Welcome to Hacksaw's Q1 earnings call for 2026. During the questions- and- answer session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to Group CEO Christoffer Källberg and Group CFO Mikael Rahm. Please go ahead.
Good morning, everyone. Thank you for dialing in to our earnings call. I will start with commenting on our performance during the quarter before handing over to Mike for a closer look at our financials. After that, I will conclude with key takeaways before we open the floor for questions. We start 2026 with a strong quarter, both operationally and financially. Q1 was another stellar quarter in terms of operational accomplishments.
We closed 79 new deals across all regions and with both existing and new clients. We secured a Connecticut license, an important step as we strive to follow our clients across their prioritized markets. We developed 12 new in-house games, and 15 games were developed by our third-party studios on OpenRGS. We welcomed Foxhound Games as a new studio during the quarter and Good Times Studios after the end of the quarter.
Today, we have 10 studios that have developed games on our platform. During the quarter, we agreed with Jinx Gaming, one of our OpenRGS studios, that we would invest in them in order to help them further grow. We did this investment under Hacksaw Ventures, where our aim is to allocate, relatively speaking, small amounts of capital to promising ventures when we believe that we can make a difference by backing the entrepreneurs, utilizing our platform, distribution, and industry knowledge.
We generated revenue of EUR 58 million in Q1 and EUR 210 million during the last 12 months, equivalent of 37% and 43% growth respectively, adjusted for FX. All growth is organic. Our EBIT margin came in at 82% in Q1, which is in line with the margin for the last 12 months. We continue to generate significant cash, and free cash flow amounted to EUR 43 million in Q1 and a 93% cash conversion rate in the last 12 months.
As we have stated before, we estimate our global market share to be a low single-digit percentage, and I remain of the opinion that we have a very strong proposition and should continue to grow faster than the market. Our Q1 results is good evidence thereof. So, in-house developed games. We released 12 fully in-house developed games during the quarter and have released 48 games during the last 12 months that you can see on the page in front of you. We continue to expand our development team, and we expect to increase the release cadence over time.
We continue to see a strong reception of newly released games from both operators and players, and we continue to see strong interest for our wider catalog. Our third-party studios released 15 games during the quarter and 53 during the last 12 months. As we have pointed out before, the cadence of third-party developed game releases, quarter- to- quarter, may fluctuate slightly given that several studios are working in parallel. As a reminder, OpenRGS studios develop the front end while we develop the back end.
We own the OpenRGS games, we take full responsibility for the games in terms of compliance, and we distribute the games using our existing commercial agreements with our customers. After the end of Q1, we welcome Good Times as a new partner studio, thereby becoming the 10th studio that has released a game on our platform. Also finally, we expect the existing studios will increase their release cadence over time, and we will continue to onboard new studios. We've recently onboarded on average one studio per quarter.
Turning to the operational performance indicators. At the end of the quarter, we had 320 games live in our portfolio, up from 236 a year earlier. One of the key metrics we follow is the number of rounds played on these games. With rounds, we focus on the average daily number of rounds played, given the varying number of days across months and quarters. The daily number of rounds during the last 12 months was 43% higher than the 12-month period that ended a year ago.
The average bet size for these rounds will naturally vary both across markets and over time, and the outcome of those bets, in other words, whether players are winning or losing, will by definition vary, and in short term sometimes be above and sometimes below the mathematical mean. In addition, our take rate on the gross gaming revenue is subject to a mix effect between clients and jurisdictions. Therefore, the development of rounds versus revenue is not fully correlated from period- to- period. With that, I will hand over to Mike to go through the financials.
Many thanks, Chris, and hi, everyone. If we take a closer look at the numbers for the first quarter , revenues amounted to EUR 58 million, which was up EUR 13 million, or 28%, versus last year. Similar to last year, revenues for Q1 were negatively impacted by currency movements compared to the same period last year. On a constant currency basis, the Q1 revenue growth was 37%. This growth is entirely organic and primarily driven by the number of rounds played, which comes from additional games released and continued growth in our customer base.
Moving to the expense side, for Q1, our adjusted operating expenses amounted to EUR 10.2 million, which was up EUR 2.5 million compared to last year and reflected the following drivers. First, our personnel expenses continued to increase as we continued to invest in new talent, primarily within game development and distribution in order to capitalize on the market opportunities and enable continued revenue growth. We will continue to invest in talent and investment that gives us the best possible return, given the opportunities we see.
