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Fredrik Ruden: Good morning, everyone, and welcome to EG7 fourth quarter earnings release. My name is Fredrik Rüdén. I'm Deputy CEO and CFO in the company, and with me, I have my colleague and the company's CEO, Ji Ham. We will start with the presentation and then end with a Q&A session. And if you have any questions, please e-mail our Investor Relations e-mail address, and then we'll take that by end of this. So by that, I hand it over to you, Ji.
Ji Ham: Thanks, Fredrik. Good morning. Thank you for joining us this morning. Let's go to the first slide. We're pleased to report SEK 437 million of net revenue for the fourth quarter, a strong ending to our 2025. Net revenue declined 4.4% from the year before, excluding foreign exchange impact, SEK 80 million of adjusted EBITDA, which represented 18.2% margin. Some of the key highlights for the quarter included Daybreak delivering strong results with 11% net revenue growth year-over-year, and that's in local currency, excluding foreign exchange and adjusted EBITDA, which came in 26% higher at SEK 33.4 million for the quarter. Palia continues to perform well, 146% net revenue growth year-over-year. And now it is the largest revenue contributor for Daybreak's live game portfolio and Big Blue Bubble, even though it's performed -- had some difficulty throughout the year, December was a great ending to the year with a 27% growth in MAU and 59% net revenue sequentially growing from November. And that momentum is also carrying into January, which is a great sign. And Fireshine, net revenue grew by 10% year-over-year, and Jurassic World Evolution 3 physical release in Q4, along with digital launches of A.I.L.A and Lens Island contributed to that revenue growth. Next slide, please. For the full year 2025, SEK 1.6 billion of net revenues. When you exclude foreign exchange, net revenue declined by 1.1%. Adjusted EBITDA came in at SEK 254 million and margin was at 15.6%. Some of the key achievements that we had throughout the year. Daybreak portfolio has performed really well for the year, live titles, Lord of the Rings Online, Dungeons & Dragons Online and DC Universal Online, all back to growing and demonstrating growth and that momentum carrying into 2026 as well. And Palia, one of our main highlights for the year, platform expansion into PlayStation and Xbox with 70% year-over-year net revenue growth, when you compare the second half of 2024 to second half of 2025. And Fireshine is continuing to grow with this indie digital publishing, a nice revenue growth for the year and continuing to build out the back catalog with Core Keeper being a main component of that growth in addition to the physical distribution business that continues to do well. Petrol is back to profitability. And along with Petrol being back to profitability, all of our business units for the group is now cash flow positive, contributing toward growth. Next slide, please. Some of the headwinds that we encountered for the year, one of the main ones, foreign exchange impact, net revenue declined by 1.1% for the full year when you exclude foreign exchange, but without that, actually looking at it just from SEK, you're looking at 5.1% decline. So there is a significant distortion in our numbers with foreign exchange swings, which has been very volatile for 2025. So this is something that we are looking into, being able to present our numbers in a way that presents it in a more comparable manner for investor base and shareholders to be able to understand it better. So looking at the local currency versus looking at -- just looking at it from a SEK perspective, which has a lot of this distortion that's coming in with the volatility in the foreign exchange is what we're aiming to do. So going forward, we will be looking at better presentation of our numbers so that our investor base could understand that better. My Singing Monsters is another one where we had lower user numbers throughout 2025. This was an unexpected decline in the springtime with a lower organic user acquisition that lasted until December when we had the trends reversed pretty meaningfully with the viral uptick that happened with a successful collaboration with a big influencer on TikTok, but this was unexpected. And that did impact our revenues and profitability to be lower for 2025. We're very much encouraged by the reversal that's happened in December and that momentum carrying into January. EverQuest IP infringement, so this is another one that's impacted our performance for Daybreak's portfolio of live service titles, especially EverQuest. Good news is that Daybreak did prevail here. We were able to win a preliminary injunction, shutting down the competitive title that was infringing on EverQuest IP. But nonetheless, that event did have a negative impact on EverQuest performance for some time throughout 2025. There is a positive momentum with EverQuest with the injunction having been put in place. We're getting users back. EverQuest is performing well again, but once again, some amount of impact that resulted in Daybreak's numbers being lower this year because of this situation. But for 2026, we do expect trends to normalize as we gain players back from this particular situation going forward. Cold iron game release delayed. So this one is a big one, right? So for 2025 originally targeted for release, this now is being delayed to Q3 2026. So we're making great progress there. We do expect this game to be contributing significantly for our performance of 2026. But nonetheless, that delay is something that has impacted our 2025 performance to a certain extent. Piranha Games net revenue declined by 45% year-over-year. This was due to MechWarrior 5: Clans having released in Q4 2024 and no new game release for 2025 for Piranha. So when you look at the