Hello. Good morning.
Good morning. It's us.
Yes. Yes. It's your boys, Jussi and.
Antti.
Yeah. I'm Jussi Tähtinen, the CEO and Co-founder of Nitro Games.
I'm Antti Villanen, Chief Strategist Officer and a Board Member here together with Jussi. It's been hot summer.
Yeah, it's been a hot summer, and we have a great year in the making, overall. We just put out some news while we started this webcast. We are now starting or have started the pre-registration period for NERF: Superblast. More about that later. Yes, yes. Busy times. It's been probably one of the most busiest August months ever in Nitro, I would say.
August is the busiest time.
Yeah. Yeah
... of the year. Executing our plan and sweating alongside.
Yes. Without further ado, let's get into the business and check out what we just delivered in terms of our report for the first half of the year, and we're also gonna talk about what's gonna happen during the second half of the year and beyond. Overall, for those of you who might not be familiar with Nitro, we're a global mobile games company. We specialize in action and shooter games on mobile. Everything we do is taking us towards our vision, which is to become a household name in this category on mobile.
This season and going forward, we've been taking very concrete steps towards.
Yes. Yes
towards our vision and now everything's starting to finalize.
Yeah
what we've been planning and executing
Exactly.
Yes.
Exactly. As a reminder, shooter games and action games in general are typically categories that on any platform out there, as the platform becomes more and more powerful from technology point of view, become usually the dominant platforms. What we're seeing on mobile is no different to that. Therefore it's
Following the trends as
Yeah
as in PC
Yeah
console platforms.
Yeah. Exactly. What we've been up to recently, like we said in the beginning, it's very much a great year in the making in Nitro. The first half of the year has already been pretty awesome. Despite the fact that not everything from that awesomeness yet translates into our financials. We did deliver growth in revenues again, a pretty impressive plus 400% year-on-year, whether you look at the second quarter or the first half of the year. Still we're only getting started, we feel and a big part of the good thing we have been up to are hopefully materializing, moving forward rather than behind us. And o verall, if we look at the first half of the year, most of the growth came from the B2B service business.
Most of the spending went into preparing for the upcoming game launches.
Yeah. On the B2B service business, we've been quite successful and proving our customer model.
Yeah
also our development model. We have a multi-project model, and we have proven that we can run many projects simultaneously.
Yeah
On a scalable fashion, keeping the costs in a reasonable level.
Yeah
While enabling the scale when needed. And also the fact that the customers are coming back and we are signing new returning deals with the existing customers.
Yeah
Proves that the model works, the quality is where the top tier guys from the industry are expecting it to be. We are making great progress on that front.
Yeah, definitely. Definitely. Overall, the whole investment in the quality in Nitro has been very much on the table for the previous recent years, which reflects in what you just said, is a direct result of us getting better and better people and focusing more on that topic. And overall, it's really good that in times like these when the world is going a little bit crazy outside of Nitro, we've been able to strengthen our position, get several different revenue streams, diversify that whole thing, and work on bigger and better projects with the customers we have, and in that way, kinda like bring stability into our business.
Absolutely.
Yeah.
Not forgetting about the potential high scenarios with some of the projects where we have models where we can then make a big success also.
Yeah
also with the game launches.
Yeah. We're gonna talk that a little bit later, today soon because, as you can see in our numbers, we've been investing pretty heavily in the upcoming game launches, and that's exactly as planned, and we're super happy about that. One thing worth mentioning, still from the first half of the year, what we achieved is that, we also strengthened our board of directors again.
Exactly. Old, old friend of ours joined for the board and.
Yeah
with the great experience, great expertise, and I would say, most of all, great energy.
Exactly. For those of you who don't know, Nitro used to work with PC games back in the early days when we were still young and beautiful. Now we're old and beautiful these days. Back then, we worked a lot with Paradox Interactive. That's how we got to know Susana Meza Graham, who now joined our board of directors. Good times. Let's have a look at how we're doing with our team. And uh we often like to say that our team is our most valuable assets, and that's definitely so because these are the people that make all the magic happen here in Nitro. Overall, what we're doing here is, you know, growing uh in a very controllable, controlled, moderate fashion, I would say.