This was partly offset by increased capitalization of development expenses. Note that from this quarter, we accrue for annual bonuses throughout the year instead of expensing them in December, and this impacted Q1 by EUR 0.4 million compared to last year. Second, our cost of services sold was up, mainly due to the increase of OpenRGS revenues and to higher license fees. As we have discussed in earlier presentations, the growth in OpenRGS increases our revenues and profits in euros but slightly reduces the average margin.
OpenRGS remains below 10% of revenue. Should this materially change going forward, we will provide additional information in due course. Finally, depreciation and amortization increased, primarily related to the continued investments in capitalized game development expenses. Our adjusted EBIT for Q1 amounted to EUR 47 million, which was up EUR 10 million or 27% versus last year. The EBIT margin for Q1 was 82%, which is in line with recent quarters.
If we move further down to P&L, financial expenses declined from last year, as Q1 last year included a one-time financial expense item of EUR 5 million relating to the FX impact on dividends that year. In terms of tax, our effective tax rate for Q1 was 4.9% compared to 6.3% last year. This all leads to that our net income for Q1 amounted to EUR 45 million, which was up EUR 15 million or 51% versus last year, and our fully diluted earnings per share reached EUR 0.157 . Adjusted for the one-time financial expense in 2025 mentioned earlier, net income was up 30% versus last year.
Now, if we look a bit closer at cash flows, our Q1 cash flow from operating activities before changes in working capital amounted to EUR 49 million and was up 45% year-on-year. As mentioned earlier, Q1 last year included a one-time financial expense of EUR 5 million relating to the FX impact on dividends, and adjusted for this, cash flow from operating activities before changes in working capital was up 26% year-on-year. Changes in working capital reduced cash flow by EUR 3 million in Q1, primarily due to our revenue growth, which obviously leads to higher receivables and accrued revenues.
Last year, changes in working capital included a positive one-time items relating to the dividend payment totaling EUR 11 million, which means that the underlying change in working capital adjusted for these items is therefore an improvement versus last year, despite our growth, which is the result of improved working capital management by the team. This leads to that our total Q1 cash flow from operating activities therefore amounted to EUR 46 million and was up 32% year-on-year when adjusting for the one-time items incurred last year mentioned earlier.
Our free cash flow for the quarter reached EUR 43 million, which is 31% higher than last year when adjusting for the one-time items incurred last year mentioned earlier. We maintain a very strong free cash flow conversion rate of 93%, and this metric shows our ability to convert profit into free cash flow and is calculated as free cash flow for the last 12 months divided by EBITDA for the same period.
Our Q1 CapEx of EUR 2 million increased given our continued investments in game development, and it mostly comprises capitalized expenses related to the development of new games, functional improvements to our technical platform, and investments in patents and trademarks. We made no major investments in tangible assets during the quarter. Finally, in terms of our financial position, it continues to be very strong, and we further improved our cash balance during the quarter.
Our total cash and cash equivalents amounted to EUR 176 million at the end of March, compared to EUR 133 million at the end of December and EUR 26 million at the end of March last year. Note that a dividend of EUR 106 million was made in March last year, and a dividend of EUR 116 million is planned in March of this year. Planned and decided. Sorry, May this year. We still have no interest-bearing debt. That's it for my comments, so back to you, Chris.
Thank you, Mike. Summarizing the quarter, we should be very proud of what we have achieved. We continued to release more content, both in-house and via third-party studios. We continued to onboard third-party studios that we believe will complement our offering. We signed a large number of new deals with existing and new clients around the world. We continued to deliver strong revenue growth, and we maintain high margins and strong cash conversion, and we initiated Hacksaw Ventures.
Looking ahead, we continue to face a very attractive market opportunity, and we are in a better than ever position to capitalize on it. I would like to thank the entire team for the great work being done during the quarter and to all of our shareholders for your continued support. With that, I would like to hand it back to the operator for any questions.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Martin Arnell from DNB Carnegie. Please go ahead.
Hi. Good morning, Mikael and Christoffer.
Morning, Martin.
I have a few questions. I'll start with a question on Europe, actually. There's been discussions in the sector about regulatory headwinds and like poor channelization and some turbulence in Southeast Europe. What is your view on the effects on your business from this?