comparison of product and content slate and pipeline for Piranha comparing '24 to '25, you see that decline in its net revenue and profitability. Otherwise, we had some restructuring in order to get businesses like Petrol get back to profitability. We also had some significant impairment cost along with the Q4 that did impact our 2025 negatively on the profitability side. Next slide, please. Looking forward for 2026 and beyond. So the Daybreak momentum, we have encouraging momentum coming at a number of our titles. DC Universal Online, LOTRO and DDO, all demonstrated nice growth for 2025. And once again, we do see that momentum carrying through 2026 as they're coming out of the gates quite strongly for 2026. Palia expansion, second annual expansion is something that we expect to release sometime late spring. So we're excited for Palia to continue to grow. 2025 was a pivotal year for the game. We expect the additional content that we could bring will continue to build on that momentum and get Palia profitability and become a meaningful contributor, bigger than where it is today for the entire portfolio. Cold Iron's game launch, we're looking at Q3 2026. As mentioned, this is something that we have invested significantly in. We're quite optimistic about its potential performance and looking forward to its release in 2026. Fireshine's pipeline, Fireshine continues to grow with their indie digital publishing business, 10 titles currently forecasted for 2026, about 50% in digital, 50% in physical. And one of the key titles that they're seeing a lot of positive momentum around is Far, Far West. So it's a brand-new title that's already been announced. 400,000 players have come into play test the game and their Steam wish list is approaching 400,000 people. And based on that early signs, we are quite excited and also encouraged by the potential positive performance from this title coming from Fireshine later this year. Long-term targets, growth targets that we are retracting at this point. We did announce our 2026 target at Capital Markets Day in 2023. We are revisiting that given some of the delays with our product pipeline, including Cold Iron's game. So we intend to schedule another Capital Markets Day coming in Q1 2027 to be able to talk about our updated strategy or targeted and our expectations for what we want to deliver from the shareholder and shareholder value creation. So that's coming up next year. But for now, we are retracting our 2023 announced Capital Markets Day guidance for 2026. Next slide, please. Fredrik, over to you.
Fredrik Ruden: Thank you, Ji. Next slide, please. Fourth quarter net revenue was SEK 437 million, representing 4% FX-neutral decline. The difference from fourth quarter last year is mainly attributable to SEK 49 million lower net revenue from the launch of MechWarrior Clans in Q4 last year and a significant SEK 53 million impact from unfavorable currency fluctuations. Net revenue increased from previous quarter, explained by strong fourth quarter momentum, as we talked about, supported by content upgrades in several titles such as EverQuest, Palia and an active release pipe for Fireshine. The full year net revenue was SEK 1.626 billion. The full year adjusted EBITDA margin was 16%, which is a bit low but pretty much in line with historic average. Next slide, please. More predictable revenue comes from the live service and back catalog titles. Net revenue from this portfolio was SEK 346 million, representing 4% growth. And to show growth despite unfavorable currency movements in this cash generative and more predictable part of the business is mainly a good indicator on how we perform long term. Over the last 12 months, net revenue amounted to SEK 1.626 billion, of which SEK 1.273 billion derives from the more predictable revenue base. And the two most cash-generative businesses, Daybreak and Big Blue Bubble are included in these figures and delivered, excluding Palia, a net revenue of SEK 873 million, with SEK 189 million EBITDA. That's a KPI that we mentioned now and then. So EBITDA minus capital expenditures. So this corresponds to an EBITDA margin of 22% in 2025. Next slide, please. Daybreak is the largest contributor to the net revenue, generating SEK 195 million. And as Ji pointed out in SEK, this is a decline but represents an organic increase in local currency of 11%. This increase is explained by generally strong momentum fueled by content upgrade Ji mentioned and a strong 70% growth for Singularity 6 in the second half of the year. And Singularity 6 was acquired 2024 and consolidated from July 1. So the second half of the year is the first kind of real comparable period that we have. The adjusted EBITDA came in at SEK 33 million, corresponding to 17% EBITDA margin. And Big Blue Bubble delivered net revenue of SEK 55 million corresponding to a 32% decline in SEK or CAD 23 million. And we mentioned this also with the drop in active users over the year, but an uptick between November and December due to a new influencer strategy. And this gave an activity peak in December, which also generated a good start of January. So the net revenue in November was CAD 2.1 million. And in December, it was CAD 3.3 million which is the highest ever since the massive viral peak a few years back. And in January, the preliminary net revenue is CAD 3.1 million. Next slide, please. Net revenue Fireshine was SEK 126 million correspond to around 10% growth in local currencies and 1.5% in Swedish krona, which is explained by the physical release of Jurrasic world Evolution 3 and digital releases of Palia and Lens Island, and adjusted EBITDA was SEK 16 million. And in the press release that we sent out this morning, we also highlight some trends. So -- and in there one message is that we have successfully invested in transforming Fireshine towards digital releases, which