Paradox Interactive FY2023 Q2 Earnings Release

Jul, 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 – JUNE 202 3

INTERIM REPORT , JANUARY – JUNE 2023 2

INTERIM REPORT
JANUARY – JUNE 2023
SECOND QUARTER
• Revenues amounted to MSEK 737.3 (MSEK 458.8 ),
an increase by 61 % compared to the same period
last year.
• Operating profit amounted to MSEK 292.9 (MSEK
213.6), a n increase by 37 %.
• Profit after financial items amounted to MSEK
310.9 (MSEK 213.0 ), and profit after tax amounted
to MSEK 239.4 (MSEK 170.1 ).
• Cash flow from operating activities amounted to
MSEK 421.6 (MSEK 261.8 ), and cash flow from
investing activities amounted to MSEK -172.5
(MSEK -230.2 ).
• By the end of the period cash amounted to MSEK
844.2 (MSEK 594.9 ).
• Earnings per share before dilution amounted to
SEK 2.27 (SEK 1.61 ) and after dilution SEK 2.24
(SEK 1.61 ).
• Revenues in the quarter are mainly attributable to
Age of Wonders 4, Cities: Skylines, Crusader Kings
III, Hearts of Iron IV and Stellaris.
IMPORTANT EVENTS SECOND QUARTER
• Age of Wonders 4, developed by Triumph Studios,
was released for PC, Playstation 5 and Xbox Series
X|S.
• Mechabellum developed by Game River was
released in Early Access and published by Paradox
Arc.

• New downloadable content for the following
games was re leased during the quarter;
Domination for Europa Universalis IV, Galactic
Paragons for Stellaris, Tours & Tournaments for
Crusader Kings III, Voice of the People for Victoria
3, Hotels & Retreats for Cities: Skylines and Dragon
Dawn for Age of Wonders 4.
• New ports of downloadable content were released
during the quarter; Royal Court to Crusader Kings
III Console Edition.
• Paradox Interactive sold its shares in Hardsuit Labs
to Keywords Studios , which affects profit after
financial items by MSEK 15 .4.
FIRST SIX MONTHS 2023
• Revenues amounted to MSEK 1,220.1 (MSEK 934.9 ),
an increase by 31 % compared to the same period
last year.
• Operating profit amounted to MSEK 448.6 (MSEK
422.0 ), a n increase by 6 %.
• Profit after financial items amounted to MSEK
468.0 (MSEK 420.7 ), and profit after tax amounted
to MSEK 363.1 (MSEK 338.7 ).
• Earnings per share before dilution amounted to
SEK 3.44 (SEK 3.21 ) and after dilution SEK 3.41
(SEK 3.20 ).

INTERIM REPORT , JANUARY – JUNE 2023 3
COMMENTS BY THE CEO
RELEASE HEAVY QUARTER DRIVES
RECORD REVENUES
It is with joy and a forward -leaning optimism that we
can now present the second quarter of 2023 for
Paradox Interactive. I have previously emphasi sed
the work put in to focus more clearly on our core
business and we are now really starting to see that
this is paying off.
In the quarter, we delivered on all parts of our growth
strategy. We have continued to strengthen our core
titles with great downloadable content, replenished
the portfolio with Age of Wonders 4 and continued to
experiment with new smaller titles to find g ames with
the potential to reach a large audience through our
player base. That gives a good result for the quarter
with a strong top line as well as a good bottom line,
which was further boosted by currency tailwinds.
If we look at the half year, the firs t six months are
very typical for Paradox. The first quarter was weaker
in terms of the quantity of published content, while a
lot of new content was published in the second
quarter. Although we are satisfied with the period as
a whole, it shows that our r esults are completely
connected to what we release and that the size of the
releases continues to vary between periods.
If we dig a little deeper into what shaped the quarter,
it is mainly, and as usual, our strong core business
and many good releases. We have released many
DLCs of varying sizes for the majority of our core
titles. Special attention is deserved for Europa
Universalis IV’s Domination, a game that also
celebrates ten years in August, along with Crusader
King III’s Tours and Tournaments and St ellaris:
Galactic Paragons.
In the quarter, we also added the fantastic 4X
strategy game Age of Wonders 4 to our portfolio. The
very positive reception made clear that the players
appreciated the strong mix of strategy, role -playing
and the opportunity to create their own fantasy
story. The game’s first DLC released in June and was
also well received, which bodes well for the game’s
future development.
On the experimental side, Paradox Arc released
Mechabellum, a different type of strategy game for
Paradox. It met very good interest, albeit at a lower
level than the games in our core portfolio, but with
the potential to grow over time.
In addition to this quarter’s DLCs and games, we are
putting a lot of effort into preparing for the fall and
we are in full swing with marketing and sales
activities for what is to come. It has of course affect ed
the cost side in the short term, but we are really
looking forward to launching some very exciting
things in the fall.
Last but not least, with so many great releases and
announcements it has been incredibly exciting and
fun to be a part of Paradox the past six months. The
creativity and energy of the teams is almost palpable,
and we are all looking forward to our next steps!
Happy summer holidays,
Fredrik Wester, CEO

