Interim report
Page 1
Paradox INTERACTIVE INTERIM REPORT JANUARY - JUNE 2026 * Please note that this is a translation for information purposes only - in case of any discrepancies between this version and the Swedish , the Swedish version shall prevail .
Page 2
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 2 INTERIM REPORT JANUARY–JUNE 2026 SECOND QUARTER • Revenues amounted to MSEK 524 (MSEK 459), an increase of 14% compared to the same period last year. • Operating profit amounted to MSEK 182 (MSEK 133), an increase of 37%. • Profit after financial items amounted to MSEK 188 (MSEK 139), and profit after tax amounted to MSEK 149 (MSEK 110). • Cash flow from operating activities amounted to MSEK 105 (MSEK 262), and cash flow from investing activities amounted to MSEK -168 (MSEK -208). • Earnings per share before dilution amounted to SEK 1.41 (SEK 1.04) and after dilution to SEK 1.41 (SEK 1.04). • Revenues for the quarter are primarily attributable to Age of Wonders 4, Cities: Skylines, Cities: Skylines II, Crusader Kings III, Europa Universalis V, Hearts of Iron IV, Stellaris, Vampire: The Masquerade – Bloodlines 2, and Victoria 3. FIRST SIX MONTHS • Revenues amounted to MSEK 955 (MSEK 922), an increase of 4% compared to the same period last year. • Operating profit amounted to MSEK 283 (MSEK 280), an increase of 1%. • Profit after financial items amounted to MSEK 294 (MSEK 293), and profit after tax amounted to MSEK 235 (MSEK 234). • Cash flow from operating activities amounted to MSEK 413 (MSEK 528), and cash flow from investing activities amounted to MSEK -290 (MSEK -425). • Earnings per share before dilution amounted to SEK 2.22 (SEK 2.22) and after dilution to SEK 2.22 (SEK 2.21). SIGNIFICANT EVENTS SECOND QUARTER • New downloadable content was released for games during the period: Songs of the Realm to Crusader Kings III, Thunder at our Gates and Peace for our Time to Hearts of Iron IV, Nomads to Stellaris, Secrets of the Archmages to Age of Wonders 4, Fate of the Phoenix to Europa Universalis V, Loose Cannon and The Flower & the Flame to Vampire: The Masquerade – Bloodlines 2. • Paradox Interactive AB’s shares were admitted to trading on the Nasdaq Stockholm Main Market on 9 June 2026. The listing was completed without an offering or issuance of new shares. • A publishing partnership was entered into with Urban Games for the publishing of Transport Fever 3. • A Publisher Sale was held on Steam during the period, offering discounts across a large part of its game catalogue. • At the Annual General Meeting held on 12 May, Lars Jörnow and Kaisa Salakka were elected as new members of the Board of Directors.
Page 3
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 3 COMMENTS BY THE CEO We close the first half of the year with a strong quarter. The results were driven by solid catalogue sales combined with a broad range of new content for our established games. That is, of course, very encouraging, but when I look back at the quarter, it is not really the numbers that stand out to me. What gives me the greatest confidence in the future is what it says about Paradox's ability to build for the long term. Many years ago, our business was largely about launching games. Today, it is about building worlds that players want to return to for many years. When our largest franchises continue to grow long after launch, it confirms that this shift has been the right one. A launch is not the end of a project. It is the beginning of a long relationship with our players. That is also why much of our work during the quarter focused on continuing to develop our existing games. New content for Crusader Kings III, Hearts of Iron IV, Stellaris, Europa Universalis V, and others is not just about giving players more content. It is about continuing to deepen the experience, create new stories, and give players new reasons to come back. It is a model we believe in strongly, and one that continues to deliver. One example that I believe illustrates our philosophy particularly well is Hearts of Iron IV: Peace for Our Time. The content was developed in close collaboration with three modders from our community. To me, it is much more than a small content pack. It demonstrates the talent and creativity within our player community and how we can build even stronger games by working more closely with them. We believe user generated content (UGC) is an area where we have only begun to explore the possibilities. We are also continuing our work on Cities: Skylines II together with Iceflake Studios. The game did not get the start we wanted for our players, but that never changed our ambition. Since the beginning of the year, a methodical improvement effort has produced clear results. After the game reached a "Mostly Positive" rating in recent Steam reviews for the first time earlier this year, that positive momentum continued throughout the quarter, with