Slides
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May 20th, 2025
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transformingTSG with focus strategy for long-term growth 3AI Why do we need change?(drivers of transformation)Market evolutionpost-pandemic market evolution & fierce competitionRising complexitymature live games need scalable, precise operationsPlayer expectationsdemand for faster, more personalized, higher quality experiences Where are we now?(status of transformation)Internal change under way■new leadership onboard■combining DNAand competence: challenging alignment still in progressOrganization is adaptingto a new way of thinking, testing, and deliveringIt takes timeReasons:■avg. new location cycle = 90 days (development + test)■avg. A/B test duration = ~2 months How Will We Accelerate? (strategic enablers)Cross game leveragebest practices in one game replicated in the otherStronger frameworksfor LiveOps, segmentation, personalizationStrategic patience +Executional speed =Sustainable results
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Q12025Q12025 Bookings and marketing expense (PLN M) 5 M PLN challengesamid transformationof main products AI ■Q1 2025 key focus:■retention■improvement of quality of user experience■LiveOps operations and engagement. ■Smaller number of new locations in both products. Main objective to stabilize churn & improve retention.■Decision to decrease of UA expenditure in Q1 2025 at the expense of short-term monetization to improve long-term results.■Extensive A/B tests: of new features (FC) and segmentation of offers and difficulty of events (HC).■Technical improvements. BookingsPLN 52.6M-11.7% q-o-qMarketing expenditurePLN8.2M -28.4% q-o-qBookingsPLN18.6M-12.7% q-o-qMarketing expenditurePLN4.4M-44.5% q-o-q redesign of the first stage of players’ journey in the games(first 7 days)segmentation of offersKey focus inQ2 2025:first attempts at personalization of experience visual quality improvements &
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improving balance between monetization and engagement with new locations 6 Pushing AheadDespite Early Missteps AI segmentation■first tests on lower level paying users finalized - visible uplift ■phase II: testing higher tier of paying users;Start of offer segmentation testsUSER EXPERIENCECentral Hub: ■simplifying the game event system, creating a daily user journey for existing and new players.■re-designing early user journey of the playersin early levelsTutorial for players beginningadventure in the gamecontent
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7 M PLN Wings of Heroesflying high with consistent growth AI ■Growth of bookings by 2.9% q-o-q in Q1’25; ■In Q1 2025the team focused on:■improving first time user experience & matchmaking■introduction of coupons and pilot subscription to improve game’s economy ■preparation for the release of Battle Pass mechanizm which took place on April 1st, 2025 ■visual improvements of interface Users in M PLNpriorities for Q2 2025 RetentionGameplayMonetizationIteration ofleague systemnew game modeBattle Pass iterationdevelopment of new social feature awaited by players new system of offers (VCO)
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progress in development of new projects 9 TROPHY HUNTER AI real combat simulator launching game on global markets on Google & Apple platforms on the turn of Q2/Q3 2025reaching milestones leading to game’s global test the results of the test will determine the future of the project on the highly competitive market adding new planes & featurescurrent round of tests on Google Platform will run till August 2025
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Hunting Clash vs Trophy Hunter:Different Players, Shared Expertise 10 TYPE OF GAMEMID-CORECASUALCORE GAMEPLAYReal-time duels, 1 shot = 1 killFast, turn-based, skillful duelsPROGRESSIONUpgrading lure cards, unlocking new locationsCollecting trophies from duelsMONETIZATIONIAPsHybrid: IAPs & AdsSOCIALClubs, FBFull social hub, FB, Discord
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TSG STOREon the rise 12 TSG Store’s% share in Group’s bookings19.1%share of TSG Store bookings(March 2025)share of TSG Store grew in both product: Fishing Clash & Hunting Clash JD New shop design for Fishing Clash introducedA series of store improvements to offer better deals and more value per transactionin Hunting ClashOngoing tests of payment providers to optimize provision per transaction & new offer pricing policy in Fishing Clash Federal court ruling against monopolistic practices of Apple in US (May’25) opens possibilities to promote TSG Store directly in games for US players using iOs platform