INTERIM REPORT , JANUARY – JUNE 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 seven 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 and Age of Wonders 4.
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

1 0
Active games
4 0 %
R12 profit margin

1 2
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
800
Revenues Operating profit

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

AGE OF WONDERS 4
Release date : 2 May 202 3
Plat forms : PC, PLAYSTATION 5, XBOX SERIES X|S
Description : Rule a fantasy realm of your own design! Explore new magical realms
in Age of Wonders’ signature blend of 4X strategy and turn -based tactical combat.
Control a faction that grows and changes as you expand your empire with each turn!
Publisher : Paradox Interactive
Developer : Triumph Studios

AGE OF WONDERS 4: DRAGON DAWN
Release date: 20 June 2023
Platforms: PC, PLAYSTATION 5, XBOX SERIES X|S
Description: Embrace the power of the Ancient Dragon Lords, in the Age of Wonders
4: Dragon Dawn Content Pack. New features about dragons, for dragons, possibly by
dragons will bring your magical ambitions to an entirely new scale! From your
Dragon Throne, forge empires inhabited by reptilian minions, use draconic magic
that focuses on evolving your people, and for the first time, play as a Dragon Ruler
and set the realms ablaze!
Publisher: Paradox Interactive
Developer: Triumph Studios

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

CRUSADER KINGS III: TOURS & TOURNAMENTS
Release date: 11 May 2023
Platforms: PC
Description: Life is a journey of chivalric adventure, so why don’t you embrace
yours, ruler? Create your very own epic story with the major expansion, Crusader
Kings III: Tours & Tournaments. Be awed by the sights and events that await you,
from bold, mock combat in t he jousting area to adventuring perilous wilds with your
royal entourage.
Publisher: Paradox Interactive
Developer: Paradox Development Studio

CRUSADER KINGS III CONSOLE – ROYAL COURT
Release date: 17 May 2023
Platforms: PLAYSTATION 5, XBOX SERIES X|S
Description: There is but one true center for power and prestige: a ruler’s court.
Step into your own fully immersive throne room with Crusader Kings: Royal Court,
and get ready to impress vassals and courtiers with your splendor and treasure on
display. Watch visitors pay respect or family members squabble as you pass
judgment in royal audiences, establishing the vital link between your people and
your realm.
Publisher: Paradox Interactive
Developer: Paradox Development Studio and Lab42 (port )

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

EUROPA UNIVERSALIS IV: DOMINATION
Release date: 18 April 2023
Platforms: PC
Description: Revisit some of the most powerful and popular nations in Domination,
an immersion pack for Europa Universalis IV. Centered on the great empires of the
Early Modern world, Domination offers new mission trees, new government reform s,
new estate management and new events for several of the major powers in the
game. These popular starting nations are now given new life and new balance, with
greater historical depth, more promising rewards and branching mission trees so
player choices can have a dramatic impact on the course of history.
Publisher: Paradox Interactive
Developer: Paradox Tinto

