Thank you very much, Operator. Good morning everyone, and thank you for joining our webcast today covering our Q1 results.

This is a quarter that shows the foundations we have been laying are starting to pay off, let's get straight into it. Müge and I welcome you today from our Stockholm office, and as usual we'll run through the main updates for our operating segments and the financial performance, and then open it up for Q&A.

One important reminder, from this quarter we report in our new operating segments, and we've introduced Cash EBIT as our key earnings measure. Together these changes sharpen our focus on operating performance, capital discipline, and stronger conversion of earnings into cash flow.

This is the operating model we are building the future on, and it sets us up for the spin-off of Fellowship Entertainment in calendar 2027. Let's get going.

Overall, our quarterly results reflect another delivery above plan on both the revenue and Cash EBIT side. Net sales were 3.9 billion SEK, a 33% organic growth year-over-year, driven by the Embracer segment with broad growth across its business areas: PC/Console, Mobile, and not least, Entertainment & Services, which had a standout quarter.

Following a strong Q4, we delivered positive Cash EBIT and positive free cash flow on a group level in a quiet quarter from a major game release perspective. Now that's the power of the catalog we are building, that our core franchises keep delivering quarter after quarter.

For the full year, we confidently reiterate our Cash EBIT forecast of at least 1 billion SEK. The year is anchored by Metro 2039, expected to be released in February next year, and the momentum is building fast.

After its reveal, Metro 2039 raced to 1 million wishlists, reaching this milestone faster than any title in our history, and wishlists continue to grow ahead of expectations. Our team is lining up a major marketing beat for Metro at this year's Gamescom just in a couple of weeks now, with new content at the Opening Night Live show on Tuesday, the 25th of August.

There's also a huge show floor presence where players can get hands-on with the game for the first time. During the quarter, we made further progress in building the future Fellowship Entertainment organization towards the planned spin-off in 2027, with IP increasingly at the center of our operating model, investment decisions, and long-term value creation.

Rather than simply replicating existing structures, we're creating a leaner model where experienced people take broader responsibility across clearly defined areas. This includes ongoing strengthening of greenlight and portfolio decisions, or bringing community insight close to game development and live operations.

The organization continues to evolve, but the direction is clear: IP is at the center of our operating model, investment decisions, and long-term value creation. Starting this quarter, we've made several changes to our reporting to improve the relevance and clarity of the information presented for the group ahead of the Fellowship spin-off.

From my side, the message is clear: the groundwork is done, the progress is visible, and we're moving into the next phase from a position of strength. Now let's just step back and look at the longer-term picture because it tells a powerful story.

The trough is behind us. After FY '25/'26, the trajectory has turned.

On a trailing 12-month basis as of Q1, organic growth is running at 5% versus fiscal '25/'26, and our Cash EBIT margin is climbing. Two things I think make this genuinely impressive.

First, we've achieved this improvement with no major game releases for Fellowship in the period and limited seasonal revenue drivers for licensing. That's while being measured after the February 2025 launch of Kingdom Come: Deliverance II, and the momentum that followed through FY '25/'26.

This is what a diversified business looks like when it's working, with multiple segments and business areas all pulling their weight. Second, please note that our historic numbers in FY '23/'24 and FY '24/'25 include a significant positive contribution from Easybrain.

The absolute numbers are not fully like-for-like; the underlying momentum is stronger. Here's the key point: today's trailing 12-month levels are the floor, not the ceiling.

The hard work is behind us, the release engine is ramping up, and there is substantial growth ahead across both operating segments. We intend to capture it.

A quick recap from May: from this quarter we report our business across two segments: Fellowship Entertainment and Embracer. In total, these business areas we show here.

Now let's dive into the segments now. First up, let's look at Fellowship Entertainment.

Fellowship Entertainment is built around one strategic focus: IP-all worlds that fans return to again and again. In Q1, Fellowship delivered net sales of 810 million SEK, a headline 22% organic decline.

Now let me put that in context. We had limited new content across both publishing and development and our licensing businesses, and we were up against tough comps with Kingdom Come: Deliverance II releasing in February 2025.

