FOURTH QUARTER, JANUARY-MARCH 2025 (COMPARED TO JANUARY-MARCH 2024)

• Net sales decreased by -6% (19% organic growth) to SEK 5,386 million (5,757). The sales split per operating segment:
  • PC/Console Games: decreased by -2% (22% organic growth) to SEK 3,069 million (3,126).
  • Mobile Games: decreased by -31% (30% organic growth) to SEK 943 million (1,366).
  • Entertainment & Services: increased by 9% (9% organic growth) to SEK 1,373 million (1,265).
• EBIT¹⁾ amounted to SEK 4,322 million (-13,344), an EBIT margin of 80% (-232%). Adjusted EBIT increased by 3% to SEK 1,077 million (1,046), corresponding to an Adjusted EBIT margin of 20% (18%).
• Cash flow from operating activities amounted to SEK 1,671 million (1,078). Net investments in intangible assets amounted to SEK -831 million (-1,461). Free cash flow after changes in working capital amounted to SEK 956 million (-272).
• Basic earnings per share was SEK 18.77 (-58.93) and diluted earnings per share SEK 18.76 (-58.93). Adjusted earnings per share was SEK -0.19 (6.75). Adjusted earnings per share after full dilution was SEK -0.18 (6.25).

FULL YEAR, APRIL 2024-MARCH 2025 (COMPARED TO APRIL 2023-MARCH 2024)

• Net sales decreased by -18% (-9% organic growth) to SEK 22,370 million (27,409). The sales split per operating segment:
  • PC/Console Games: decreased by -27% (-13% organic growth) to SEK 10,450 million (14,410).
  • Mobile Games: decreased by -9% (-1% organic growth) to SEK 5,359 million (5,916).
  • Entertainment & Services: decreased by -7% (-7% organic growth) to SEK 6,561 million (7,082).
• EBIT¹⁾ amounted to SEK 3,535 million (-14,400), an EBIT margin of 16% (-53%). Adjusted EBIT decreased by -33% to SEK 3,344 million (4,984), an Adjusted EBIT margin of 15% (18%).
• Cash flow from operating activities amounted to SEK 3,492 million (5,694). Net investments in intangible assets amounted to SEK -3,615 million (-6,811). Free cash flow after changes in working capital amounted to SEK 1,351 million (-819).
• Basic earnings per share was SEK 12.31 (-67.28) and diluted earnings per share SEK 12.31 (-67.28). Adjusted earnings per share was SEK 5.93 (14.66). Adjusted earnings per share after full dilution was SEK 5.80 (13.56).

¹⁾ EBIT equals Operating profit in the Consolidated statement of profit or loss.
In this report, all figures in brackets refer to the corresponding period of the previous year, unless otherwise stated.

CEO COMMENTS:
KINGDOM COME: DELIVERANCE II LAUNCH CONTRIBUTES TO SOLID Q4 PERFORMANCE, WITH COFFEE STAIN GROUP TO BE SPUN OFF IN 2025

In a solid ending to the year, net sales grew by 19% organically to SEK 5.4 billion, while Adjusted EBIT grew by 44% year-on-year pro forma to SEK 1.1 billion, with a free cash flow of SEK 1.0 billion in Q4. Kingdom Come: Deliverance II continued to perform in Q4, and reached 3 million sold copies after quarter-end. Organic growth within Mobile accelerated to 30% year-on-year. By the end of 2025, we now plan to spin off Coffee Stain Group, a group of leading community- driven game developers and publishers. We have a strong financial position, and we remain focused on enhancing efficiency and long-term resilience ahead of the spin-off.

The solid Q4 results were driven by PC/Console Games and the performance of Kingdom Come Deliverance II. The game, developed by Warhorse Studios, reached three million sold copies after the quarter and has maintained a highly positive player and critic reception. Free updates and paid DLCs (Downloadable Content) are planned to release over the next 12 months, keeping players excited and deeply engaged. In the Mobile Games segment, organic growth accelerated significantly to 30% YoY, driven by recent game releases and increased user acquisition costs. We expect these investments will provide sustained long- term profitability.

For the full year, excluding the contribution from the divested assets, we reached net sales of SEK 19 billion, Adjusted EBIT of over SEK 2.4 billion and EBITDAC of SEK 2.1 billion. Over the last year, Embracer has made significant progress in the process of transforming the Group. The divestment of Easybrain and Asmodee spin- off have been successfully completed, and we remain dedicated to further optimizing our business and unlocking value through the next spin-off.

By the end of 2025, we plan to spin off Coffee Stain Group (previous working name “Coffee Stain & Friends”), distributing its shares to Embracer’s shareholders and listing it on the Nasdaq First North Premier Growth Market in Stockholm. This strategic move will allow Coffee Stain Group to focus on its core strengths as passionate game developers and publishers, focused on delivering high quality experiences. Embracer will at the time of separation of Coffee Stain Group be renamed Fellowship Entertainment (previous working name “Middle Earth & Friends”). Fellowship Entertainment will be uniting top creators and intellectual properties, fostering creativity to build unforgettable experiences for the fans. The strategy is to transform into one powerhouse group with game development and publishing at its core, complemented with transmedia capabilities within IP licensing, comics, merchandise, film and distribution.