EUROPA UNIVERSALIS IV: HISTORY LESSONS
Release date: 20 June 2023
Platforms: PC
Description: Learn while you play in this package of history lectures specially
designed for Europa Universalis IV. Knowledgeable authorities on the history and
culture of the early modern era present short lectures on specific topics, organized
by region. Available th rough the in -game music player, each pack contains hours of
content divided into 5 to 10 minute lectures, focusing on nations, monuments,
events and societies .
Publisher: Paradox Interactive
Developer: Paradox Tinto

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

STELLARIS: GALACTIC PARAGONS
Release date: 9 May 2023
Platforms: PC
Description: The galactic council is vast and full of personality! Add Galactic
Paragons to your empires and experience a new level of character and story as great
leaders rise to positions of power and follow your lead to the stars. With exclusive
additions to the all -new Council mechanic, leaders who you ca n shape to amplify the
vision for your empire, new civics, and much more, Galactic Paragons will shape the
future in ways the galaxy has never seen before .
Publisher: Paradox Interactive
Developer: Paradox Development Studio

VICTORIA 3: VOICE OF THE PEOPLE
Release date: 22 May 2023
Platforms: PC
Description: Relive the dramatic political events of the 19th century in this first
immersion pack for Victoria 3. Drawing from the historical struggles between
reformists, reactionaries and revolutionaries, Voice of the People puts you in the
middle of political crises as charismatic characters from history vigorously push their
agendas.
Publisher: Paradox Interactive
Developer: Paradox Development Studio

INTERIM REPORT , JANUARY – JUNE 2023 9
RELEASES IN THE PERIOD

CITIES: SKYLINES – HOTELS & RETREATS
Release date: 23 May 2023
Platforms: PC, XBOX ONE, PLAYSTATION 4
Description: With everything from conference hotels for your business travellers , to
mountain hotels for nature lovers. Start with a small hotel chain and unlock more
luxurious options as you make your way to a successful hotel business – with a
significant tourism boos t for your city .
Publisher: Paradox Interactive
Developer: Colossal Order

MECHABELLUM
Release date: 11 May 2023
Platforms: PC
Description: Mechabellum is an epic auto -battler taking place on the newly
colonized planet of Far -Away. You’re the Commander of an army of mechs fighting it
out in massive PvP battles. Customize and level up your units, strategically place
them on the battlefield and watch them destroy your enemies.
Publisher: Paradox Arc
Developer: Game River

INTERIM REPORT , JANUARY – JUNE 2023 10
FINANCIAL OVERVIEW
REVENUE AND PROFIT SECOND QUARTER
Revenues amounted to MSEK 737.3 (MSEK 458.8), an
increase by 61 % compared to the same period last
year. New downloadable content for the following
games was r eleased during the quarter; Domination
for Europa Universalis IV, Galactic Paragons for
Stellaris, Tours & Tournaments for Crusader Kings III,
Voice of the People for Victoria 3, Hotels & Retreats for
Cities: Skylines and Dragon Dawn for Age of Wonders 4.
New ports of downloadable content were released
during the quarter; Royal Court to Crusader Kings III
Console Edition. Paradox Interactive sold its shares in
Hardsuit Labs to Keywords Studios. Revenues in the
quarter are mainly attributable to Age of Wond ers 4,
Cities: Skylines, Crusader Kings III, Hearts of Iron IV and
Stellaris.
Cost of goods sold amounted to MSEK 337.8 (MSEK
197.2 ), attributable to game development,
development support, operation and maintenance of
games, costs of licenses, brands, and similar rights, as
well as royalties and revenue based earn -outs to
development studios and external rights holders.
Amortisation of released games amounted to MSEK
154.6 (MSEK 85.9 ). The amortisations have increased
as a result of new games released.

