Good morning. Good morning. Good morning. Good morning. Yes, and Happy Valentine's Day. Yeah, it is. Friend's Day here in Finland. Yeah, yeah. The weather though, it's not that great at the moment. Yeah, it's rainy slush. Yeah like normal Yeah Southern Finland winter weather. Exactly. Welcome to Nitro Games webcast for the year-end report 2021, which was a good year for us. It was. Yeah. It was. We're very well-positioned now for 2022. Yeah, continuing the good progress from the last year. Yeah ... future- Exactly Looks bright. Let's begin by brief introductions to Nitro and who we are. I'm Jussi Tähtinen, the CEO and co-founder of Nitro Games. I'm Antti Villanen, the Chief Strategy Officer, Co-founder together with the Jussi, and I'm also one of our board members. Exactly. Nitro Games, we're a global mobile gaming powerhouse. We're headquartered here in Finland, and we have partner studios around the world here and there and everywhere these days pretty much. More and more. More and more. Every day. Yeah. With the setup that we have, we are going towards our vision into the growing category of action and shooter games on mobile. Definitely. We see lots of new opportunities on that category that there are new sub-categories growing inside of the shooter and action category, and also the instant gaming platforms are starting to wake up into the business, and seems that there are lots of opportunities. Yeah, yeah. in those areas also. Yeah. It's kinda going into different directions. Yeah. You have the instant gaming, then you have, you know, bigger mobile games than ever with big brands coming to mobile and so on. Yeah. We're well-positioned for all that. Well-positioned on our spot. Let's have a looksee at some of the recent highlights here in Nitro. Like I said, 2021 was a good year for us. Our revenue grew 125%, and the big focus topic that we had for last year, which was in expanding our project portfolio both with our own games and with the partner projects, that was definitely a success. What we can see is that parallel to increasing our revenues throughout the year, we also worked on improving our EBITDA. Even though year-on-year we didn't improve, but throughout the year, we improved on that one, and that helped us to retain the strong cash position, which is very essential for going towards this year. Exactly. One key tool for our better position was the active and successful business development that lead in the several new service business partnerships. Especially what we were really happy about was that we could continue with several of our existing partners. Have like a continuous deals and continuous business with the valuable partners. I think one thing to mention after the period, we signed the biggest deal ever with the Supermassive. Supermassive Games. Yeah, yeah. Supermassive Games. That was also kind of continuous deal for the early prototyping and market validation project, and that is exactly the model that we are now going forward during this year also. Yeah, indeed. This whole concept of working with partners together with us expanding our teams globally and so on, I think that's built a really good foundation for not just last year, but especially for moving forward. In addition to the partner projects and signing new deals, we of course also work with our game portfolio, where we now have started the soft launch for the first game in the Snapchat platform. We have a total of four games with them, but the first one is now in soft launch. We announced NERF: Battle Arena, which is a big production we've been working on here in Nitro since late 2020. We also started the soft launch for that one. We're super excited about the game and how things look moving forward with that one. Parallel to these, we are obviously preparing more soft launches, so we have more stuff in our portfolio, but we will discuss a little bit more about those as we move forward in the presentation. We have something new, a new gaming production we haven't announced yet. Yeah, something new. I would say on a higher level, we truly last year proved the multi-project model to be working. Indeed. For us, the multi-project doesn't mean two or three, but really. Multi-project model where we can run several projects in the different stages through our quite well-validated and data-driven process. Exactly. I think one highlight more coming from the ownership side is that the Nordisk Games support is continuing to the company, and they increased their ownership in Nitro Games to become a major shareholder, and that was like a really good news for the company and even more support from our big brother, and more and more also the operational cooperation between other companies in a family. Yeah, definitely. Yes. It totally helps with us building our long-term strategy and long-term shareholder value while still making sure that we're doing great things short-term as well. If we go forward, our most important asset we like to say is our team. Like I said in the introduction, what we have here in Nitro is a global team, and we're headquartered in Finland where we have two studios. We're 40 people, and in Finland we have the sort of a structure where we have 360 degrees of capabilities, everything from concept and IP creation to development and to publishing and marketing, and the whole data preparation process is in here, as well as obviously, you know, business development and managing the global functions. Globally, we have several good studios, some new studios that we have partnered with