give resilience from the physical decline and a more diversified and future-proofed pipeline going forward. And over the past 5 years, the high-margin digital net revenue increased from nothing to GBP 11 million in 2025 and Petrol generated SEK 27 million in net revenue, but with a negative EBITDA, which, to some extent, is explained by a write-down of that debt. Next slide, please. Piranha delivered net revenue of SEK 34 million with an adjusted EBITDA of SEK 11 million, correspond to a 31% margin. And what Piranha is doing is that they continue the successful leveraged DLC strategy for MechWarrior. Next slide, please. Our financial situation remains solid. We invested SEK 61 million, of which SEK 42 million divided equally between Palia and Cold Iron. The level of investment in the more predictable revenue base remained low. Operational cash flow increased to SEK 74 million, which is approximately SEK 40 million higher than the adjusted operational cash flow in previous quarter. And by end of the quarter, we had SEK 43 million in net cash position and SEK 390 million in cash. And we still have the flexibility in the unutilized revolving credit facility of SEK 100 million and the potential of issuing more bonds with the SEK 1 billion frame that we have. Next slide, please. So to improve the transparency for investors to evaluate the company to structure foundation for potential strong value creation, the Board has in the beginning of 2026 taken several initiatives, which for clarity were communicated in separate releases, and Ji mentioned this also. So we will conduct a strategic review. We will, during 2026, evaluate all ongoing projects. And based on this, present a strategic update when all important data points have come to surface. We have also agreed to accelerate the contingent consideration for Daybreak. And for those who remember this, this derived from a 15-year tax deductible amortization of which the benefit was agreed to equally be shared between buyers and sellers when Daybreak was acquired. So now we have agreed to pay SEK 5 million for the years 2024 and 2025, and another SEK 6 million for this year and all future remaining years. And what this will give us is improved annual cash generation of USD 1 million to USD 3 million per year over the next 12 years. It will also generate a positive impact to net profit for 2026 and it terminates the continued consideration related party relationship. And in addition to that, we did an impairment of SEK 2.51 billion, of which SEK 1.86 billion is not correlated to performance expectation in any ongoing projects, but it is reflecting a strategic decision to move game development to a more cost-efficient geography. This gives also SEK 120 million lower annual amortization for 2026, which also improved our potential to generate positive net profit. And the last press release this morning then aimed to increase transparency. And in today's press release, we show several local currency KPIs over the past 5 years. We also point out important trends and the value of the tax losses carryforward. And for further information about these releases, please have a look at them yourself. They are all presented on the Internet already. So by that, I hand over back to you, Ji.
Ji Ham: Thanks, Fredrik. Let's go to the last slide. Next, please. So some of the key takeaways for our Q4 as well as the year-end 2025. Positive signals in terms of our core franchise is delivering nice growth, so Palia growing by 146% year-over-year for Q4. And the number of Daybreak live titles performing really well, demonstrating growth for 2025 with strong momentum going into '26 and Big Blue Bubble once again softer 2025, but we're very encouraged by the momentum that they're showing with the viral uptick that they experienced in December, and that's following into 2026. That should be providing a nice foundation for progress for 2026. And secondly, we have key launches set to really drive growth for 2026. Q3 release target [indiscernible] for Cold Iron's title, which we're optimistic for performance to make significant contribution to the group's overall performance for 2026. Palia has got its second annual expansion coming out, sometime next spring. Last year's expansion did extremely well. So we're very encouraged by the new update with new content, new features and systems that the player and the communities will be able to really enjoy to continue to grow that community and the game's performance. And Fireshine is continuing to grow with 10 new titles planned for 2026, 5 physical, 5 digital and digital titles being something that we continue to build that baseline foundation of that catalog revenue, which becomes very much recurring and mimics live service titles in many, many ways. So we're looking forward to their continuing growth there. And Daybreak's proven franchises, overall portfolio showing strength. EverQuest rebounding from 2025 as well as these number of games that we mentioned as continuing to show momentum from '25 coming into 2026. And lastly, strategic actions underway. Board has been very active to start out 2026, highly focused on delivering shareholder value here, so increasing transparency along with additional data that we shared relating to a number of our titles and business units, balance sheet cleanup with accelerated contingent consideration settlement that Fredrik talked about, also laying the groundwork for that value creation. We're looking forward to being able to share a lot more about where we want to take the business, where the group could go and what type of value creation we could deliver with a strategic framework that we intend to present through a Capital Markets Day that we hope to host first quarter 2027. So that concludes our Q4 presentation, and we will follow with the Q&A session. Fredrik, back to you.