Amortisations of licenses, brands, and similar rights
amount ed to MSEK 2 1.0 (MSEK 2 1.4).
In addition to depreciation, amortisation and write –
downs within the item, a total of MSEK 153 .1 (MSEK
82.6 ) was expensed regarding non -capitalised
development costs, development support, operation
and maintenance of games, royalties and revenue
based earn -outs . Non -capitalised development costs
have increased compared with the comparison period
as a result of a greater number of games where
capitali sation 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 has
increased compared to the same period last year.
Reve nue -based earn -outs have also increased as a
result of the release of Age of Wonders 4.
Selling expenses for the period amounted to MSEK 90.2
(MSEK 39.8). Costs have increased as a result of more
game releases and upcoming game releases compared
to the sam e period last year.
Administrative expenses for the period amounted to
MSEK 26.3 (MSEK 24.1). Costs for administration are
generally unchanged over time and are relatively
unaffected by other operations, this quarter as well.

Other income amounted to MSEK 10.0 (MSEK 17.6),
and other expenses to MSEK -0.2 (MSEK -1.6 ). Other
income and other expenses consist primarily of
exchange rate effects on the group’s cash and cash 0
20
40
60
80
100
120
140
160
Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023
Write-downs 0
50
100
150
200
250
300
350
400
450
500
Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023
COGS Selling expenses Administrative expenses

INTERIM REPORT , JANUARY – JUNE 2023 11
equivalents, operating receivables, and operating
liabiliti es during the quarter.
Operating profit amounted to MSEK 292.9 (MSEK
213.6 ). Financial items amounted to MSEK 18.0 (MSEK
-0.6). Profit from shares in associated companies MSEK
15.4 million ( MSEK 0.0 million) has increased as
Paradox Interactive sold the share s in Hardsuit Labs to
Keywords Studios. Other financial items primarily
consist of calculated interest on lease liabilities and
interest received on cash and cash equivalents.
Profit after financial items amounted to MSEK 310.9
(MSEK 213.0 ), and profit after tax amounted to MSEK
239.4 (MSEK 170.1 ).
FINANCIAL POSITION
Capitalised development amounted to MSEK 1,767.5
(MSEK 1,407.1 ) 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
122.2 (MSEK 198.7 ).
Goodwill amounted to MSEK 2 3.8 (MSEK 2 1.5 )
attributable to the acquisition of Iceflake Studios.
Right -of-use assets for offices amounted to MSEK 122.0
(MSEK 1 49.1 ).

Shares in associates amount to MSEK 0.0 (MSEK 31. 7)
by the end of the period, the change is attributable to
the sale of Seattle -based Hardsuit Labs.
Accounts receivable amounted to MSEK 235.9 (MSEK
137.4 ).
Cash and cash equivalents amounted to MSEK 844.2
(MSEK 594.9 ).
Shareholders’ equity amounts to MSEK 2,459.9 (MSEK
1,910.3 ), of which MSEK 363.1 (MSEK 338.7 ) consists of
accumulated profit for the year.
Long term lease liabilities amount to MSEK 89.2 (MSEK
118.8 ) consisting of liabilities for office prem ises.
Deferred tax liabilities amount to MSEK 126.8 (MSEK
158.4 ), mainly relating to untaxed reserves and
intangible assets from acquisitions.
Short term lease liabilities amount to MSEK 3 7.2 (MSEK
32.9 ) consisting of short -term liabilities for office
premises.
Accrued expenses and prepaid income amounts to
MSEK 385.4 (MSEK 300.8 ) 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
higher than the comparison period.
CASH FLOW SECOND QUARTER
Cash flow from operating activities amounted to MSEK
421 .6 (MSEK 261.8 ), primarily attributable to the
operating profit. Cash flow from investing activities
amounted to MSEK -172.5 (MSEK -230.2 ), mainly
referring to investments in game development. Cash
flow from financing activities amounted to MSEK –
220.4 (MSEK -114.4 ) and mainly refers to dividends
executed in May.
THE FIRST SIX MONTHS IN SUMMARY
Revenues amounted to MSEK 1,220.1 (MSEK 934.9) an
increase by 31 % compared to the same period last
year. Cost of goods sold amounted to MSEK 600.8
(MSEK 411.9), primarily attributable to game
development, development support, operation and
maintenance of games, as well as royalties and
revenue based earn -outs to third parties. Write -downs
within cost of goods sold amounts to MSEK 9.7 (MSEK 0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023
Thousands
Capitalised development costs

