Ten Square Games Stock

Good morning or good afternoon to our earnings call for the second quarter of 2026. My name is Andrzej Ilczuk, and with me is Magdalena Jurewicz, our CFO; and Janusz Dziemidowicz, our CTO; and Nina Grabos, who is our Investor Relations Officer. Let's move on to our performance in the second quarter where we consistently implemented our strategy which is based on 3 pillars. So, stabilizing the core portfolio, strengthening our growth titles and thirdly, building new product lines. By way of introduction, we have seen an improvement in our performance, so we can improve -- we can increase our marketing spend. In Trophy Hunter and Wings of Heroes, we have improved metrics, and we launched our Medal Hunter, which we are very pleased of. Before we discuss all those games individually, let us give you some background information about how we do marketing.

Right. Before we move on to the business results, we have those 2 slides because we believe that it makes sense to explain how marketing works with free-to-play because this will help you draw more informed conclusions. To grow, you need to invest. In mobile gaming, we mostly invest in marketing. Marketing in P&L approach is divided into periods. So the long bar here is the zero period and payback is distributed over consecutive periods. First, we have the first bookings from the players acquired in a given period. So first, we break even over a couple of periods. And what happens after the breakeven is our pure profit, our return on investment. In TSG, we want to publish profitable games. We want to make money on our marketing spend. So -- this is also the idea right now as we publish Trophy Hunter and after launching Medal Hunter. So we pay here and now, and we expect earnings in the future. This is perfectly normal, and it looks like this everywhere. It's not something endemic to us. So the cohorts we acquire now pay back over a longer period of time.

So it's important for us to have good long-term performance and player retention. If players keep coming back, if they enjoy the game, then the bookings are recurrent and they continue for longer. So this is the payback from a single cohort over time. And this slide is pretty much the same, but from the bookings perspective. So where the bookings come from. We have bookings in month X or period X. It's not only bookings from the players we acquired in that period. That's the bookings accumulated from many different cohorts, especially when we have a new title such as Trophy Hunter, Medal Hunter. In the beginning, we have one cohort, then we add another one and next and so on and so forth. So in our growth titles where we do not have a long history, it's obvious that we need to wait until the cohorts accumulate to generate more bookings. And then in later periods, as you can see with these colors, Well, the result -- the final result is the revenues from many cohorts, the older ones and the new ones.

So please take this perspective when you look at our marketing spend. And quite importantly, we look at marketing from the perspective of efficiency of each separate cohort. We don't look at each period separately. We just want to make sure that each money -- each dollar we spend on marketing brings money over time.

Now let me move on to discuss our performance. Let's start with our core portfolio. So, what good news is the improvement in Fishing Clash after we have improved our parameters recently over the last couple of months, we have been spending more and more on marketing. And our benchmarks remain the same. We haven't changed anything. So it's pure product improvement here. In Hunting Clash, we have focused on improving the technical layer, which is very important for games that have a lot of organic traffic and Apple and Google stores are looking at this quite carefully, and we expect the first results in 2 or 3 months.

So things take time, the algorithms take some time before they pick up the performance improvement. Both games still require new updates, new features. They have to stay fresh because as Magda explained, we want to make sure that those players who started with us 9 years ago in Fishing Clash, well, some of them still keep playing. And this is why we keep making those efforts. Now Real Flight Simulator, a very stable subscription-based game. In the second quarter, the revenues have been slightly lower, mostly because we have a new feature in a competitive game and some players hop on and off between the 2 games. Right now, obviously, we are working on yet another large major feature after we launch it. We hope to regain some of those hopping players. And hopefully, they will stay with us. Last but not least, quite importantly, with Real Flight Simulator, we keep increasing the size of the cake. Our game piece by piece takes over this segment of players, and we want to accelerate the whole process with our new features.

With Real Combat Simulator, that's obviously a new game launched in 2025. Right now, we're working on a major update that will address all those issues that need improvement, and we'll see if that update will allow us to expand to the entire segment. Will it be as big as Real Flight Simulator or perhaps this will be just an update to Real Flight Simulator and Real Combat Simulator will become a part of RFS. This is still a question. We are working on that update and then 1 or 2 months after it's launched, we will know more. Now Wings of Heroes, as you probably recall from the previous conference, we have a lot of expectations regarding this game, and we want to improve -- we want to repeat the leap we did in '24 and '25. If you look at the bookings, after the global launch, the bookings stabilized at PLN 2 million per quarter. But even back then, not even for a while, we considered this to be the ceiling. We knew that we can do more. And that's why we combined the worlds. So RORTOS specialists in simulators and our team specialists in product development. And after a few years, we can see revenues that are much higher.

So when we reach a level that is not a ceiling, we take decisions that help us grow. In the third quarter, we focused strongly on searching the future for Wings of Heroes. We did lots of A/B tests, lots of experiments. And we have the idea for a plan using which we want to break through the ceiling. Our product team is working on the last details -- and we hope that the plan will be completed in a few months. And we will know whether this is a growth title or a sustainment title. I believe that Wings of Heroes still have a story to tell. Now let's move on to Trophy Hunter. Here, our goal remains the same. We want to improve lifetime values in the game. We want to build monetization. So nothing changes here. This is what our team is still focusing on. And in the second quarter, our marketing expenditure exceeded -- our revenues exceeded marketing expenditure for the first time. We had some production problems with one of the features. It will be somewhat delayed.

We are not very happy about this. I'm not happy about this personally, but things like this happen. We have to be more attentive to make sure that such things do not happen or happen hardly ever. But the direction stays the same. We build monetization. We will keep adding more layers of monetization, and we will improve our product. In July, bookings reached PLN 5.1 million. I'm mentioning this because there's one interesting thing here. For the first time ever in July, we worked a little bit more with LiveOps. So this is the moment when those LiveOps become important. We have more and more advanced players, and this is bringing new results. Now the whole second quarter shows very significant progress in implementing our product line-based strategy. As a group, we are committed to growth. We want to build on a more repeatable development model. With approach like this, we want to test new concepts quicker, test new games quicker, mitigate risk and keep the cost of game production under control.

Why is cost so important? Well, currently, we have games that have huge production and marketing budgets, but they are unsuccessful. This is why our approach is completely different. We publish games quickly. We test them quickly. So development itself up to the point of optimal readiness takes a little bit of time, but the game is already on the market, but this takes a lot of risk off our shoulders. So as we add more and more games, we strengthen our portfolio. We add more sources of revenues. Now our first product line is a shooter line. We have 2 games here. We have Trophy Hunter and Medal Hunter. And why is it important to have 2 or more products in 1 product line. Firstly, we can move features between the games, and it's already happening. So what works with Medal Hunter can work in Trophy Hunter and vice versa. And this has a lot of advantages, shortened development, less risk, same conclusions from A/B tests. We can learn things from both games as far as features or changes are concerned.

Fishing Trip potentially -- that's the start of another product line. The game is at an early stage, but our KPIs are growing even before we hit the soft launch. All right. So let's say a few words about Medal Hunter because I expect that this is an interesting topic right now. So it premiered on 30th of July, and this is not going to change. This is set in stone. It was developed over the course of 12 months. So it's half the time compared to Trophy Hunter. And the cost of production was a bit less than PLN 2 million. So fast development, low costs. And this -- it's a very good info. And the development time and the low cost was possible to reach despite the fact that this game is far more complex than Trophy Hunter. And once you see how many vehicles we are shooting at, so ships, motorbikes, armored vehicles, so it's very complex as well as the range of weapons that we are using as well. So sniper rifles and so on.

So, we can talk about the complexity of the game. And this is the thing that makes the development period far longer. And despite that fact, we managed to make it even shorter. And it's also important to reach outside of our comfort zone. So we are reaching to a completely new segment, a significant segment with high -- greater competition, but greater potential as well. And what we can see after the first 14 days of the marketing teamwork is that we have twice the number of downloads compared to Trophy Hunter within that same time period. What is also very interesting is that this game propagated into many different markets. So we see what we expected to see. Hunting is mostly U.S. No other market is even close to that. So owning a weapon, shooting in there, is far more popular in there. For Medal Hunter, we see interest from more exotic locations. We have presence in South Korea, a very important market. But we -- the market that we didn't break through in with, for example, Trophy Hunter. So also we have far greater coverage.