A BACK-END LOADED FY 2025/26, WITH A CONTINUED FOCUS ON QUALITY
In Q1 FY 2025/26, we expect a relatively stable Adjusted EBIT YoY in the PC/Console Games segment, with no significant new releases in the quarter. The value of completed games development within PC/ Console is expected to reach around SEK 3.8 billion in FY 2025/26, of which SEK 0.3 billion in the first quarter. For the Mobile games segment, we expect limited topline growth YoY on a pro forma basis, with a somewhat higher pro forma Adjusted EBIT contribution sequentially compared to Q4, driven by lower UAC relative to net sales. For the Entertainment & Services segment, we expect no Adjusted EBIT contribution in Q1, with no noteworthy product releases expected in the quarter.

As of today, we expect to release 76 different games during FY 2025/26 that we have invested in, with a a mix of new IPs, sequels, and remasters. We have a solid slate of exciting new releases in FY 2025/26, including Metal Eden, Gothic 1 Remake, REANIMAL, Fellowship, Wreckreation, the next SpongeBob SquarePants game, NORSE: Oath of Blood, Deep Rock Galactic: Rogue Core alongside a handful titles yet to be announced.

Our AAA game releases continue to be key financial drivers across specific years and quarters. In FY 2025/26, we currently have two AAA games. First, Killing Floor 3 is now scheduled for Q2, with a 24 July release date, following a delay from the previous financial year. The development team has spent this extra time engaging directly with feedback from its community. Second, Marvel 1943: Rise of Hydra is now scheduled late in FY 2025/26. The game is developed by Skydance Games, in a team led by award-winning industry icon Amy Hennig of the Uncharted franchise. The game is published by PLAION. We are expecting Marvel 1943: Rise of Hydra to drive notable revenues but to have lower margins due to shared economics with several other partners.

For the other previously expected third AAA title in FY 2025/26, management is now taking the more prudent view that the game will likely need a few more quarters to polish and subsequently would release in FY 2026/27. We expect this specific game to have financial dynamics more similar to Kingdom Come: Deliverance II. Overall, on a pro forma basis, we expect net sales to be slightly above FY 2024/25 with both EBITDAC and Adjusted EBIT to be broadly in line with FY 2024/25. Looking into the following two financial years, FY 2026/27 and FY 2027/28, we have 9 additional AAA games currently slated, excluding any AAA games financed by partners. Realistically, one or a couple of these games will slip into FY 2028/29, but we do see a clear increase in release cadence as compared to our average of just over 1 AAA game per year in the past five years.

STRENGTHENING THE BUSINESS AHEAD OF COFFEE STAIN GROUP SPIN-OFF
In preparation for the next spin-off, we are strengthening the business for long-term stability and growth, with our key studios, publishers and IPs at the center. As a result, we have adjusted the size and structure of several teams in the quarter, primarily within PC/Console publishing and distribution, as well as work-for-hire development. Additionally, changes are being made within Amplifier Game Invest to improve group profitability. This involves integrating successful and high-potential studios, including Tarsier Studios, into other operative groups within Embracer to support their continued growth, while underperforming games and studios with negative cash flow have been closed or divested. The decision has also been made to dissolve Amplifier HQ. Ultimately, these changes will help us invest more into greater player experiences and support future growth.

The changes we have now made have rendered a number of items not affecting Adjusted EBIT. This primarily includes a gain from the sale of Easybrain, and also as part of the annual impairment tests IAC costs related to goodwill impairment, with a net effect of SEK
+3.8 billion on reported EBIT. Furthermore, we have also impaired several earnout obligations, lowering both estimated obligations to be settled in cash and shares.

A ROBUST FOUNDATION IN TURBULENT MACROECONOMIC TIMES
After the quarter, we have seen positive incremental market developments, especially regards to mobile app store fee dynamics. Whilst our own execution and capital allocation is key, improving industry dynamics will be supportive in our strides to grow into a sharper, stronger and more future ready company.

We operate mainly as a digital business, with limited direct effects expected from tariff developments. The exposure is estimated at around 2% on an Adjusted EBIT basis and is concentrated to our Entertainment & Services segment. We are working actively with mitigating actions where relevant and we are closely monitoring macro and tariff developments for any potential impact on general consumer demand.

Backed by a strong financial position, management continues to be focused on executing in the right order. We are actively exploring opportunities to enhance strategic optionality, improve operational efficiency, and maximize shareholder value by evaluating divestments, acquisitions, mergers as well as further separations of specialized public listed companies. We always strive for an optimal capital structure in our business, and we will return to the topic of capital distribution when we take the next step in shaping our future.

To conclude, I would like to send my thanks to all our team members, shareholders, customers, and business partners for their contributions to our continued success and growth.

May 22, 2025, Karlstad, Värmland, Sweden
Lars Wingefors
Co-founder & Group CEO