INTERIM REPORT , JANUARY – JUNE 2023 12
0.0). Cost of royalties is higher compared to the same
period last year due to higher sales of royalty
generating game s. Revenue based earn -outs have also
increased following the release of Age of Wonders 4.
Operating profit amounted to MSEK 448.6 (MSEK
442.0 ), an increase by 6 %. Profit after financial items
amounted to MSEK 468.0 (MSEK 420.7 ), and profit after
tax amoun ted to MSEK 363.1 (MSEK 338.7 ). Cash flow
from operating activities amounted to MSEK 666.2
(MSEK 4 98.2 ). Cash flow from investing activities
amounted to MSEK -342.5 (MSEK -387.7 ). Cash flow
from financing activities amounted to MSEK -229.3
(MSEK -123.2).
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 SECOND QUARTER
The parent company houses the publishing business.
Within the publishing bu siness, the parent company
buys development services from 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 making up the group’s total turnover .
Parent company revenues for the quarter amounted to
MSEK 737.4 (MSEK 451.7 ). Operating profit amounted
to MSEK 176.9 (MSEK 103.9 ). Profit after financial items
amounted to MSEK 214.6 (MSEK 103.8 ). Profit after tax
amounted to MSEK 166.9 (MSEK 82.4 ).
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 p arent company
applies the Swedish Financial Reporting Board’s
recommendation 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 car rying
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 essentially 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 include a depen dency 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 – JUNE 2023 13
FINANCIAL CALENDAR
Interim report January -September 2023
Year -end report 2023
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 July 27 2023

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 infor mation was submitted for publication 08:00 CE ST
on 27 July 2023 .

INTERIM REPORT , JANUARY – JUNE 2023 14
KEY FIGURES FOR THE GROUP

For definitions of key figures, see the annual report. 2023-04-01 2022-04-01 2023-01-01 2022-01-01 2022-01-01
2023-06-30 2022-06-30 2023-06-30 2022-06-30 2022-12-31
Revenues, KSEK 737,334 458,806 1,220,111 934,902 1,972,906
Operating profit, KSEK 292,899 213,596 448,598 422,047 887,146
Profit after financial items, KSEK 310,883 213,025 468,021 420,699 884,440
Profit after tax, KSEK 239,351 170,128 363,062 338,671 708,709
Operating margin 40% 47% 37% 45% 45%
Profit margin 42% 46% 38% 45% 45%
Equity/assets ratio 74% 71% 74% 71% 73%
Equity per share before dilution, SEK 23.29 18.09 23.29 18.09 21.70
Equity per share after dilution, SEK 23.06 18.05 23.06 18.05 21.70
Earnings per share before dilution, SEK 2.27 1.61 3.44 3.21 6.71
Earnings per share after dilution, SEK 2.24 1.61 3.41 3.20 6.70
Number of shares by the end of the period before dilution 105,619,209 105,600,000 105,619,209 105,600,000 105,619,209
Number of shares by the end of the period after dilution 106,690,559 105,853,350 106,690,559 105,853,350 105,619,209
Average number of shares before dilution 105,619,209 105,600,000 105,619,209 105,600,000 105,609,605
Average number of shares after dilution 106,521,942 105,815,348 106,196,422 105,828,411 105,723,810
Average number of employees 674 666 670 688 672
Number of employees by the end of the period 676 657 676 657 656

INTERIM REPORT , JANUARY – JUNE 2023 15
GROUP INCOME STATEMENT ( K SEK)

OTHER COMPREHENSIVE INCOME (KSEK)

