Paradox Interactive Interim Report January – June 2023

[TheSilentWombat]

Full Report: https://www.paradoxinteractive.com/...ress-release/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), an 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 in the 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 released 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 of 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), an 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).

Graph showing revenue and operating profit, as well as the number of games they have and are currently developing

Full financial data as well as employee count

Shows breakdown by region and platforms

 

[DarkDetective]

From the interim report PDF, page 11:

Profit from shares in associated companies MSEK 15.4 million (MSEK 0.0 million) has increased as Paradox Interactive sold the shares in Hardsuit Labs to Keywords Studios.

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.

And from the cash flow statement on page 18:

Cash flow from sales of associated companies KSEK 53,174

In other words:
- The shares in Hardsuit Labs were valued at SEK 31.7m on Paradox' balance sheet
- Paradox Interactive sold these shares to Keywords Studios for SEK 53174k (~$5.0m)
- Paradox Interactive made a profit on this sale of SEK 15.4m
- Whatever unreleased (and not cancelled) development Hardsuit Labs has produced was valued at 53.2m - 31.7m - 15.4m = SEK 6.1m on Paradox' balance sheet.

Paradox Interactive had acquired 33% of Hardsuit Labs in January 2018 (source, and reconfirmed).

 

[KR_EP]

Thread got lost in the sales shuffle last week, good to see you back @DarkDetective all the same to balance out the Japan-centric industry discussion on much of the forum.

Not a huge amount to say about Paradox Interactive, save that Europa Universalis IV is free on Epic Games Store this week. By free I mean the first hit is free as its a Trojan Horse for Whales, over 60 pieces of DLC (including 20 expansion packs) or you can buy the Ultimate Bundle for an arm & a peg leg. Seeing as its a decade old, you might think its possible for any Great White Whales to out last the Paradox Crew until a GOG listing appears with everything included. Fat Chance! The games have already been listed on the store & seeing as Europa Universalis III: Complete is anything but, you'll need the Collection Upgrade for key features included that costs twice as much (even when on sale) it's unlikely that option will ever appear.

Anyway one thing I did want to pick up on is the curious tale of the acquisition & sale of its stake in Hardsuit Labs. Delisted on PC years ago, Blacklight: Retribution is still available on PS4. Out of morbid curiosity, tried it out - sadly the co-op mode is empty, the multiplayer is still (kinda) active. Good luck against the veteran players still playing as its pay 2 win & the mechanics are designed around being aggressive play due to the visor revealing player locations. However there is an enjoyable game buried underneath when you survive long enough to pick up one of their weapons or sneak into a vacant mech suit to go on a revenge tour. Keywords Studios could always give the studio a chance to redesign, rebalance & rerelease as a retail/digital title.