We've been increasing the level and amount of talent in Nitro a little bit during the first half of the year. Overall now, when you say the people on our payroll and the freelancers, we're 60 people in-house distributed here and there everywhere because we're still very much in a hybrid remote working mode. We have our global network of partner studios where we work with different partners from time to time, from one project to another.
I mean, I think in both areas, both in the payroll and partner side, our kind of reputation is getting better and better.
Yeah, definitely.
We are attracting the better people to work with us and better and better partners to partner with.
Yeah
I think that is a kind of good progress that has been seen in the past months and uh during the year.
Yeah. Yeah. It's awesome that the way we work is that we have people from Nitro's in-house team and people from our partners' studios in same projects, and it's always a mix and, basically the teams are always global as well. For example, last week we had visitors from South America.
Yeah
here in Kotka in Finland, so from the other side of the world. That's the true Nitro way of doing things. You find the best people and the best talent no matter where they are and in which company they work from, and then we put those people together.
And that also-
That's how we deliver quality.
Yeah. That also allows us to have a multi-project model.
Yeah, yeah.
where we scale up and scale down very flexible when needed.
On a positive note, this means that we don't need to do too much of hiring when we start new projects. We need to do some, of course, but not too much, so we can keep the cost and risks at bay as well. Then about our owners and strategy of the company. Like we've said so many times before, we have a strong foundation here in Nitro. We're proud and happy members of the Nordic Games family, as we call it. Nordic Games, who are then again part of the Egmont Group here in the Nordic countries, are our leading investor.
Has been supporting us ever since they started.
Yeah, from 2020.
Yeah. There is lots of synergies, lots of support, lots of Danish hygge going on in that.
That's it.
in that partnership or cooperation.
Yeah. Of course there's fantastic companies in the family.
Yeah.
We've been working together with some of them, are working together with some of them as we speak, and might work with some of them more in the future. In any case, it's a great pool of great talent in this business, and there's so many learnings that you can share within the family, and that's of course good.
I think like sharing and caring really.
Yeah
works on that family.
Yeah, definitely. When we have a look at our strategy, this is one of the good things about this ongoing year that now we can really see our strategy working out. We've been able to increase the business from our service business, which is supposed to bring in security and stability, but still having an upside in the future as well since we work on games. At the same time, we've been able to focus on our game portfolio and the upcoming game launches without kind of like hurting our base business too much. We get both the upside and the protection. It's of course always a balancing act, but this year it really looks like it's working better than ever before.
Yeah
On that front.
On the service business, I would say that the quality has been able to scale up the teams-
Yeah
The multi-project model, those are the two key factors for the success on our service business.
Yeah.
Bringing the security and stability for our own game launches.
Yeah.
Model works.
Definitely. Obviously moving forward, we're seeking to be active on this front, as well, so we're on the constant lookout for new games. We're on the constant lookout for new partnerships and new projects in the business development as well. Speaking of which, let's have a looksee into our project portfolio or as Mr. Villanen always calls it, multi-project model, which is very fancy term for describing that we work on several teams to distribute our risk and also to build several streams of revenue and upside. We'll talk about NERF: Superblast a little bit later more today, so let's skip that for now. Blast Heroes is our first ever instant game, which we launched at the end of the first quarter.
Blast Heroes is part of our initiative where we're exploring new type of gaming, new type of platforms together with the leading platform owners, Snapchat in this case.
It seems that many of those instant platforms and social platforms are entering into the gaming space.
Yeah.
With a little bit different strategies.
Yeah.
There are quite a lot of new interesting things happening on that field.
With Snapchat, we have still three more games in the works at the moment, out of which the game number two is currently in soft launch, and we're looking to get that into the launch. With the first one, Blast Heroes, we gained so many good learnings that we can now apply into the upcoming ones. Overall, the business with this new type of things, it's something where we are making money, yes. It's not huge monies yet, but it's all about exploring the big potential that might be there for future with these big platform holders. In that sense, we're really happy with how those things are developing. It may be worth highlighting that in our MVP process, we are on the constant lookout for new winners into our portfolio.
We have-
Not only for ourselves, but it's an essential part of our business.
Yes. Yes.
Business development and when we are engaging the new partners.