more players returning and base game sales performing well. To me, this illustrates an important strength of our business model. We have built a company that can afford to take the long view and continue investing until a game reaches the level of quality that both we and our players expect. In the quarter, we also entered into a new publishing partnership for Transport Fever 3. This is a concrete step in the expansion of our project portfolio that we outlined earlier this year, where, alongside our own game development, we are also strengthening our position through publishing partnerships. The management genre remains an area where we see significant potential, and this title is an excellent fit for our portfolio. It shares many of the qualities we value: depth, high replayability, a strong modding community, and an engaged player base. We look forward to working with Urban Games and helping make the series even stronger. The quarter also marked an important milestone as Paradox shares were admitted to trading on the Nasdaq Stockholm Main Market on 9 June. The listing was completed without an offering or share issue. We do not need additional capital, and to me it is a testament to the stability and long-term strength we have built. At the same time, I would like to extend a warm welcome to Lars Jörnow and Kaisa Salakka, who were elected to the Board of Directors at the Annual General Meeting in May. When I look at Paradox today, I feel a strong sense of confidence. Over many years, we have built an organisation with experienced development teams, a culture shaped by long-term thinking, and a business model that has proven its strength over time. We continue to invest in our teams and in AI tools that support our employees. Taken together this gives us both the financial stability, and the expertise required to develop games that engage players for many years.
Page 4
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 4 When I look at the projects now taking shape, I am very optimistic about the future. It is not about any single title, but about a portfolio of games with the potential to become an important part of Paradox for many years to come. Finally, as is often the case, the third quarter will be somewhat quieter than the second quarter of the year when it comes to launching new content for our existing games. At the same time, activity remains high, and at Gamescom we look forward to showcasing several projects that our teams have been working on for a long time. More on that this fall. Fredrik Wester, CEO
Page 5
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 5 KEY FIGURES FOR THE GROUP For definitions of key figures, see the annual report 2026-04-01 2025-04-01 2026-01-01 2025-01-01 2025-01-01 2026-06-30 2025-06-30 2026-06-30 2025-06-30 2025-12-31 Coming releases 8 9 8 9 7 Revenues, MSEK 524 459 955 922 2,192 Operating profit, MSEK 182 133 283 280 146 Profit after financial items, MSEK 188 139 294 293 167 Profit after tax, MSEK 149 110 235 234 125 Operating margin 35% 29% 30% 30% 7% Profit margin 36% 30% 31% 32% 8% Equity/assets ratio 76% 81% 76% 81% 79% Cash flow from current operations, MSEK 105 262 413 528 1,237 Investments in capitalised development, MSEK -166 -161 -287 -280 -606 Capitalised development, MSEK 1,080 1,628 1,080 1,628 1,015 Cash and cash equivalents 956 1,019 956 1,019 1,375 Earnings per share before dilution, SEK 1.41 1.04 2.22 2.22 1.19 Earnings per share after dilution, SEK 1.41 1.04 2.22 2.21 1.18 Average number of shares before dilution, millions 106 106 106 106 106 Average number of shares after dilution; millions 106 106 106 106 106 Average number of employees 695 640 688 618 638
Page 6
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 6 MAIN RELEASES SECOND QUARTER Title Date Price USD Developer Platform Age of Wonders 4: Secrets of the Archmages 16 June 19.99 Triumph Studios PC, console Crusader Kings III: Songs of the Realm 20 April 4.99 Paradox Development Studio PC Europa Universalis V: Fate of the Phoenix 6 May 9.99 Paradox Tinto PC Hearts of Iron IV: Peace for Our Time 22 April 5.99 Paradox Development Studio, Logan Calkins, Abbus Fung, Marijn Vroegh PC Hearts of Iron IV: Thunder at Our Gates 11 June 19.99 Paradox Development Studio PC Stellaris: Nomads 15 June 24.99 Paradox Development Studio PC Vampire: The Masquerade - Bloodlines 2: Loose Cannon 27 April 14.99 The Chinese Room PC, console Vampire: The Masquerade - Bloodlines 2: The Flower & the Flame 11 June 14.99 The Chinese Room PC, console Victoria 3: The Great Wave 28 April 29.99 Paradox Development Studio PC
Page 7