I mean, first of all, when it comes to Europe and any region, we are very diversified. We've had no country that accounts for more than 10% of revenue or no jurisdiction, meaning that even when we do see developments in individual jurisdictions, may they be positive or negative, it has a limited impact on our total revenues. I mean, we read the same articles you do when it comes to channelization. I can't say they're right or wrong, but I do think that is a challenge in some of the markets, indeed.
Mm-hmm. Okay. You did this near 40% constant currency sales growth despite some macro uncertainties, et cetera. How would you say that the main contributors to that growth? I guess it's both the new games and the existing. Are you still in a size where like one single game can make a real difference here on the topline growth when you release these new games?
Sure. I mean, from that point of view, I suppose there's no ceiling how good a new game could be, right? Theoretically, you know, the answer would be yes, a single game could make a difference. Having said that, I mean, we take a portfolio approach to this, and we always strive to make sure that we have several releases that we consider good releases, much more than we hope for a blockbuster here and there, which we would see as lower quality of earnings.
I think what you're getting at is do individual releases impact our results? Of course, they do. Once we have, you know, a few stronger releases in a row, we have a positive impact from that. If we have a few more lukewarm releases in a row, we have a slightly negative impact. Either way, that doesn't change our view on the longer term.
In general, do you think that you had stronger successes of the new releases in this quarter compared to Q4?
Not that much of a difference, I would say, to be honest.
Okay.
Not a material change. No.
How do you feel about the pipeline for the next coming quarters, Q2, Q3, for example?
We feel good about the pipeline for the coming quarters.
You mentioned in the report that you enter Q2 with solid momentum and great confidence. Does that mean that the underlying sales growth year-on-year has continued to trend in the same range as in Q1 so far in April?
You know that I never, even for myself, comment on short periods such as, you know, sort of weeks or even a month because there's always ups and downs. What you can read into that comment is that we don't see any worries on the horizon as we enter Q2, which of course, if you go back a year, we had a more challenging start to Q2 last year.
Mm-hmm. Perfect. Thanks. My final question is on the U.S. expansion case. Can you remind us, you know, what the main focus area is right now, what you look forward to the most here in the near term when it comes to the U.S., and also how your games are being received by U.S. operators and audience over there? Thank you.
Yeah. If we start with the priorities of the U.S., I mean, first, if we take one step back, I reiterate my view that in the longer term, the U.S. presents a great opportunity for us. In the short to medium term, I think it's sometimes being overstated. Remember that in the U.S., we've been regulating, we have approximately 40 million people in the U.S. who live in regulated states. That's, you know, around 12% of the population, around 12% of GDP. It's still a relatively small market from that perspective, as it is right now. However, the longer term, you know, projections, what we expect that more states will regulate over time, is of course very big.
When it comes to our priorities, we have relationships and we have games live with all of the key operators in all of the states that we operate in. We have a, relatively speaking, small share of wallet. The focus from our point of view, if I look down operationally, is to continue to work with these operators and continue to ensure that we can be their supplier of choice as they continue to grow in these markets. That is something we don't change overnight. That's something that takes a bit of time. I think we're progressing well. But it's a marathon to get it done. When it comes to games.
Okay.
Specifically, you, I think what you're alluding to is that we do have different game preferences among U.S. players in general compared to what we see elsewhere in the world. What that means is that the games that are successful for us in the U.S. are not necessarily the same games that are successful in other jurisdictions. Meaning that when we work with the operators and when we demonstrate our games in the U.S., the work is slightly different than we would find elsewhere.
And that, as we've talked about before, to a large extent is due to the fact that they have a much stronger land-based legacy than you find in other jurisdictions. As a result of that, the player preferences are slightly different.
Perfect. Thank you for that, those answers.
Thank you, Martin.
The next question comes from Jamie Bass from Citi. Please go ahead.
Morning, Chris. Morning, Mike.
Morning, Jamie.
Just the three questions from me, please. First of all, I know you said it was less than 10%, but could you give us more of an idea of where OpenRGS attracting is in? Are we getting close to that 10% level? Second question, on cost of services, you said it was up year-on-year, but a couple of things. One, as a percentage of revenue, it's materially lower, and also, it's actually down quarter-on-quarter despite the revenue being up. Could you give us an idea of the moving parts there, why that's come down, where the scaling is?