From a Cash EBIT perspective, the margin was -4% in the quarter. I'll be straight with you: not a strong quarter on the headline, but here's what it proves: we came in above our internal expectations powered by solid catalog performance, especially Kingdom Come: Deliverance, Metro, Remnant, and Dead Island.

The worlds we steward keep earning. That's really the foundation this business is built on, and it's exactly why the release slate ahead matters so much.

On the next slide, let's look at some earnings dynamics that drive Fellowship. This chart shows the engine of the publishing and development business.

New releases drive the revenue peaks, feed the catalog, and ultimately power Cash EBIT margins and Cash EBIT. You can see it clearly: the release of Kingdom Come: Deliverance II in February 2025 drove a significant revenue peak, followed by solid catalog performance in FY '26 boosted by three DLC releases.

Over the past five quarters, new releases have been limited, the model has been running on catalog alone. That's about to change.

First up, we have two titles lined up for Q3: both Dawn of War IV and Space Hulk, and both are showing promising early traction. From a publishing perspective, the big one this year, Metro 2039 is scheduled for February and is expected to be a key driver, bolstered by Amazon's publishing of Tomb Raider: Legacy of Atlantis.

Our collaboration with Amazon continues strongly on all things Tomb Raider. We're excited to share more updates on Tomb Raider: Legacy of Atlantis again at Gamescom in just a couple of weeks.

It builds from there: from FY '27, we expect the release of the next game in the Kingdom Come franchise from Warhorse Studios and Darksiders 4 from Gunfire Games. As we said in May, at least two major games with full economics.

That's the rhythm this business was designed for. We spent the past two years putting the studios, the pipeline, the discipline, and the empowerment in place to sustain it, and it will power the growth and profitability of Fellowship Entertainment.

Thanks Phil, and good morning everyone. Looking in a bit more detail at Fellowship's financial performance.

While Phil has just spoken about the top-line performance where Fellowship delivered net sales of 810 million SEK, down 22% on an organic basis, the gross margin percentage for the quarter remained stable year-on-year at 85%. The impact of the top-line evolution was partly offset by lower operating expenses, which came in at 373 million SEK before marketing costs, reflecting the realization of prior year savings initiatives.

CapEx remained relatively stable at 288 million SEK for the quarter. Adjusted EBIT margins were relatively stable due to lower D&A as a result of no new releases in the quarter.

Cash EBIT amounted to -32 million SEK, with the year-on-year evolution mainly due to the strong top-line comparator mentioned earlier and limited new content in both publishing and development and licensing during the quarter. We'd like to emphasize that Cash EBIT margins will be impacted by the level of capital we decide to deploy in growth CapEx relative to the revenue generated in a particular year.

In the short term, these margins may be lower as we build the revenue engine Phil referred to earlier, but as that ramps up and release cadences increase, we can expect a steady improvement in the Cash EBIT margins over time.

That's the pipeline, and there's a lot to be excited about. The current financial year is anchored by Metro 2039 and Tomb Raider: Legacy of Atlantis, both expected to be released in February.

To touch on Warhammer 40,000: Dawn of War IV, this is now expected in Q3, December, rather than Q2, and fan excitement is building strongly. The game looks really promising and early indicators show the excitement amongst fans is building, with over 1 million wishlists on Steam already.

The fan engagement for Space Hulk from Redacted Games is also very real. This game is being built with community at the heart, and it was great to see their reaction at the recent San Diego Comic-Con.

As mentioned, in the year after, a further strengthening pipeline with Darksiders, Kingdom Come, and Tomb Raider Catalyst, the next chapter in our Tomb Raider series published again by our friends at Amazon. In May, we talked about our new licensing business area, and our conviction has only grown since.

This is a durable, high-margin revenue stream that sits alongside development and publishing, and the foundations are already producing. There is a lot of exciting stuff going on, some near term and some further out, starting tomorrow with the launch of Magic: The Gathering - The Hobbit, the trading card game from our great partners at Wizards of the Coast.

Far, it's tracking very well as a fan favorite and follow-up to the 2023 successful release of The Lord of the Rings: Tales of Middle-earth. In Q2, we expect our licensing business to compensate for the lighter new content quarter in publishing and development.

