Nitro Games Oyj (NITRO) Earnings Call Transcript & Summary

Good morning. [Foreign Language]

Indeed, indeed. It's Jussi Tähtinen here, CEO and Co-Founder of Nitro Games.

I'm Antti Villanen, Co-Founder and Chief Strategy Officer. Good morning.

Good morning, and welcome to our webcast for the year-end report 2025.

Setup is a bit of a change. We are now in...

Twitch. Yes. So let's see how things flow.

Shout out for channel for the gamers of gaming company.

Yes. Indeed, indeed. And in case you are new to Nitro, we're known for action and shooter games. We operate with various brands across platforms.

We've been here for close to 20 years and we work with various projects, games and partners around the world. But the action and shooter brands are something that where we are shining.

Yes, indeed, indeed. And this is part of our strategy where we focus on working with various partners and also with our own games, we call Nitro Originals, and we focus on the specific category. So over time, we have become better and better and also get to work on better and better projects, if you ask me. Coolness. So let's have a quick look at the highlights from the report. And we're happy to say that it was a little bit turbulent year, but despite of all the things, we're happy to say that we delivered, I think, second best.

Second best and there was some challenges but nothing that we wouldn't overcome and now we have a much better foundation for the future.

Definitely, definitely, yes. And we again delivered profits, and that was very much a focus point for us in 2025 to maintain profitability. And overall, in the games business during these 20 years, we've seen a lot of ups and downs in the whole industry, and we've seen a lot of new companies come and then some go. But our focus is always that when things get shaky, we start to focus on making sure that we are one of the winners coming out of turbulent times when they're over. And happy to say that by the looks of things, it seems that maybe things are starting to be a little bit better in this industry overall.

We went last week in one of the industry events in the U.S., and it seems that there are a bit of a positive signals and positive trends and people seem to be a little bit positive and many of the comments and statements that kind of rock bottom has been seen and people are initiating new projects and new ventures. And it seems that things might be going in a little bit better direction from the whole industry point of view.

Yes, yes. I definitely agree with that one. And on the nitro side, we have some recent events again this quarter and after the quarter that we want to share.

We signed a EUR 1.6 million development agreement with one of the big European partner. Also with the Starbreeze continuing to determine some expansion, as you who have been following us longer, you maybe have recognized the trend that we quite often start with something a little bit smaller with the partner and then expand and expand and continue the collaboration and it's shown in these cases also that.

Yes, yes. We're big fans of long-term partnerships, but also we're big fans of being selective. And that goes both ways. And I think it's a healthy way to start. Let's do something small together and make sure that both parties are happy and then do something bigger and bigger and bigger and take it forward.

And that is something you might see in the future from our new stuff that we are doing also. Also, what we are very happy is that the Pistolo, the iGaming product that we did together with a great partner, it started to generate like a significant revenues and income for us.

Yes, yes. And this is our sort of side venture, if you will, into the world of iGaming, but it's a great example on how we are able to take advantage from things we've done in the past. So there's so many great game, core [ looks ], so many great gaming brands we've built with mobile free-to-play back in the day, and those are all available for us to try to find new ways to monetize them. And this is a prime example of how we can recycle stuff from the past and modify it in a new environment.

One wiser one said that the best people are making the best games, and it definitely applies to us also. And we have 2 good examples of homegrown talent growing up in their career path. And we're very happy that Mr. Antti Ruonala and Milka Tarkiainen have kind of climbed up into the C level and was nominated as the COO.

Yes. They're now part of the management team.

Management team and we are very, very, very proud and happy that those people have found their places and contributing to the success of the Nitro even better and higher than before.

Yes, indeed. And this whole concept of home growing people and talent, while we, of course, also hire best talent out there, we're big believers in thinking these things long term and we're very famous for getting interns in. And over the years, they might get employed by Nitro and then they might grow in Nitro. And we still have quite a few people who've been with us almost since the beginning and quite a few who have been with us since the beginning.

10 years, 15 years.