and we are gaining the scalability and efficiency, and also we can offer such a knowledge and more resources that we don't necessarily have in-house through those partners. Model has been now kind of tested, and it seems to be proven to work at scale also. It's not just having one partner there and another there and one project or two projects, but now we can run multiple projects simultaneously and have a scalable benefit out of that model. Yeah. I think for Nitro this is pretty natural evolution because we've been outsourcing some parts of the game development for pretty much all the time more than 10 years now. Like, going into this direction just helps us to further develop those partnerships that we've been building throughout the years, and us doing everything with our process and so on means that we can add value to the partners, but definitely get value from them, per Nitro. Overall the team is in really good shape now and moving forward to 2020. Obviously we'll continue building both our presence in Finland, but also in other places of the world as well. If we look at the owners and strategy side of things, the strong foundation is something that we've had for a while, and that hasn't changed other than Nordisk becoming a majority shareholder now at the end of 2021, which is definitely a good thing for us. Me and Antti here, we are the founders of Nitro Games. We've been working together for a freaking lifetime now. Nitro Games was founded back in 2007. We used to work on PC games back in the day. We did a little bit of white label work on consoles and so on. We started work already 2004. Yeah, yeah it's been over 16 years. Yeah. Exactly. We've been focusing on mobile basically since 2015. The first mobile games we did was with game publishers until we listed Nitro in Nasdaq First North in 2017, and that's when we really started building the self-publishing capabilities and look at the long-term strategy of the company. I think about the Nordisk Games, the family so far, it's quite a lot of synergies, different type of companies. There's some expertise on mobile, there's some expertise on shooter category, bigger companies, smaller companies. But what it means for Nitro and everyone else in the shareholders is that it enables us to be slightly bigger than we actually are and gives us muscle in areas where we might be lacking if we would be just alone in a way. Exactly. It's definitely. It has been really beneficial for the business development negotiations to be a part of the bigger family. Yeah, yeah. The strategy we have since 2017 when we listed Nitro is twofold. We are building our game portfolio of action and shooter games on mobile. This whole strategy aims to enable us to reach our vision, which is to become the greatest on the shooter and action games on mobile. When we look at the game portfolio, that's something where we do most of the investments in, and that's how we build those potential for hockey sticks down the line. The purpose of this two-leg strategy is to make sure that we can control the downside while we maximize the upside as well. Especially last year, this started to click in a really nice fashion because we were able to expand on both fronts. Yeah. It's not only the kind of risk management tool, this service business, what we do for the partners, it's also learning kind of curve w here we are getting access to such big projects that we haven't yet been able to initiate ourselves, or we get the learnings from the processes, how the games are developed in the U.S. or Asia. That's the big benefit and also the value for the company to get access to the very big interesting projects and also good tool to draw in the new people in a team. Also good tool to find the new development partners for the new projects. There are quite a few angles on this model. Yeah, yeah. Obviously also in the B2B service business, when we work with partners, there's of course the long-term mindset as well that should something become really popular and successful, then it benefits us in a, in a great way as well. Yeah. Cool. That's our strategy. Let's talk about the beef and the biggest achievement of last year and the focus points was in expanding our project portfolio. Basically here is where we stand. The way we look at things in Nitro and the way we develop is very data-driven. We call it our MVP process, where we are measuring everything basically from the earliest concept stage as early as possible. It seems that resonates also in kind of service business side. Yeah. Many of our clients are also willing to adapt that model that we are using for our own games into their projects. That has been quite successful kind of sales tactic, so to speak. Exactly. More and more parties are really seeing the value as we showcase the results of those and so on. What this means in a nutshell is that obviously since we work on mobile games, we work on a very hit-driven industry, and when we look at free-to-play gaming, it's very data-driven, and it's something where the games are basically never ready. The way we approach this with our portfolio is that we develop the games, then we validate those steps with data, and that helps us to basically get rid of something that doesn't work and really focus on the things that actually do work. This has been pretty efficient last year in bringing new games to soft launch and helps us to push more games to soft launch this year as well. That's key for us in basically finding the winners and then really focusing on those moving forward. Same