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 7 FINANCIAL OVERVIEW REVENUE AND PROFIT SECOND QUARTER Revenues amounted to MSEK 524 (MSEK 459), an increase of 14% since last year. Revenues for the quarter are primarily attributable to Age of Wonders 4, Cities: Skylines, Cities: Skylines II, Crusader Kings III, Europa Universalis V, Hearts of Iron IV, Stellaris, Vampire: The Masquerade - Bloodlines 2 and Victoria 3. The change in revenue is strongly correlated with variation in the releases that occur. Revenue growth compared to the previous year was primarily driven by the new games Europa Universalis V and Vampire: The Masquerade – Bloodlines 2, both released during the fourth quarter 2025. In addition, Cities: Skylines II continued to perform strongly despite the absence of new releases during the quarter, driven by continued strong sales of the base game following quality improvements and free updates released over the past year. Among the quarter's releases, Thunder at our Gates and Peace for our Time for Hearts of Iron IV were significant contributors to revenue. Revenue from Crusader Kings III, however, was, compared to the corresponding period last year, negatively affected as this year's PC release, Songs of the Realm, was smaller in scope than the expansion Khans of the Steppe released in the comparative period. The Group's revenue is mainly in currencies other than SEK and is therefore exposed to exchange rate fluctuations. The quarter's revenue has been negatively affected by the exchange rate development of the strengthened krona compared to the corresponding period last year. Cost of goods sold amounted to MSEK 259 (MSEK 232), attributable to game development, development support, operation and maintenance of games, costs for licenses, trademarks and similar rights, as well as royalties and revenue-based contingent consideration to development studios and other rights holders. Amortisation of released games amounts to MSEK 103 (MSEK 79). The games are generally amortised over 18 months using a degressive depreciation method. The purpose of the amortisation is to provide a fair presentation of the company's operations and gross profit but may contribute to volatility in the cost of goods sold item. The increase compared to last year was primarily driven by amortisation of the games Vampire: The Masquerade – Bloodlines 2 and Europa Universalis V which were released during the fourth quarter 2025. Amortisation of the game Surviving Mars: Relaunched that was released in November 2025, also contributed to the increase. At the same time, depreciation for previously released downloadable content for Crusader Kings III decreased. Write-downs recognised in cost of goods sold for the period amounted to MSEK 0 (MSEK 0). Amortisation of licenses, trademarks and similar rights amounted to MSEK 8 (MSEK 19). Amortisation has decreased primarily due to the excess values arising from the acquisition of Playrion Games Studio now being fully amortised. In addition to depreciation, amortisation and write- downs within costs of goods sold, a total of MSEK 141 (MSEK 127) was expensed for non-capitalised development costs, development support, operation and maintenance of games, royalties and revenue based earn-outs. Non-capitalised development costs amounted to MSEK 83 (MSEK 76). These costs relate to the development expenses recognised as running costs since they do not meet the Group requirements for capitalisation. This includes costs generated in the early stages of a project and other expenses that are not directly attributable to specific development projects suited for capitalisation or not expected to generate future economic benefits. Costs for development support, operations, and maintenance of games amounted to MSEK 30 (MSEK 24). This item primarily refers to internal costs for technical support and platform functions related to
Page 8
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 8 the development, launch, and management of the Group’s game portfolio. Royalties and revenue-based contingent consideration amounted to MSEK 28 (MSEK 26). Royalties increased primarily due to higher sales of Cities: Skylines and Cities: Skylines II, while expenses relating to the revenue-based contingent consideration for Age of Wonders 4 decreased due to the expiry of the earn-out period in April 2026. Selling expenses for the period amounted to MSEK 53 (MSEK 54). The decrease was primarily attributable to lower costs related to the launch of Europa Universalis V, while costs for other titles in the product portfolio increased. Administrative expenses for the period amounted to MSEK 33 (MSEK 27). The increase compared to the previous year was primarily driven by non-recurring costs related to the transfer of the listing to the Nasdaq Stockholm Main Market. Administrative expenses are generally unchanged over time and are relatively unaffected by other operations. Other operating income amounted to MSEK 4 (MSEK 2) and other operating expenses to MSEK 0 (MSEK 15). Other operating income and other operating expenses consist primarily of currency rate changes in the Group's cash and cash equivalents, operating receivables