And then we also recently announced that we received EUR 0.3 million of funding. This is related to the project we had with Business Finland, which is a governmental entity supporting export companies who specialize in tech, and this was the last payment from the project that we've now completed and it's been approved. So very good for us. And overall, if we look at the financial performance, this is 5 years from us, revenue and EBITDA are the sort of key KPIs for us that we tend to follow and highlight. And in our case, we believe that also the EBITDA is a very good representation of what's happening operationally like in our case, it gives a very healthy view into the business. And clearly shows that we're continuing with the path of profitability that we started towards the end of 2023 and revenues might evolve go up and down depending on how we're doing with the projects.

Most important is the EBITDA profitability and securing the cash. And those are -- especially in the times like this [ games ] industry, those are more important for us.

Yes, definitely, definitely. And if we look at things in a little bit more detail here on the left side, you can see the P&L statement, and then we have the balance sheet there. And something that I think is very good for us, especially with the long-term mindset is that behind this profitability, we were able to manage our cost structure. So we're now leaner in many ways, which, of course, is a good foundation to build on moving forward. We were also able to improve things on the balance sheet side. We were able to repay back the loans to new [ PC ] games.

If we move to equity. And I think that protecting the cash is the key on times like this, the fact we have reserves and we can either allocate into the investments or then we can secure for the uncertainties. And I think that's kind of healthy and wise thing to -- definitely lead the business in that manner.

Yes. And moving forward, we obviously intend to continue with the same mindset that we want to be mindful with everything where we invest that cash and make sure that we continue with the focus on profitability.

We have a quite unique way of building the setup here in Nitro. We have a global and scalable team, and we've been building the setup where we have a core senior leadership within the Nitro in Finland. And then again, lots of affiliate and partner studios that we've been working for 10 to 15 years there using our processes and tools and sharing the culture and values. And that is the way also where we can scale up in the bigger projects and sometimes scale down when there -- every now and then projects are ending. And that's very handy and effective way of building the -- building both the gaming studio, but also the projects and staffing for the projects.

Yes. And I think it's maybe a little bit our secret sauce that while we focus on profitability in Nitro, we position both ourselves and our partnerships so that we're not the cheapest, and we always make sure that we invest in quality, both when it comes to our own staff, but especially when it comes to these partners we work with. And I think some of the partnerships we've had are well over 10 years now. So it's a really good setup. And as if you have been following us for a longer time, you've seen it sometimes scale up and down, and this is visible in the materials and services in our P&L where we have third-party outsourcing. So...

And especially on our partner business, we are even -- we are quite close to the movie studio model where the core leadership is within the company and then every project are staffed with the best people from various partner studios.

Yes, indeed. That's a good analogy. And action and shooter brands across platforms, this is what we do. And we have kind of like 2 business areas, if you will. Nitro Originals, it's our own game, so to speak, based on our own IP. And last year on this front, Autogun Heroes, we expanded it to various platforms, live on mobile, web, we went to Discord. We released the game on Steam. And that's now live there. And then we have Pistolo, which was our venture in iGaming. And as we mentioned earlier, started revenue share for us. So we consider that a great start on that field. And obviously, we want to look further down that path as well. And then Nitro MVP process stands for maximum viable product, minimum viable product. And this is where we have all the new stuff. And it is part of our DNA that on a continuous basis, there's always some new stuff improving. But at this point in time, maybe more than usual. So we're very heavily looking into new things, PC, cross-platform, there's mobile stuff and then there's obviously things related to iGaming.

And a similar kind of methodology applies on our MVP process as with our partner projects. We are starting very small. We are validating stuff, and then we are extending or further investing when we already have some proof that there could be something there could be a market, there could be a fit on a concept or a prototype or game that we are working.

Yes, yes.

On the Nitro Partners, we are very happy to have great companies to work with. Great partners, some of them now with a little bit longer term. There is a digital strategies that we've been working already, what, 3 years, I think.

Maybe even more than that.

Maybe even more and just showing the strength of the partnership and how we've been building the collaboration in various projects. And one of the projects is kind of on the finalization stage, then there might be something coming along in the future also with them.