So the rankings in shops are greater as well, only after 2 weeks. So this is a very important information because it shows us that this segment is very significant. It's big. I cannot say a lot about marketing right now because right now, we are in the period of observing the algorithms. They need to learn of what type of players we need. And after the end of the last week and the beginning of this one, we are starting with optimization of marketing. And we can add more. But for now, the marketing budget, so paid traffic costs more compared to Trophy Hunter for the respective period because during the period of soft launch, we saw that this player's life cycle is similar. And we can say that it's not identical, but it's similar to Trophy Hunter.

So we know how to act, how to behave. And the test is yet to come. It's similar to the case of Trophy Hunter. Medal Hunter also has to add monetization. It's going to be simpler because we have 2 games that can exchange the features between themselves. Going to Fishing Trip, it's potentially the start of our second line of products. It's first and foremost, the expansion of our fishing segment. So gradually, we are adding new territories, new fisheries, and we observe whether the players like it or not. So we are observing the engagement KPI because this is the most relevant to us. Why? Because if we start touching the monetization right now, the engagement will disappear. And this is something natural for the cycle of the game. Right now, we are focusing on engagement. And what I'm happy about right now is that every single update right now, every modification that we are implementing is improving the metrics.

And this is a good prognostic. What it means? It means that we understand that segment very well. We understand the player. So that's why we are seeing the improvement. Right now, the KPIs are matching, and we are approaching the soft launch. Now a couple of words about the development funnel. Based on the Fishing Trip, we are on the stage of market testing. So right now, we are focusing on engagement. We -- those are the metrics that we pay attention to. The second thing is paying attention to the updates, how they -- what's the -- how they affect the perception of the game. And we need to observe and we need to wonder what's the next thing to do. But everything that we see right now is very optimistic. So the soft launch is not threatened in any way. But from the prior experience, we are cautious as well.

Before we continue, a couple of words from Janusz on the D2C channels.

So, when it comes to D2C, so direct-to-consumer platform, this is the cost initiative that allows us to optimize the interest that we have to pay, and it's composed of 2 elements right now. So this is the shop. So the website. Apart from the game that allows the players to purchase items, the shop is present in Fishing Clash and Hunting Clash. And the second part of that platform is the alternative payment methods or booking methods. And the decision of the United States courts allowed us to use other options of payments directly in apps. And consequently, we have been implementing those in all of our titles. So it's in Fishing Clash, Trophy Hunter, Wings of Heroes, Hunting Clash as well.

And in Medal Hunter, this is the first game that at launch has the elements of the D2C platform in it. So that's how we reached the 24% of the revenue. So that's 33% share of Fishing Clash, 26% of Hunting Clash. So Shop and the alternative payment methods for Trophy Hunter, it's 11%, for Wings of Heroes, it's 21%. Wings of Heroes has only alternative methods of payments active in the U.S., and that gives 21% going to D2C. So that's a very good result.

When it comes to those numbers, we have to admit that we have a slight problem. So this is our marketing that is active right now. So the new players are less eager to use the alternative methods. The older the game is, the easier it is for the players. And this is something that we observe in either other entities on the market. And the share of D2C is changing in those, but it's most frequent for the games that have no marketing. So it's very important that this very active marketing is not making that easier, but we will be working on that, and it's completely natural to preparing that for Trophy Hunter, Wings of Heroes and other titles as well.

When it comes to legislation, in the U.S., we can use those alternative payment methods. And those decisions -- legal decisions from the U.S. are confirming that. Last week, we received an information about an amendment when it comes to Apple in European Union. So for us, nothing changes at this very moment. So we are expecting that sooner or later, those provisions will be -- those interests will be decreased, but this is probably about the situation on the market. And right now, we are just using the legislative provisions that are active within the European Union.

And right now, we can continue to the financial results summary when it comes to bookings, so revenue, what we want and what is successful is to be an increasing company. We want the bookings to increase, and we want to be perceived as a rising company. So the increase of 11.5% year-on-year compared to the previous year. So in 2025, there was no Trophy Hunter in that period. So mainly the new titles are responsible for that growth and sustain or maintenance of the existing titles as well. So this is what is happening right now. So this strategy brings results in numbers as well. A comment on the Q2 as well. You can see that this is sort of like fresh scent of spring. So after long winter months, people are always more eager to go outside, but this is just a temporary decrease in interest in games, and they return. And in Q2, we have less expenditure as compared to the first more complex quarter related to Trophy Hunter as well. So less market expenditure. So this is the slide sort of like strip of new cohorts is smaller as well. So it decreases the bookings level as well.

But in the long run, we are the rising increasing company, and this is how we want to be perceived. When it comes to the results, we present the marketing expenditure and expenditure because it was marketing that was the biggest lever when it comes to the intensification that was happening in Q1 of 2026. And automatically, our EBITDA was lower as compared to the previous periods. Q2 adjusted EBITDA was higher, thanks to lower marketing expenses. But as we progress, those are significant marketing expenses. And as we compare the matching periods from 2025 to 2026, those are double the expenses. So the investments in marketing are investments in development of our products and development of the whole company group.

And when it comes to free cash or cash flows, we are scaling a lot. So even if we're investing, we are generating free cash flow quarter-to-quarter, year-on-year. So operational was -- cash flow was PLN 20 million. We paid out the dividends as well, so PLN 65 million (sic) [ 63.7 million ] and the latest earnout as well. So that decreased the cash flow. And yet at the end of the half of the year, it was at the level of PLN 73.1 million. So it's a safe level. It allows us to keep investing in new products as well. So we feel safe because we know that we have enough assets, resources. And what we want to highlight as well so that you can perceive our business in that way, the investment in new products is low cost. Of course, you can interpret PLN 3 million in different ways.

But considering what is happening on the market, so, for example, the other titles from free-to-play segment -- so, the first one, Trophy Hunter, just above PLN 3 million. The next one, Medal Hunter, so it's PLN 1.7 million and Fishing Trip, PLN 0.6 million. So, this number is expected to be bigger, but it's still PLN 600,000 [slot there]. And if we look at the balance sheet when it comes to the assets, so it's 1.5%. So we want to be a light company. as understood, we want to try to seek for new prototypes to act in an agile fashion because maybe we will discover some new great product line, but this is not something that puts a big strain on our business in the long run. So, of course, the amortization is decreasing as well and consider to the Trophy Hunter -- so this lightness and the financial results translate into the numbers looking as they are right now. So we are in a very comfort situation right now.

And some comments from me. We've had a lot of updates today. More updates are coming soon. In early October, we will publish our sales update for the third quarter. And on the 9th of November, you can expect our financial report followed by an earnings call the next day, and the Board will surely tell you more about our achievements and progress with our strategy. We will also be present at investors conferences. The first one will be the back-to-school organized by Bank Ochrony Srodowiska on the 3rd of September, then Trigon TMT & Gaming Conference, the 8th of October. Both events are available online, join us, talk to us. Also, today, we've spoken a lot about our new strategy and our new game development model.

These are exactly the topics we have addressed previously in our financial reports and in presentations and at the Investors Day. A presentation that shows our new game development model split into different stages is available on our corporate website in the Presentations tab for those of you who would like to find out more. And now the last word, last comments from our CEO.

Right. So we have 4 pieces of good news. Fishing Clash has improved its KPIs significantly. As a result, over the last couple of months, we have been spending more money on marketing while maintaining the same benchmarks. And please remember that Fishing Clash is nearly 10-year old. Also Trophy Hunter parameters are improving. You can see this when you look at bookings per player improved nearly threefold. We keep working hard to increase this even further. We have launched Medal Hunter and our product line model is starting to work in practice. We have Trophy Hunter, Medal Hunter, 2 games that can inform each other. Development becomes quicker, costs become lower, and we gain competitive advantage. We have 2 teams that can share insights. This is very, very important. We also have improved our Fishing Trip KPIs. The game is approaching its soft launch stage.