2023-04-01 2022-04-01 2023-01-01 2022-01-01 2022-01-01
2023-06-30 2022-06-30 2023-06-30 2022-06-30 2022-12-31
Revenues 737,334 458,806 1,220,111 934,902 1,972,906
Cost of goods sold -337,759 -197,230 -600,831 -411,934 -862,629
Gross profit 399,575 261,577 619,280 522,968 1,110,277
Selling expenses -90,196 -39,812 -138,052 -81,616 -170,490
Administrative expenses -26,347 -24,084 -49,185 -45,890 -91,618
Other income 10,038 17,561 16,881 28,265 56,635
Other expenses -171 -1,646 -326 -1,680 -17,658
Operating profit 292,899 213,596 448,598 422,047 887,146
Profit from shares in subsidiaries 15,440 – 15,440 – –
Financial income 5,485 644 9,951 729 3,952
Financial expense -2,941 -1,215 -5,968 -2,077 -6,658
Profit after financial items 310,883 213,025 468,021 420,699 884,440
Tax -71,532 -42,896 -104,958 -82,028 -175,731
Profit for the period 239,351 170,128 363,062 338,671 708,709
Profit for the period is attributable to the shareholders of the parent company.
Earnings per share before dilution, SEK 2.27 1.61 3.44 3.21 6.71
Earnings per share after dilution, SEK 2.24 1.61 3.41 3.20 6.70 2023-04-01 2022-04-01 2023-01-01 2022-01-01 2022-01-01
2023-06-30 2022-06-30 2023-06-30 2022-06-30 2022-12-31
Profit for the period 239,351 170,128 363,062 338,671 708,709
Other comprehensive income
Items that may be reclassified to profit or loss
Translation differences 7,148 10,820 11,885 14,112 20,780
Other comprehensive income 7,148 10,820 11,885 14,112 20,780
Total comprehensive income for the period 246,499 180,948 374,947 352,783 729,489
Profit for the period is attributable to the shareholders of the parent company.

INTERIM REPORT , JANUARY – JUNE 2023 16
GROUP BALANCE SHEET (KSEK)

2023-06-30 2022-06-30 2022-12-31
ASSETS
Non-current assets
Capitalised development 1,767,488 1,407,103 1,650,275
Licenses, brands and similar rights 122,209 198,712 159,501
Goodwill 23,751 21,512 22,415
Property and equipment 16,896 19,441 17,561
Right-of-use assets 122,025 149,131 136,118
Investments in associates – 31,703 32,555
Other long term assets 18,772 18,642 18,695
Total non-current assets 2,071,141 1,846,246 2,037,120
Current assets
Accounts receivable 235,863 137,361 259,948
Tax assets 31,225 7,307 709
Other receivables 56,348 59,191 34,769
Prepaid expenses and accrued revenue 88,977 52,208 61,376
Cash and cash equivalents 844,209 594,867 747,506
Total current assets 1,256,622 850,933 1,104,307
TOTAL ASSETS 3,327,763 2,697,179 3,141,427 EQUITY AND LIABILITIES
Equity
Share capital 528 528 528
Other capital contributed 29,542 27,994 29,542
Reserves 37,062 18,508 25,176
Retained earnings 2,029,671 1,524,634 1,528,422
Profit for the period 363,062 338,671 708,709
Total equity 2,459,865 1,910,336 2,292,377
Long term liabilities
Lease liabilities 89,244 118,806 104,845
Deferred tax liabilities 126,832 158,416 137,220
Total long term liabilities 216,075 277,222 242,065
Current liabilities
Accounts payable 67,420 93,259 52,487
Current tax liabilities 102,429 48,226 66,529
Lease liabilities 37,210 32,903 35,616
Other liabilities 59,374 34,434 33,725
Accrued expenses and prepaid revenues 385,390 300,800 418,628
Total current liabilities 651,823 509,622 606,985
TOTAL EQUITY AND LIABILITIES 3,327,763 2,697,179 3,141,427

INTERIM REPORT , JANUARY – JUNE 2023 17
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 363,062 363,062
Other comprehensive income
Translation difference 11,885 11,885
Total other comprehensive income – – 11,885 – 11,885
Total comprehensive income – – 11,885 363,062 374,948
Transactions with owners
Share-based payments staff – – – 3,778 3,778
Dividends – – – -211,238 -211,238
Total transactions with owners – – – -207,460 -207,460
AT THE END OF THE PERIOD 2023-06-30 528 29,542 37,062 2,392,733 2,459,865 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 – – 338,671 338,671
Other comprehensive income
Translation difference – – 14,112 – 14,112
Total other comprehensive income – – 14,112 – 14,112
Total comprehensive income – – 14,112 338,671 352,783
Transactions with owners
Share-based payments staff – – – 1,590 1,590
Dividends – – – -105,600 -105,600
Total transactions with owners – – – -104,010 -104,010
AT THE END OF THE PERIOD 2022-06-30 528 27,994 18,508 1,863,305 1,910,336