and operating liabilities during the quarter. Operating profit amounted to MSEK 182 (MSEK 133). Financial income amounted to MSEK 6 (MSEK 7) and consisted primarily of interest income from bank accounts. Financial expenses amounted to MSEK 0 (MSEK 1) and consisted primarily of calculated interest on lease liabilities. Profit after financial items amounted to MSEK 188 (MSEK 139), and profit after tax amounted to MSEK 149 (MSEK 110). FINANCIAL POSITION Capitalised development expenses at the end of the period amounted to MSEK 1,080 (MSEK 1,628). This item relates both to games that have not yet been completed and games that have been released and are subsequently amortised. The decrease compared to the previous year is mainly attributable to the releases of Vampire: The Masquerade – Bloodlines 2 in October 2025 and Europa Universalis V in November 2025. At the same time, capitalised development costs remain for, among others, the announced game Prison Architect 2. Development is also ongoing for several unannounced games, with development costs being capitalised on an ongoing basis, as well as for expansions to previously released games. Licenses, trademarks, and similar rights amounted to MSEK 92 (MSEK 124). The item mainly relates to the acquired publishing rights to Stranded: Alien Dawn, as well as excess values from the acquisition of Haemimont Games. Goodwill amounted to MSEK 22 (MSEK 22), attributable to the acquisition of Iceflake Studios. Right-of-use assets for rental premises amounted to MSEK 153 (MSEK 51). The increase refers to the renewed lease agreement for the office on Södermalm, Stockholm. Accounts receivable at the end of the period amounted to MSEK 253 (MSEK 199). Prepaid expenses and accrued income amounted to MSEK 262 (MSEK 86). The increase was primarily attributable to guarantee payments (advances) made under a partnership agreement with an external developer for an upcoming game. The developer has received USD 20 million to date and, under the agreement, will receive an additional USD 10 million, payable upon the commencement of pre-orders and when the game becomes available for download. Cash and cash equivalents at the end of the period amounted to MSEK 956 (MSEK 1,019). Equity amounted to MSEK 2,216 (MSEK 2,612). Long-term lease liabilities amount to MSEK 120 (MSEK 14). The increase is due to an extension of the lease agreement commitment for the office premises in Södermalm, Stockholm, through the end of September 2031, replacing the current lease agreement from October 1, 2026. Deferred tax liabilities amounted to MSEK 153 (MSEK 167) relating to tax on untaxed reserves and intangible assets from acquisitions.
Page 9
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 9 Short-term lease liabilities amounted to MSEK 26 (MSEK 31), relating to short-term rental commitments for office premises. Accrued expenses and deferred income amounted to MSEK 286 (MSEK 277) at the end of the period. Provisions for royalties payable to game developers increased compared to the previous year. Deferred income remained in line with the previous year. CASHFLOW SECOND QUARTER Cash flow from operating activities for the period amounted to MSEK 105 (MSEK 262), primarily attributable to operating profit adjusted for depreciations, amortisations and write-downs. Cash flow from operating activities was negatively impacted by an advance payment of MSEK 185 under the publishing partnership entered into during the quarter. Cash flow from investing activities amounted to MSEK - 168 (MSEK -208) and mainly relates to investments in game development. Cash flow from financing activities amounted to MSEK -538 (MSEK -538) and primarily related to dividends distributed to shareholders and repayments of lease liabilities for office premises. FIRST SIX MONTHS IN SUMMARY Revenue amounted to MSEK 955 (MSEK 922), an increase of 4% compared to the corresponding period last year. Cost of goods sold amounted to MSEK 524 (MSEK 453), relating to game development, development support, game operations and maintenance, as well as royalties and revenue-based contingent consideration payable to third parties. Impairments recognised within cost of goods sold amounted to MSEK 0 (MSEK 0) during the period. Operating profit amounted to MSEK 283 (MSEK 280), an increase of 1%. Profit after financial items amounted to MSEK 294 (MSEK 293), and profit after tax amounted to MSEK 235 (MSEK 234). Cash flow from operating activities amounted to MSEK 413 (MSEK 528). Cash flow from investing activities amounted to MSEK -290 (MSEK -425). Cash flow from financing activities amounted to MSEK -548 (MSEK -548). RELATED PARTY TRANSACTIONS No significant transactions have taken place between the group and related parties that have affected the group’s position and results. PARENT COMPANY SECOND QUARTER The parent company houses the publishing business. Within the publishing