Further out, the slate is genuinely exciting: multiple feature films with our partners at Warner Bros., a strong collaboration with Asmodee across tabletop games, plus merchandise, location-based experiences, and of course, video games. In closing, The Lord of the Rings is one of our core IPs, but as we highlighted in our May update, we've got a great roster of other amazing IPs to fuel our licensing business.

Now let's turn to the Embracer operating segment, which delivered a strong earnings improvement. The PC/Console business area led the way with a successful launch of Gothic 1 Remake and continued momentum for Reanimal.

Gothic saw a strong reception from players, reaching 500,000 copies sold within the first week. The game is, as of today, already close to recouping its full development and marketing spend.

The strength ran right across the segment: Mobile grew net sales and profitability year-over-year driven by Sled Surfers; Entertainment & Services delivered very strong top-line growth with high profits driven by distributed titles from Plaion partners, including Crimson Desert. Embracer is much more than a games business, and that's a strength.

With the diversity of activities and stable revenue-generating businesses in the E&S and Mobile business areas in particular, we expect Embracer to deliver a steady and more predictable revenue profile on a like-for-like basis going forwards. These businesses share a lot of DNA, but they are different in terms of revenue and profit dynamics.

In Q1, each business area grew, every one. E&S grew the strongest, driven by Plaion partners' physical business spanning software, hardware, and retro, true specialists.

Cash EBIT showed a strong improvement, though the gross margin was notably lower year-on-year due to the sales mix. Going forward, sales or revenue mix between the business areas will be the primary variable driving gross margin and Cash EBIT margin year-over-year.

That's a mix effect, not a health question. The underlying businesses are performing.

Turning to the more detailed Embracer financials. The Embracer segment was the main driver of group top-line performance with 3.1 billion SEK of net sales representing 63% organic growth year-on-year.

As Phil mentioned, the PC/Console, Mobile, and Entertainment & Services business areas all contributed to this growth. The very strong growth in the Entertainment & Services business area resulted in an adverse mix effect, which reduced the gross margin by 10 points to 49% for the quarter.

Operating expenses, excluding marketing, declined to 543 million SEK. This was driven by targeted savings actions, including divestments over the last year.

User acquisition costs for the quarter amounted to 300 million SEK, supporting revenue growth in Mobile. The increase in segment marketing costs resulted from higher release activity in PC/Console.

CapEx of 389 million SEK was down 76 million SEK year-on-year, also benefiting from savings actions taken over the course of last year. Adjusted EBIT margins improved by 10 points due to the gross margin contribution of new releases in PC/Console and the effects of the OpEx savings.

Cash EBIT for the quarter of 136 million represents a significant improvement of over 300 million SEK year-on-year, with around 40 million of that arising from the impact of decisions to divest or close certain entities over the course of last year.

That's the Embracer pipeline, and it's packed full of fun. In the second quarter alone, we have several exciting releases: Hot Wheels: Infinite Rush from Milestone, Way of the Hunter 2 for console from Nine Rocks Games and THQ Nordic, and the early access release of The Guild: Europa 1410 from Ashborne and THQ Nordic.

Although not on this slide, I also want to spotlight Reanimal again, developed by the talented team at Tarsier and published by THQ Nordic. With solid continued momentum, Reanimal's main expansion, The Expanded World, will release in three chapters, and chapter one, The Prisoner, just launched on 7th of August.

On top of that, there's a stream of new iterations of previous releases and asset care plays for some great IPs, as you can see here. This is an area where Embracer truly excels.

Embracer today has the strongest, most focused PC/Console project pipeline it has had in years, with an improving ROI and profitability outlook. The strategy is decided, the portfolio is set.

Now it comes down to execution and converting this pipeline into significantly higher profitability and cash generation, which is exactly what this team is built to do. With that, I'll hand over to Müge to take us through the group financial performance.

As you've already seen this morning, we have delivered a strong start to the year with net sales for the quarter of 3.9 billion SEK, up 24% year-on-year and above our expectations. The top-line performance was primarily driven by strong performance across all business areas in the Embracer segment, including the successful release of Gothic 1 Remake, and partly offset by negative growth in the Fellowship segment due to a strong comparator we mentioned.

Sales growth was also partly impacted by divestments, primarily from Arc Games, as well as moderate FX translation effects, which had a combined impact of around -210 million SEK for the quarter. Now, if we exclude the divestment and FX impacts, our organic and pro forma net sales growth stands at 33%.