Yeah
We are entering with the process that is proven with ourselves and with our partners to be the way to start the projects.
Very much so. During the first half of the year, throughout this summer, we've been pretty damn active when it comes to testing new
Yeah
... new games that could potentially find their way into our portfolio. On that front, it's. We're happy to see that the maturity of the games that we are testing and the maturity of the data we get. It just keeps getting better and better. It looks very interesting on that front as well. We have Lootland and the third unannounced game that we've been referring to in the past. Those are now at the moment in a point where we decided to put them on hold for now. We're not actively developing them as we speak now after the summer. We've done all the testing and gotten the results. Right now we're focusing on the NERF: Superblast and the upcoming launch with that one.
Once we have done that one, then we'll revisit Lootland and the unannounced game and see that what's the best foot forward with those.
At the same time, there are some discussions going, you know.
Yeah
how to monetize those potentially someday.
Yeah. Coolio. We have obviously our process with our partners. Digital Extremes is a partner that we just signed an expansion agreement with. We can't talk yet too much about this one, but like we said before, it's a very cool project that we're working on, and we're really happy about the collaboration so far.
Yeah. Collaboration going deeper and deeper all the time.
Yeah.
We are an essential part of the success of that game experience.
Yeah
in total.
Yeah. Definitely. We have our dear friends, Supermassive Games. Again, it's a project where we're working with their IP.
Part of the Nordic franchise.
Yeah, yeah. Through that. Yes. That too. The game is progressing fantastically. I would love to show it, but unfortunately we can't yet. Again, it's awesome. Take my word on it. We will talk about it one day when the time is right. We are working with fellow Finns Metacore. We haven't announced which project this is, but we are helping them with their IP with a few guys from our team.
Very good learning for us.
Yes
also on how to very big game
Yeah
runs in a live market and then
Yeah. That's a good one. We just announced a new project with the US-based mobile games publisher. The same guys we worked with last year, quite a lot.
Again, like a returning customer.
Yeah, yeah. This new project is something where we are pretty damn excited, and we're interested to see how things develop moving forward from here. Overall, we have what we call a record order intake this year. We've signed more than EUR 7 million in service business revenue this year alone. We have no intentions of slowing down either. That part of the business is definitely moving to the right direction and with an accelerating pace.
Yeah.
Let's talk about.
Nerf
NERF: Superblast. This is something that, I'm sure you guys have been waiting for a while now. We've been in soft launch throughout the year so far. Like we've said, several times, we've been really happy about the reception that the game has received and excited about-
Yes
the results and everything.
We've been testing a lot.
Yes. Yes. There's so many things that you need to look into when you're building a real-time synchronous multiplayer game on mobile with so many aspects.
Running those tests and analyzing the results always brings the kind of trust and credibility for the game.
Yeah
also for our investments in the future.
Yeah
There is a strong foundation with the game.
Yeah. I think overall, if you just look at the game or if you know, are not able to do that yet, just look at the, you know, materials that you can see online about the game, it's a pretty good example of the quality level that we are reaching these days here in Nitro. We're really proud about the game overall so far. As of now, we are in the middle of preparing for the actual hard launch for the game together with all the stakeholders involved. There's tons of stuff going on on that front. We believe that moving forward now to the actual launch phase, that we will hit our targets with the game.
Yeah
that we can develop something great out of this. We're really happy about where we stand now.
As of today, we just announced pre-registration.
Yeah. The pre-registration for NERF: Superblast is now open. The whole point with that is that people who are interested and excited about the game, they can sign up, and they will be notified when the game is available. We haven't announced any launch dates like we never do in advance, of course. Obviously we're very, very much busy working on that as we speak. As the mandatory disclaimer, part of the fun in launching games is that no one can ever predict how they actually go, so there is always a level of mystery attached to these things as well. Overall, we're really excited about the second half when it comes to our projects. We have NERF: Superblast launch coming up. We have several stuff cooking with the instant gaming side of the business.