business, the parent company buys development services from both external and wholly owned development studios and pays royalties to these where applicable. The parent company also provides administrative services to the subsidiaries. All in all, this leads to the parent company's revenues to a large extent making up the group's total revenues. The parent company's revenues for the quarter amounted to MSEK 515 (MSEK 459). Operating profit amounted to MSEK 183 (MSEK 184). Profit after financial items amounted to MSEK 448 (MSEK 190). Profit after financial items includes dividends received from subsidiaries of MSEK 300 (MSEK 0), as well as impairment of shares in subsidiaries of MSEK -39 (MSEK 0). Profit after tax amounted to MSEK 409 (MSEK 148). PARENT COMPANY FIRST SIX MONTHS The parent company's revenues for the period amounted to MSEK 946 (MSEK 920). Operating profit amounted to MSEK 296 (MSEK 398). Profit after financial items amounted to MSEK 566 (MSEK 410). Profit after tax amounted to MSEK 508 (MSEK 323). ACCOUNTING PRINCIPLES This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting as well as RFR 1 and the annual accounts act. The parent company applies the Swedish Financial Reporting Board's recommendation RFR 2, accounting for legal entities. The carrying amount of the Group's short-term financial instruments valued at accrued acquisition value essentially corresponds to its fair value as the discounting effect is not significant. Accounting principles and calculation bases are in accordance with the principles applied in the company's most recent annual report. SIGNIFICANT ESTIMATES AND JUDGEMENTS In preparing the financial statements, management and the Board of Directors are required to make certain estimates and assumptions that affect the carrying amounts of assets and liabilities, income and expenses, and other information disclosed. Actual results may differ from these estimates if the estimates
Page 10
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 10 or underlying circumstances change. The significant estimates and assumptions applied in the preparation of this interim report are consistent with those described in Note 4 of the 2025 Annual Report. RISKS AND UNCERTAINTIES Paradox is, like most companies, exposed to certain risks in its operations. The risks and uncertainties are described in the Annual Report for 2025, page 30. Risks to be specifically mentioned include dependency on key employees, dependency on a few sales partners, delays of game projects, cancellations of unfinished game projects, low revenues from game releases, and foreign currency. These risks and uncertainties may have a direct or indirect impact on the group's financial position and results. DIVIDEND The ordinary dividend of SEK 5.00 per share, resolved upon by the Annual General Meeting on 12 May 2026, was paid through Euroclear Sweden AB on 20 May 2026. SHARE REPURCHASE PROGRAMME At the Annual General Meeting on 12 May 2026, the Board of Directors was authorised to resolve on the repurchase of the Company's own shares in accordance with the proposal presented in the notice. No share repurchases were carried out during the reporting period. DIVIDEND POLICY The Company’s primary objective is to create long- term shareholder value. Shareholder distribution will be determined annually based on capital available after funding organic growth initiatives, potential acquisitions and maintaining a prudent capital structure. Distributions may be made through cash dividends and/or share repurchase programmes.
Page 11
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 11 FINANCIAL CALENDAR Interim Report January-September 2026 2026-10-29 Year-end Report 2026 2027-02-04 CONTACT Additional information about the company can be found on the corporate website www.paradoxinteractive.com. The company can be contacted by e-mail, ir@paradoxinteractive.com, or by post Paradox Interactive AB, Magnus Ladulåsgatan 4, 118 66, Stockholm, Sweden. ASSURANCE BY THE BOARD OF DIRECTORS The Board of Directors hereby provides an assurance that the interim report provides a true and fair view of the parent company's and the group's business, positions, and earnings, and describes the significant risks and uncertainties faced by the companies making up the group. Stockholm 6 August 2026 Håkan Sjunnesson, Chairman of the Board Fredrik Wester, CEO and Member of the Board Mathias Hermansson, Member of the Board Linda Höglund, Member of the Board Lars Jörnow, Member of the Board Gustav Palmqvist, Member of the Board Kaisa Salakka, Member of the Board Andras Vajlok, Member of the Board This report has not been subject to review by the company’s auditors. This information is information that Paradox Interactive AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act (2007:528). The information was submitted for publication at 08:00 CEST on 6 August 2026.