The gross margin percentage for the quarter was 56%, down 12 points year-on-year. The primary driver is the revenue mix with a higher proportion of revenues in the Entertainment & Services business area in Embracer and the lower revenue contribution from publishing and development in Fellowship.

Operating expenses, excluding marketing costs, decreased from 1.1 billion to 972 million SEK, supported by targeted savings actions, including divestments. User acquisition costs increased around 80 million SEK to 300 million SEK, supporting the sales growth seen in Mobile within the Embracer segment, while other marketing costs increased by around 60 million SEK due to higher release activity, also in Embracer.

In total, operating costs as a percentage of net sales reduced by 10 points year-on-year. We're happy to maintain discipline and focus on our operating expenses.

CapEx for the quarter amounted to 677 million SEK, down slightly from 736 million SEK in the prior year, driven by Embracer, and largely stable since Q4. This results in Cash EBIT for the quarter of 47 million SEK, up 146 million year-on-year.

A strong start to the year in the context of our expectations. Similar to the net sales drivers, the improvement is mainly driven by higher new release activity and the effects of savings actions in Embracer, partly offset by the effects of a strong KCD2 comparator in Fellowship.

Moving on to cash flow. We delivered positive free cash flow for the quarter, a significant improvement compared to -383 million SEK in Q1 last year.

On a trailing 12-month basis, free cash flow amounted 192 million SEK, up almost 400 million SEK compared to last year. We're happy to see another quarter where TTM free cash flow continues to trend positively.

The improvement was driven by improved profitability and lower CapEx, which I've described on previous slides. Lower tax payments and improved net working capital movements also contributed.

Below free cash flow, cash flow from financing activities mainly relates to drawing of local facilities, but also includes an outflow of 94 million SEK related to the share buyback. The net cash flow from acquired or divested companies is primarily driven by earnout payments.

The earnouts paid in Q1 cover the vast majority of earnout obligations for the fiscal year. Total remaining obligations related to historical acquisitions amounted 214 million SEK.

At quarter-end, we have a net cash position of 3.5 billion SEK and total available funds of 6.4 billion SEK taking into account undrawn facilities. Finally, looking ahead, we are reiterating our full-year guidance of at least 1 billion SEK Cash EBIT, with improving confidence following our Q1 performance.

For Q2, we expect Cash EBIT improvement year-on-year following a similar pattern to Q1. Free cash flow is expected to be weighted still towards H2, with some seasonal buildup of working capital expected in Q2, with significant improvement in full-year free cash flow generation in line with the improvement expected in Cash EBIT.

Overall, we're happy with the quarter, and we're working hard with our teams to continue delivering on the ongoing business while also preparing for the separation and spin-off of Fellowship. With that, I'll close out the presentation part of this morning's call and we'll move on to Q&A.

Operator, over to you.

Yes, thank you Operator and good morning. A few questions from my side.

First question is on the Cash EBIT and CapEx here as more of the year-on-year Cash EBIT improvements appear to come from lower CapEx and leases. How much of this lower investments should we view as structural versus quarterly phasing?

Thank you very much for the question. We had already mentioned during last quarter that we expected the CapEx levels to continue trending lower than last year.

I shall say, as the restructuring group has already made big progress, the levels represent a higher portion of our underlying activity, we don't expect big swings or big changes in the levels we are having on our CapEx levels now.

All right, that's clear. Secondly on Fellowship and the licensing business, if you could give some more color around this one: how large you think it could be, what annual growth rates could we see in the next three years, and is this more a lumpy business for you?

That's a great question. I think it's too early right now to predict sort of percentages and get overly precise.

I think what we see is, as we've mentioned, it's a very durable and we believe high-margin revenue stream. We're getting going with it, and we've got a number of initiatives right now between sort of further out and near term.

We'll see growth certainly in the quarter we're in now when we get through the launch tomorrow of Magic: The Gathering - The Hobbit. We see it as really something that can grow well for us if we look at other licensing streams from different organizations and see how they've approached and the sort of scale they get.

We certainly see that's well within our reach. I don't think right now is the time to get drawn on particular growth rates.

Will it be lumpy? I think there's going to be some element of lumpiness.