Yes. Yes. And this is a great life cycle that projects always come and go. That's the nature of the business, but these partnerships are really the thing where you invest in the long run.

Yes. VOID Interactive and Starbreeze spend a little bit earlier on our partnership, partnership lifestyle, but I think both of them very much in fit for our action and shooter brands across the platforms kind of slate and very happy to see those -- both of those partnerships evolving and new needs coming up and new offering and needs matching and finding lots of synergies between what we are doing and what they are looking for.

Yes. And given that these things are still early, as always, we can't talk about the process too much yet at this point, but I'm sure everybody knows what these companies are known for. So really good match for us. And of course, just last week, we were in Las Vegas in this event called D.I.C.E. It's one of the big ones for us every year, especially with North American...

North American executives and bigger North American companies, and we are constantly in discussions and positive signals from the industry overall and a couple of very interesting discussions that could be further the logos from there someday.

Yes, one day, day. Then if we look at a little bit of the road map horizon, we've been enjoying each other for almost 20 years now under Nitro Games, but we actually met before that when we were with your previous company. But with Nitro Games, we're at a very exciting point in our journey. End of last year, we basically completed our previous strategy period. And now we are busy starting a new one, and we have this 5 years horizon that we like to use because it gives us sort of enough of long term in our mindset. And our focus has been on action and shooter brands where we come from. And now moving forward, we want to basically take the natural next steps. We're profitable. We're able to operate on various platforms, various channels. We have the track record of working with many great partners. So we now want to go towards being more and more recognized for category-leading games. That's the long-term vision.

And we kind of are there already in Nitro Partners and with our partner projects, but we want to also grow the Nitro Originals to be -- and to meet that vision alongside with our partner projects. And as you can see, the big map of logos and there are quite a few companies that we're working on their top titles. And even today, those projects that we are working on are definitely in the category leading on the categories.

Yes. Some of these things we've done throughout the years are so-called white label. So we work on cool stuff, but we can't go too much into detail. Sometimes we take ownership of the title and then we can more freely talk about what the game was and so on. And I think moving forward, we are especially interested in continuing to leverage our expertise and well known for good quality, high technical expertise and then also for our process of building new products and the sort of data-driven approach. And those are usually the things that people come to look for when they want to work.

Yes. And now especially the later one seems to be resonating on traditional platforms even more like on a PC and console kind of what has been norm in the mobile game, this data-driven development is starting to be something that the PC and console developers and publishers are looking for also to early enough to minimize the risk of development and validating the games before doing the big investments. And there is a bit of an advantage for us as we are coming from those mobile data-driven development side of things.

Definitely. And especially if still a couple of years back, things tend to be very much that you have something happening on free-to-play mobile and then you have, let's call it, PC premium on the other end, and there's very little similarities. But now these are coming together in many ways, and we're seeing PC becoming to mobile. There's these new business models like try before you buy type of things on mobile and so many new type of opportunities.

Exactly. Yes. Somebody claims that the 5 years strategy period could be quite long in these turbulent times, and we fully agree. And that is the reason why we have every year kind of annual theme and a [ shorter ] 1 year is the kind of horizon that we are taking on operationally. And for this year, the theme for the year is new growth.

New growth. Yes. And what this stands for is that we are focusing on many new things. This means Nitro Originals, like we discussed, we have many cool things going on. We feel positive that things will start to surface from that this year, and then we build the release road map for the years to come. We have a lot of cool stuff in the Nitro Partners. We have some fresh new partnerships we've started recently. Obviously, we're looking to get new things going moving forward as well. We have the whole iGaming thing to explore. That's a new thing for us. And whatever other things happen moving forward. So I think it's a very exciting point in time because we are in a good position to explore many of these new things in Nitro. I think that's probably all from us, maybe...

Yes. There are a few questions already came in.

Yes, yes. Let's see.

Maybe if I throw the questions and...

Yes. Yes.

The first one is there about the long-term potential of the new contract with the European game developer. Can we say -- can we see change or extension after the current project is finished? Short answer is yes.

