MTG reports record Q1 with 14% pro forma growth and 25% adjusted EBITDA margin

Financial highlights Q1

• Net sales up 24% YoY to SEK 3,159 (2,557) million and up 37% in constant currencies
  • Pro forma[1] sales up 14% YoY and organic sales up 12% YoY
• Group total UA spend of SEK 1,199 (959) million, or 38% (38%) of total revenues, up 17% on a pro forma basis
• Adjusted EBITDA up by 30% YoY to SEK 802 (616) million, with adjusted EBITDA margin of 25% (24%)
  • Adjustments of SEK -49 (-21) million for M&A transaction costs, revaluation of put/call options and other adjustments
• Reported EBITDA of SEK 754 (594) million and EBIT of SEK 371 (290) million
• Net financial items of SEK -160 (-86) million, including net interest of SEK -64 (-19) million
• Tax of SEK -72 (-140) million
• Net income of SEK 138 (65) million, and adjusted net income of SEK 550 (326) million
• Cash flow from operations of SEK 605 (176) million and unlevered cash conversion of 78% for the 12-month period ended 31 March 2026

Strategic and operational highlights Q1

• PlaySimple’s Draft Red Herring Prospectus filed on 23 April as part of potential 2026 IPO preparations
• Midcore District transformation well underway and on track for annualized cost savings of USD 20 million by the end of 2026
• AI integration proceeding at rapid pace across the group, with adoption of external and internal AI tools across areas such as concept development, data analytics, marketing and game localization
  • Today’s extended Q1 call will include an AI update and Q&A
• Increasing contribution from Direct-to-consumer revenues, up to 39% (24%) of group revenues in Q1

Financial overview

[1] MTG calculates pro forma growth on a like-for-like basis: as if all currently owned businesses had been consolidated (or de-consolidated) for the entirety of both the current and comparative periods and on a constant currency basis.

Letter from the President and CEO

A great way to kick off 2026

I am incredibly proud of our performance in Q1, as the positive momentum of our games that we built through strong execution in 2025 has continued into 2026. We had another record quarter, with 14% pro forma growth year over year. This performance is another proof point that MTG delivers on its promise as a growth company, with Q1 marking our 6th sequential quarter of strong organic growth. This doesn’t come easily or for free. It is testament to the fusion of the high quality of our games and IP’s, the drive and ambition of our teams, and our focus on consistent strategic execution.

This report has a new format that reflects our new operating model with two Gaming Districts, that we implemented from the beginning of the year. This operating model has been designed from the ground up to make us better at empowering and supporting our studios. It enables us to best realize the benefits from our proprietary tech and tools, and emergent technologies like AI at scale, and it reinforces our competitive moat – together strengthening our ability to ship great games and content, and to deliver continued profitable growth.

Our Midcore District had a strong Q1, reporting 10% pro forma year over year growth. This was largely driven by RAID: Shadow Legends, with exceptional 25% pro forma year over year growth driven by a busy schedule of in-game content in the quarter, including a highly successful IP partnership in January and a very strong anniversary event in March. The release of new content for RAID: Shadow Legends will be more measured in Q2 and the summer period, which is important for the long-term health of the game and the player base, before a step-up in pace through the second half of the year. In the Casual District, sales were up an outstanding 29% year over year in constant currencies, as PlaySimple continued to rapidly and successfully scale key new games including Crossword Go and Tile Match.

Strong margins of 25% despite continued UA investments

We remain focused on driving long term profitable growth and I’m pleased that we were able to continue to invest in marketing our games at attractive return levels. We invested a total of SEK 1,199 million in user acquisition in Q1, corresponding to 38% of our total revenues in the period and representing a pro forma increase of 17%. User acquisition spend for the Midcore District was up 3% on year over year on a pro forma basis, primarily reflecting the strong momentum in RAID: Shadow Legends and F1 Clash. User acquisition spend for the Casual District was up 48% year over year in constant currencies as PlaySimple continued to scale key new games.

We reported a record SEK 802 million in adjusted EBITDA in Q1, up 30% year over year, and with a strong adjusted EBITDA margin of 25%. The Midcore District reported an adjusted EBITDA margin of 28%, underscoring the inherent strength of evergreen midcore titles. I want to again call out the success of RAID: Shadow Legends in the quarter, which showcased how strong in-game content that resonates with our player base can have a very direct and noticeable impact on our bottom line, as growth is underpinned by an increase in ARPDAU. Our margins also benefited from our continued strategic focus on DTC initiatives, as the Midcore District generated almost half of its revenues from direct-to-consumer sales in Q1. Our Casual District, which continues to have a focus on scaling new games, reported a strong margin of 24% in Q1 despite ongoing investments in marketing.