Of course it all depends on the relative scale you're looking at. We certainly see growth.

We see the importance of building up a broader portfolio on the licensing. We have a broader portfolio now, but of course a lot of the focus is always on The Lord of the Rings and The Hobbit primarily, but we have more licensing opportunities and we're executing on that on a number of our IPs.

I think we'll over time come and present back more on this business, but certainly see big growth opportunities for us.

Thank you for that. It would be interesting to hear your view on Sony's decision here to stop support physical copies, what implications you see from this given that you had quite good sales growth in Entertainment & Services from distribution in this quarter?

I think we know it's something I guess we've always known in some ways that potentially this can happen, to get that news out and delivered is something now that we're planning hard for. I think it's fair to say with our physical distribution businesses, there is always already today a natural diversity.

We have distribution of retro products, we're also distributing physical consoles as well. I think it's too early to get too precise again on what that could mean for us, especially if other solutions.

It's going to be interesting to see from a broader perspective how the code in box works with GTA, and what a great example that could be to see how that sort of trends going forward. We'll always adapting, and we'll judge the impact over time.

All right, thank you for that. I'll jump back in line here.

Yes, hi. Good morning.

Thanks for taking my question. Just on the guidance for the second quarter, you don't have any real releases of any significant size, but so the driver for the better profit is a combination of is it the licensing and lower costs and CapEx, or how does that play out in your guidance?

First, we had already indicated that the first part of the year would be more quieter because, as primarily Metro is already lined up in the second part. As you have seen today, Embracer segment, for example, has contributed on all business areas to both sales and earnings growth.

We expect the following quarters to benefit from all our business areas. It will be a combination of both new releases, which are lined up in the coming quarters with different depth, as well as the underlying performance, the catalog performance, and obviously the right level of CapEx monitoring.

We don't expect any surprise or it isn't relied on any unexpected or uncommon initiative, if you will.

Basically, if I was try to take the two businesses separately, there is licensing to help in Fellowship, and then in both businesses, I guess, or you have the current momentum in Embracer Group then, from Mobile and the releases you had in the previous quarter. Is that how it works, or?

The momentum in Embracer is correct. On our Fellowship activity, we expect to benefit from licensing, but our PC/Console activity is also expected to contribute to wider growth with the releases we've shared earlier.

In just the coming quarter, there isn't anything from Fellowship, right?

No major release.

No. Okay.

All right. Thank you.

Hello, and good morning everyone. Yes, I have a question on the new game from Warhorse scheduled for next year.

If I understand correctly, this is a Kingdom Come game. Can you maybe elaborate a bit on how long it has been in development and the scope of the game given the short timeline since the last game?

I'll take that question. Thanks, Simon.

It's a big game. When we talked about it in May, I think we wanted to sort of make that announcement in May really is quite symbolic because it helps put color on the Fellowship pipeline.

It really is for the game team to talk more about the title with the right time with players. We think it's something that, if you stand back, we know we've got a great player count now through Kingdom Come: Deliverance II, we see through their play styles what they're looking for, you could imagine we're building something really that's going to, we believe, hopefully excite the audience in that Kingdom Come sort of setting.

It's a full-sized game. This is what Warhorse is supreme at, building these rich, really vast open-world sims, and it's something we're very excited about.

As for development time, it's been in development for quite some time. It's a full project.

This is part of our planning to have that better cadence coming off Kingdom Come, Deliverance II. There's a lot of smart work between the respective teams and that's really when we talk about the rhythm and the structural changes, but primarily it's by having world-class studios like Warhorse who can really deliver in that way.

I'm excited, hope you all will be too.

All right, got it. When you say it's a full-sized game, does that mean a regular sequel or could it be some kind of spin-off?

I don't know what regular sequels mean in today's world, but I think we're building worlds and I think we can find lots of story arcs in the worlds we build. That's again, it's for the game team to talk more, but I think what's great, a great day for me when I'm at work is seeing creative teams who are thinking about sequels, prequels, spin-offs, I think there's lots of planning and creative thought that goes in, but very much within that Warhorse studio DNA and expertise.

Fans should be excited.

Okay. Thanks.

It's a very impressive cadence from Warhorse indeed. That's all for me, thank you so much.