As you can see, interesting times are ahead. We will keep increasing our portfolio. We will keep developing our growth titles, and we will be building new product lines. And we will keep you up to date when it comes to the progress in those areas. So thank you very much for your attention. Nina, I think we can move on to our Q&A.

Right. We have the first question. The question is about marketing. The currently expected return on marketing, is it the same as it was a few years back? Or perhaps have you reduced your expectations because the market is more difficult?

Let me put it this way. We take a shorter perspective in mind. That's all I can say.

Okay. That was very succinct. Now a question about Trophy Hunter, a series of questions about Trophy Hunter. And here comes the first one, new monetization models in the third quarter. In the beginning, will it be limited tests?

Always, each feature goes through A/B tests, usually one, but in 30% or 40% of cases, we have to rerun the A/B test if we have some concerns after the first test. Sometimes it's just a question of balance, and we have to rerun the A/B test.

What marketing expenditure in Trophy Hunter is planned in the quarters to come? Will you still have an aggressive campaign? Or will you gradually reduce the spendings as you did in the second quarter?

Well, let me repeat, we do not have a budget -- a marketing budget. We have parameters that we follow, and each campaign has to stick to those parameters. If the campaign allows us to acquire 1,000 players, then that's what we do. If it's 1,500 players, that's exactly what we do. If it's 7,000, then 7,000, if 300 then 300. So sometimes, you can't compare month-over-month for many different reasons. It's a large market, but there are also large players, meaning large publishers. If we have a competitive game being launched in a given period, then we can't acquire that many players. Also, it's seasonal if the physical fishing season begins, then we have fewer virtual fishing enthusiasts. So we don't have a budget. It's always a question of what we can do. So we don't want to say $1 million or $5 million upfront and then try and follow that goal. We just want to be practical and reasonable about our return levels and return times.

What's your opinion about the effect of new monetization functions on Trophy Hunter performance improvement? Is it -- is the current improvement a result of those changes or greater spending on marketing?

Well, it's both. Magdalena showed you the slide with cohorts as they accumulate month-over-month. In July, we managed to repeat the performance from the first month. In Trophy Hunter, the best days are usually those when we have new locations, the premiere of new locations. But in July, we had major spikes through our LiveOps operations. So this shows us that the game is increasingly mature and the players are at a level where we can start monetizing. So it's like a system of communicating vessels.

And a question that actually was answered during the presentation, how many of the monetization systems planned have been already implemented and how many will still be implemented?

We tested the first system, but I would say that everything is still ahead of us. 80% or 90% of systems is still coming. But as for now, this is, kind of, expert's view. It does happen that players actually surprise us. But yes, I would say that it's still all ahead of us.

In August, is Trophy Hunter still improving its performance? And what's marketing scaling right now? And is there still space to increase marketing expenditure?

Well, you have to be patient about this.

MAU in Trophy Hunter is still going down despite greater marketing expenditure in the first quarter. Does it worry you?

No, not really because the tail is still building well. The players who are more involved, they've been with us for more than a year. They stay with us and new players keep coming. So Trophy Hunter as a rule was never supposed to be a game that is mostly based on MAU, pretty much like in Fishing Clash. It's never been a game that would attract millions of players each day or tens of millions of players each month. It's always been a game that as a rule, build its tail well and each cohort added a little bit to our performance. And this game is pretty much the same. As I explained before, our strategy is to launch our products real quick. As a rule, they are not as ready as they could be after 2 or 3 years of development. So in principle, we keep improving them as players play. And you can see that improvement month after month, quarter after quarter.

But all of this, unfortunately, takes a little bit of time. So MAU itself is not our KPI that's a KPI for Brawl Stars or Clash of Clans. So mass market games. let's see what it's going to be like with Medal Hunter. Perhaps that's more of a mass game. But still, that game also repeats our Trophy Hunter monetization model. So we will be looking at other KPIs.

And now we have a long list of questions about Medal Hunter, the newest game from Ten Square Games. Lots of marketing questions. Perhaps I can cluster them into one. At this moment, the investments in Medal Hunter, are they greater or lower than investments in Trophy Hunter? And what's the plan? Does the company plan to spend more or less than it did for Trophy Hunter?

We spent more than we did in the beginning of Trophy Hunter. Firstly, we already have proof of concept. We know how Trophy Hunter behaves. We know how Medal Hunter behaved in the soft launch stage. So we are more relaxed about performance. And also here, the segment is larger, and we have a worldwide campaign. This is -- this means the world with the exception of U.S. And we can see a lot of traffic here. So that's why we spend more than we did for Trophy Hunter in its initial stage.

And how do you compare Medal Hunter to your key KPIs and monetization when compared to Trophy Hunter at the similar early stage?

Well, the data is very, very early. Fresh retention looks a bit more -- a bit better. but we have a smaller share of U.S. players. So conversions are somewhat weaker, but it's hard to say after such a short period. We need 2 or 3 months of data to give you more informed conclusions. So the first conversion improvements were started last week. And after the release, we need another 2 or 3 weeks to monitor the situation to have more data because we don't want to change things too early. That's why I am very conservative about these comments. But the differences are still very, very small. It's nothing that could be a concern.

And after a couple of weeks after the premiere, is there anything that surprised you positively or negatively?

Well, the whole Epic operation that's going on in Medal Hunter right now. This seems to be the way to go. We have a game at a very early stage, a few players that have progressed into the game. And still, we have clearly better monetization. But still, the scale is very low. The number of players is moderate. So that was a nice surprise. Another nice surprise was the reception of our marketing efforts. We try to add current conflicts, previous historical conflicts and perhaps future conflicts into the game and players are very enthusiastic about this. Guys, my age, somewhat older, somewhat younger, they are interested in history. They take interest in what's going on in the world. They want to be part of it. So yes, it works well with our marketing, and we will continue this. But if you want to know more, you have to wait to the next conference.

One of the potential risks for Medal Hunter is relatively low CPI. Does it really limit the scaling possibilities of marketing expenditure? Or is it possible, thanks to the results that are happening right now?

Right now, the expenditure is stable. So we've reached a certain point. And right now, we are not planning to -- any increases. So the results are stable, satisfying. But right now, we are approaching the most interesting stage of the marketing work. So in the next 2 to 3 months, we'll be searching for -- let me give you an example. One video can work well in South Korea and work bad in the U.S. And this is the moment where we have to observe and see what is encouraging for the players and what is not. And through the course of the next few months, we'll be adjusting those needs. So it can turn out that we need twice the creative work. So the marketing will have full hands of work. But at this stage, it's very difficult to say. We don't have the sufficient data to tell.

Do you observe any risk of migration of players from Trophy Hunter to Medal Hunter? Or is it a chance for the company to have players active in 2 titles? Is there any trend in here?

We don't see any trend. It's a small portion. So if a player is migrating from Hunting Clash to Fishing Clash or some other -- between some other titles, it's okay. We just want to keep the -- retain the players. So if the player were to go from Trophy Hunter and to go to Brawl Stars for some reason, we want that player to pick up a different title of ours. It's still a good info because the player stays with us.

Because we are talking about Trophy Hunter and Medal Hunter, we can see that some shareholders are players as well. And we can see some remarks about the mechanics that is used in 2 titles, of clans or clubs. Is it possible to change the hour of ending the race not to be 3:00 a.m. So it could start at 2:00 p.m., for example, and it could because ending the race in the middle of the night is not fair because we will never be able to compete with players from U.S. and that's why many players are backing away from the game. Can we address that somehow?

So we'll address that topic with the product team, and we'll see if there's anything we can do.

But speaking about the project that is at the stage of soft launch, so Fishing Trip, how do you evaluate the potential of that project as compared to the other titles? And what about the KPIs?