Page 12
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 12 GROUP INCOME STATEMENT (MSEK) OTHER COMPREHENSIVE INCOME (MSEK) 2026-04-01 2025-04-01 2026-01-01 2025-01-01 2025-01-01 Note 2026-06-30 2025-06-30 2026-06-30 2025-06-30 2025-12-31 Revenues 1 524 459 955 922 2,192 Cost of goods sold 2 -259 -232 -524 -453 -1,657 Gross profit 265 226 432 469 535 Selling expenses 2 -53 -54 -94 -102 -236 Administrative expenses 2 -33 -27 -64 -52 -111 Other income 4 2 10 5 9 Other expenses -0 -15 -1 -40 -52 Operating profit 182 133 283 280 146 Financial income 6 7 11 14 23 Financial expense -0 -1 -0 -1 -2 Profit after financial items 188 139 294 293 167 Tax -39 -29 -59 -59 -42 Profit for the period 149 110 235 234 125 Profit for the period is attributable to the shareholders of the parent company. Earnings per share before dilution, SEK 1.41 1.04 2.22 2.22 1.19 Earnings per share after dilution, SEK 1.41 1.04 2.22 2.21 1.18 2026-04-01 2025-04-01 2026-01-01 2025-01-01 2025-01-01 2026-06-30 2025-06-30 2026-06-30 2025-06-30 2025-12-31 Profit for the period 149 110 235 234 125 Other comprehensive income Items that may be reclassified to profit or loss Translation differences 4 4 8 -9 -17 Other comprehensive income 4 4 8 -9 -17 Total comprehensive income for the period 153 114 243 225 108 Profit for the period is attributable to the shareholders of the parent company.
Page 13
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 13 GROUP BALANCE SHEET (MSEK) 2026-06-30 2025-06-30 2025-12-31 ASSETS Non-current assets Capitalised development 1,080 1,628 1,015 Licenses, brands and similar rights 92 124 106 Goodwill 22 22 22 Property and equipment 10 7 8 Right-of-use assets 153 51 172 Other long term assets 19 19 19 Total non-current assets 1,376 1,851 1,341 Current assets Accounts receivable 253 199 271 Tax assets 20 53 91 Other receivables 32 30 27 Prepaid expenses and accrued revenue 262 86 63 Cash and cash equivalents 956 1,019 1,375 Total current assets 1,523 1,386 1,828 TOTAL ASSETS 2,899 3,237 3,170 EQUITY AND LIABILITIES Equity Share capital 1 1 1 Other capital contributed 30 30 30 Reserves 23 23 15 Retained earnings 2,163 2,558 2,453 Total equity 2,216 2,612 2,498 Long-term liabilities Lease liabilities 120 14 137 Deferred tax liabilities 153 167 154 Total long-term liabilities 272 182 291 Current liabilities Accounts payable 64 66 41 Current tax liabilities 3 16 1 Lease liabilities 26 31 28 Other liabilities 32 54 32 Accrued expenses and prepaid revenues 286 277 278 Total current liabilities 411 444 380 TOTAL EQUITY AND LIABILITIES 2,899 3,237 3,170
Page 14
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 14 CHANGE IN GROUP EQUITY (MSEK) Share capital Other contributed capital Reserves Retained earnings Total equity At the beginning of the period 2026-01-01 1 30 15 2,453 2,498 Profit for the period 235 235 Other comprehensive income Translation difference 8 8 Total other comprehensive income - - 8 - 8 Total comprehensive income - - 8 235 243 Transactions with owners Share-based payments staff - - - 3 3 Dividends - - - -528 -528 Total transactions with owners - - - -525 -525 AT THE END OF THE PERIOD 2026-06-30 1 30 23 2,163 2,216 Share capital Other contributed capital Reserves Retained earnings Total equity At the beginning of the period 2025-01-01 1 30 32 2,847 2,910 Profit for the period 234 234 Other comprehensive income Translation difference -9 -9 Total other comprehensive income - - -9 - -9 Total comprehensive income - - -9 234 225 Transactions with owners Share-based payments staff - - - 5 5 Dividends - - - -528 -528 Total transactions with owners - - - -523 -523 AT THE END OF THE PERIOD 2025-06-30 1 30 23 2,558 2,612
Page 15