Yes, it's always yes. Well, it's in our DNA to work like this that when we start something new, we start small and we are big fans of taking things in steps. I think it works for all parties associated. And obviously, the goal is always to find avenues for long-term collaboration. Not all partnerships end up being long-term collaborations, but I think we can safely say that we have a pretty solid track record of getting these what some call like returning customers, if you will.

Yes. Then there's a question about our partnership with the Starbreeze and I note that both are cutting costs and increasing focus on the payday on the Starbreeze side. And question is that, is this aligned with what we are working with them and our partnerships? And I think we shouldn't go deeply into what they are doing and -- but safe to say that we are part of the future rather than past.

Yes. We are big fans of looking forward, looking into the future. And I'm happy to say that we are very happy with the collaboration with Starbreeze, so far. I'm very much looking forward to seeing how things develop moving forward as well.

Then there is a question about the Nitro Originals and timing, when do we starting to see the potential with the launches on Nitro Originals games and potentially something that we're already measuring. But when we are starting to see some concrete signs and make final decisions, that's probably within this year, at least making the decisions whether those games are going to see the light of the day.

Yes. We're not that concerned internally about like when are we actually launching those new games. Our focus is on building quality and make sure we do things right. With Nitro Originals, there's so many different things on different platforms and things can go so many ways. But if we look at any of the free-to-play mobile games we have there, we want to take things forward step-by-step data-driven because everything is so dictated by user acquisition still. What comes to exploring anything on PC or cross platform, then probably the first steps are once we have gotten to a certain point, we're going to talk with game publishers and explore any potential collaborations with the title ahead of the potential launch. In the field of iGaming, those are maybe more simplistic by nature, like the actual game software. So things might move forward a little bit quicker...

And the value chain is a little bit more difficult.

Yes. Yes. So it depends, but we are very much on it, and I'm sure we will talk a lot more about new stuff this year.

This is a great segue to the next question that is about the iGaming, and it's been stated that after now the solid start with the Pistolo, will there be more? And are we going to explore the iGaming world more after the now solid start with the Pistolo? And short answer being yes, and we already...

Yes. Short answer is always, yes.

We've also been doing that already with the current partner, but you were just visiting one event and we are exploring also the outside of the current partnership.

Yes. We were in January in this event called ICE Barcelona, which I've understood is one of the biggest events in this -- basically casino business. It had a lot of like land casino stuff, but we're obviously more focused on the online casino side. So moving forward, I think it's becoming more and more clear how we want to position ourselves and what's the added value we bring to the table because we're not big fans of going and competing whoever is already winning there, but we want to come with something new. And on that front, it seems like there's both a supply from us and a demand on the other side. So we're busy exploring how those things materialize.

Yes. Then there's a question about the growth in '26 and whether we are going to also maintain focus on profitability and cash flow while looking for that new growth. And again...

Yes, yes. So we want to stay very clever about it. So if we need to, we're not ashamed to break down a little bit what comes to investing in new product development in order to protect our cash position, while at the same time, we want to make sure that we take, how to say, the maximal effect from the cash and the position that we have. So -- but we will definitely keep focus on the bottom line.

Yes. Then the final question that I at least have at this point, there was about the last quarter and about the decline on the materials and service costs, whether it's kind of sustainable or was it like a temporary drop on the quarter? And I think starting this year, we are starting it lower cost base overall, including the materials and services.

Yes, yes, definitely. So in that sense, it is sustainable, and you can expect that from us moving forward. And like we discussed with our unique scalable global team model, as we go forward and then when there are times that we need more staffing, that's always a positive thing. Then obviously, we can expect to ramp up those things as well.

Yes. Exactly.

Yes. I believe that's all the questions we have for now. So thank you all. Great questions, by the way, this time.

There wasn't any more.

Yes, not any more -- So thank you for tuning in.

[Foreign Language].

I hope Twitch thing worked out fine. Fingers crossed. And we'll see you guys the next time, the latest in April when we put out our numbers and the webcast for the first quarter of the year. [Foreign Language] We're done.

[Foreign Language]

Thank you. Bye-bye. Have a great day.

Have a great day. Bye.