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TSG STORE:Accelerating Growth 13 JD Fishing Clash surpasses 25% target - hitting 26.1% in March 26.1% 17.5% Hunting Clash on a steep growth path
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cost discipline, Growth of Adjusted EBITDA &Net Profit 15MJ Q1’252024Q4’24Q3’24Q2’24Q1’242023PLN m96.7386.594.494.098.0100.1436.0Revenues from sales90.5398.199.9102.396.299.7443.7Bookings81.6320.179.178.282.180.7363.3Gross profit on sales85%83%84%83%84%81%83%margin44.8215.853.055.952.055.0239.5Selling costs, including: 15.686.522.724.719.419.886.8User Acquisition costs24.2105.725.925.026.428.4123.6Commissions6.427.96.76.77.17.538.7General and Administrative costs01.21.200078.2Write-downs30.5109.728.426.527.327.5118.5Adjusted EBITDA32%24%25%28%28%27%27%margin27.567.114.612.522.017.915.2Net Profit/Loss 234 9.5% q-o-q decrease in bookings, due to focus on engagement features in main products and lower UA expenditure. Wings of Heroes and FRS continued growth trajectory. User Acquisition costs decreased in Q1’25 by 31.1%% q-o-q due to decision to withhold intensive UA activity due to extensive efforts to improve early user experience and retention. General and Administrative costs kept decreased in Q1’25 by 5.1% q-o-q mainly as a results of lower cost of subsidiaries and office rental. Adjusted EBITDA in Q1’25 grew by 7.5% q-o-q and by 11.0% y-o-y. The main reason behind this growth was the decrease in UA costs.Net profit higher q-o-q & y-o-y due to lack of significant one-off events and cost decrease. __________________________________________In the long terma possible positive impact on results may have the release of PLN 12.5 M tax provision. The tax control has been prolonged till July 30th, 2025. 12345 5 1
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MJ Cash flow generation with a strong cash poolQ1’25Q4’24Q3’24Q2’24Q1’24M PLN30.528.426.527.327.5Adjusted EBITDA30.026.528.126.832.4Net Cash Flows from Operating Activities(0.9)(2.3)(1.4)(12.5)(1.4)Net Cash Flows from Investing Activities(0.7)(1.0)(1.0)(0.7)(114.4)Net Cash Flows from Financing Activities28.423.325.713.6(83.4)Total Net Cash Flows172.4143.8121.495.076.8Cash and cash equivalents16 Strong cash positionat the end of Q1’ 2025 - PLN 172.4 M proves TSG’s strong cash generation capacity. The Group grows the level of cash consistently in each of the previous quarters.Main outflows of cash in Q2’ 2025 include:❖dividend payment of PLN 100.0M (late June),❖earnout payment to Rortos’ shareholders ofEUR 3.5M(already paid in May).
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Solid Q1 2025Profitability Despite Strategic Challenges 17MJ Adjusted EBITDA Q1 2025PLN30.5MLN+7.5% q-o-q Profitability Net profit Q1 2025PLN27.5MLN+88.1% q-o-q Strong cash generation Adjusted EBITDACash flow from operating activities Bookings Q1 2025PLN90.5MLN-9.5% q-o-q Key facts: M PLN M PLNcost disciplinedecision to significantly decrease UA expenditure to prioritize retention, technical improvements & long-term UA profitabilitydecrease in bookings due to focus on retention & engagement rather that short-term monetization & decrease in UA expenditure onboarding of new people, implementing changes in processes
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sharing profitswith shareholders 19MJ PLN100.0 Mto be paid out to shareholders in the form of dividend in 2025 PLN15.73*dividend per share16%dividend yield * based on the data of publication of this presentation**excluding Company’s own shares A record-high dividend demonstrating TSG’s commitment to shareholders approved by General Meeting of Shareholders Dividend day:20.06.2025Payment of dividend:27.06.2025Number of shares participating in the dividend:6.359.865out of6.476.000
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ambitiousGROWTH targets 2025-2029 under new msop 20MJ I TRANCHE2025-2027II TRANCHE2026-2028III TRANCHE2027-2029STRUCTUREcONDITIONSFINANCIAL performance:ADJUSTED EBITDA(80%WEIGHT)MARKET:tsg stock PERFORMANCE (20%WEIGHT)targetyoyGROWTH OF ADJUSTED EBITDAtsg stock higher by 10 pp than wig index
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targetfor the first tranche 2025-2027 21MJ Incentive plantied to long-term value creationPLN438 MADJUSTED EBITDA FOR 2025-202715%YOY GROWTH OF ADJUSTED EBITDA100%shares allocated under this conditionPLN399 MADJUSTED EBITDA FOR 2025-202710%YOY GROWTH OF ADJUSTED EBITDA65%shares allocated under this conditionPLN363 MADJUSTED EBITDA FOR 2025-20275%YOY GROWTH OFADJUSTED EBITDA35%shares allocated under this condition