So as I stated before, we have specific benchmarks. So the title can either fit in those or not, depending on the perspective. What's going to be the potential of that title? It's too early to say. So there's no monetization in there. So it's very difficult to speak about the potential. But there's one interesting thing. It depends on the scale. As you probably can recall, there are different types of campaigns. So the cheapest ones, so the CPI, they usually bring low-quality traffic, but allow you to test the game at the very early stages. And we can see that even the CPI campaigns are behaving very, very well. And for that moment, we don't know what it means for this specific title. But as a principle, because this is the first game of that line, I would say that this approach towards marketing, as in case of Trophy Hunter, it's going to be more cautious. And this is all I can say for now about that title.

Our discussion today was dominated by new projects, but we have a question about Fishing Clash as well. Do you see any space in August to increase this expenditure for Fishing Clash?

As stated before, we cannot comment on that.

The next question, what do you think about the dividend for 2026 at the actual marketing expenditure, the net result is relatively low, and there's going to be expenditure for Medal Hunter as well.

So as the CEO said, we are not thinking about that right now. The idea is to create a long-term business. So let's just wait for the year to conclude. Let's see the numbers. But yes, stating the fact that the marketing is decreasing the long-term low net result is true, but we are not thinking about that in the middle of the year.

But as a principle, we want to be a dividend company. Nothing has changed in that regard. But as Magda stated, it's still too early to tell. When the time comes, we will see the exact numbers. And this will be the time to discuss how the new titles are behaving. But for now, it's still too early because sometimes it's very difficult to state some facts even a month or 2 months ahead. And this is not because we don't want to, but we've seen so many directions, the courses of actions and the changing information that sometimes the things can change from one week to another so.

Thank you for that. And now we have a couple of questions concerning the D2C. So direct sales, there is a request from one of the viewers to summarize the changes in the Android and iOS and how the changes in App Store is changing and getting -- is the -- are those changes a big chance for TSG?

So in short, the most important thing is that the situation in Apple and Google is different, and it depends -- it's country specific. So it's -- the general principles are country dependent, unfortunately. The most important thing that reserve it. So third-party App store. So alternative shops, we are not using that because for Apple, it's available in European Union, but it's extremely unpleasant to use for users. I don't know anybody who would like to use that. I tried to use it and I gave up, and it was implemented by the request of the European Commission because we just had to do it, but there's nobody using that. So right now, it doesn't make any sense. But there are certain payments on the Apple side, which are lower. But after you take into account all the costs, it's going to be 30%.

For Google, it works well in the U.S. It's something new this year. There are certain restrictions as well if something appears a big shop that will be popular. I'm not saying no, but we are trying to limit our enthusiasm. And maybe Epic will be one to provide that. But right now, there's no popular shop in the U.S. So right now, we are using all resources that make sense. And the second aspect, so the operators of those payments, so everything that we are doing in the U.S. is once again country-specific, country dependent. So the U.S. and said that the users have the chance to choose. And this is something that we use. We are not bearing any costs because of that. So we are -- we have that option. When it comes to other countries, for Google, it's not allowed. And for Apple, in theory, it's possible within the EU. But once again, this is restricted.

There are certain things that you have to meet because there are certain pop-up windows that are stating, like, for example, a dear player, you're leaving that environment, please be cautious and careful. So we had to do that, but it's not user-friendly. So just to summarize this, third-party app stores, the enthusiasm is limited. So the change in interest will be continuing as there is one more program called Level Up on the Google part that allows to decrease the interest to 25% for new players, if I can recall. So the new Google accounts that have not installed the game before. And once you meet those requirements, and we are working to meet those requirements to implement that. So the payments will be decreasing, but it's going to be happening slowly. So we cannot provide any time frame because this is something that is postponed by Apple, by Google.

So if something like that is implemented because we are trying to stay up to date with all those solutions and use them.

At a certain stage, there was an info that the platforms will be collecting payments for purchases in external stores. Is this implemented? Yes and no.

Yes. This is something that is planned, but it depends on the options that I was referencing. As a principle, when it comes to our shop, so the external website, if the user access that website individually or by clicking a link from our social media channels, there's going to be no additional fee because there is no need to collect that. And what was announced by 2 platforms is the possibility to advertise the shop within the apps and there are payments in those. So in theory, they are created in a way that it doesn't make sense. And right now, there are certain decisions or judgments in the U.S.A., in which the court stated that -- or the judicial system stated that it's not possible to have it this way. In the U.S., we are using that option in the remaining countries.

In theory, they exist in practice, nobody is using them or it's just not suitable for use. So what's going to be happening in the future? It's very difficult to tell.

Thank you very much for that. What about the user acquisition costs? Do you see any decrease in those costs in Europe after the 1st of July, the restrictions for the Chinese companies.

So once again, even if for a second, there is a small hole or gap. This is something that we can just see for a small period of time, but this is not something that we are observing right now.

Also, the possibility to track the results of the company based on the publicly available data, is it -- does it make sense to evaluate the company's results based on Sensor Tower? So what does -- where does Sensor Tower take their data from? So the basic data.

So the data from Sensor Tower does not come from the company. So those are the estimations of Sensor Tower -- based on the publicly available information. So the rankings from both shops that they are calculating that based on. They have some machine learning models as well that make it possible for the Sensor Tower to show that. But 2 comments when it comes to Sensor Tower, they are rounding up the data to full million, so 2.1 million or 1.9 million.

So pay attention to that. And the second thing is that if you have a look at the 1st September, if you look for the data at Sensor Tower on 1st of September, it's not full. Does it make sense to have a look at that data? Of course, it's an estimation. You can compare different sets of data as well, but it's very difficult for me to tell.

And one more question. I don't think we'll be able to ask all those questions, but the one that I have right now, could you please explain what's the reason of the monetization in new products, but in older ones, the strategy applies as well.

Right, the presence of ads has -- makes a lot of sense because if a player sees the ad, that's a signal for our advertising partner that, okay, let's imagine we bought that player for $1. And then we have $0.10 for one display of the ad. These are not the actual numbers, but it gives you the idea. So that's a signal for Google showing us that we can have return on investment, not only through purchases, bookings in the store, but it's also from advertising. And players initially watch more ads. But later on, they move on to a model where they make a booking every now and then. And in this way, we have our return on investment. So this is why we have ads in our products.

Thank you. We still have individual investor chats ahead of us, and everyone is invited that's today at 2:00 p.m. We will try to take the other questions. Now unfortunately, our earnings call comes to an end.

So yes, thank you very much. Thank you very much for your attention. Hopefully, we have answered all your questions and looking forward to see you next time.

[Interpreted] Good afternoon, ladies and gentlemen. Welcome to a conference summarizing the first quarter and 2026 at Ten Square Games. My name is Andrzej Ilczuk. I'm the CEO. I'm joined by Magdalena Jurewicz, CFO; Janusz Dziemidowicz, CTO. Good afternoon. And as always, Nina Grabos, responsible for relationships with shareholders.

Before we start commenting on the results of the first quarter, allow me to tell you a few words about our priorities for this and the next years. First and foremost, we are planning on growing. As a gaming company, we are planning to grow, develop new games and expand our operation. This means that we improve and develop our existing titles, we are looking for new potential projects with a lot of potential for growth, and we are doing all that based on our new model of development. This new model is very restrictive with very strict benchmarks and high market expectations.

As you've seen in the first quarter, we have done a lot of progress on these works, which has been demonstrated by our market test of two prototypes and the soft launch of Medal Hunter.

Moving forward, allow me to tell you how we wish to implement this strategy. Fishing and Hunting Clash for starters. These are our core games. The games which for the next 10, 15 years are going to generate a lot of profit. These are games that are played by millions of players. They are a window to the world, demonstrating how the player is changing, how the needs of the player are evolving. Without these games, our knowledge and our learning would be much more compromised. It would be very difficult for us to navigate the free-to-play segment.

As for the new titles, the titles are expected to bring growth. This is to start with. The development of these games is based on a very strict model of validation. This system is intended to increase our chances of achieving success. It's supposed to allow us to make quick decisions.

