Sales exceeded expectations at SEK40.4m, compared to our estimate of SEK35m. EBITDA of SEK3.9m was also higher than our forecast of SEK0.8m. With D&A in line with our estimate, EBIT stood at SEK-1.3m, versus our projected SEK-3.7m. Therefore, the outcome surpassed expectations across all metrics. The primary contributor was once again the popular game "Ghost of Tabor", published by Beyond Frames. The game demonstrated financial stability throughout the quarter and remained one of the top sellers on the Meta Quest Store in the first half of Q1.

"Ghost of Tabor" operates on a "Games as a Service" business model, ensuring continual launch and sale of new content (DLCs) to cater to the expanding player community. As long as monthly active user engagement remains high, the game will sustain and generate cash flows for Beyond Frames. Combat Waffle and Beyond Frames, the developers of the game, will continue their collaboration, with an agreement signed to publish two more games developed by Combat Waffle. It is certainly reassuring that Beyond Frames will maintain its partnership with the developer of their greatest success.

Beyond Frames' internal VR game studio, Cortopia, is currently working on three titles. Development fees will help stabilise cash flows and support Cortopia financially throughout 2025.

In the short term, we believe that the publishing title "Ghost of Tabor" will be the most significant growth driver. The company plans to port the game to other platforms, such as Playstation VR2, which will expand sales for the title.

We are revising the full-year estimate for 2024 slightly upwards regarding sales to SEK153.6 million from the previous SEK148 million. As the game "Ghost of Tabor" remains the primary known revenue driver, we anticipate continued low gross margins in 2024, as royalty costs are expected to remain high. It's worth noting that distribution costs are also deducted in COGS (Cost of Goods Sold).

We have increased the cost base compared to our previous estimates. "Total net OPEX" remains in line with previous estimates. However, we have slightly raised personnel costs while external costs have been reduced by almost the same amount.

With COGS increased by SEK13 million, the gross profit amounts to SEK34 million compared to the previous SEK42 million. This results in EBITDA being reduced to SEK7.2 million (from SEK15 million) and EBIT reduced to SEK-12 million (from SEK-3.5 million) for the full year 2024.

We are also raising sales for the full year 2025 slightly to SEK167 million from the previous SEK160 million. EBITDA is expected to be around SEK26 million (previously SEK30 million) with an EBIT of SEK5 million (previously SEK9 million) in 2025.

In 2025, we expect Beyond Frames to successfully add another successful publishing title, while the studio Odd Raven (in which the company owns 38% of the shares) releases its PC game.

We anticipate the next significant increase in revenue in 2026, when their internal development studio, Cortopia, is expected to release their major game based on a "multi-billion-dollar IP." Our best guess at the moment is that this game is based on a major brand from Disney or Warner, such as MARVEL, Avatar, Star Wars, or Batman. But we currently belive the most likely IP it is based on is Harry Potter. Due to the similarties with Cortopias previously popular VR-game "Wands".

During this year, we expect the gross margin to have increased from 22% (estimated for 2024) to 34% (estimated for 2026).

The success in Beyond Frames publishing business (read Ghost of Tabor) has secured a valuation that is not that depressed as in its Nordic peer group. Beyond Frames is also a “pure play” with a clear focus on VR and no major acquisitions during the last years. The company is debt-free, which also is an important parameter these days.

On EV/Sales multiples, Beyond Frames looks cheap both compared to its Nordic and its international peers. However, the company report sales before distribution costs which make the number inflated compared to most peers. Beyond Frames is also a very small company in an obvious growth phase so it is hard to do a good peer comparison on profitability metrics such as EBITDA and EBIT. Compared to internation peers, when looking at the median, Beyond Frames is in line with other gaming stocks looking at 2026 estimates.