Financial · January 1, 2025

Thunderful Group Q4 2024 Report

Summary

Thunderful Group underwent a profound structural transformation throughout 2024, shifting its strategic focus toward external publishing and core internal development while divesting its distribution segment and several subsidiaries, including Headup and Jumpship. This transition resulted in a significant decline in financial performance, with annual net revenue falling 23.8% to 292.8 MSEK and Q4 revenue dropping 27.6% to 77.4 MSEK. The fiscal year was defined by a substantial operating loss of 917.3 MSEK, primarily driven by 848 MSEK in depreciation and asset write-downs. These impairments reflect the aggressive cleanup of the balance sheet as the organization streamlined its workforce to 297 employees and moved away from non-core business units. Despite the heavy accounting losses and a deterioration of the adjusted EBITDA margin to -14.1%, the group successfully stabilized its financial position by reducing interest-bearing net debt from 402.1 MSEK to -7.7 MSEK. This improvement in liquidity was largely achieved through a drastic reduction in core working capital and the settlement of liabilities. Furthermore, a comprehensive cost-savings program is expected to generate between 80 and 90 MSEK in annual savings, positioning the company for a return to positive cash flow in the coming year. The outlook for 2025 remains optimistic, supported by a robust release pipeline consisting of twelve ongoing development projects. This portfolio includes eight internally developed titles, such as Reignbreaker and Lost in Random: The Eternal Die. By concentrating resources on a leaner operational model and a high-potential publishing slate, the group aims to recover from the volatility of its restructuring phase and establish a more sustainable, profitable trajectory within the global gaming market.

From the report

# A more agile and sustainable game company following restructuring program Fourth quarter October–December 2024 - Net revenue decreased 29.6 MSEK to 77.4 MSEK (107.0) compared to the same quarter last year. - Operating profit (EBIT) decreased 76.2 MSEK to –631.5 MSEK (–555.2), corresponding to an operating margin of –815.5 percent (–519.0). - Write-down of capitalised development cost amounted to 560.2 MSEK for the quarter, of which 444.0 MSEK was acquisition-related goodwill values. - Adjusted EBITDA increased 7.1 MSEK to –10.8 MSEK (–17.9), corresponding to an adjusted EBITDA margin of –13.9 percent (–16.7). - Adjusted EBITA increased 0.1 MSEK to –154.8 MSEK (–154.9), corresponding to an adjusted EBITA margin of –199.9 percent (–144.8). - Profit & loss for the quarter amounted to $- 4 9 2 . 9$ MSEK (–595.1), and for continuing operations $- 4 4 9 . 1$ MSEK (–541.0). - Earnings per share before and after dilution amounted to –7.01 SEK (–8.47), and for continuing operations –6.39 SEK (–7.70). - Cash flow from operating activities amounted to 26.7 MSEK (300.0), of which discontinued operations amounted to –7.4 MSEK (489.2). - Consolidated cash and cash equivalents together with unutilised credit facilities amounted to 150.2 MSEK (209.1) as of 31 December $2 0 2 4$ . - Thunderful has signed an agreement with Jumpship’s former owner, Dino Patti, for the transfer of all shares in Jumpship — Limited. The company has also reached a settlement agreement regarding former seller claims on future earnouts in exchange for shares in Jumpship Ltd. According to the settlement agreement, Jumpship shall receive 752,6 TGBP from Thunderful, which corresponds to expected wind-down costs. Thunderful shall also waive all internal loans to Jumpship. The transfer of shares is conditional upon shareholder approval at the extraordinary shareholders’ meeting. The period January–December 2024 - Net revenue decreased 91.7 MSEK to 292.8 MSEK (384.4) compared to the same period last year. - Operating profit (EBIT) decreased 371.4 MSEK to –917.3 MSEK (–546.0), corresponding to an operating margin of –313.3 percent $( - 1 4 2 . 0 )$ . - Write-down of capitalised development cost amounted to 659.3 MSEK for the period, of which $4 4 4 . 0$ MSEK was acquisition-related goodwill values. - Adjusted EBITDA decreased 150.6 MSEK to –41.3 MSEK (109.2), corresponding to an adjusted EBITDA margin of –14.1 percent (28.4). - Adjusted EBITA decreased 287.4 MSEK to –383.9 MSEK (–96.5), corresponding to an adjusted EBITA margin of –131.1 percent (–25.1). - Profit & loss for the period amounted to –887.5 MSEK (–629.8), and for continuing operations –665.5 MSEK (–579.6). - Earnings per share before and after dilution amounted to –12.63 SEK (–8.96), and for continuing operations –9.47 SEK (–8.25). - Cash flow from operating activities amounted to 241.3 MSEK (299.0), of which discontinued operations amounted to $3 4 3 . 6$ MSEK (346.2).