At the core of the system, there are small teams. These teams are very quick in operation. They have very clear benchmarks. A decision on whether we wish to continue developing a particular game rests on this entire system. Whether a game is going to be continued in terms of development is determined by the benchmark. What matters is that we do not get boggled down in development for many years if the game does not demonstrate market potential. These are the biggest things of the free-to-play segment. We are trying to make good quick decisions as fast as we can as soon as obviously to the extent to which it is possible.

As you can see, Trophy Hunter was the first game developed in this system. We hope that Medal Hunter will repeat the story of Trophy Hunter, and we hope that many more games will follow.

Moving on to our core portfolio, which is Fishing and Hunting Clash. I would like to talk about our goals for the first quarter. We intended to stabilize our proceeds, and we achieved that. In the next years, we are planning to do two things. We want to achieve early retention, meaning that we want to improve the early funnel and increase marketing expenditure, and we want to work on monetization and the content developed for the players that we have achieved for these two titles.

What negatively affected the result of this -- of Fishing Clash in this quarter was the existence of two fisheries. Our content cycle, which is five weeks long, means that there can be fewer fisheries in a particular quarter, and this is the situation with Fishing Clash.

What is going to implement our results in the future in a positive way, disrupting what we see in Sensor Tower are advertisements. Right now, we are testing the solution in two games. We hope that in the next month, we'll be able to fully implement them.

As for April, I know you are going to ask about that. First of all, we wish that you do not judge us by only one month, be it perfect or an average month. Usually, a lot of factors impact our performance in such a month as April this year. First of all, the first weeks of better weather make outdoor players spend outside their free time. That's what we've seen with flat fish, Wild Hunt. There is a repetitive pattern in their behavior. So there is nothing to worry about. These players are still with us, but simply, they just choose to spend more time outside. It changes after time, but the first spell of good weather usually causes our players to leave their homes and spend some time outside.

The second thing is marketing. As you can clearly see, we have spent fewer -- less money on marketing. The third thing, which is the most important factor is poor release of a fishery in Fishing Clash. We always consider whether we should launch a fishery in the way we used to do it or maybe there is something we can do better. However, sometimes the intended improvement does not bear the expected result.

Another factor are mistakes or errors in live ops combined with a weak release and mistakes in live ops have accumulated in April. Still, I hope that you can see the pattern, please concentrate on a longer perspective because any given month does not tell you anything. I cannot, after 20 years in business, judge a game after just one month in the sector.

Moving on to Real Flight Simulator. Above all it's a very predictable game. It's a very stable game. At the same time, it's a product that we continue on developing. We introduce more content. We improve its features. We improve its graphics. We have put a lot of effort into this game, which has borne results. We can see that in the first quarter where our competitors have struggled to keep up with us. Real Flight Simulator was ranked first in the segment. We hope it's going to stay there for longer. This would provide us with more motivation to continue our efforts. We hope that the fact that we occupy higher standings in the ranking will bring more players to our game, and we hope that more players are going to subscribe to our game and stay with our titles for longer.

Moving on to Wings of Heroes. There's another great news. We have recorded a -- over 50% of increase year-over-year. It's the third consecutive quarter of growth. These are really great results. The situation is great, and we hope that in the next quarters, we are going to continue on this trend. At the moment, the team is facing extensive work on monetizing this game. We have determined a path we want to go, and we want to see even greater bookings. We also want to increase the potential of monetization of the title, and we want to make sure that its role in the portfolio increases.

Now let's move on to Trophy Hunter. First of all, Trophy Hunter is the fastest-growing title in TSG history. The result is very, very good. The result is great because for the first month since the launch, we have not focused on the monetization of this game. For the last months, we have worked on streamlining the gameplay. Why? If the gameplay is bulletproof, it will allow to build players' engagement for years to come, and that was our goal. As a result, we do have a great title that is prepared for the next leap.

And as I said during the last conference, the first quarter was supposed to fulfill the following task. We wanted to find our path towards monetization, and we were able to find this path earlier. So we began the month of May with a very good direction. We accelerated our works of two months really. And I'm very glad because the team was able to conclude the works faster.

Our goal is very clear. And we know where we want to go with the monetization. And our goal for this year is scaling the revenues from this title. We do have a base of players, and now we need to scale up the monetization.

And now let's move on to our new games. Let's start with Medal Hunter. So the very Medal Hunter is our newest project. This project is being developed within our new development model. It's a very conservative model. It's a mobile shooter PvP, military themed. This title is very important for us. It's important for many reasons. Why? Because it's going to show whether our model is repeatable, whether we should use this model further on. Right now, it seems that it is.

Furthermore, it translates this established gameplay to a new extensive military segment. What is really important in the case of Trophy Hunter is that shooting games, and I'm talking about shooting to animals, these games have very limited monetization and expansion possibilities. With Medal Hunter, this is not so.

Let me talk about Google and Apple platforms in this context. Featuring the very active promotion. Here, we have limited possibilities with hunting games. But with Medal Hunter, where you can shoot anything like not only towards animals, but anything, these possibilities are greater. And the organic traffic is going to be greater as well. Right now, the stage of this game is very, very initial, so to say, but the organic growth is higher compared to Trophy Hunter at the same time since the release. So it's too early to confirm our hopes but we do see some signals, positive signals.

Before we move on to global launch, we need about a month in order to enhance the gameplay. And again, it seems that the gameplay model is the same. But of course, when players start playing the game, we usually start some things that can be improved. And this affects our development model. So our model is 80 to 20. So we do need some time in order to enhance and work on some elements. But after the global launch, we'll need about a month more or less to validate this market potential of this game.

And some more information about the game. If you have not downloaded the game yet, please download it and play it and share your feedback with us. So to summarize, this is a game that is rooted in Trophy Hunter gameplay. It uses the same mechanics, but it translated into the military themed world. This world can have much better promotion opportunities via Apple and Google platforms.

We also focus on the graphic layer and the look -- the appearance of the game is very important. Of course, there's room for improvement and there's about 20% of this element to be improved. Before the global launch, we are going to work on new functionalities. But what is very nice about the game is that we can use Trophy Hunter solutions. What worked in Trophy Hunter, what caused higher retention, what caused higher lifetime value compared to the situation from a couple of months ago can be applied to Medal Hunter faster, so it's more repeatable. We have an ambitious plan, of course, but we base on the mechanics and models that we know very well.

Let's move on. As you have heard and as you have observed, Q1 is a time of very intense work in TSG. And we work not only on our core titles and Trophy Hunter, Medal Hunter, but we also look for new projects that could enhance our portfolio. And it's not only Medal Hunter, it's also Fishing and Hunting sectors. So why do we want to have a new hunting game? After all, we have Wild Hunt, Hunting Clash, Trophy Hunter?

Well, I cannot focus on details, but when we work with development and marketing sectors, sometimes we hear signals that there's a group of players that might be interested in some different solutions. And in both these cases, this is the case basically. So in the next months, one month, two months, we're going to validate these two ideas. We're going to check whether they have any opportunity for commercial success. If so, they are going to move on in the funnel. If not, we are going to address other ideas.

So we do have this idea pipeline. We know what the further steps are. Of course, new prototypes are included in the pipeline. They are being developed. However, they are at a very, very early stage of development, and it's too early to talk about them in detail.

But what we would like to focus on is not wasting time without future, without any possibility of commercial success. This business opportunity cannot be wasted, and we want to spend money very wisely. There are various estimates that show that creating a game in the West cost EUR 4 million. Here, this cost is much lower. Of course, Magda is going to talk about that later on. But we want to have a chance for development and growth as a gaming company. But we want to spend our money wisely, marketing, not really development and something that cannot succeed in the market in the future.

Okay. So this is the part devoted to TSG store. But since today, we are going to talk about expanded initiatives that we call D2C platform, so direct-to-consumer, and I'm going to explain that. So far, I talked mainly about TSG stores. So this is mainly website, digital website where you can buy our games and our goods. So this is for Fishing Clash and Hunting Clash. And the basic limitation of the store was that we were not able to advertise it in our applications. Of course, we could do social media and the players could talk about the store among each other, but we could not do that within the applications. And the aim of the store was to optimize costs. We have lower commissions, of course, when we sell our products compared to Google and Apple platforms.