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 15 GROUP CASH FLOW STATEMENT (MSEK) 2026-04-01 2025-04-01 2026-01-01 2025-01-01 2025-01-01 2026-06-30 2025-06-30 2026-06-30 2025-06-30 2025-12-31 Cash flow from operations Operating profit 182 133 283 280 146 Adjustment of depreciation, amortisation and write-downs 121 108 258 206 1,180 Other adjustments 1 2 3 5 8 Interest received 6 7 11 14 23 Interest paid -0 -1 -0 -1 -2 Tax paid -41 -58 14 -41 -91 Cash flow before changes in working capital 268 191 569 463 1,264 Changes in working capital Change in current receivables -199 30 -185 62 15 Change in current liabilities 35 41 30 3 -42 Cash flow from current operations 105 262 413 528 1,237 Investing activities Investments in capitalised development -166 -161 -287 -280 -606 Investments in licenses, brands and similar rights - -47 - -47 -47 Investments in equipment -1 -0 -3 -1 -3 Investments in subsidiaries - - - -97 -97 Cash flow from investing activities -168 -208 -290 -425 -753 Financing activities Amortisation of lease liability -10 -10 -19 -19 -39 Paid dividend -528 -528 -528 -528 -528 Cash flow from financing activities -538 -538 -548 -548 -567 Cash flow for the period -601 -483 -424 -444 -83 Cash and cash equivalents at the beginning of the period 1,555 1,502 1,375 1,469 1,469 Exchange rate effect 3 0 6 -7 -11 Cash and cash equivalents at the end of the period 956 1,019 956 1,019 1,375
Page 16
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 16 PARENT COMPANY INCOME STATEMENT (MSEK) OTHER COMPREHENSIVE INCOME (MSEK) 2026-04-01 2025-04-01 2026-01-01 2025-01-01 2025-01-01 2026-06-30 2025-06-30 2026-06-30 2025-06-30 2025-12-31 Revenues 515 459 946 920 2,196 Cost of goods sold -252 -183 -508 -338 -1,525 Gross profit 263 276 439 582 671 Selling expenses -51 -52 -89 -95 -225 Administrative expenses -33 -27 -63 -52 -109 Other income 3 1 10 3 6 Other expenses - -14 - -39 -50 Operating profit 183 184 296 398 294 Profit from shares in subsidiaries 261 - 261 - - Financial income 4 5 9 11 18 Financial expense - -0 -0 -0 -0 Profit after financial items 448 190 566 410 312 Year-end appropriations - - - - -75 Tax -39 -41 -58 -87 -66 Profit for the period 409 148 508 323 171 2026-04-01 2025-04-01 2026-01-01 2025-01-01 2025-01-01 2026-06-30 2025-06-30 2026-06-30 2025-06-30 2025-12-31 Profit for the period 409 148 508 323 171 Other comprehensive income - - - - - Total comprehensive income for the period 409 148 508 323 171
Page 17
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 17 PARENT COMPANY BALANCE SHEET (MSEK) 2026-06-30 2025-06-30 2025-12-31 ASSETS Non-current assets Capitalised development 1,036 1,513 954 Licenses, brands and similar rights 45 62 53 Property and equipment 4 1 2 Shares in subsidiaries 283 320 320 Other long term assets 17 17 17 Total non-current assets 1,386 1,913 1,347 Current assets Accounts receivable 248 190 266 Receivables from group companies 10 2 10 Tax assets 11 - 84 Other receivables 27 25 19 Prepaid expenses and accrued revenues 266 89 70 Cash and cash equivalents 719 643 876 Total current assets 1,281 949 1,326 TOTAL ASSETS 2,667 2,862 2,672 EQUITY AND LIABILITIES Equity Restricted equity Share capital 1 1 1 Capitalised development reserve 1,036 1,513 954 Non-restricted equity Share premium reserve 30 30 30 Retained earnings -51 -177 384 Profit for the period 508 323 171 Total equity 1,523 1,689 1,540 Untaxed reserves 695 755 695 Current liabilities Accounts payable 56 45 32 Liabilities to group companies 155 113 164 Current tax liabilities - 19 - Other liabilities 9 22 14 Accrued expenses and prepaid revenues 229 219 227 Total current liabilities 449 418 438 TOTAL EQUITY AND LIABILITIES 2,667 2,862 2,672
Page 18