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Investor’s calendar 23 Company news flow:■Q2 2025 Sales Update – early July 2025■H1 2025 Financial report -August 25th, 2025 Investors’ conferences:■29 WallStreet Conference - May 23rd, 2025■ERSTE: The Finest CEElection Equity Conference 2025- May 28th, 2025■DM BOŚ Back to School 2025 Conference -September 2nd, 2025NG
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24 sUMMARY: focus on transformation AI SegmentationEarly user experience Wings of HeroesGame depth: new game mode & social layerEarly user experience PrototypesTrophy Hunter:on the path to global testReal Combat Simulator:on trackScaling marketing budgetScaling marketing budget Main titles
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Contact details:Nina Graboś– IR, PR & ESG Directornina.grabos@tensquaregames.com
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Balance sheet 31.03.2531.12.2430.09.2430.06.2431.03.2431.12.23Selected positions in k PLN*ASSETS198,609206,436208,412212,420214,234215,778Fixed assets31,78833,15532,76033,74236,25338,937Receivables172,377143,755121,38994,97176,784162,826Cash and cash equivalents323,816210,414187,623158,748152,186242,325Current assets431,424416,850396,035371,168366,420458,103Total assetsEQUITY AND LIABILITIES266,575243,263228,612217,607194,689291,011Equity 4,8755,5866,1916,8637,4201,379Lease liabilities23,00125,41024,36424,22334,88129,465Total long term liabilities12,41710,54315,42110,25116,09310,422Trade payables141,848148,176143,059129,338136,850137,627Total short term liabilities164,849173,586167,423153,561171,731167,092Total liabilities431,424416,850396,035371,168366,420458,103Total equity and liabilities27*restated data
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Profit andloss reportQ1’252024Q4’24Q3’24Q2’24Q1’242023Selected positions in k PLN96,653386,54394,35793,97997,998100,118436,076Revenues from sales90,461398,13699,939102,30696,23099,661443,682Bookings52,643242,62059,64462,15859,59761,219274,232Fishing Clash2,0257,3332,2271,6091,7631,7327,529Let’s Fish2,0008,3992,2591,8982,0332,2098,131Wild Hunt18,63890,17521,35322,97922,10923,732110,497Hunting Clash7,29119,1427,0865,6393,4952,92211,526Wings of Heroes5,29820,4275,2385,4684,7614,96018,179Real Flight Simulator2,56710,0402,1312,5532,4702,88613,588Others 6,192-11,683-5,582-8,327-1,769-457-7,606Deferred revenues15,01366,32115,28215,78515,86319,38972,717COGS 81,640320,13279,07578,19382,13680,728363,359Gross profit on sales84%83%84%83%84%81%83%GPS margin44,824215,85053,04955,89651,95454,950239,574Selling costs46%56%56%59%53%55%55%As % of revenues6,38327,9736,7326,6837,0587,50938,613G&A costs01,21.200078,306Write-downs30,61976,24118,24715,60723,27819,1083,518EBIT 30,79294,19623,31519,56027,70723,614101,531EBITDA 35%24%25%21%28%24%23%EBITDA margin27,48667,07714,60912,50522,02317,93915,207Net profit28%17%15%13%22%18%3%Net profit margin30,509109,73428,38626,51627,34327,489118,583Adjusted EBITDA
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Cash flow reportQ1’252024Q4’24Q3’24Q2’24Q1’24Selected positions in k PLNOPERATING ACTIVITIES30,28074,10216,22713,88823,26620,720Profit/loss before tax0,941,04312,62716,397(1,784)13,803Total adjustments3,17316,7613,8733,9534,4294,506Amortisation31,166115,14528,85430,28521,48234,523Cash from operations-1,171-1,261-2,305-2,225-5,346-2,077Income tax paid29,995113,88326,54926,82826,82832,446Net cash flows from operating activitiesINVESTMENT ACTIVITIES11356162113306Inflows -881-17,952-2,302-1,384-12,527-1,739Outflows-870-17,595-2,286-1,363-12,514-1,433Net cash flows from investing activitiesFINANCIAL ACTIVITIES01,449002651,184Inflows -689-118,510-988-979-967-115,576Outflows------Dividends-689-117,061-987-979-702-114,391Net cash flows from financing activities28,436-20,77323,27625,71813,611-83.378Total net cash flows 29
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Method of determining adjusted EBITDA 30 Q1’25Q4’24Q3’24Q2’24Q1’24Selected items of the P&L Statement in k PLN30,61918,24715,60723,27819.108Operating profit IFRS+3,173+3,873+3,953+4,429+4,506Amortisation0+1,194000Write-down for impairment33,79223,31519,56027,70723,614EBITDA IFRSAdjustments:+495+369+441+311+2,855Non-cash impact of the incentive programs-3,768+4,745+6,515-675+1,331Deferred result (unused virtual currency and durables)-10-43---310M&A costs00000Other 30,50928,38626,51627,34327,490Adjusted EBITDA
