Fourth quarter 2024

Full year 2024

1. Operational EBIT is defined as EBIT excluding non-operational amortisation and impairment of intangible assets.
2. Consolidated profit for the quarter includes a goodwill impairment of SEK 23.7 million relating to subsidiary Lucky Kat.
3. Per number of shares at the end of the quarter.

CEO Stefan Tengvall comments

Fragbite Group closes 2024 with a strong fourth quarter with revenue on par with 2023 and a notably improved EBITDA. We can see clearly how cost reductions and reorganisation have had an impact, and that the business is developing in the right direction. Revenue totalled SEK 59.0 million, on par with the fourth quarter 2023 of SEK 60.4 million, with an EBITDA of SEK 7.1 million compared to SEK 5.1 million in the same quarter last year.

A new outfit for the parent company
The measures implemented chiefly in the second half of 2024 have resulted in the parent company reporting a full-year adjusted EBITDA of SEK -11.0 million, compared to SEK -17.8 million in 2023, which represents a significant reduction in costs compared to last year. The Company intends to maintain an efficient cost structure going forward.

Show of strength from Playdigious
Playdigious reports a great result both in terms of revenue and EBITDA, making this quarter the best in 2024. As previously communicated, the third quarter was weak due to an important game release being delayed at the request of the IP owner. Part of the contract's fixed compensation has been brought forward to compensate Playdigious for this delay, which impacts the fourth quarter and also gives an indication of the high expectations on the game from all parties involved. The subsidiary has an exciting pipeline in 2025 with several prominent titles to look forward to.

Playdigious’ strong delivery this quarter also includes the distribution agreement with Epic Games which generated revenue in December. No less than four of Playdigious’ titles were part of the launch offer when the global Epic Game Store for mobile games opened its doors on 24 January, and negotiations for additional titles are ongoing. With this positive distribution agreement, Playdigious has again widened its distribution which is a key factor in leveraging the full portfolio.

During summer and fall, the team working with publishing has gradually increased the presence of our two upcoming PC titles Fretless and Crown Gambit in media and at events. These titles obviously lack the security that established IPs afford the porting business, but at the same time the upside is greater because Playdigious is the sole publisher. 2025 will therefore be an important year for this business model.

In January, Netflix cancelled its exclusivity deal with Klei, the developer of Don't Starve Together, which means that this game that Playdigious is commissioned to port will now instead be distributed initially via Apple App Store and Google Play Store. For Playdigious, this will have a negative effect in terms of the game being delayed, but at the same time there is a greater positive effect in that Playdigious can now bring the game to all channels and markets in the role of publisher. The cooperation between Playdigious and Netflix has not been affected by this deal, and we expect a continued good relationship in the future.

FunRock & Prey Studios report profitability
Our Swedish game studio FunRock & Prey Studios closes 2024 with a positive EBITDA for both the quarter and the full year, and the business has been cash flow positive since November. I am very proud of the team that worked hard to get to this point. As previously communicated, a second work-for-hire (WFH) contract was signed in the fourth quarter. Under the first contract, the studio is building a white label game based on MMA Manager 2. The second assignment is also a white label game based on the game engine from Capital War, an inactive IP that is now being utilised again. Both contracts include options for extension, for which dialogue is ongoing, as well as the possibility of profit sharing if the games are successful. The way the projects have developed, we can see that they are broader than normal WFH projects as the studio has the opportunity for both creative and financial participation over time. The goal is for the subsidiary to establish more hybrid projects of this type in parallel with its own game development and maintenance of MMA Manager 2, thus establishing a sharper business model that supports long-term profitability. The subsidiary has finally caught a tailwind, and we are working together to maintain this positive trend.

Doubled EBITDA and profitable year for Esports
For the second year in a row, business area Esports delivered great results and distinguished itself as one of few profitable esports companies in Sweden. Revenues in 2024 are on a par with last year, but with increased efficiency and distribution of projects over the course of the year, which has also led to an improved cash flow. Adjusted EBITDA of SEK 1.2 million is almost double to SEK 0.7 million in 2023.

This year's Swedish Cup confirmed the strength of the IP that Fragbite AB has created, with the subsidiary surpassing 2023 levels of audience engagement on all metrics which is a key indicator of the tournament's relevance to commercial partners. During the finals weekend, the event attracted 1.75 million unique viewers, and the full tournament had 3.9 million started streams. With participants, partners and sponsors all content, there is room for the Swedish Cup to continue to grow. For the business area, the Swedish Cup is an important catalyst for other businesses and the goal for 2025 is to grow both in turnover and profitability.

This week, it was announced that Fragbite AB has initiated a collaboration on Nordic level tournaments and thus taken a first step in the long-planned expansion of the business to the Nordic region, which is very positive. During the quarter, the team has also focused on broadening and further developing Config's business, and I look forward to being able to tell you more about it in the near future.

Lucky Kat and Wagmi enter the final stretch
In November, we were able to announce that $KOBAN is being further developed into a protocol token and that work on our own gaming protocol has begun. This was a natural next step based on how the business area had developed and the opportunities that arose. The benefits of building our own protocol are that we can create a long-term sustainable B2B business in which we sell services to other game developers to build their games and digital assets on our protocol. The Web3 business has been successful since its inception in terms of significant revenue generated from NFTs and tokens, but the revenue is very irregular which means that we need to broaden the business to enable more even cash flows. The establishment of a proprietary protocol based on nodes enables just the long-term foundation that the business area currently lacks.

In December, Fragbite Group deepened its collaboration with 4+Ventures, a partner coming in as a minority shareholder in the Web3 business. In early 2024, it became clear that the business area needed additional expertise, which proved difficult to solve quickly enough through traditional recruitment, and a collaboration was therefore initiated with 4+Ventures. The co-ownership further tightens the team, which allows us to drive forward faster and better. We have worked diligently together during the year to make up for the delays that occurred in 2023 and now see the light at the end of the tunnel.

2025 will be a pivotal year for the Web3 business area, starting with node sales and the public launch of $KOBAN, and then establishing the B2B business. Cash flow has been a challenge for Lucky Kat and Wagmi for some time, which is why Fragbite Group recently raised a short-term loan from shareholders and web3-interested investors to support and accelerate the final steps towards the launch of these important projects that are expected to contribute significant revenues.

We continue to look ahead
The Gaming and Esport business areas both enter 2025 with the wind in their backs, with convincing financial results at the end of 2024 that show promise for the years ahead. The Web3 business area has never faced greater opportunities, and after 2024, which was a steel bath not only for the Group but also for Lucky Kat and Wagmi, we are now almost ready to reap the rewards. At the parent company, we continue to have a big task ahead of us to improve performance at Group level and continue to build shareholder confidence, something we work tirelessly on every day. Many thanks to all our shareholders for your support.

Stockholm 20 February 2025

Stefan Tengvall, CEO

The report is attached to this press release and available for download from the Fragbite Group website: www.fragbitegroup.com/financial-reports