Last year, new possibilities emerged, possibilities of optimizing the situations. And in the United States, after court decisions in certain cases, an opportunity emerged to directly in the application and to offer lower commissions and to lower payments. And this commission is comparable to the commission offered in our stores. So we use this opportunity, and we introduced what we call alternative payment methods. We have introduced such methods in Fishing Clash and Hunting Clash and other games in which this feature has not been available, which is Trophy Hunter and Wings of Heroes. Possibly in the foreseeable future, this feature is going to be added to Medal Hunter.

Both these approaches, PSG store and D2C are presented by share of these platforms in our group bookings. As you can see, last month, it was 20%. The dip, which you can see lasting from July last year to February this year is obviously the impact of Trophy Hunter. Trophy Hunter premiered in March last year. The launch was very successful. The store was not available there. But in Trophy Hunter, we introduced alternative methods of payments. And as you can see, the share returns to the trend. We are going to develop these platforms. More options are going to be added -- more similar options are going to be added to other games, and we hope this is going to have a positive influence on our financial results.

Ladies and gentlemen, allow me now to comment on the financial part of the presentation. The first slide, as I want to highlight, is the first quarter of 2026. And the numbers are very similar to the fourth quarter of the previous year. So we can see a major investment in marketing. This is predominantly the marketing of new titles, Trophy Hunter and Wings of Heroes, followed by bookings.

As we always try to do, we want to mention once again that spending here and now doesn't mean a profit here and now. This means that we are investing in the medium term. Every money spent, every penny spent now is going to be reflected in the foreseeable future. This means that the profitability of our expenditure is considered in the longer time perspective. We hope that the investment that we made is going to be profitable in the medium to longer perspective.

Moving on to summarizing the figures. It's going to be a very short summary. We have recorded an increase in bookings quarter-to-quarter and year-over-year. This is obviously due to our new titles. Obviously, our marketing initiative is also important. We have a strict control of our other expenditures. There are no major fluctuations, nothing significantly has happened that would reverse the trend. So as you can see, we maintain a cost discipline, and this has translated to a adjusted EBITDA result very similar to the fourth quarter of 2025, amounting to slightly less than PLN 90 million. And we know that the effect of deferred income is sometimes negative and sometimes positive when considered in terms of results.

What hasn't changed is our significant cash position. This is another quarter with a significant cash position. We're closing the quarter with over PLN 137 million in cash. Therefore, we have the funds to pay the dividend, and I'm going to talk about that in a while.

What is slightly new in relation to what we used to demonstrate to you before, we want to show to you two chosen aspects of our balance sheet. First one is the new games. We've always maintained our cost discipline. The fact that we produce new titles and the fact that we want to test them ASAP means that the costs that we capitalize, which are reflected in the balance sheet as capitalized costs are the costs incurred until the soft launch.

Please look at the order of magnitude which accounted PLN 2.7 million, but when the game was launched, it was PLN 2.6 million. So the entire cost of production was PLN 2.6 million. And right now, this cost is deferred, which is why this position is decreasing. Medal Hunter used the experience of Trophy Hunter and until the stage of soft launch of the game cost us slightly above PLN 1 million.

We are not talking about millions of dollars. We are very strict about our budgeting. We have a way of very quickly validating whether a particular title has a chance in the market. When it comes to our new prototypes, they have started to be developed recently, but they have cost us only PLN 400,000 in the first quarter. It would -- it is not the amount of money that would turn our balance sheet on its head. In our opinion, these budgets are very limited.

Another aspect we would like to draw your attention to is a figure from liabilities, which is the earn-out. To remind you what it was, it's some part of the price we paid for shares in RORTOS. This is the amount of money paid to former owners of RORTOS. It was defined as depending on the EBITDA achieved by RORTOS. The final installment of the earn-out is going to be paid for its results in 2025. Naturally, the financial statement has to be accepted. This means that earn-out for 2025 is going to be paid in the second quarter of 2026.

What we would like to underline very clear is that it was always in our balance sheet. When we bought the company in 2021, we demonstrated this liability in our balance sheet. It used to be much higher. Now we are looking at the final installment of the earn-out. However, the earn-out never affected our net profit because the result of RORTOS was added to the financial results of TSG. The final payment of the final installment is not going our financial results increase.

What did happen, however, was our expense. We have to report these payments as an expenditure from our investment activity. The final such expenditure is going to be recorded in the second quarter of 2026.

On the 12th in April, we held a shareholders' meeting that accepted or adopted resolution under which a dividend of PLN 10 per share is going to be paid to all shareholders. The dividend record date falls on the 15th of May, which is this Friday, and the payment of dividend is going to take place on the 22nd of May. If you haven't bought our shares yet, you have a great opportunity to use this opportunity to participate in the profit of the company.

A few updates. When it comes to our financial data, you might expect the average financial results are going to be published early July 2026, whereas our report, financial report for H1 is going to be published on the 24th of August. We also wish to invite you to other conferences and the meetings. The first such meeting taking place on the 19th of May in Warsaw and the others have been listed on the screen. All our individual investors are also invited to meet our company in Karpacz.

A really brief summary of the first quarter. We are taking care of our foundations. We are continuing on developing them. We are supporting the scaling of our new products, including Trophy Hunter, Wings of Heroes. We are implementing our intended growth strategy. Medal Hunter is moving closely to its global launch much faster than we previously assumed. We are going to assume the market potential type quite soon.

In parallel, we are testing other ideas. We are looking for new projects to develop. We are looking for a next project with a huge growth potential that would increase the profitability of the entire group. We have an entire backlog of ideas that we are planning to test -- briefly all we are testing right as we speak.

And with these words, I would like to end the presentation part. Now it's time for Q&A. Nina, the floor is yours.

We have a lot of questions that were asked during the conference. We have an entire block on Trophy Hunter. The first question pertaining to Trophy Hunter is the following. It's about scaling. Marketing spend is increasing, but for four months, revenue has been around PLN 5 million per month. Why isn't it growing?

I already tried to answer this question here and during the last conference. In Trophy Hunter, we do not have monetization. You can buy weapon and bullets there. And we expected that we are going to reach the ceiling very fast because there's nothing to buy in the game.

During the last conference, I said that the first and second quarter served the purpose of finding our monetization path in this game. So new systems or maybe a new approach. And at the very beginning of May, we ended these works. We know where we want to go with monetization of this title.

It's very valuable because each new game after Trophy Hunter would be able to use this experience. And we wanted to be responsible. We wanted to iterate. We wanted to move gradually so that the work is done properly. We didn't want to rush with our decisions because the decision is very serious, and it's very important. We did not want to make it very fast.

That's why if there's nothing to buy in a given game, the revenue is as it is, and we did not want to release a new location in order to artificially increase our revenue. That was not our goal.

And another block of questions pertaining to comments on the results of Trophy Hunter in April. I think I collected them all. So why the dynamics of Trophy Hunter in April is poorer? Is it because of limiting marketing expenditure or something else?

Well, marketing expenditure, marketing spend was lower, significantly lower indeed. The weather I talked about also affects marketing. When we see that suddenly businesses that spend a lot of money on marketing and CPIs are growing, these businesses get better results well compared to worse. We do limit our marketing spend. We did that on purpose because we were working on our monetization path and the number of marketing tests was lower, too. But what we expect is that starting from June, we are going to get back on track.

Please do not focus on the one month only because it doesn't show you anything. Sometimes it's because of the weather. Sometimes it's because of some shift within our company. Sometimes there are poor marketing tests. Sometimes our partners have technical problems.

For example, in one of our partners, that was a fraud issue. So somebody wanted to sell us something that wasn't an entirely good move. So there are different situations. Please focus on trends, not on single month because yes, we can be very happy because of good results in a given month, but we can also be very concerned if the results also are poor. This is not a big picture. That's why we do not focus on single months. We do not look on our competitors on our products through the prism of a single month because it may cause FOMO, and this is the way you should not run your business.