tions –665.5 MSEK (–579.6). - Earnings per share before and after dilution amounted to –12.63 SEK (–8.96), and for continuing operations –9.47 SEK (–8.25). - Cash flow from operating activities amounted to 241.3 MSEK (299.0), of which discontinued operations amounted to $3 4 3 . 6$ MSEK (346.2). # Events after the end of the quarter • On February 10, 2025 the Thunderful shareholders approved the transfer of the Jumpship shares. Closing of the divestment is expected to be concluded shortly.

| Key performance indicators | Quarter | Period | | | | | | --- | --- | --- | --- | --- | --- | --- | | GROUP | Q4 2024 | Q4 2023 | Δ% | Jan-Dec 2024 | Jan-Dec 2023 | Δ% | | Net revenue, MSEK | 77.4 | 107.0 | -27.6% | 292.8 | 384.4 | -23.8% | | Gross profit, MSEK | 53.4 | 56.2 | -5.0% | 229.6 | 319.4 | -28.1% | | Gross margin | 69.0% | 52.6% | | 78.4% | 83.1% | | | EBITDA, MSEK | -29.7 | -22.4 | -32.8% | -69.4 | 99.8 | -169.5% | | Adjusted EBITDA, MSEK | -10.8 | -17.9 | 39.6% | -41.3 | 109.2 | -137.8% | | Adjusted EBITDA margin | -13.9% | -16.7% | | -14.1% | 28.4% | | | EBITA, MSEK | -173.7 | -159.4 | -9,0% | -411.9 | -105.9 | 288.9% | | Adjusted EBITA, MSEK | -154.8 | -154.9 | 0.1% | -383.9 | -96.5 | 297.8% | | Adjusted EBITA margin | -199.9% | -144.8% | | -131.1% | -25.1% | | | Operating result (EBIT), MSEK | -631.5 | -555.2 | -13.7% | -917.3 | -546.0 | -68.0% | | Operating margin (EBIT margin) | -815.5% | -519.0% | | -313.3% | -142.0% | | | Profit & loss for the period, MSEK | -492.9 | -595.1 | 17.2% | -887.5 | -629.8 | -40.9% | | Profit & loss for the period for continuing operations, MSEK | -449.1 | -541.0 | 17.0% | -665.5 | -579.6 | -14.8% | | Net core working capital, MSEK | 8.9 | 526.3 | -98.3% | 8.9 | 526.3 | -98.3% | | Cash flow from operating activities, MSEK | 26.7 | 300.0 | -91.1% | 241.3 | 299.0 | -19.3% | | Interest-bearing net debt, MSEK | -7.7 | 402.1 | -101.9% | -7.7 | 402.1 | -101.9% | | Interest-bearing net debt/adjusted EBITDA, R12M, MSEK | 0.2 | 3.7 | -94.6% | 0.2 | 3.7 | -94.6% | | Earnings per share before dilution, SEK | -7.01 | -8.47 | 17.2% | -12.63 | -8.96 | -41.0% | | Earnings per share after dilution, SEK | -7.01 | -8.47 | 17.2% | -12.63 | -8.96 | -41.0% | | Earnings per share before dilution for continuing operations, SEK | -6.39 | -7.70 | 17.0% | -9.47 | -8.25 | -14.8% | | Earnings per share after dilution for continuing operations, SEK | -6.39 | -7.70 | 17.0% | -9.47 | -8.25 | -14.8% | | Net profit margin | -636.5% | -556.2% | | -303.1% | -163.8% | | | Net profit margin for continuing operations | -580.0% | -505.7% | | -227.3% | -150.8% | | LOST IN RANDOM: THE ETERNAL DIE STORMTELLER GAMES