Thank you, Simon.

Good morning, guys. Just two follow-up questions for me here.

Obviously, Metro seems to be doing well with being high number of wishlists, a good reception, and a reveal that seemed well at Gamescom. Just want to touch upon your increased confidence here in the target of at least 1 billion in Cash EBIT.

Is that related to Q1 being good, or is it related to higher expectations for Metro or anything else in the pipeline here which you can tell us about?

I'll

start with that one. Hi, good morning, Amar.

I think it's multiple facets. I know we get these questions sort of is it either/or, but it's a multiple of contributors.

We do respect Q1 was a relatively small quarter, but just the momentum that's behind beating sort of forecasts coming in ahead is very real. I certainly feel we're taking momentum into Q2.

Step by step, that's how we build the fiscal plan going forward. That's really where I think the confidence all comes to.

If we look at something very specific like Metro, the wishlist cadence was great to see. This is a very new or relatively new sort of indicator, but to see how fans engage when there's so much choice out there for entertainment, see how they sign in is really pleasing.

Obviously, it's a relatively late reveal, Metro 2039, it's exciting just to get that out and see the reaction. We'll get more from Gamescom.

It's going to be great that people get their hands on. I think this is how confidence generally builds through the fiscal year.

I think as we get towards the half year and looking forward, we'll come back and comment on that even further, but it's multiple factors. Getting that business delivery in line with what we're seeing in production terms and gamer reaction, really these are the three that we're trying to balance and get right all the time.

Good morning, Amar. We are reiterating our guidance with increased confidence.

Obviously, when we work on our projections, it's a very thorough process where we slice and dice things by line, but also by period. Every quarter has its importance.

This is a quiet quarter, but we're not taking it light, every quarter is an achievement, makes the year to go shorter, if you will. However, every quarter ahead of us is filled up with deliveries that we take seriously.

When we work on the forecast, as it's a mixture of different risks and opportunities that are embedded, we'll be staying humble, but we'll be working really hard to achieve the upside as we've indicated.

That's all clear. Thanks for that.

Then just maybe one follow-up on Metro and Tomb Raider. What are the current statuses of those games?

Are they entirely finalized and complete? Do you have any more milestones that you need to achieve for them to kind of hit their planned release dates?

Yeah.

For sure. Ultimately there's multiple milestones left.

We're close in now as ever. As ever with games, there's a level of polish, there's performance, there's play testing, all the debug and QA, final tuning, getting that content ultimately locked as soon as possible as well.

This is the path we're on now. It's a pattern, frankly again, world-class studios in 4A and Crystal Dynamics who are working with Flying Wild Hog and also recently with Eidos-Montréal too, this is what these studios do.

We work through those milestones step by step, every day.

Perfect. Thank you guys, that's all for me.

I'll get back into the queue.

Thank you for taking my question. I would like to ask a bit about the Embracer segment profitability.

It delivered 136 million Cash EBIT this quarter versus -193 million last year. How much of that improvement reflects structural cost reductions versus stronger releases?

What would you say is a reasonable average through-cycle operating margin for the Embracer segment going forward?

As you have seen, the Embracer segment is composed of a diversity of activities, each of which having their seasonality, business profile, and margins. It would be fair to assume that the margins and the business cycle of PC/Console is very different than Entertainment & Services, which itself is very different than Mobile.

Not sure if it would be relevant, at least it isn't the way we try to look at a blended margin forecast because it really depends on the activity. On your question around costs versus new releases, we did enjoy the successful release of Gothic 1 Remake in the PC/Console business area of Embracer with a high margin obviously, which did contribute.

From a sales perspective, Entertainment & Services was the main driver with an adverse mix effect. Overall, I shall say we maintain a cost discipline.

A vast majority on Embracer segment of the initiatives have taken place, we'll be ensuring that we maintain them. We don't expect much volatility there, which would mean that good business in the year to go is going to deliver Cash EBIT and earnings, but it wouldn't be relevant or easy to guide on a blended margin percentage.

Thank you very much.

Thank you. Just a follow-up on Metro 2039.

Obviously, we've got it coming out and landing in February 2027, and it's likely to be a far more important contributor to profit than Legacy of Atlantis. Just wondering whether it would be possible to achieve your Cash EBIT guidance if Metro 2039 in particular slips a couple of months and therefore lands in FY '28?