INTERIM REPORT , JANUARY – JUNE 2023 18
GROUP CASH FLOW STATEMENT (KSEK)

2023-04-01 2022-04-01 2023-01-01 2022-01-01 2022-01-01
2023-06-30 2022-06-30 2023-06-30 2022-06-30 2022-12-31
Cash flow from operations
Operating profit 292,899 213,596 448,598 422,047 887,146
Adjustment of depreciation, amortisation and write-downs 187,898 117,928 341,515 231,827 473,498
Other adjustments 1,192 35 -1,023 993 4,362
Interest received 5,485 644 9,951 730 3,952
Interest paid -2,941 -1,215 -5,968 -2,076 -6,658
Tax paid -54,652 -34,304 -111,534 -35,444 -126,703
Cash flow before changes in working capital 429,881 296,684 681,540 618,077 1,235,598
Changes in working capital
Change in current receivables -77,667 -21,046 -23,020 -33,827 -141,060
Change in current liabilities 69,348 -13,878 7,666 -86,058 -9,799
Cash flow from current operations 421,562 261,760 666,186 498,192 1,084,740
Investing activities
Cash flow from sales of associated companies 53,174 – 53,174 – –
Investments in capitalised development -224,114 -218,814 -393,249 -375,740 -793,771
Investments in equipment -1,532 -350 -2,456 -838 -2,119
Investments in subsidiaries – -11,055 – -11,055 -11,055
Investments in other financial assets – -25 – -25 -25
Cash flow from investing activities -172,472 -230,244 -342,531 -387,658 -806,969
Amortisation of lease liability -9,139 -8,814 -18,057 -17,555 -35,371
Paid dividend -211,238 -105,600 -211,238 -105,600 -105,600
Cash flow from financing activities -220,378 -114,414 -229,295 -123,155 -140,971
Cash flow for the period 28,712 -82,897 94,360 -12,620 136,800
Cash and cash equivalents at the beginning of the period 812,708 671,219 747,506 767,561 767,561
Exchange rate effect 2,788 6,545 2,343 7,762 10,981
Cash and cash equivalents at the end of the period 844,209 594,867 844,209 594,867 747,506

INTERIM REPORT , JANUARY – JUNE 2023 19
PARENT COMPANY INCOME STATEMENT (KSEK)

2023-04-01 2022-04-01 2023-01-01 2022-01-01 2022-01-01
2023-06-30 2022-06-30 2023-06-30 2022-06-30 2022-12-31
Revenues 737,434 451,701 1,220,089 929,698 1,992,191
Cost of goods sold -459,474 -300,404 -818,466 -616,111 -1,276,664
Gross profit 277,960 151,297 401,623 313,587 715,528
Selling expenses -84,805 -38,712 -129,072 -78,258 -163,264
Administrative expenses -26,166 -24,135 -48,482 -46,049 -91,873
Other income 9,907 16,832 12,428 27,044 54,248
Other expenses – -1,404 – -1,404 -17,060
Operating profit 176,895 103,879 236,498 214,920 497,578
Profit from shares in subsidiaries 35,381 – 35,381 – –
Financial income 4,351 – 8,018 – 1,952
Financial expense -2,000 -66 -4,001 -69 -2,391
Profit after financial items 214,627 103,813 275,896 214,851 497,140
Year-end appropriations – – – – 200,000
Income tax expense -47,708 -21,385 -60,329 -43,839 -145,215
Profit for the year and total income for the year 166,920 82,427 215,567 171,011 551,925

INTERIM REPORT , JANUARY – JUNE 2023 20
PARENT COMPANY BALANCE SHEET (KSEK)

