Interim Report: January - June 2018

Paradox Interactive demonstrated robust financial growth during the first half of 2018, characterized by a 38 percent increase in revenue to SEK 565.8 million and a 20 percent rise in operating profit to SEK 239.9 million compared to the same period in 2017. This performance was largely propelled by the successful launch of BATTLETECH and consistent demand for existing expansion content. While the second quarter specifically saw a 3 percent revenue uptick, operating profit for that period declined by 39 percent to SEK 99.4 million, a result of elevated royalty payments for third-party titles and the impact of one-time write-offs associated with cancelled development projects.

The company’s strategic trajectory during this period focused heavily on expansion and portfolio diversification. The acquisition of Harebrained Holdings for $7.5 million served as a cornerstone of this growth, alongside the announcement of new titles such as Imperator: Rome and Age of Wonders: Planetfall. These investments in game development and studio acquisition contributed to higher administrative and selling expenses, yet the firm maintained a strong financial foundation, concluding the first half of the year with a profit after tax of SEK 186.7 million.

As of June 30, 2018, the company held total assets of SEK 944.5 million, bolstered by significant growth in capitalized development and healthy cash reserves. This period of activity reflects a commitment to long-term scaling, supported by internal initiatives such as the implementation of a new employee warrant scheme. Despite the volatility in quarterly operating margins caused by development write-offs and royalty structures, the overall financial health of the organization remains stable, supported by a clear strategy of acquiring talent and expanding its intellectual property catalog.