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 18 NOTES (MSEK) NOTE 1. SEGMENT REPORTING Group Management has determined the operating segments based on the information processed by the CEO and which is the basis for making strategic decisions. The operations consist of one reportable segment. A breakdown of revenue is presented below; Group revenue from clients based on where the distributor is located is divided into the following geographical areas; During the quarter and the six-month period, MSEK 461 (MSEK 395) and MSEK 798 (MSEK 776), respectively, of the Group's revenue was generated through a single platform, Steam. The Group's revenue by major product category is presented below; NOTE 2. DEPRECIATIONS, AMORTISATIONS AND WRITE-DOWNS BREAKDOWN PER FUNCTION NOTE 3. SUBSEQUENT EVENTS On 5 August 2026, the Board of Directors resolved to initiate a share repurchase programme under the authorisation granted by the Annual General Meeting on 12 May 2026. 2026-04-01 2025-04-01 2026-01-01 2025-01-01 2025-01-01 2026-06-30 2025-06-30 2026-06-30 2025-06-30 2025-12-31 USA 458 392 813 797 1,873 Sweden 9 11 20 20 59 Rest of Europe 42 47 96 86 213 Rest of the World 14 9 27 18 47 Total 524 459 955 922 2,192 2026-04-01 2025-04-01 2026-01-01 2025-01-01 2025-01-01 2026-06-30 2025-06-30 2026-06-30 2025-06-30 2025-12-31 PC 466 405 811 795 1,896 Console 46 38 117 87 223 Mobile 9 12 20 25 46 Other 3 4 8 14 28 Total 524 459 955 922 2,192 2026-04-01 2025-04-01 2026-01-01 2025-01-01 2025-01-01 2026-06-30 2025-06-30 2026-06-30 2025-06-30 2025-12-31 Cost of goods sold 118 105 253 201 1,169 Selling expenses 1 1 2 2 4 Administrative expenses 2 2 4 3 7 Total 121 108 258 206 1,180
Page 19
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 19 HISTORIC FIGURES tid. 2026 2026 2025 2024 2023 2022 2021 Q2 Q1 Full year Full year Full year Full year Full year Coming releases 8 8 7 8 9 15 14 Revenues, MSEK 524 431 2,192 2,201 2,642 1,973 1,447 Operating profit, MSEK 182 101 146 721 658 887 307 Profit after financial items, MSEK 188 106 167 757 688 884 304 Profit after tax, MSEK 149 86 125 585 531 709 248 Operating margin 35% 23% 7% 33% 25% 45% 21% Profit margin 36% 25% 8% 34% 26% 45% 21% Equity/assets ratio 76% 80% 79% 82% 73% 73% 66% Cash flow from current operations, MSEK 105 309 1,237 1,124 1,452 1,085 737 Investments in capitalised development, MSEK -166 -121 -606 -603 -676 -794 -744 Capitalised development, MSEK 1,080 1,016 1,015 1,454 1,463 1,650 1,199 Cash and cash equivalents, MSEK 956 1,555 1,375 1,469 1,098 748 600 Earnings per share before dilution, SEK 1.41 0.82 1.19 5.54 5.02 6.71 2.35 Earnings per share after dilution, SEK 1.41 0.82 1.18 5.53 4.99 6.70 2.34 Average number of shares before dilution, millions 106 106 106 106 106 106 106 Average number of shares after dilution; millions 106 106 106 106 106 106 106 Average number of employees 695 681 638 587 649 672 716
Page 20
PARADOX INTERACTIVE AB (PUBL) INTERIM REPORT JANUARY–JUNE 2026 20 Paradox Interactive is a leading developer and publisher of strategy and management games for PC and consoles. The company's games reach six million players every month worldwide, with its largest markets in North America, Western Europe and Asia. The portfolio includes popular game franchises and intellectual properties such as Age of Wonders, Cities: Skylines, Crusader Kings, Europa Universalis, Hearts of Iron, Prison Architect, Stellaris, the Surviving games and Victoria. Paradox Interactive also owns the intellectual property rights to the World of Darkness universe. Paradox strives for a healthy profit margin, a stable operating cash flow and strong growth. Thus, enabling stable operations and continuous investments in the company’s future. ABOUT PARADOX INTERACTIVE