Nitro Games (Stockholm:NITRO) Q3 2026 Earnings Call

0:00 Good morning, good morning, greetings from Finland. Indeed, indeed. It's your boys Jussi and Antti here and we are here to deliver you the latest and greatest on Nitro Games. Nice to see you all. Likewise, likewise. It's been busy third quarter, busy first nine months. We've done a lot on many fronts and we still have a lot to do this year as we move forward. Cool, cool, cool. If you're new to Nitro Games, then as a quick introduction, we are one of the oldest game companies in Finland. We have a big celebration next year when we celebrate 20 years. I think we are best known from our action and shooter games and projects and partner projects.

0:45 Yeah, in recent years especially. And in a long history, starting from where we started, from strategy and action games. That's something that we... We've been carrying on for four years. And stuff that we do lately, we operate a lot on multi-platform, also cross-platform. We do a lot of mobile, we do a lot of PC these days, and also cross-platform games that are basically PC, console, sometimes even on mobile. And one thing that kind of like... describes Nitro well is that we have a habit of taking pretty advanced technically challenging projects and are sort of a big USB and if you ask me maybe the secret sauce why we have been around for such a long time is that we deliver uncompromised quality.

1:33 Quality and technical know-how which is quite often the things where both of our original projects are starting and also when our partners are approaching us that is what they are That's what they are after. And nowadays more and more multi-platform, cross-platform adaptations of the existing or new IPs. bingo and if we look at the third quarter and the highlights from the report that we just published this morning the third quarter overall is pretty well in line with our goals for this year and what we have discussed earlier how we are this year taking careful investments in building new products new partnerships new collaborations and increasing our games revenue step by step going forward so first investing and then collecting the fruits Yes, indeed, indeed. And this game revenue for us means basically that we want to see increased skin in the game from Nitro, also in our partner projects, and then we expect to see revenue share and other forms of compensation moving forward.

2:36 And that's how we built during this strategy period that we're going through now. and then investing into the Nitro original games and yes those always means first investments and then recouping and profits yeah yeah and if we look at the sort of happenings uh during the third quarter uh most of the stuff is going behind the scenes in in a way because this is a year when we build a lot of new stuff so these things will surface one by one But we started the quarter by signing a follow-up agreement with a European games developer and publisher. This is a great project for us, great collaboration. Then we launched Warhammer 40,000, Voltcon Boom on mobile. Quite a good kind of start for the new business area.

3:22 Free-to-try mobile business. Pre-registrations and first indications of the Lords of Water games were really great. Yeah, I'm really happy with the results of the pre-registration phase when we scored 1 million pre-registrations. That's essentially double our target that we had for the phase. and then when we started to go in towards the launch we started to see nominate placements by Apple and Google instantly and that's super good because not only makes us proud of what we just delivered but it also means that the cornerstone of this type of premium game release if you will it relies on the continued support from the platforms as we go forward in the launch so very good and then and then also fresh news end of last week we signed with team 17 so cool new stuff cool new stuff cool new partner yes and following following the strategy that we have and skin in the game game revenues yeah still something something to go yeah indeed and this is a deal where out of the total project value which we put into the press release that it's uh approximately 0.7 million uh they bring in some of the funding we bring in some of the funding and then we have a revenue share when the game goes live so so fully in line with us and increasing the share of the game in our business yeah If we look at the numbers a little bit closer, I think the pillars on the left side of

4:58 the screen, they pretty well describe what we're after this year. So as a reminder, we started with our new strategy period that runs for five years. And this year, it's all about investing carefully. in new growth and with new growth we mean new games new partnerships new collaborations and especially like I mentioned earlier increasing the game revenue by putting more and more skin in the game and as you can see from the charts also paying heavy attention to the bottom line yes yes so that's one of the cornerstones of this strategy period that we pay attention to the sort of sound business as we call it and prioritize bottom line over the top line at least in the beginning yes exactly and now that we have been doing those investments then going forward we are of course trying to collect the fruits on the game revenue side indeed and on the balance sheet side if we look at the assets those numbers are pretty close to what they were one year ago so no huge changes on that side but on the liability side then again that's where we have some concrete progress compared to last year so since End of September last year was we have essentially halved our sort of debts. This is mostly due to the business Finland for giving the R&D loan that we have from them.

6:24 So that helps to clean up the balance sheet, if you will. And if we look at Nitro all the way since the beginning. We always be working with the great partners. Yes. And the slide explains a few of them. And I think the key thing going forward is that even working with the partner projects, we are steering all of the partner projects towards having skin in the game, doing the controlled investments and increasing our share on our 100% and I think that's the biggest change in Nitro today if you compare that against anything we've done in the past so historically we've been doing a lot of pretty close to work for hire type of models but now this year moving forward we seek to put some more skin in the game against what you just described so that's a big difference and I think thanks to our history we are in a position that we can actually do it you wouldn't be able to do it if we were fresh in this business And also this lineup of the partners tells about the quality, tells about the technical capabilities that we have and quite often why they are coming to us is either of those and then some innovative game elements that we are one of those few that can deliver. Yeah, yeah.