applies for our partner projects. Yeah. Not to invest too much money into the concept or idea that doesn't work. The activities and success that we have had on our business development have driven the kind of record high results on a deal size. On top of that, also the steady monthly revenues, increase in revenues coming from those projects. It seems that we haven't yet at least find a kind of ceiling, but we can scale it Higher and higher. The business development is very active on with their sales funnel, looking for those opportunities and selecting the best possible ones for us. Exactly. We now have quite a few shots on goal. Moving forward, we're seeking to have even more. If you look at the games and projects that are in the portfolio, so with NERF Battle Arena, as a reminder, we have exclusive license for that one on mobile. What we're building is a first-person blaster game where players blast each other in multiplayer arenas of different kinds. This game is something that if you've seen anything from it, you've seen that it's very all audiences friendly in a way, so it's very sort of gender and like people from different ethnic backgrounds. It's very global concept that we managed to build. Also very influencer-driven game. Yeah. Lots of influencers doing the videos around the NERF and kind of that. You can do a lot of crazy stuff in that game, but in a fun way, because that's what gaming is about. It's about building something that's fun. This one is currently in soft launch and obviously parallel to us going forward with the development in soft launch and measuring things and gaining more and more confidence as we go forward. We're busy preparing for, you know, the launch related activities moving forward. We have Snap. We have Snap game or actually four projects together. First one in the soft launch stage. Still on the development phase, but cooperation have been really good and fruitful, and it seems that there are common trust between partners, and we are seeing the possibilities on those instant game platforms for o ur expertise and Snap being very good example on those ones. Yeah. I really like how the whole partnership has evolved in a direction where we've obviously learned a lot and, now we have again, several shots on goal with them, and, one by one, we will be pushing titles forward this year. We have Lootland, which is our own IP, and as we've discussed earlier, that's now being externally developed in one of our partner studios. With that one as well, we gained some good progress towards the end of last year when we started to approach the end of the so-called production phase, which is when we do the heavy lifting on the game and get to the so-called beta stage, if you will, if you compare to what happens on PC and console. This game is currently in technical testing, which is a phase where we make sure that everything works as intended and so on before we roll out the game forward to a soft launch phase. The game is really, really fun and addictive to play. I think there is a good opportunity with that one. Yeah. Yeah. We have one game on our own MVP process that is not announced, but, I think it's not too far from where we have been, but some new angle and some new take on those genres that we've been working on and that's still in a process. Let's see how the data looks and how fun of a experience we can create out of that. Exactly. I'm really happy with how it's developed somewhat quickly, even though i t's still early on in the process, but very much looking forward to be able to talk about that more moving forward. We have Digital Extremes. We are working on a game based on their IP, and that's something that unfortunately we can't talk too much about other than what we've said earlier. It's awesome. We've really enjoyed working together with them and very much look forward to- I think that was the one project where it's a good example of the learnings. So, o f course, there are some new techs for us to include into the project. That in that way, it's on top of the great project and big order value, but there are also lots of learnings that we can gain from. T hat project. Yeah. Another thing we can't talk too much about is the cooperation we did with this U.S.-based mobile games publisher last year. This is something that we completed as planned now in early 2022. This was a project where we basically worked on their game and their IP, but we can't go into too much details on that. Then we have the- We had this one U.K.-based PC Console games developer, now it's safe to say that one was the Supermassive Games and with them, we did pretty much our one-to-one to our process, the MVP process, starting from the ideas, went into concepting, used the data pipelines and analytics and all the tools to measure which one of the concepts are the best one for the kind of needs that they had. Early this year, we concluded the kind of early-stage prototyping validation project, now heading toward the production. Exactly. I think that's a prime example of how this several shots on goal approach and how our process works in general. We started with a lot of different type of concepting and ideas. Out of those, we came up with three, which we then, you know, prototyped. Narrowed down. Yeah. Further defined and market tested and all that. Out of those three, we then killed two and selected the best one, and that's now the one that we're going forward with. Obviously, we will continue this testing and iteration process moving forward. Overall, if we look