Starbreeze Entertainment FY2024 Q4 Earnings Release
Download PDFstarbreeze.comFourth Quarter 2024 Presentation2025-02-18
Quarter & Period in Brief201Q4 2024
Fourth Quarter – Key Takeaways3Q4 2024Leveraging the PAYDAY® IP – PUBG: Battlegrounds and Roblox“Baxter” in full production – ongoing meetings with potential partners this springContinuously keep several titles on market, reduces risk and diversifying revenueControlling our cost-side and improving e!ciency Cash position and limited debt ensure strategy execution
Our Strategy402
A Strong Foundation to Deliver and Grow5Q4 2024Core focus created capacity for growth…üSecure PD3 development and quality – deal with PLAIONüContinued monetization of PD2 – DLC – 30+ DLCs published for PD2 during this periodüDevelop and implement Starbreeze Nebula – enhanced, multi-platform communityüExpanding IP portfolio and restart of publishing…into a broadened IP portfolio… üPAYDAY 3 launched in September 2023 – operating three games on the market•Ensuring high LTV for PAYDAY 3 through consistent release of paid and free DLCs is our current highest priorityüDungeons & Dragons® licensed for Project Baxter, self-financed and planned release in 2026üExpanding Third-Party Publishing – smash-hit Roboquest added…building games, IP and beyond•Self-publishing of own titles•Operating several games on the market – increasing revenue streams and reducing title-risk•Continuous monetization of all titles published by Starbreeze•Continue to build the PAYDAY franchise – media beyond games but also opportunities to partner and out-license our IP2020-20222023-20242025-2027
6Q4 2024We make cooperative multiplayer games with a strong focus on community engagement, committed to having a long lifetime by updates and support
Significant events, during and after the period7Q4 2024Year 1 Edition – multiple new features“First World Bank” free heistPAYDAY™ 3 on PlayStation®PlusWork-for-hire for KRAFTON, Inc.PAYDAY experience on Roblox®Starbreeze joins forces with The GangRoboquest coming to PlayStation in H1
Controlling cost and investing in e!ciency•Strategic overview completedtaking into account current and future projects – strengthening Starbreeze long-term.•As a result we have;•Evaluating the opportunity to build a state-of-the-art tech team, with its base in Sweden•Reviewed the organization in terms of needs and competencies, which over the past months unfortunately has included some redundancies across primarily marketing roles•To reduce cost and complexity we are also evaluating the termination of foreign entities•We continue to hire specific competencies for each of our projects, and are currently at a net change of employees in the single digits•We are taking several steps to strengthen Starbreeze long-term, financially and operationally.8Q4 2024
Groupfinancials903Group financials
10Quarter & Period in BriefNET SALES, SEKm46.4 (69.2)EBITDA, SEKm19.7 (-20.6)CASHFLOW FROM OPERATING ACTIVITIES, SEKm-0.3 (62.7)DEPRECIATION, AMORTIZATION & IMPAIRMENT, SEKm71.6 (74.4)Financial update, Q4 2024PROFIT/LOSS AFTER TAX, SEKm-49.2 (-91.7)CASH AND CASH EQUIVALENTS, SEKm191.9 (347.8)
11Quarter & Period in BriefNET SALES, SEKm185.9 (633.5)EBITDA, SEKm97.6 (439.3)CASHFLOW FROM OPERATING ACTIVITIES, SEKm64.9 (114.6)DEPRECIATION, AMORTIZATION & IMPAIRMENT, SEKm298.8 (249.0)Financial update, Full-year 2024PROFIT/LOSS AFTER TAX, SEKm-199.3 (207.6)CASH AND CASH EQUIVALENTS, SEKm191.9 (347.8)
Cashflow developmentGroup financialsSEKm*Cash and cash equivalents1.Operating activities after changes in working capital, SEK 64.9m2.Investing activities, SEK -245.5m (-227.6m game development)3.Financing activities, SEK 24.5m(financing for game development 47.9m, and financial lease -23.4m. Outstanding trade receivables linked to PAYDAY 3 financing amounted to 19.3m)123YTD 20241483 108 348 157 129 65 -245 25 192 Year-end 2019* Year-end 2020* Year-end 2021* Year-end 2022* Year-end 2023* 1 2 3 End Q4 2024
Operating expensesGroup financialsDirect costs for Q4’24 amounted to SEK 80.4m (111.3m) and consists of costs related to game development, depreciations of IP:n, royalty payments and non-activatable personnel expenses. The change from Q4’23 mainly comes from lower server costs of SEK 1.5 m (19.8) and higher capitalization of development expenditure of SEK 48.8m compared to SEK 37.8m. Selling and marketing costs amounted to SEK 6.7m (15.3m) and relate to marketing activities and personnel costs. The decrease is mainly attributable to lower external marketing expenses compared to Q4 2023. Administrative expenses amounted to SEK 9.8m (22.3m) and refers to items including o!ce costs and payroll for employees who do not work in game development or marketing. The lower expenses are mainly due to lower personnel-related costs compared to Q4 2023. Other expenses amounted to SEK 6.4m (17.8m) and relates to a capital loss linked to liquidation of subsidiaries. In comparing figures this item consisted of exchange rate e”ects.We continue to hire specific skills for each project while streamlining and adapting the organization to our needs while ensuring long-termcompetitiveness and skill development.Cost base developmentSEKmNOTEQ4’24Q4’2320242023Direct costs-80.4-111.3-330.3-309.3Selling and marketing costs-6.7-15.3-30.2-46.8Administrative expenses-9.8-22.3-29.0-79.4Other expenses-6.4-17.8-6.4-21.4Number of employees at the end of the period186194186194Average number of employees189196189184Source: Company information.ABCDABCD15EE
5188958211215348226Current assetsPPEFinancial assetsIntangible assetsCash & equivalentsCurrent liabilitiesNon-current liabilitiesEquityAs per December 31, 2023SEKmBalance sheetAssets•Intangible assets amounted to SEK 491m and consist of IP rights SEK 116m, capitalized costs for own game and technology development SEK 343m, publishing and licenses SEK 32m •PPE (property, plant and equipment) relates to right of use assets of SEK 18m and IT and other equipment of SEK 8m•Financial assets of SEK 4m, consists of long-term deposit•Current assets consists of–Cash and equivalents of SEK 192m –Prepaid expenses and accrued income of SEK 74m–Trades and other receivables of SEK 43m (trade receivables related to PAYDAY 3 of 20m)Liabilities•Non-current liabilities amounted to SEK 3m, including–Lease and other non-current liabilities of SEK 0.5m–Tax SEK 2m •Current liabilities amounted to SEK 122m, including–Trade and other payables of SEK 69m –Accrued expenses and deferred income SEK 36m–Lease contracts SEK 18mAs per December 31, 2024SEKm49170504326122192117Current assetsPPEFinancial assetsIntangible assetsCash & equivalentsCurrent liabilitiesNon-current liabilitiesEquityGroup Financials
Fourth Quarter – Key Takeaways17Q4 2024Leveraging the PAYDAY® IP – PUBG: Battlegrounds and Roblox“Baxter” in full production – ongoing meetings with potential partners this springContinuously keep several titles on market, reduces risk and diversifying revenueControlling cost and improving e!ciency Cash position and limited debt ensure strategy execution
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