Then finally, are there just any particular games, whether that's 1P or OpenRGS, that you thought performed particularly well in the quarter that you'd like to call out? Thank you.
Sure. Let me do your first and third question and then I'll hand over to Mike for the second one. With OpenRGS, we continue to say that it's less than 10%. It is growing. As I've said before, its growth is a little bit more volatile, which is quite natural given that we're talking about now 10 studios in different stages of their journey. It remains below 10%, but it's growing. We haven't disclosed a single number. We've said before that it's more than 5%, so that's, you know, the range you can play with for now.
As I've said before, once we see that initial volatility of growth come down and once we see that being a bigger part of our total revenues, we will come back to the market with more information. That time is not now. It will be sometime in the future. When it comes to games, I mean, the question is a little bit similar to what we, you know, what I just discussed with Martin, right? We don't have specific games that really, you know, made the quarter, so to speak.
We definitely had a few releases that were perhaps a little bit more successful than we would have anticipated, and a few that were perhaps a little bit less than we would have anticipated. That's always the case. We've seen that in every single quarter and every single month. I think if I summarize the quarter when it comes to releases, both from our in-house developed studios and third-party studios, there are no surprises. It is very much overall what we would have expected.
Sorry, your question about what's cost of services sold, right? I think that no.
Yeah.
No major things, but I mean these expenses can fluctuate, and they don't grow sort of consecutively. I mean, I think that nothing major, but these expenses can fluctuate. It means both revenue share to OpenRGS studios, but it's also license fees across the world.
That makes sense. Thank you.
Thank you.
The next question comes from Hjalmar Ahlberg from Redeye. Please go ahead.
Morning. Thank you. Maybe just a question. You mentioned that you have, I mean, continued to add employees and you saw potential for increasing the release pace of in-house games eventually. Can you cast some more light on that? Could it be this year? It would be interesting to hear.
We haven't communicated a, you know, a specific date when we step up the cadence. I would revert back to what I've said before, which is that when it comes to the development team, as soon as we find talented people in any function within that broader team, we want to bring them on board. Whenever we feel that the entire team is ready to increase the cadence, we will do so. We always strive to do that. The absolute most important thing here is not to set a date, it's to make sure that we can maintain or increase quality before increasing quantity.
Okay. Thank you. Also on the personnel costs, I think you mentioned, I mean, we saw that you have continued to increase the number of employees. Just trying to understand quarter-on-quarter, I think the costs were largely stable. Is it like kind of a lag effect that you should see more cost increase in Q2 quarter-over-quarter? If you could add some input on that would be helpful.
In terms of personnel cost?
Yeah, yeah. Correct.
Well, I think I mean, Q4 we had annual bonuses as well. I don't know if you're comparing that, but I mean, obviously, personnel cost will grow as we increase our personnel. I mean, almost linearly.
Okay, good. Just interesting to see if you have any, I mean, you got the question about regulatory challenges in Europe maybe. Also, what [audio distortion] , that's like sweepstakes, if it's still the same kind of trends there, anything that could be worth mentioning?
Yeah. You're spot on. It's the same trends. What we've said from the outset that we do expect over time that there will be states who change their view on sweepstakes, and our policy is intact. When states change their view, we adjust accordingly, no surprises there.
All right. On the commercial deals, I mean, you continue to keep a very high pace here, and you mentioned that you have a, I mean, small share in terms of the global market. But, I mean, can you keep this pace in the coming quarters, and can you even maybe increase it? If you can share some flavor on that, it would be interesting.
Yeah. It's very hard to predict the number of deals for any given period of time. If we look back on this quarter and the past quarter, we have achieved more new deals than we would have expected. I think that is very strong evidence of the thesis that we've had for a long period of time, which is that we have a good platform, we have good content, we have the right relationships, and we have a strong sales team that can execute.
The outcome of that is that we continue to strike a lot of new deals, both with existing clients in existing or new jurisdictions or with existing and new brands, or that we identify new clients that we believe in and that we bring on. I remain positive on our ability to close new deals also in the coming quarters as I did before. I can't quantify the number of deals, or the impact of those deals, in the short to medium term
Got it. As a final question, I mean, on Hacksaw Ventures here, do you think, I mean, as you say, you can help your OpenRGS partners here to grow further. Do you see that as something that you can kind of accelerate the pace where you add number of studios on your platform?