Another question about Trophy Hunter. In the last month, the company did not focus on Trophy Hunter monetization. Why the marketing spend is so high on this title?

Okay. Let me repeat. We have certain marketing benchmarks. We have certain assumptions regarding this cost. And we want to see the results and profits generated by these marketing campaigns. And if we fit these benchmarks, we make this decision because this is the best decision we can make.

And sometimes the marketing spend is going to be higher, sometimes it's going to be lower. The weather is going to be worse. The weather is going to be good. And sometimes we have Christmas, et cetera, other festivities. So you cannot focus on a single month or a two-month period. What is important is that we look at every month through the prism of how fast we get back our marketing spend.

And since the release of Trophy Hunter, each campaign has been perceived in the same way. So in a certain time frame, we want to get our money back. And then we want to enjoy profits of [various campaign]. So we do not want to spend a particular amount of money and then get a particular amount of money from players. No, it's about realistic and wise spending so that we see returns on investment.

So with Trophy Hunter, can we say that it has a high LTV, but -- it's spread over a longer period of time compared to other games?

Well, I don't know whether I can say this. Let me just tell you this. Trophy Hunter has a greater number of payers compared to the remaining games of TSG and lifetime value compared to Fishing Clash, well, it's lower compared to Fishing Clash. So LTV in Fishing Clash is higher. And there is democratization.

Maybe let me put it this way. If you have 100 players in Trophy Hunter, the number of payers will be higher compared to Fishing Clash, but lifetime value in Fishing Clash will be higher compared to Trophy Hunter. That's why we are working on monetization.

When we see the potential from the very beginning, I'm talking about monetization. When we see this potential, and then we see that the players do not spend as much as they could and they do not spend the money because there's nothing to buy because you can't buy like huge numbers of bullets, right, in Trophy Hunter. So when you reach a certain stage in the game, you can enjoy the game play, and we see that the players are very much engaged, but they do not spend money because there's nothing to spend this money on.

Thank you. We have a lot of questions about breakeven related to marketing spend in Trophy Hunter. So understood there is a month in which bookings will be equal or higher than marketing expenditure. So when in 2026, can we expect this breakeven? Is it going to be Q3?

Yes, indeed, it can be Q3, provided that our marketing expenditure is not going to be significantly high. If we streamline the product, if we enhance monetization, it may turn out that the marketing spend is going to be higher. I don't know that yet. But it might happen.

Let me add that I understand your questions. You expect breakeven, yes, indeed, but we keep repeating that we assess the campaign in the long term. Our goal is not to achieve breakeven this year. It's not like a sign of success. Because we spend our money, it means that this is profitable. Please do not treat it like, okay, Q3 is a fixed point for breakeven. No. Maybe this breakeven is going to happen later on depending on our marketing spend. So it's a good decision long term.

Has the company seen an improvement in the efficiency of marketing expenditure in Trophy Hunter? Understood as the cost of acquiring a player versus LTV in [indiscernible] of the first quarter to the previous quarter. Does these caving's still overtake monetization?

Yes, it is. However, in the next years of its life cycle, we are going to see an increase in the cost of player acquisition. This is what we have seen in every game. I think that's all I can offer as an answer to the question.

Concerning Trophy Hunter, there is another question. What is more or less a quarterly cost of supporting development of Trophy Hunter that is directly reflected in the balance sheet apart from deferred of intangible and legal assets and the marketing expenditure?

Answering your question, the only costs that haven't been reported are the cost of the team. But yes, there are payments bookings from the plans or advertisement. Advertisements are not commissioned, where there's the marketing is, there is an operational result. And there are twofold cost of the team, which is the first part of deferred cost, the first phase of soft launch is deferred, then the cost of the team. At the moment, Trophy Hunter is a team of 20 people. You might assume how much it cost us to support such team in a month. And this would be the result of the product.

There is a more general question concerning marketing as well. What is the reasonable amount of time that we need to wait for a return on an investment in marketing. Are the benchmarks really long? And have they been extended since the pandemic?

Well, it depends on who you are. There are companies that even consider a return in the seven years perspective. Our perspective is not that long. If we spend dollar now, this means that you will regain the dollar back after seven years. And not to mention benefiting on that dollar, we are looking at a much shorter yield time. We cannot tell you how short it is because it's our secret of a company. It all depends on who you talk to, what segment you analyze. There are segments that have a really hard time. There are segments where these periods are much shorter, but we cannot tell you more about that.

I think that as you - presentation, I think this question was answered, but I think it requires a comment. Could you please briefly summarize what is the reason for a worse result of these games in April compared to the first months of the year?

Once again, outdoor games suffer from good weather. People spend more time out of doors. They go fishing, they go camping instead of playing mobile games. That's the first thing. The second thing is that companies who have been dormant outside of the season haven't spent money on acquiring users. And now they start fighting for the attention of the users, be it games or stores that buy advertisements.

And we don't want to compete with somebody who offers 10x more than we used to pay for a particular user because it would be silly on our part. This is why we choose to weather the storm and simply wait for the situation to stabilize, which is exactly when this store loses its money who simply has no more money to spend.

When it comes to Fishing Clash, our new fisheries have not been particularly successful. We try different things. Sometimes these things do not work out. But again, we have to try new things. We need to test new patterns. We need to offer novelty to our players, and we need to learn from our experience. We need to -- we know that we need to change our approach to launching new fisheries.

Another thing are mistakes. Some mistakes in that period has overlapped. There were not very successful fisheries in Fishing Clash. We have made some mistakes in terms of live ops as well in Fishing Clash too. And these all were layered on top of one another. I hope this offers you some kind of an explanation. But please once again, do not look at one month only. Please try to find a pattern because the pattern that you see will allow you to better understand our strategy and what we are doing.

There are a few questions concerning new projects as well as prototypes developed by the group. One of dominating question concerns a common on sharing your first conclusions about the parameters of fishing trip and hunter's lodge. What do they look like against for the hunter?

Well, fishing is doing better than hunting. That's what I can say it started. We see the engagement of users in fishing. We have observed certain problems in hunting. As of now, fishing seems to be doing better. It offers more optimism. However, it's far too early to say whether this project is going to reach the next stage of development.

There is also a question concerning Medal Hunter. There are a few questions actually. And the main message from the question is, what is the reason for such an acceleration of global launch in Medal Hunter?

We felt that it was going to be the end of the year. Well, we have decreased the scope of the game. This means that we have managed to launch the game faster than planned. We always have more ideas about improving a particular game in the state of development. We decided we wanted to pack too much in that particular game. We wanted the game to be comparable to Trophy Hunter. This would allow us to benchmark the game against the tested model.

Over time, we are planning to add a sprinkle or the icing on the cake. This is why we decided to accelerate our efforts. This small team is doing a terrific job. They are very effective. We have managed to tweak something here, something there. We have streamlined the processes, which is why the game is going to launch sooner than planned.

There is a particular way in which we approach the game. Marketing expenses, I suppose you are going to ask about that are so far unknown. We're going to launch the product. We're going to observe its retention KPI. Once we have decided everything looks well, we are going to start to scale it. Whether we are going to scale it immediately, we simply have no way of knowing. It all depends on the content. If the content allows that we are going to scale it. If we decide we are missing a few locations, the scaling is going to be longer. We need to observe the behavior of the users very closely.

What matters is that we do not make assumptions. Assumptions usually lead you astray. It's more like going with the flow and watching the landscape around you and seeing what works and what doesn't. It's about adaptation. We want to adjust to the current situation. I hope this answers your question.

That was the second question in essence, what kind of expenditure are we supposed to expect in relation to the soft launch of Medal Hunter? There are some varieties of this question. Is the market expenditure on Medal Hunter going to be additive in relation to the current budget? Or are you planning to reallocate the budget on other titles?

