Financial highlights Q3

• Net sales stable YoY at SEK 2,988 (2,987) million and -2% in constant currencies (also pro forma and organic bases[1])
• Group total UA spend up by 6% YoY (4% in constant currencies) to SEK 1,178 (1,112) million, or 39% (37%) of net sales
• Adjusted EBITDA up by 3% YoY to SEK 693 (675) million, with adjusted EBITDA margin of 23% (23%)
• Reported EBITDA of SEK 688 (590) million and EBIT of SEK 318 (232)million
• Net income of SEK 149 (39) million, and adjusted net income of SEK 431 (361) million 
• Cash flow from operations of SEK 431 (382) million 

Financial highlights nine months

• Net sales up 8% YoY to SEK 9,112 (8,456) million and up 13% in constant currencies, 6% pro forma1 and 5% organic
• Group total UA spend of SEK 3,540 (3,125) million, or 39% (37%) of net sales
• Adjusted EBITDA up by 14% YoY to SEK 2,202 (1,931) million with an adjusted EBITDA margin of 24% (23%)
• Reported EBITDA of SEK 2,132 (1,780) million and EBIT of SEK 1,006 (745) million
• Total net income of SEK 386 (43) million and total basic earnings per share of SEK 3.24 (0.36)
• Cash flow from operations of SEK 1,507 (884) million and unlevered cash conversion of 82% for the 12-month period

Key highlights

• MTG unveiled Playamp as the new brand for its Midcore District
• MTG exercised the final put/call options for Snowprint, thereafter owning 100% of the studio
• MTG acquired  WARP36, Inc, the developers of the upcoming Star Trek: Warp game, and onboarded the studio into Playamp
• After the end of the period, MTG announced the decision to postpone the potential IPO of Playsimple due to prevailing conditions in the Indian capital markets

Financial overview

Letter from the President and CEO

Solid Q3 in a challenging market; Playsimple IPO postponed, strategy unchanged

Q3 was a stable quarter of disciplined execution against strong comparisons coupled with a more challenging marketing and user acquisition environment across the industry. On 9 October we also announced the postponement of the potential IPO of Playsimple. I explain our reasoning below, but our strategy and ambitions are unchanged. We reiterate our full year outlook, with revenue growth now expected towards the lower end, and adjusted EBITDA margin towards the upper end of our guided ranges.

Our pro forma revenues were down -2% year over year in Q3 but up 6% for the first nine months of 2026. Total revenues for Playamp (previously the Midcore District) were down -6% year over year in Q3 but up by 2% for the year to date, both on a pro forma basis. Playamp’s performance reflected 1% pro forma revenue growth in RAID: Shadow Legends, more than offset by declines in Forge of Empires (-13%), and Warhammer 40,000: Tacticus (-10%) as the latter had an outstanding Q3 last year. Playsimple delivered 11% pro forma growth year over year against strong comparisons from Q3 2025, when several new titles began to scale rapidly, and were up 23% for the year to date on the same basis.

Healthy margins as DTC gains offset UA investments

We invested a total of SEK 1,178 million in user acquisition (UA) in Q3, a 6% increase year over year, corresponding to 39% of our total revenues in the quarter. This comprised a 19% increase in Playsimple’s UA in constant currencies, coupled with a -4% constant currency decline in Playamp, as higher UA levels in RAID and Tacticus were more than offset by lower marketing spend in other games.

DTC revenues represented 42% of group total compared to 38% in Q2 and 26% in Q3 last year, with Playamp generating 55% of total revenues from its various DTC initiatives in Q3 (51% in Q2, 33% in Q3 last year). This reflected our direct monetization strategy and our focus on driving players to engage with our DTC channels. Google introduced new rules on alternative billing and began charging platform fees on external links for Android players in the US from 1 October, reducing some of the cost advantages of DTC from these players. Our full year margin outlook reflects this expected impact. Our teams are implementing a range of mitigation tactics to optimize our DTC revenues and strengthen our direct relationships with our players.

Our adjusted EBITDA was up 3% year over year to SEK 693 million in Q3 and up by 14% to SEK 2,202 million for the year to date. The adjusted EBITDA margin was stable at 23% in the quarter and increased to 24% for the year to date, from 23% last year. The performance reflected lower platform fees, driven by continued success of our DTC initiatives, being largely offset by higher user acquisition spend, mainly in Playsimple. In August, MTG also acquired WARP36, the studio behind the upcoming game Star Trek: Warp, which resulted in an increase in operating expenses in Playamp in the quarter. Playamp reported adjusted EBITDA margins of 26% in Q3 and 27% for the year to date, up from 24% for both periods last year. Playsimple reported margins of 21% and 23% for Q3 and for the year to date, down from 23% and 25%.

