Q4 2024 Full-Year report Beyond Frames Entertainment AB (publ)

Delivering another record-breaking year of growth, with the highest year for revenue in Beyond Frames' history.

Fourth quarter, October 1 - December 31, 2024

• Sales amounted to 43,264 (40,386) kSEK, an increase of 7,1% compared to Q4 2023              
• Operating profit before depreciation and amortization and shares in associated companies' earnings (EBITDA) amounted to 3,637 (3,853) kSEK
• Profit after financial items amounted to -4,395 (-3,749) kSEK
• EBITDA per share amounted to 0.21 (0.22) SEK
• Profit per share after financial items amounted to SEK -0.25 (-0.22) SEK
• Cash and cash equivalents at the end of the quarter amounted to 7,364* (21,820) kSEK. This compares to 8,952 kSEK at the end of the previous quarter.
• Equity attributable to the parent company's shareholders in the Group amounted to 63,467 kSEK at the end of the quarter, corresponding to 3.62 SEK per share, compared with 81,921 kSEK, corresponding to 4.77 SEK per share at the end of the corresponding quarter last year.

The Period, January 1 - December 31, 2024

• Sales amounted to 175,834 (136,932) kSEK, an increase of 28,4% compared to the full year of 2023 
• Operating profit before depreciation and amortization and shares in associated companies' earnings (EBITDA) amounted to 12,582 (10,160) kSEK 
• Profit after financial items amounted to -19,264 (-7,746) kSEK 
• EBITDA per share amounted to 0.72 (0.59) SEK 
• Profit per share after financial items amounted to SEK -1,10 (-0.45) SEK 

Comparative figures refer to the corresponding period of the previous year unless otherwise stated.
*10,2 MSEK additional capital raised after the quarter, January 2025.

CEO comments: Highest year for revenue in Beyond Frames' history

I couldn't be more proud of the company for delivering another record-breaking year of growth. Q4 2024 marks the best full-year and Q4 by gross revenue in Beyond's history. Our revenue, portfolio, and operational diversity have risen above a year beset with VR and general games industry challenges. 

Secure Cash Position
We ended the period with positive cash flow from operations, though our cash holdings were lower than usual. This was planned, as we anticipated milestone payments and a strong Q4 to balance our cash position. However, changes in the Meta Quest store, mentioned in previous communications, introduced volatility into our cash flow forecast, adding uncertainty to our cash outlook should there be further market changes.

To mitigate this uncertainty, we executed a directed share issue of 10 million SEK in early January to ensure undisrupted continuity in our development pipeline. We are also actively exploring ways to increase cash liquidity to strengthen our operations and pursue new opportunities.

Studio Pipeline Update

• The game Cortopia is developing in partnership with the publisher Devolver Digital is progressing according to plan. Milestone payments were collected in the quarter in association with this development. More details are expected to be shared soon.
• The "large Hollywood IP" under development by Cortopia that was teased in previous releases was revealed to be the Teenage Mutant Ninja Turtles (TMNT). We're incredibly excited about this title as it has an enormous built-in audience, especially among VR owners in the US, our largest market. We have not yet executed a consumer-based announcement, but we anticipate significant noise about this title once we get going on promotional initiatives. Milestone funding for this title was earned during the quarter. 
• After the quarter, we shared our gross revenue expectations from the TMNT game, which range from 350-700 mSEK between mid-FY 2026 and FY 2029. This estimate is 30% to 50% of successful VR games based on larger IP.

Publishing Pipeline Update

• On the publishing side, the early access launch of Combat Waffle's GRIM moved out of Q4 and launched as a top-10 best-selling title in the Meta Quest Store in January, after the quarter. Being a one-developer project supported by Combat Waffle and Beyond Frames, we are happy with the launch into early access in terms of retention and session metrics and are looking forward to continued development and further growth over 2025 as more features are introduced. Combat Waffle's multiplayer survival horror game, Silent North is still scheduled for a Q1 FY25 release. As with previous titles, Silent North is launched into Early Access for further development and tuning together with the community. And, as with GRIM, we have a strong belief in the potential of these releases, but expect the initial growth to be somewhat slower than the explosive launch of Ghosts of Tabor. 
• Ghosts of Tabor has been generating exceptional add-on revenue which has increased over 260% since the first year in App Lab, primarily driven by the permanent and time-limited starter packs. Overall, Ghosts of Tabor generated more gross revenues than 2023 with a 50%+ YoY lift over the holidays, so we see this confluence of KPIs as a positive underlying signal that the game will continue to thrive as a live service title. 

Market Update
In industry news, XR's growth continues to be a positive trend. Meta's Reality Labs division posted its strongest year ever, with a 40% revenue increase YoY primarily driven by new hardware sales. Additionally, Google has re-entered the market with AndroidXR, a new Android-based OS for XR devices. Among Google's first partnerships is a new headset by Samsung, and we anticipate hearing more news about more headset partners in the near future.

Changes to the Meta Store
The Meta Quest store changes had a negligible impact on Ghosts of Tabor's new unit sales but a larger impact on the rest of our portfolio. Once again, this highlights the strength of our diversity as we were not subject to the potential negative fallout from being "all-in" on one genre, marketing channel, or revenue source. Revenues from downloadable content and project funding more than made up for soft spots elsewhere in our portfolio. Our strategy is to increase our diversification over time.

Based on our Q3 and Q4 observations, we're even more confident in the future success of our upcoming and recently launched games: GRIM, Silent North, the unannounced title with Devolver, and TMNT. These games benefit from built-in audiences and align with current demand for social, sandbox, and VR-first experiences.

Looking Ahead
We see many opportunities next year as a continued tough economic climate depresses the cost of publishing rights and assets compared to 1-2 years ago. We believe revenues from our catalog and new titles will be strong and hope to convert our historic positive performance into strategic opportunities to continue the trend.

We extend our gratitude to our players, staff, partners, and stakeholders for their ongoing support as we advance toward our goal of being one of the greatest providers of immersive entertainment in the world.

Ace St. Germain, CEO Beyond Frames Entertainment AB (publ)

Link to the video presentation of the Q4 and full year result: Link to presentation