Fredrik Ruden: Thank you. So having a look at the questions we have received. So here's one Hjalmar from Redeye. Do you believe that improved performance for My Singing Monsters is sustainable?
Ji Ham: It's too early to tell, but nonetheless, once again, part of the decline related to My Singing Monsters in 2025 was a lower engagement on platforms such as TikTok and in December, along with that partnership that they were able to establish with a very well-known influencer, they were able to get that engagement level on TikTok significantly higher. The strategy going forward for Big Blue Bubble is to be able to continue those types of partnerships. So on a quarterly basis, they intend to work with influencers to feature My Singing Monsters' content and keep the engagement high on social media platforms, such as TikTok to continue to push and maintain that engagement level. So while it's too early to say whether December uptick and what momentum we're seeing into January is a sustainable momentum for the long term, we do believe the strategy that Big Blue Bubble is going to be undertaking is something that could be replicated for similar type of success going forward. Of course, it depends on what type of influencer, how many followers they have and et cetera, but nonetheless, along with them investing into this effort, we do have optimism that Big Blue Bubble will be able to continue keeping the players highly engaged for social media platforms.
Fredrik Ruden: What are your expectation for Palia from here? Is it stable at a new level? Or do you see further upside potential? This is also from Hjalmar at Redeye.
Ji Ham: Yes. We expect Palia to continue to demonstrate growth. The game is not complete yet. It's not quite 1.0. 2025 was a major step, along with the expansion release and also expanding to PlayStation and Xbox last May, but they followed that up with significant additional feature and content update that happened in September as well as in December 2025. And going forward, they intend to have these big annual expansions that come out, so it was May last year, we're intending that this could be May of this year as well, subject to development is progressing. And along with that, they're going to be bringing significant amount of new content, new ways to play, lots of additional content for community to enjoy, to expand the game and also expand gameplay type for the experience. So we do think it's a multiyear journey for them to continue to grow and continue to build out the overall experience for the community, but with a lot of what's planned for 2026, there's a lot of excitement for what they could bring, and we expect that to drive additional growth for Palia for '26 and beyond.
Fredrik Ruden: Thank you. How firm is the release date of the Cold Iron game project? Is it mainly timing or optimized sold units? Or does the game still need additional polishing?
Ji Ham: Yes. So based on where it's trending and what we know today, we do have a high degree of confidence for Q3 release. And as with any other game, it's never done until it's done. So there's continuing effort going into polishing as well as improving the game, but nonetheless, based on the trajectory and the momentum around the current development, we do expect that Q3 is a very good target for when we could release the title.
Fredrik Ruden: How should we view the MechWarrior franchise following the write-down? Is the IP still relevant for your long-term portfolio? And I can explain -- I can take that one. So the write-down was reflecting the Clans game, which was one major game that was launched in 2024. And even though that game generated very high meta critics and the quality in itself, it didn't meet our commercial expectations. And the book value of that title and the DLC connected to the regional game, that was what we wrote down. So long term, MechWarrior, the DLC strategy that we have for Piranha is something that we will continue to evaluate. I don't know if you want to add something to that, Ji.
Ji Ham: No, I think that's exactly it. So it's not so much about the MechWarrior IP itself because we see that MechWarrior Mercenaries DLC is performing really, really well, as evidenced by DLC #7 that came out in September of last year. So we still do believe that there's continuing upside with the IP itself. But as to the Clans title, that did underperform our expectations, and that's the reason why we did take that write down.
Fredrik Ruden: Can you explain a bit more about the write-down and shift of development assets to Canada? And this is a question we get from a couple of the investors. Will it lower your employee cost in 2026?