Uh, we're working with-
Service side
... bigger, larger projects on the service side. Everything is taking us towards, you know, our vision, but also helping us to drive ourselves towards profitability and the break-even point in the future. Speaking of which, let's have a look-see at the financials. Like we discussed earlier, we did deliver revenue growth again. If you look at the percentage, it's really significant in that sense, but still we're on a pretty moderate levels in terms of the amount of euros that we bring in. Most of the good stuff that we've been working on, we expect to materialize moving forward now, after the summer and so on. Not yet everything we've done is visible in our financials.
Regardless of that, the revenues for the first half of year are almost as big as the whole last year.
Yeah
We're having a good run so far. Our EBITDA is still in the red, which is our result of us doing all the planned investments for the upcoming game launches. Everything to do with the soft launches and testing and getting everything ready, which is exactly as planned.
As planned.
Yeah.
Yeah.
End of last year, we reserved a lot of cash for the first half of the year so that we could now spend it to prepare for the second half. That's all going as planned. If we look at our performance with revenue and EBITDA quarter by quarter, we can see the same thing. We've been increasing our revenue step by step, and now during the first half we've been pretty active on the spending side. Moving forward, we expect to keep obviously growing our revenues and working on our EBITDA to get it towards profitability. That's obviously the plan moving forward. To conclude with the so-called big picture, let's have a look-see at our roadmap. This is a
Nothing new on the roadmap.
Nothing new here.
New on the roadmap.
Yeah. Yeah.
Yeah.
It's almost boring when things go like you plan. This is the same slide we've been looking at the whole year. That's what we're saying. No reasons to change everything. This year is all about game launches and B2B projects and we are very much-
We're very much on that.
Yeah. Yeah.
Executing the well-designed plans.
Exactly. This year we are very much intending to deliver what we were set out to deliver this year. Then moving forward to next year and beyond, we believe that will help us reach our visions and also deliver shareholder value to you guys and to ourselves as well. So overall, very happy times in Nitro. Great year in the making. Thanks for tuning in, and we're happy to take any questions if there is any.
Thank you.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two. There will be a brief pause while questions are being registered.
While we wait for that, we can check out some stuff from the email. There's questions about the expectations for the Q4 2022. Well, obviously, the expectations for this year are positive and like said, we are super excited about things to come. We don't do any financial guidance.
Yeah
or anything like that in Nitro. I think things that you can expect from Nitro is that we intend to deliver on the game launches and we intend to deliver growth on the B2B service business. That's what we've been up to. We've been already signing and announcing several new deals, which most of the good stuff is only materializing going forward.
Going forward.
Yeah.
And then-
Yeah. Then there was questions about the instant gaming side and, like we said, it's something where we're definitely, you know, we're making some money. It's not a huge part of the business yet. It's something where we are investigating and exploring future opportunities together with the leading players.
I think we are in the same stage as the whole industry in general.
Yeah. Exactly. Yeah.
Everybody is still in the-
Yeah
exploration phase, and nobody knows which of the platforms will be the winners and the
Yeah
which of the models even. Whether they've been ad funded or is there some kind of
Yeah
That's still like, very early in evolution of the instant games. So
Spot on. Yes
some games.
Yeah. Like anybody else, people wouldn't be looking into it unless a lot of these big players saw a big potential there, but how it materializes, we will see. We make sure that we are on the trend. Was there anything on the phone line?
At this time, there are no questions on the telephone conference, so I'll hand the word back to you speakers.
Okay. There was nothing on the phone line. There was question about NERF: Superblast and about the exact timing with the launch. We get a lot of that, by the way. Everybody's trying to figure out when are we actually pushing it out. We are busy working on it, but we don't announce any dates beforehand. I think that's the.
The pre-registration in general is a pretty good sign that,
Yeah, yeah.
... it's-
Something might happen.
Something might happen.
Yeah. Sounds to me like we're done, and me and Antti, we will now go and do some packing. We're heading to Germany this week.
Seems so.
Gamescom in Cologne. I think it's.
The biggest in Europe, at least.
Yeah. I think it's the biggest industry event in Europe, and we have a great team of Nitro people going there, meeting partners old and new. We're also going ourselves to meet with some of the most important people we need to meet with, and we're looking forward to a very hot and busy week.
Exactly.
Yeah.
Sweating competition.
Thank you all for tuning in, and have a freaking fantastic.
See you.
Rest of the day. Bye bye.