Potentially. I think those are two different things. If we're talking about OpenRGS specifically, we have historically added approximately one studio per quarter. And that's the pace we've been operating at. Can we increase that over time? Possibly, yeah. I think the important thing when it comes to onboarding studios is that we don't strive for quantity, we strive for quality.
And we would rather onboard fewer studios that we believe more in than a high number of studios that we're not so sure about. We want to be very cautious and ensure that we find people that we like to work with, who are very good at what they do, and who produce content that first of all, we believe is great content, and second of all, that we believe is complemented to our existing portfolio.
You know, for now, one studio per quarter is as good as a guess as we can have at this point. When it comes to Ventures, remember the key thing for us when it comes to ventures is that if we feel that with our position, with position I talk about our distribution, our industry knowledge, our experience, if we feel that with that position, we can use some of the capital we have, which for us is relatively speaking small amounts, and we can invest that in entrepreneurs that we believe in order for them to accelerate their growth with us, that's a great proposition for both parties.
Because we find a partner and we help them grow, and when we find that, we're definitely gonna look at that. That I think could be, you know, again, whenever we find opportunities, we don't have a sort of specific number of deals that we would expect to do in any specific period of time. It will be opportunistic when we find entrepreneurs that we believe in and where we think we can make a difference, we will look into that.
All right. Thank you very much.
Thank you.
Thank you.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Jack Cummings from Berenberg. Please go ahead.
Good morning, Chris. Good morning, Mike.
Good morning.
My first question was just, you mentioned earlier and also you flagged last year that in Q2 in April and May, there was a little bit of softness because of macro volatility. Clearly, it doesn't look like you've seen much volatility in Q1, but it'd be great to just get a sense of whether you saw any kind of impact or changes to consumer demand, either in March or at the beginning of Q2.
No. We don't have data to support that there will be a big difference following, you know, the developments we've seen globally over the last, call it, eight weeks. No.
Okay, perfect. Thank you. My second question, in the release, there was no mention of kind of full year 2026 guidance. I just wanted to check if you are comfortable with where consensus sits for the full year, which I think is about 30% revenue growth and just under 80% EBIT margins.
Yeah. I mean, as you know, we don't give guidance for individual years, but what we have said is that over time, our aim is to grow above 30%, which is higher than the market. That goes back to some of the reasons that I outlined earlier in this call. We maintain that view. We haven't changed anything from that. Yeah, that's pretty much where we stand.
Understood. Perfect. To my final question on OpenRGS, you've now obviously got 10 studios developing games on the platform. You mentioned the release cadence can be lumpy, but it'd be good to just get a sense of was Q1, in your view, a faster cadence of releases for OpenRGS, or is 15 kind of like a baseline that we should anticipate from OpenRGS? Thank you.
No, it's a baseline for now. I would go back to what I mentioned before, right? On the one hand, we do continue to onboard studios. As a result of that, you would expect that, you know, as we have more studios, clearly the release cadence would increase. Thereafter, we would also have the studios that we have on the platform would increase their release schedule over time. We would expect it to increase over time.
Okay, great. Thanks very much.
Good. So there's a number, we have a number of questions in the activity feeds. If you give me a second, we should go through these very quickly and see what we have. We've covered that. Yeah, we have somebody asking about the growth per geographical region. As you know, we don't talk about that on a quarterly basis, but if you look at the full-year numbers that we talked about in the full-year earnings, you saw that we grew across all regions during the last year. As I mentioned in my opening remarks today, we grow in all regions now, as well. I think OpenRGS we've covered. Question around stock buybacks.
We've not issued a statement on any stock buybacks at this point in time, so there's no news around that. You would have seen from the press release following the AGM yesterday that the board has a mandate to, in the future, potentially issue stock buybacks should they want to, but no decision has been taken at this point in time. Ventures, I think we've covered.
Yep.
I think we've covered most of those written questions. Yeah. Good. Super. With that, I think I would like to thank everyone for dialing in, analysts and investors alike. Always a pleasure hearing your questions. We're now gonna get back to our Q2, and we'll speak to you in a few months again, if not before. Thank you very much, and back to you, operator.