at the portfolio and, like, let's say compare the beginning of 2022 to the beginning of 2021, we're in a night and day different position. Much better, like we have a strong cash position, we have the orders in the partner business, so we have good visibility to revenues moving forward, and we have a lot of stuff to roll out the doors one by one. Really exciting. Even more shots on the goal kind of. Yeah. Yeah. Very exciting times on that front. If we look at the financials, last year, the performance was strong, but obviously, you know, we're nowhere near satisfied yet. Last year was still building our project portfolio and so on, and working our way with our cost structure to make sure that we are aiming towards profitability in the long run, and we don't destroy our cash and everything. In that sense, it was really strong and just validated that the model we've chosen works. If we look at some of the numbers there, the revenues definitely increased towards the end of the year, and we made a decent chunk of our revenues during the fourth quarter. The materials and services is something where we have our third-party development costs. That's also where we have our marketing costs, so we do constant user acquisition for the testing and all those things. We saw our personnel costs increase slightly because we invested in hiring more key people into Nitro, and that's obviously a very positive thing. In the other operating expenses, we have a variety of third-party costs related to administration. All the legal stuff is there, and so on and so on. Maybe more interesting view on the numbers is if we look at the revenue and EBITDA development. Like I said, during last year, we were able to systematically increase the revenues quarter by quarter while we kept our EBITDA at bay and managed to improve on that towards the end of the year as well. As a result, the key thing for us from operations point of view is obviously that we succeeded in retaining a strong cash position, so we still have EUR 3.7 million in our bank basically at the end of the year, which is very much needed now when we go to this year and start to invest more and more in the product launches and obviously invest into new product development as well. If we look at the high level big picture, where we stand and what's ahead of us, the roadmap is basically the same that it's been in, throughout this year since 2017. As a recap, we started with this new strategy in 2017. That's when we listed Nitro Games in- It's lots of the building the team and building the techs and portfolio and creating this MVP processes, all the tech and tool and publishing pipelines and all that. We spent quite a lot of time and money for building the basis for scaling and success. Exactly. Yeah. Obviously, we made our first mistakes at that point and so on, but that's something that is very valuable for us now when moving forward. That kind of concluded the first period when Nordisk Games joined that really enabled us to focus on the long-term execution of the strategy. Like we said earlier, last year focus point was in expanding the project portfolio, and that we consider definitely a big success, b oth on the B2B and with our own titles. Yeah. Also during the past year, we strengthened our business development quite a lot and looking for more and more new opportunities, and we're successful also by signing those and with the new projects. This year, then again, it's all about basically two things. We obviously have a lot of games. We're looking to launch them and roll them out one by one. This is where the several shots on goal really comes to play. Not always one by one, but there are some. Oh, yeah, yeah. Good point. on the parallel also. Yeah. Anyway, this spring already being kind of time of the... When there are more and more launches coming out. Yeah. A lot of activities on that front, we've already started to, like, further strengthen our publishing capabilities when it comes to avenues of launching the games and so on. Yeah. At the same time, while we are still increasing our business-to-business projects and we have a good visibility now for the revenues from that side, but s till looking to grow that area and have been even stronger and stronger and that's mostly been due to the fact that we have those partner studios around the world. We are every day closer and closer collaboration with those guys. Many of them are starting to be or feel like a part of the Nitro since we've been working so many years with them. Nitro has started to grow on all fronts b asically, there's no need to stop that. That's well in line with where we're heading towards our vision. Obviously, building shareholder value is something that we keep in the back of our heads every day because we're shareholders, of course, as well. In the long run, we think about these things long-term, that we are building this approach to maximize the long-term potential of Nitro. In that perspective, we're only getting started now. It feels good. It's good starting position for this year. At this point, we'd like to thank you for tuning in and listening. Thank you so much. We have some questions. At least we received some in email, so let me have a look. There's one question regarding the development agreement deals we have done during last year and the big one in January. Do you get revenue streams along the way piece by piece, or is it at the end of project? Quite often what we are looking for with our deals are milestone-based payments, and often they are monthly