# CEO Comments 2024 was a transformative year for Thunderful Group. We have taken critical steps to strengthen our financial control, streamline operations, and create a clearer path forward. The decision in November to focus more explicitly on game publishing in collaboration with external studios also marks an important change. The many changes throughout the year have laid the foundation for a more financially sustainable and flexible business. During the fourth quarter, we implemented the restructuring program announced in November. The program aims to streamline our publishing operations and is expected to generate annual cost savings of 80–90 MSEK. At the same time, we are increasing our investment in publishing rights to strengthen our future game portfolio and create new revenue streams. One-time costs related to the restructuring are estimated at a maximum of 30 MSEK, of which 19 MSEK was recognized in the fourth quarter. Additionally, we have made write-downs of development costs, goodwill, and game rights amounting to 560 MSEK, of which 216 MSEK were related to the restructuring program and 344 MSEK were adjustments of acquisition-related goodwill values to better reflect market valuation of industry assets. The Group’s net revenue for the fourth quarter $2 0 2 4$ amounted to 77 MSEK (107), with an operating result of –632 MSEK (–555). # Publishing In the Publishing segment, net revenue amounted to 49 MSEK (68), a decline explained by fewer game releases and one-time revenue during the same period last year. Costs have decreased due to reduced personnel expenses, as well as high one-time royalty costs in the comparison period. Transactional sales remained stable at approximately 45 MSEK (45), demonstrating the growing strength of our portfolio and the value of efficient back catalogue management. # Co-development & Services For the Co-development & Services segment, net revenue for the quarter decreased to 29 MSEK (39), primarily due to lower revenue from Coatsink—a result of a reduced monthly billing rate in exchange for a revenue-sharing model for an upcoming game release. Revenue from Services remains limited and declined marginally compared to the same quarter last year.

the quarter decreased to 29 MSEK (39), primarily due to lower revenue from Coatsink—a result of a reduced monthly billing rate in exchange for a revenue-sharing model for an upcoming game release. Revenue from Services remains limited and declined marginally compared to the same quarter last year. # Looking ahead to the future Despite major challenges this year, we have seen improvements in our operational efficiency and financial control. These positive developments give us renewed confidence, which, combined with several exciting and important launches in 2025, make us optimistic about the future. Our commercial ambition for the year is clear: to ensure positive cash flow and create the necessary conditions for sustainable growth. Our increased focus on collaboration with external game studios makes it easier to adapt to changing market conditions. This strategic choice results in lower fixed costs, greater flexibility, and improved control over our cash flow. At the same time, our remaining internal game studios ensure that we retain the longterm ability to capitalise on the creative and commercial potential of our own established IPs and brands. The past year has not been easy for the organisation, and we still have challenges to overcome. However, the foundation has been laid to create long-term value in the coming years for shareholders, partners and players worldwide. I remain excited to lead Thunderful Group and I have confidence that, together with our incredibly talented and dedicated leaders and employees, we will succeed in making this happen. # Martin Walfisz CEO of Thunderful Group February 2024

# About Thunderful Group Thunderful Group AB (publ) focuses on the publishing and development of high-quality digital games primarily for PC and console platforms. Headquartered in Gothenburg, Sweden, Thunderful Group spans a significant portion of the game industry value chain through its two main operating segments: Publishing and Co-Development & Services. The group encompasses a global games publishing business, five game studios with various creative and technological expertise, and a services business. The segments work synergistically to develop, market, and support a diverse portfolio of gaming experiences. With 297 employees, Thunderful Group leverages a talented workforce, primarily based in Europe, dedicated to providing engaging and innovative digital entertainment. # MISSION To provide creative entertainment products of the highest quality for people of all ages. # VISION To be a leader in a world where everyone can play.

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