7:42 And this gives good synergies against our own portfolio, of course, as well. And when we put this all into context of our sort of almost 20 years of history now, we're now... Next year you can say that. Next year we can finally say that, yes, yes, yes, we need to throw a big party then. This year is in many ways about new beginnings. It's super exciting here inside Nitro because we're building a lot of new stuff. There's a lot of cool new things going on and all that sort of financial stability that we built during the previous few years, we're now putting all that into good use. making sure that we do careful investments in building new growth for the remaining part of the strategy exactly and going forward I think what can be expected is the more new games coming out from Nitro and new partner projects while at the same time also increasing the ambition level as we go so we want to make sure that every game that we do we try to make it a category leading product in that specific niche wherever it's placed the team this is one of our secret sources in a way and I think the word partnerships applies here as well so we're roughly 50 people in total in Finland in two studios when you count all the employees and the freelancers we have with the very senior kind of leadership team controlling all of that multi-talented and multi-location hybrid teams here and there and I think

9:15 Yeah. Yeah. Yeah. Yeah, basically working with our partner studios who we worked with for so many years now already gives us the ability to do exactly that. So we can invest when the process is required and balance everything so that things go smoothly with our financials as well. and it seems that this is more and more accepted also in our partner projects and even though some years ago it was seen a bit of a risk to have externals in the project but now more and more industries going into the direction where this kind of hybrid team models are accepted and sometimes even even favored because of there might be somebody in the same time zone as a as a client that is part of our partner project and this kind of things is starting to play in our benefit even though we started it already 20 years ago but now it seems to be becoming becoming more and more standard in the in the game developer Yes, definitely. And especially with the turbulence in the industry overall during the previous few years, there's a lot of big teams that unfortunately are not justified anymore and so on and so on.

10:38 So this way of working seems to become maybe even the new industry standard, if you will. Game Portfolio. This is of course always the most important and juicy part. As we've already referred, we have like two sections or categories. Nitro Originals, where we are operating with our own IPs. Yes. And Nitro Partners, where we are operating with somebody else's IPs. But both of these are now the areas where we are growing the game revenues. Yes. And so Nitro Partners games are not only the work for higher... Business Models but also in there we are building structures where we are getting into the long long earnings from the hopefully successful games.

11:23 Indeed 100% and then again also on the Nitro Originals side we're also working more and more with different partners who are investing into something so we're not taking full risk on that side either. and if we quickly talk through what's happening in the game portfolio this year so Wolf Commando is the first one of hopefully many PC games coming out from us in this strategy period and with this one earlier this year during the summer we did the first public test this game is currently in production phase aim to watch a launch which we haven't announced yet and With this one, we're also looking into potential partnerships moving forward. Otakani Heroes, we announced it during the summer that we've signed that with Hyperkani.

12:11 Great partner. Great partner, yes. They leverage everything that we have done and adding their kind of know-how on optimizing the stores, optimizing the marketing funnel. Yeah. it seems that the guys are getting some results yes indeed indeed indeed so I'm really looking forward to how how they can help us to make Autogun Heroes go to the next phase of the game and what comes out of that Autogun Heroes Super Charge so same IP same brand but on PC that's something that we've been more silent recently and for a good reason there's stuff going on that we haven't announced it so happy to see what comes out of that moving forward then we have Pistolo which is our first ever iGaming game which we released at the end of sorry not the end but at the beginning of 2025 so end of 2025 that was the opening of a new kind of category for us as the Yeah. Yeah. Yeah.

13:25 Indeed, indeed. We work with Ethereal Gaming. The first game that we did is called Cobalt Hop, which was released during the quarter. Now we have a second one and we are pretty much done with that and looking forward to releasing that and then hopefully many more to come. So interested in exploring those things forward as well. Yeah, I think they're kind of like What to say about that is that it's a great way to start this whole mobile premium free to try, try before you buy, whatever you want to call it, approach.

14:10 And in that space, we seek to work with existing IPs. We seek to work with great partners because finding that audience and getting the support from the storefront is essential. This is not your typical user acquisition game like in free to play mobile. So it's completely different in that sense. So that's a great way to start. And it seems that there are quite a lot of traction on that area. We have several discussions going on. It's new for many, so it's a little bit slow to get the project started, but interest is definitely there and there are quite a few. Quite a few discussions in various steps on our PD funnel. Yeah, definitely, definitely. And speaking of which, I think the opportunity to collaborate with Team17, that also feels good because if you know Warhammer and Warhammer 40k are brands that you know we've all gotten exposed as kids back in the day, Team17 is also like, everybody remembers so many classic games that they've done, so This is something that's super cool for us as well.

15:11 To be honest, all of our partners are in a such category, applying the Void Interactive, applying to Warframe and Payday as well. Yeah, yeah, through that, through that. maybe to note about Payday because during the quarter they announced that they finally released the Unreal Engine 5 version of the game so that's something that was super cool thing for us to be part of because as far as we know it is the first ever time somebody has done something like that for a live game so that was an interesting challenge and again proving the quality and technical know-how that we have in Nitro and Great partners of us are coming to us with this kind of challenges when they really need the quality, when they really need the technical capabilities of doing something as challenging as updating the live game engine.

16:07 Indeed, indeed. And if we look things forward, this year our focus is on new growth and with that we mean that we lay down the groundwork for this strategy period that we have ongoing. New games, new partnerships, new collaborations. We invest, we put skin in the game, and how much we invest, how much the partner invests, that's case by case. And all of this we do to increase the game revenues moving forward. then come next year then I think we can start expecting to hear and see something that has been brewing during this year whether that is then revealing something or releasing something but I think both of those will be happening during the next year yeah yeah definitely because this year is far from done there's still so much to work on but also like when we start to look at the next year and stuff it looks super exciting for us now because it's been a good start so far exactly yes Okay, let's then start to conclude this webcast.

17:11 Hope you enjoyed it. Hope you found the answers to whatever questions you might have had. Let me just check if we've gotten any new ones. Before the webcast, we got some asking about the new deal that we just signed and so on. So we already commented on those. Then there was some questions about the Boltcon launch. I think we spoke about that. So I think we probably covered pretty much all of those. So... I think where's my mouse I need to find my mouse okay let's see let's see let's see come on now we're losing our mouse but hey don't worry about it we will conclude this webcast now and until next time see you thanks for joining and don't hesitate to reach out if you have any questions thank you so much bye bye