Playsimple IPO postponed, strategy and ambition unchanged

On 9 October we announced the decision to postpone the potential IPO of Playsimple due to the prevailing conditions in the Indian capital markets and to revisit the timing during 2027. We have two specific goals with the potential listing: to crystallize value for our shareholders and to empower Playsimple to better execute on all aspects of its growth strategy. We do not believe that a listing with the challenging market backdrop would enable us to effectively deliver on these objectives.

We took this decision proactively, having followed market conditions closely in recent months. The decision does not change our long-term strategy or ambitions for Playsimple, or for MTG. With extensive preparations completed we are well placed to proceed with a potential listing when conditions are right.

Strong cash generation with increasing balance sheet optionality

Our unlevered cash conversion amounted to 82% of adjusted EBITDA for the rolling 12-month period ended 30 September 2026. This reflects very solid underlying cash generation across the group.

We exercised the final put/call options for Snowprint in July and now own 100% of the studio. Our total leverage is now just under 1.4x and we do not have significant earnouts on our balance sheet. Taken together with our strong cash generation this means we now have increasing optionality as it relates to capital allocation and deployment. We also continue to execute on our SEK 500 million share buyback program, which runs until May 2027.  

Continued progress in the new game pipeline

Our Gaming Village continued to build the next generation of titles in Q3. Some of our newer games continue to scale, with Heroes of History from InnoGames and Word Connect Association from Playsimple being two call-outs in Q3. We also have several new games in or entering soft launch, including Bloons Blitz from Ninja Kiwi and Star Trek: Warp from our newly acquired studio WARP36. Looking further ahead, we have an exciting pipeline of new titles, both big and small, headlined by the major project from the Plarium team behind RAID, which we expect to announce in early 2027.  

2026 full year outlook

We remain on track to deliver on our full year outlook for group pro forma revenue growth of 5-8% and adjusted EBITDA margin of 22-24%, with expected revenue growth towards the lower end of the range and adjusted EBITDA margin towards the upper end.

Our teams are now fully focused on the seasonally important final months of 2026, and the year ahead, including the new game lineup, and I would like to thank them for their hard work and commitment. Our long-term focus continues to be on our organic growth strategy: nurturing evergreen titles, launching new games, strengthening shared service organizations within our Districts, and implementing AI across our value chain; as well as finding the right new studios to join our group.

Thank you for following our progress.

Maria Redin,   Group President & CEO,

2026 full year outlook on track

• MTG expects full year 2026 pro forma revenue growth to be in the range of 5-8%, now expected to be towards the lower end of the range
• MTG expects full year 2026 group adjusted EBITDA margin to be in the range of 22-24%, now expected to be towards the upper end of the range

Shareholder information

MTGs Annual General Meeting 2027

The Annual General Meeting will be held on 21 May 2027 in Stockholm. Shareholders wishing to have matters considered at the Annual General Meeting should submit their proposals in writing either by post to the “Company Secretary”, Modern Times Group MTG AB (publ), Annual General Meeting, P.O. Box 2094, SE-103 13 Stockholm, Sweden or by email to agm@mtg.com at least seven weeks before the Annual General Meeting in order for the proposal to be included in the notice to the meeting. Further details on how and when to register will be published in advance of the meeting.

Nomination Committee ahead of the 2027 Annual General Meeting

In accordance with the resolution by the Annual General Meeting of MTG shareholders regarding the procedure for the Nomination Committee, a Nomination Committee has been convened to prepare proposals for the 2027 Annual General Meeting.

The Nomination Committee comprises:

• Christian Rauda, appointed by EHM Holding GmbH
• Klaus Roehrig, appointed by Active Ownership Corporation
• Malin Björkmo, appointed by Handelsbanken Fonder AB and
• Simon Duffy, the Chairman of the Board

In line with past practice, the members of the Committee have appointed Christian Rauda, representing the largest shareholder on the last business day of August 2026, as the Committee Chairman.

Financial calendar

Questions?

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MTG (Modern Times Group MTG AB (publ)) (www.mtg.com) is an international mobile gaming group that owns and operates gaming studios with popular global IPs across a wide range of casual and mid-core genres. The group is focused on accelerating portfolio company growth and supporting founders and entrepreneurs. MTG is an active driver of gaming industry consolidation and a strategic acquirer of gaming companies around the world. We are born in Sweden but have an international culture and global footprint. Our shares are listed on Nasdaq Stockholm (“MTGA” and “MTGB”).

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[1] Growth is fully organic in Q3, and so constant currency, organic and pro forma growth are the same in the quarter, albeit not on a year to date basis. MTG will continue reporting pro forma growth in 2026 to ensure quarter and year to date numbers are consistent, due to the consolidation of Plarium from February 2025.