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General ANDadministrative costs 31 Q1’252024Q4’24Q3’24Q2’24Q1’24General administrative costs (PLN k)6,08726,2016,5546,4536,9056,288Recurring costs2,82611,8812,7493,0813,0113,039Salaries, subcontractor services9494,1561,2061,0001,024926Subsidiaries costs6782,689749674705561Office rental and maintenance1,6337,4751,8501,6982,1651,762Other 2971,7731692301531,221Non - recurring costs3062,1262122301531,531MSOP cost-10-354-4300-310M&A cost000000Other one-off costs6,38327,9736,7236,6837,0587,509General and administrative costsMJ
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32 Ten Square Games group: teamTSG group 311people Source: Company’s data as of 31 March 2025;Evergreen: Let’s Fish, Wild Hunt, Airline CommanderOther games: RortosShared serviced related to games Customer support, Localization, Marketing, Analysis, R&DMJ
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History of profitDiSTRIBUTION TO shareholders* 33*TSG became publicly listed company in May 2018. Presented profit distribution does not include dividends paid out before TSG became listed company. AGM’s decision to pay out PLN100.0 Min the form of dividend on June 27th, 2025MJ PLN385Mdistributed to shareholders in the form of dividend (PLN 252 M) and buyback (PLN 133 M) till 2024
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2025: on the path to turnaround 35AI Stabilizing the performance of &Personalisation of user experience& offers to improve player retention and spending New segmentation strategiesfor targeted monetization improvements Reaching 25% share of bookings in Fishing Clashvia TSG StoreContent management optimization(balancing old and new content to sustain engagement) Accelerating growth ofExpanding game modesto enhance engagementDeveloping a additional social layerto increase player retention and community involvementDeepening monetization mechanisms Adding new game(s) to the portfolioFinal decision on the future of Trophy Hunter & Real Combat Simulatorbased on ongoing testsValidating long-term market potentialbefore full-scale launchEnrichment of content
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2026 &beyondlong-term vision 36AI Expanding Market Reach& Strengthening PortfolioStrategically targeted acquisitionsto strengthen the portfolioAdding new games through a mix of in-house development & M&AContinued distribution of profits to shareholdersensuring financial stability & investor confidenceReplicate the success of FC and HC with new projects
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Accounting principles for revenues– IFRS 15 38 Virtual currency „Durable” BookingsSales revenueDeferred revenue/Unearned revenue■Revenue -> the player uses the virtual currency to purchase a virtual goods (e.g. rods, lure packs)■Deferred revenue -> unused balance of virtual currency booked as „Unearned revenue” on the balance sheet■Payment -> a player purchases virtual currency+ / -BookingPeriod 1Period XPeriod 1 – user makes a payment for a durable good in a game (e.g., a fishing rod) - a cash flow is generated. The revenue for the period is the value of the payment divided by X; the remaining value of the payment is booked as deferred revenue.Periods from 2 to X – in each period the same value (equal to revenue recognized in period 1) is reclassified from deferred revenue to current period revenue.X – the number of periods that paying players on average stay in a game
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Marketing expenses policyMarketing expenses model cumulative approach■The Group invests in marketing at point „0”. Cohort acquired in this period analyzed throughout user lifetime (period „0” to „n”)■The Group monitors the current performance of acquired user cohorts■Decision regarding marketing expenses based on several basic variables (user profitability, user acquisition cost, user life cycle) Marketing expenses„We invest in marketing provided we get positive returns throughout user lifetime” 0 1 2 3 4 5 n Cumulative paymentsMarketing expenses 39
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Legal disclaimer 40 ■Neither this presentation (the “Presentation”, references to which shall be deemed to include any information which has been or may be supplied in writing or orally in connection herewith or in connection with any further enquiries) nor any copy of it nor the information contained herein is being issued and may be distributed directly or indirectly to or into the United States, Canada, Australia or Japan, except as stated below. 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Contact details:Nina Graboś– IR, PR & ESG Directornina.grabos@tensquaregames.com