Ji Ham: It's something that we believe will create significant value going forward in terms of lowering the overall cost of development. So when you look at, let's say, British Columbia province in Canada, when you look at the staffing cost of that particular area versus what we have in the U.S., the cost differential could be as great as 40%. So in California, which -- where Daybreak is based, we have a significant number of staff here, including Singularity 6, working on Palia. Talented group of team members that we highly [indiscernible] even they continue to do amazing work for us. But as we think about building out additional capabilities for new titles, or whether it's backfilling loss of employees on our current teams or building out new titles that we may be investing -- we may want to invest in, it's very compelling for us to be targeting growth in a region like British Columbia, where cost of development per head could be as low as 40% below where California cost us. Hence, the reason why, whether it's a new title utilizing third-party IP or an IP that we may own, we want to spin up a new team for that particular effort. We do think it makes a lot of sense to be setting up a studio, which we already have. We did set up a brand-new studio under EG7 ownership in British Columbia and for future titles, as well as existing teams looking to build additional staffing for content development, we are looking to move development into Canada to augment what we're already doing in the U.S. So yes, it may not be super immediate in terms of, hey, does 2026 cost of development go lower than where we are today. It may take some years. Nonetheless, I think for the long term, being able to have a balanced approach of not only having our existing teams based in the U.S. continue to do what they do but building out new products, we're augmenting our teams in the U.S. with lower cost, but highly talented staff based in Canada, I think ultimately will create nice value and lower overall cost of development for the organization.
Fredrik Ruden: Thank you. And I think this is a question for myself, from Mikael [indiscernible]. In addition, EG7 is focused on cleaning up the balance sheet and delivering an improved and positive net profit number for 2026, among other things, giving flexibility to both dividends and share buybacks under the current bond agreement. Can you please elaborate about this? Yes. So the impairment takes out not only a risk of potential write-down in the future but also reduces or could potentially in this case, it reduces the annual amortization by SEK 120 million. Both write-down and amortizations have a negative impact on the net profit. In the bond terms, we need to have positive net profit to be able to do buybacks or dividend. So by doing what we have done now gives us subject to that we deliver a positive net profit for 2026, the possibility to do dividends or buybacks after 2026. So that's an important alternative, which also was communicated from the owner group represented by the Chairman in November, if you remember that. Okay. So I'll look further in this list of questions. Are you still going to focus on M&A growth?
Ji Ham: Yes. We do believe M&A is an important aspect of our continuing efforts to grow. Of course, we have our organic investments and existing portfolio of games that are performing well. But nonetheless, in order to accelerate growth, we do want to also target strategic opportunities that makes sense. But we have been very selective, we have been very careful given the market circumstance. We are looking at multiple opportunities. We turned down a lot more than we have spent time on. There are interesting opportunities that still exist, but we want to be quite, I would say, prudent and careful about deploying capital and in situations that ultimately aligns really well with what we're trying to do going forward. So yes, the short answer is yes, absolutely. M&A is a very important part. As to how aggressive we intend to be and how quickly we could secure deals, we want to be very prudent in terms of evaluating and also securing deals. So it's not a core, I would say, in terms of where we are today that could predictably drive growth, but we do want to make sure that it's part of our strategy going forward.
Fredrik Ruden: I can take this question also. It's also from Redeye, Hjalmar. Will Fireshine continue with physical publishing or is the write-down an indication that this business is not profitable? So the -- if you have the right kind of cost base then physical publishing will also be profitable. You have lower operational profit margin on that, maybe around 10% compared to the digital, which is more scalable. But since the physical part has gone down historically and will continue to go down, it's not -- it hasn't the same kind of future resilience, which is something that we think is challenging for Fireshine forward, as long as we keep getting physical missions then we will continue doing that. But I think the important thing looking at Fireshine that we have invested around GBP 50 million over the past 3 years to grow the digital release pipeline up to where we are standing at this point. And I guess that's the most important value for Fireshine going forward. So in 2025, we reached GBP 11 million in net revenue from that part. So that's the answer to that question. This is a question for Elia Ivanov. How much additional funding is still required to reach the Cold Iron launch? And what we have communicated there is that we have another USD 4.5 million that we -- U.S. dollar that we will invest in developer advance. I think that concludes the Q&A session. So thank you, everyone, for listening into today's call, and have a good day.
Ji Ham: Thank you, everyone. Goodbye.