milestones. Not necessarily always. We are looking for some sort of revenue or profit or bonus payment scheme after the project. I would say that that's the model that we are aiming for in all the projects. Yeah, yeah. Typically the bigger the project, the sort of, the milestone payments tend to increase towards the end a s the team grows, and you need to implement more people into the team and so on. In some projects there are reasons also for us to put the kind of skin in the game, so we might invest our tech into project. We might invest our Live Operations tools. We might invest some asset that we have for the project to increase the back-end side of the deal. Yeah, yeah. I think that's very well in line with our strategy and vision because we tend to work with type of partners and type of projects which have some sort of synergies with things that we're doing with our own games, so it's all very beneficial for us. Yeah. Then a question or comment about the cash position. Well, like I said, we have EUR 3.7 million in the bank as of end of last year. Overall last year was very good in a sense of us retaining our strong cash position, which like I said, that's very much needed because this year there are all these new game launches and investing into those, and that's something where we obviously need the cash. That means that we're in very strong position at the beginning of this year. Yeah Compared to where we've been historically before. Let's see if there's anything else. Is there any other questions? No. That was all there is from email, and is there anything on the phone line? Thank you. Ladies and gentlemen, if do you 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 to cancel. There will be a brief pause while questions are being registered. Excitement is building up. Our first question comes from Viktor Lindström with Redeye. Please go ahead. Viktor, if your phone is on mute, please unmute so you may ask your question. Oh, sorry. Good morning, guys, and thank you for taking my question. The first one is regarding the gross margin that improved quarter-over-quarter. Could you elaborate around that a bit? Yes. How we improved on this quarter by quarter was basically keeping our costs at bay and taking more and more advantage of the not just the reusable technology, but our processes as well. This is the beauty of our way of working because it helps us to basically improve on the efficiency all the time as we go forward. Big part last year in connection with this was the whole external partner studios network because it helped us to basically build on different studios and scale the operations without hiring all the staff into Finland and getting them onboarded and so on. We could instead start to work with already established teams rather than building them ourselves. Super. A follow-up then. How much user acquisition did you spend in the quarter, and what do you believe is a sustainable level going forward for the new game releases? During the fourth quarter, we spent roughly EUR 100,000 in different type of user acquisition for measurement and testing purposes. Mostly testing. Yeah, yeah. That basically that's something that's the kind of level that we need for ongoing with all the games in our portfolio, even the early-stage ones. That doesn't take too much in terms of capital. That said, now we have the game launches coming up, and then it's all based on the data. Obviously, we are building different scenarios and bigger and smaller ones, but long story short, this year we're looking to invest more into user acquisition moving forward. It's definitely not gonna stay stable. Right. That's helpful. Regarding the two games, NERF: Battle Arena and Lootland, what is the time schedule for those? Will they be released in the end of this year, or is it more towards 2020- You cut off there in the end, but I heard the beginning, and that's enough for us. Like it or not, we never communicate any launch schedules in advance, and we're gonna stick to that. Why we do so is that we want to obviously avoid building false expectations because in our process it's all data-driven. We develop the games, and they go out, and they go forward to different stages. They go out when they are ready. Yeah, exactly. There's obviously the other side of the coin, which is the business relationships we have. Obviously, for example, with NERF, we coordinate everything with Hasbro and so on, and whatever there might be brewing, we don't wanna talk about that too early. The third side of things is that the last thing we want our competitors to know is when exactly we're gonna roll out our games. That's why we'd rather talk about things we've already achieved and have a loose understanding of what's ahead, but we never talk about exact dates, or we don't even set them when it comes to game launches moving forward. Right. Thank you very much. Thank you. Is there anything else? As a reminder, if you do wish to ask a question, please press zero one on your telephone keypad. As of right now, there are no further questions. I'll hand back over to our speakers. Thank you. That means that we're done. We are done for this morning. Yeah. In roughly three months. Yeah. That's when we shall meet again, two months. two months. Correct. Yeah. Thank you for last year. Like I said, we think it was really good one for Nitro. We feel really good about the year ahead, so very much looking forward to sharing that journey with all of you. Thank you, and have a fantastic Valentine's Day. Valentine's Day. Bye-bye. Bye.