Our unlevered cash conversion amounted to 78% of adjusted EBITDA for the rolling 12-month period ended 31 March 2026. The strong performance reflected robust underlying cash generation across the group, and in particular Plarium, complemented by certain timing effects including a one-off tax-related item. While we expect some quarter-to-quarter variation during 2026, due to both the natural seasonality of the business and the timing of certain working capital items, we do however expect unlevered cash conversion to remain materially above our medium-term guidance of being in excess of 60%.

Midcore transformation on track

We are progressing well in our roll-out of an advanced and efficient state-of-the-art central services platform to empower our Midcore studios. This transformation is enabling our studios to more effectively do what they love and are great at – developing, launching and scaling games to serve our players - whilst making us faster and more agile.

PlaySimple IPO first milestone reached with public filing of Draft Red Herring Prospectus

PlaySimple submitted the Draft Red Herring Prospectus (“DRHP”) on April 23, 2026. We therefore remain on track, subject to all requisite regulatory approvals and commercial considerations, for a potential public listing of PlaySimple in the second half of 2026. We remain firmly convinced that a potential listing presents an exciting opportunity for MTG and PlaySimple, which we believe could in turn strengthen our ability to deliver shareholder value and growth over the medium and long term. We will come back with further details about the final size of the offering, the timing and the use of proceeds at the appropriate time.

New full-year outlook for 2026 underpins our growth ambitions

We remain confident in delivering on the medium-term guidance we set last year, targeting group gross revenue growth of 3-7%, a group adjusted EBITDA margin of over 24% and steady state unlevered cash conversion of over 60%. For 2026 we expect full year pro forma revenue growth to be in the range of 5-8% and a group adjusted EBITDA margin in the range of 22-24%. This outlook reflects our very strong start to the year, as well as the timing of key game events in the year, the typical seasonality of our business and industry, and our new game release pipeline.

We look forward to another transformative year for our group

MTG has clear goals and priorities, and we are executing on the strategy we presented in October last year. We continue to deliver growth with healthy margins and high levels of cash generation. We have clear and ambitious strategic initiatives to deliver shareholder value in 2026 and beyond. Leveraging the new AI technologies at our disposal to the fullest is one of these core strategic priorities across the group. Our teams are embracing new ways of working driven by AI, and are rapidly building out internal tools that empower our people to get more out of our creativity, proprietary data and technologies. As you may have seen, we will host an extended video conference call today, where Oliver Bulloss, the CEO of the Midcore District, will present and answer questions about the progress on AI adoption within the District.

I remain excited and enthusiastic about the strength and quality of our games, our people and our ability to execute on our plans in a highly competitive and rapidly evolving market and macroeconomic environment.

Thank you for your continued support. I look forward to sharing more news with you when the time is right.

Maria Redin,
Group President & CEO, MTG

2026 full year outlook

• MTG expects full year 2026 pro forma revenue growth to be in the range of 5-8%.
• MTG expects full year 2026 its group adjusted EBITDA margin to be the range of 22-24%.

Shareholder information

MTG’s Annual General Meeting 2026

The Annual General Meeting will be held on 21 May 2026 in Stockholm.

All information relating to the Annual General Meeting, including the notice, the Nomination Committee's proposals and related materials has been published at www.mtg.com

Financial calendar

Questions?

MTG Investor Relations

Direct: +46 8 562 000 50,ir@mtg.com

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Conference call

MTG will host a livestream and conference call at 10.00 CET today, on 29 April 2026. The call will be held in English.

How to join:

To participate via livestream, please use this link.

To join via phone, please register using this link.After you’ve registered, you’ll receive the dial-in number and conference ID to access the teleconference.

You can ask questions via phone during the teleconference or by using the livestream Q&A tool.

Modern Times Group MTG AB (publ) – Reg no: 556309-9158 – Phone: +46 (0) 8-562 000 50

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”).

This information is information that Modern Times Group MTG AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 7:30 CET on April 29, 2026.

This interim report contains statements concerning, among other things, MTG’s financial condition and results of operations that are forward-looking in nature. Such statements are not historical facts but, rather, represent MTG’s future expectations. MTG believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions; however, forward-looking statements involve inherent risks and uncertainties, and a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement. Such important factors include but may not be limited to MTG’s market position; growth in the gaming industry; and the effects of competition and other economic, business, competitive and/or regulatory factors affecting the business of MTG, its group companies and the gaming industry in general. Forward-looking statements apply only as of the date they were made, and, other than as required by applicable law, MTG undertakes no obligation to update any of them in the light of new information or future events.

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