Good question. Of course, Metro is clearly important.

Year is back-ended, but we expect positive earnings in all quarters, and not to underestimate the portion of Q3 as well. It is important, yes, but we got other important things lined up as well on other lines and on other quarters.

Thanks. Just another question.

Could you just give more color specifically on how your licensing deal with Wizards of the Coast works in relation to the upcoming release of Magic: The Gathering - The Hobbit? Obviously you mentioned your expectations, but if that releases even better than expected, could it make a noticeable difference to 2Q '27 Cash EBIT?

I'll take that one. I'm not going to get into specifics of the licensing deal, but if you look back to the 2023 release and imagine the structure behind that deal, you could imagine something quite similar.

The trading card game category has been really interesting for us as partners, but also players and consumers, and seeing how that's grown. I certainly see momentum, and I think Hasbro themselves talk about momentum they've got, and in particular I think they have some comments on The Hobbit in their earnings call just a few weeks ago.

We're encouraged that they see and talk about the growth and the fan engagement. We're obviously a step behind that, right, in terms of we're a licensing partner and they're driving that business, but we're excited by it and we certainly see more potential than we did a few months ago.

That's just because in some ways it's hard to predict. I think again, it was a comment similar to Hasbro that these games are quite hard to model, but every pack is different in terms of SKU count and cards composition, but there's certainly great potential for it.

Great, thank you so much.

Hi Phil and Müge, thanks for taking my questions. I just have two short follow-ups here.

Starting off a bit and getting back to game specifics on Legacy of Atlantis or Tomb Raider, I'm just curious to hear your thoughts on what you've baked into guidance regarding this title. If it's mainly because I suppose day one you'll probably start getting some IP royalties, but then I guess you start getting the rev share post recoupment from your publisher, right?

Just would like to hear some thoughts on what you've baked into the guidance for Legacy of Atlantis, if possible.

That is a great question. Thanks, Jacob.

I think again, all deals are quite different, I think it'd be dangerous to assume every deal looks like this or every deal looks like that. I would just guide you broader and just feel like we're trying to consistently be sort of conservative and not overly cautious, but just thoughtful as to how we approach launches.

You can look at recent releases like Kingdom Come: Deliverance II, I know it's a game we keep referencing a lot, but the launch was of a certain size, but really the real power of that game then came through in the ensuing four and now fifth quarter, sixth quarter as well. I think the launch is really just the start.

I know it's right at the end of the fiscal year and how pivotal it could be, but I think it's difficult to try and gauge too much about the deal itself. Amazon is the publisher.

We don't have the full economics, it's not necessarily a key financial driver in this fiscal year due to these dynamics, but it's hugely important for us in the long term, especially as for us as an IP company.

Very clear. Thanks for that answer.

Just a second question. Here in November, we obviously have a major release from a competitor, being Take-Two with GTA VI, and looking at the historical GTA games, it's been quite console dominant, right?

In your PC/Console business, you have a relatively good share of console sales, right? Just would like to pick your brains on how we should think about the competition in Q3, not only from a release perspective, but also from kind of a catalog perspective from this major title releasing in the market.

That's a great question. Every single launch of Grand Theft Auto, if you go back through, well certainly through V and IV, have left their watermark on the market and player behaviors.

I think since those times, more and more players in the market, more and more choice. We recognize that in terms of player time and wallet, critically, it will take time out.

We've been strategically as a business thinking about that for some time. That said, if I perhaps reference the game we slated or announced yesterday for Dawn of War and December, that's a PC launch, and it's a really particular gaming audience there, a very core RTS group.

We think although it's a few weeks then or a couple of weeks after GTA, we think we can find that audience and really capture their attention, which we've already got, but maintain that attention and launch successfully through that time as well. I think again, we've reflected what we expect to be the GTA VI impact really in our planning and in our guidance for this fiscal year, I'd say.

Very good. Thank you for those answers.

My pleasure.

Thanks everyone, and thank you, Operator Sherry. Thanks for joining our conference today.

Thanks for our teams around the world working hard and delivering. Look forward to joining you again at our next quarterly meeting.

With that, wish you a good morning.