from operations
Operating profit 155 699 208 451 887 146
Adjustment of depreciation, amortisation and write-downs 153 617 113 899 473 498
Other adjustments -2 215 958 4 362
Interest received 4 466 86 3 952
Interest paid -3 027 -861 -6 658
Tax paid -56 881 -1 140 -126 703
Cash flow before changes in working capital 251 659 321 393 1 235 598
Changes in working capital
Change in current receivables 54 647 -12 781 -141 060
Change in current liabilities -61 682 -72 180 -9 799
Cash flow from current operations 244 624 236 432 1 084 740
Investing activities
Investments in capitalised development -169 135 -156 926 -793 771
Investments in licenses, brands and similar rights – – –
Investments in equipment -924 -488 -2 119
Investments in subsidiaries – – -11 055
Investments in other financial assets – – -25
Cash flow from investing activities -170 059 -157 414 -806 969
Financing activities
Amortisation of lease liability -8 917 -8 741 -35 371
Paid dividend – – -105 600
Cash flow from financing activities -8 917 -8 741 -140 971
Cash flow for the period 65 648 70 277 136 800
Cash and cash equivalents at the beginning of the period 747 506 599 724 767 561
Exchange rate effect -445 1 218 10 981
Cash and cash equivalents at the end of the period 812 708 671 219 747 506

INTERIM REPORT , JANUARY – MARCH 2023 18
PARENT COMPANY INCOME STATEMENT (KSEK)

2023-01-01 2022-01-01 2022-01-01
2023-03-31 2022-03-31 2022-12-31
Revenues 482 655 477 997 1 992 191
Cost of goods sold -358 992 -315 707 -1 276 664
Gross profit 123 663 162 289 715 528
Selling expenses -44 267 -39 547 -163 264
Administrative expenses -22 316 -21 914 -91 873
Other income 2 522 10 213 54 248
Other expenses – – -17 060
Operating profit 59 602 111 041 497 578
Profit from shares in subsidiaries – – –
Financial income 3 667 – 1 952
Financial expense -2 001 -3 -2 391
Profit after financial items 61 269 111 038 497 140
Year-end appropriations – – 200 000
Income tax expense -12 621 -22 454 -145 215
Profit for the year and total income for the year 48 648 88 584 551 925

INTERIM REPORT , JANUARY – MARCH 2023 19
PARENT COMPANY BALANCE SHEET (KSEK)

2023-03-31 2022-03-31 2022-12-31
ASSETS
Non-current assets
Capitalised development 1 406 826 1 210 985 1 408 095
Licenses, brands and similar rights 30 962 57 092 37 495
Property and equipment 9 405 13 026 10 116
Shares in subsidiaries 305 812 305 812 305 812
Investments in associates 16 766 16 766 16 766
Other long term assets 17 393 17 393 17 393
Total non-current assets 1 787 164 1 621 073 1 795 677
Current assets
Accounts receivable 178 680 110 390 255 031
Receivables from group companies 1 805 12 725 79 656
Tax assets 36 953 – –
Other receivables 37 477 50 322 28 163
Prepaid expenses and accrued revenues 66 817 54 845 59 969
Cash and cash equivalents 652 021 592 108 448 013
Total current assets 973 751 820 390 870 832
TOTAL ASSETS 2 760 915 2 441 464 2 666 508 EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital 528 528 528
Capitalised development reserve 1 406 826 1 210 985 1 408 095
Non-restricted equity
Share premium reserve 29 542 27 994 29 542
Retained earnings 317 321 60 622 -237 669
Profit for the period 48 646 88 584 551 925
Total equity 1 802 863 1 388 713 1 752 422
Untaxed reserves 485 000 555 000 485 000
Long term liabilities
Other liabilities – 422 –
Total long term liabilities – 422 –
Current liabilities
Accounts payable 43 919 63 383 45 619
Liabilities to group companies 147 618 141 875 28 016
Current tax liabilities – 2 302 4 352
Other liabilities 3 610 14 656 4 339
Accrued expenses and prepaid revenues 277 905 275 112 346 760
Total current liabilities 473 051 497 329 429 086
TOTAL EQUITY AND LIABILITIES 2 760 915 2 441 464 2 666 508

INTERIM REPORT , JANUARY – MARCH 2023 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 MSEK 280 .0 (MSEK 265.8 ) of the group’s revenue came from one and the same customer.
Group revenue divided into major product categories;

Prepaid revenue amounted to MSEK 191.5 (MSEK 204.5 ) at the end of the period. Of these, MSEK 176.2 is expected to be reported as revenue
during the next 12 -month period, and MSEK 15.3 within 24 months .
The revenues for the quarter include MSEK 89.6 (MSEK 91.5) which were included in prepaid revenue at the beginning of the period .
NOTE 2. DEPRECIATIONS, AMORTISATIONS AND WRITE -DOWNS BREAKDOWN PER FUNCTION

2023-01-01 2022-01-01 2022-01-01
2023-03-31 2022-03-31 2022-12-31
USA 424 456 417 594 1 679 021
Sweden 2 069 2 361 21 318
Rest of Europe 44 877 45 712 234 297
Rest of the World 11 376 10 429 38 269
Total 482 777 476 096 1 972 906 2023-01-01 2022-01-01 2022-01-01
2023-03-31 2022-03-31 2022-12-31
PC 389 954 413 358 1 678 253
Console 56 954 50 345 218 810
Mobile 18 174 10 091 41 766
Other 17 695 2 302 34 076
Total 482 777 476 096 1 972 906 2023-01-01 2022-01-01 2022-01-01
2023-03-31 2022-03-31 2022-12-31
Cost of goods sold 150 557 110 679 460 407
Selling expenses 1 075 445 4 506
Administrative expenses 1 986 2 775 8 585
Total 153 617 113 899 473 498

INTERIM REPORT , JANUARY – MARCH 2023 21
ABOUT PARADOX INTERACTIVE
Paradox Interactive is one of the premier developers and publishers of strategy and
management games for PC and consoles. The players are located all over the world
but some of the biggest markets are North America, Western Europe and Asia.
The game portfo lio 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 catalo gue.
Paradox Interactive’s headquarters is on Södermalm in Stockholm and is listed on
Nasdaq First North Premier Growth Market.