2023-06-30 2022-06-30 2022-12-31
ASSETS
Non-current assets
Capitalised development 1,448,026 1,280,426 1,408,095
Licenses, brands and similar rights 24,430 50,560 37,495
Property and equipment 8,871 11,830 10,116
Shares in subsidiaries 305,812 305,812 305,812
Investments in associates – 16,791 16,766
Other long term assets 17,393 17,393 17,393
Total non-current assets 1,804,532 1,682,811 1,795,677
Current assets
Accounts receivable 228,243 134,386 255,031
Receivables from group companies 1,700 38,997 79,656
Tax assets 31,225 7,307 –
Other receivables 50,897 51,428 28,163
Prepaid expenses and accrued revenues 85,669 50,470 59,969
Cash and cash equivalents 660,298 357,111 448,013
Total current assets 1,058,032 639,699 870,832
TOTAL ASSETS 2,862,564 2,322,510 2,666,508 EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital 528 528 528
Capitalised development reserve 1,448,026 1,280,426 1,408,095
Non-restricted equity
Share premium reserve 29,542 27,994 29,542
Retained earnings 66,865 -113,859 -237,669
Profit for the period 215,568 171,011 551,925
Total equity 1,760,529 1,366,100 1,752,422
Untaxed reserves 485,000 555,000 485,000
Current liabilities
Accounts payable 60,481 61,523 45,619
Liabilities to group companies 239,440 86,980 28,016
Current tax liabilities – – 4,352
Other liabilities 11,430 11,259 4,339
Accrued expenses and prepaid revenues 305,684 241,648 346,760
Total current liabilities 617,035 401,409 429,086
TOTAL EQUITY AND LIABILITIES 2,862,564 2,322,510 2,666,508

INTERIM REPORT , JANUARY – JUNE 2023 21
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 6 -month period respectively MSEK 540 .1 (MSEK 279.6 ) and MSEK 820.1 (MSEK 545.3) of the group’s revenue came
from one and the same customer.
Group revenue divided int o major product categories;

Prepaid revenue amounted to MSEK 204.0 (MSEK 181.0 ) at the end of the period. Of these, MSEK 187.7 is expected to be reported as revenue
during the next 12 -month period, and MSEK 16.3 within 24 months .
The revenues for the quarter and the 6 -month period respectively include MSEK 76.2 (MSEK 49.8) which were included in prepaid revenue at the
beginning o f the period .
NOTE 2. DEPRECIATIONS, AMORTISATIONS AND WRITE -DOWNS BREAKDOWN PER FUNCTION

2023-04-01 2022-04-01 2023-01-01 2022-01-01 2022-01-01
2023-06-30 2022-06-30 2023-06-30 2022-06-30 2022-12-31
USA 635,368 402,399 1,059,824 819,993 1,679,021
Sweden 16,884 1,452 18,953 3,813 21,318
Rest of Europe 74,347 47,098 119,224 92,810 234,297
Rest of the World 10,734 7,858 22,110 18,286 38,269
Total 737,334 458,806 1,220,111 934,902 1,972,906 2023-04-01 2022-04-01 2023-01-01 2022-01-01 2022-01-01
2023-06-30 2022-06-30 2023-06-30 2022-06-30 2022-12-31
PC 589,627 384,784 979,581 798,142 1,678,253
Console 109,538 51,399 166,491 101,744 218,810
Mobile 16,656 8,055 34,831 18,147 41,766
Other 21,513 14,567 39,208 16,869 34,076
Total 737,334 458,806 1,220,111 934,902 1,972,906 2023-04-01 2022-04-01 2023-01-01 2022-01-01 2022-01-01
2023-06-30 2022-06-30 2023-06-30 2022-06-30 2022-12-31
Cost of goods sold 184,648 114,850 335,205 225,528 460,407
Selling expenses 1,388 1,299 2,462 1,744 4,506
Administrative expenses 1,862 1,779 3,848 4,555 8,585
Total 187,898 117,928 341,515 231,827 473,498

INTERIM REPORT , JANUARY – JUNE 2023 22
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.