No, there is no need for any relocation. Again, the situation is very good. We are highly profitable. Magda has some money put aside for rainy weather. If worse comes to worst, then we need to spend much more than we used to spend, we have some money waiting for that purpose. I think we are only three conversations away from getting extra funding. We wouldn't like to develop one title at the expense of another, be it Medal Hunter or Trophy Hunter.

If the marketing benchmarks are okay and if they suggest that we should spend, we are going to spend and...

We have a question about the content of Medal Hunter. Trophy Hunter had nine arenas during the launch. Medal Hunter had five. Are they going to be more during the global launch or five is enough?

So our target is one new location every four weeks. Of course, we are going to increase the pace of release. But for now, this is this. We missed one or two people with the proper experience in the setting. When we have these people, we will be able to accelerate the works. So three, four weeks, I think. So a new location every three, four weeks.

We don't know what the situation is going to be at the moment of the global launch because we do not have a lot of content. It's too early to assess and to say whether we need more. But indeed, the content is limited.

Okay. We have a number of questions about our flagship titles. What should we expect in the months to come with regard to these titles? Are you going to increase the marketing spend on these titles?

Again, if the KPIs, marketing KPIs show that the product has better results and we can send more, then we will. If the marketing results are not going to show that, we won't. It all depends on the product performance. That's why we work on early performance, early retention. The team has very interesting ideas on how to improve the first seven days because that's the main focus. And we are going to see whether these ideas are going to bring benefits and if we are going to be able to increase the marketing spend.

And now we have a question about Hunting Clash. The performance showed a decline in MAU in Hunting Clash. How do you want to stop this downward MAU trend in the main titles?

Well, we are not worried about this decrease. Of course, when we look at the game in which the number of players is dropping, we focus on retaining the most important players, but people come and go. But we do have a group of very loyal players who love Hunting Clash, and we want to give them new reasons to play the game. But look at Wild Hunt or Let's Fish. There are players there who will not ever, ever, ever change the game. And this is not because our competitors or us did not try. And that's how we approach Wild Hunt, Hunting Clash, Fishing Clash or Trophy Hunter. There will be players who will never ever play another game because this is their place in the world.

And by releasing new content, streamlining, improving features, adding new features, we want to retain them. We want to give them a reason to stay here with us for another 5, 10, 15 years.

I think that we talked about this question during the presentation, but let's go back to this issue so that there's no doubt that is the earn-out effect on the company's results in Q2 net.

Net profit, no. There's no -- not going to be any effect. This is just us paying the liability and a drop in our cash position. No P&L is not going to be -- our net profit is not going to be affected.

Okay. How do you understand return on investment? How do you understand a long-term horizon? And when will we see tangible results from the new games?

Okay. So you keep asking us about the return on our marketing spend and this time frame. Well, we can't say I'm talking about long term, but not strictly financially. Trophy Hunter from the release till now has lived for nine months, so to say. And I wouldn't say that there are no effects at all. So we did have a spend -- marketing spend some time ago. We do have some marketing spend now. We see some return on this investment, but it takes time.

So how much time do we need? Well, I can assure you that our marketing models that are based on other titles and based on what we can see in this title show that everything goes well. There are no deviations that are worrying. It's not a situation in which you say, Oh my God, this is the end of the world. We cannot see any returns.

No. Our marketing spend is profitable, but we just need more time. Even in like super great niches, they do not return in one or two months. Right, Andrzej?

Of course. So it's a pivot from the market. I worked on free-to-play at the very beginning and Facebook was at the stage of life, and there were campaigns that were returned in one month, two months. But now we are talking about months or even seven years. There are companies in this market that do have the seven -year period of return of investment, and that's what it is. That's what the market is like.

Okay. So return on investment. We have certain questions about Trophy Hunter investment spend. So how can you think that the investment in Trophy Hunter will pay off in full monetization is not yet in place? Is the expected return based on the assumption of significantly improved monetization in the future or on the current monetization systems?

No, we rely on KPIs and the current KPIs show to us that the return is going to come. When you look at every monthly cohort, so the number of players acquired in a given month and how much we spend. And when you look at the behavior of these players compared to the model well, we see that they outperform the model. So they behave in a better way. And this gives us hope or this makes us convinced that we will see these returns on investment.

And the same with Fishing Clash, Hunting Clash, Wings of Heroes, every game that we have, every game that has this marketing. So based on KPIs, we make the decision whether the campaign should be scaled or not. If we do not have the required performance, then we cut the budget. Maybe we spend the money non-optimally.

But in Trophy Hunter, everything looks well. The situation is healthy. But of course, there will be situations in which, for example, one of our partners is going to engage in a fraud. We luckily see these situations very fast. We are very vigilant, and we see that even in single cases. We know how to do the marketing. So please do not be worried. I would not be worried about the marketing spend. So now everything is okay.

Magda and I, we were a bit paranoid about marketing at some point. We checked everything, every smallest details. We looked at the situation from various perspectives, even from the perspectives that we do not usually adopt. And we were worried that maybe we did not see something. But after checking everything inside out four times and even more, we did not find anything that would show that we spend our money non-optimally.

Okay. Do you plan to be a dividend-based company? Or do you focus on a buyback option?

Okay. So we did not pay a dividend for 2025, and you're asking us for the future about the future. Buyback or dividend? Well, we are going to talk about that in a year. We are not planning to change our strategy. Please let us pay the dividend next week for the last year. And these questions are going to be addressed in the future.

Okay. Three final questions are ahead of us, one including product. Is the development of the Real Flight Simulator going according to plan? Or have you hit any road blocks?

No, we haven't hit any roadblocks. Everything is going according to plan. We are releasing content regularly. We see that in places where our competitors are losing breath, Real Flight Simulator is not affected by any problems. We don't know which way the game is going to go. We are still looking for the best possible scenario. At the moment, if I were to tell you where we are, I would say -- I'm inclined on saying that we want Real Flight Simulator to be a mode of Real Flight Simulator and attack a slightly larger market this. But this might change a week or two from now. However, this is an idea we are playing with.

There was one more question about your assessment of the gaming market. Do you feel that the market is supporting your activity? Or is it still a difficult market? And are all the problems reflected in the -- the products are a result of this market?

Well, I don't like to complain about something that lies beyond our control. Nothing sickens me more than talking about the weather. Whenever our team comes to us and says we did everything well, but the rest is simply depending on the seasonality. Even if it's true, it is something we can't control and nagging about problem. We don't like to talk about it. We don't want to complain about it.

So we should simply concentrate on what we do best. We need to make the best possible decision. And the sum of multiple good decisions are going to bring us forward. Obviously, complaining is our national sports. We like to do it simply for the sake of it. But once we have finished complaining, we need to get back to work and make another small good decision, release another good product, improve its benchmark. And step by step, we are going to reach the destination.

One final question. The market has been negative about the results you published. What is your comment on that?

Well, that's the market. It has a right to react in any way imaginable. We are very happy about the first quarter. We are happy with the acceleration of our work with fast development. We are happy with faster decision-making. Of course, at some point, the market is going to respond better or worse to what we release. That's the right in the market.

However, what matters and what keeps us moving forward is that we do some things better, faster. We are launching two new games, which nobody had expected. Medal Hunter is releasing faster than intended. We have decided where we want to go with Trophy Hunter, and we did it two months ahead of schedule. If it's not good news, and I don't know what you see to be good news.

But again, market is making decisions. Do I agree with this decision? It doesn't matter whether we or you agree with it. The market is simply the market. The only thing I can promise to you is that we are going to make the best possible decisions. And we're going to make them with a view to improving the situation of the company from one year to another. We want to be a dividend company. We want to share our profits with our shareholders, be it by means of a dividend or buyback. And we hope that you see the company performing better over time to any previous period. This is what we are intending to deliver as a company and as a team.

That was the final question. Thank you for staying with us till the end. Should you have any more questions, do not hesitate to send them to our e-mail address. Stay with us and see you at another conference, and we hope to meet you at business events. Thank you for your time. Have a good day.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

[Interpreted] Good afternoon, everybody. A warm welcome to you to a conference summarizing Q2 at TSG. My name is Andrzej Ilczuk, I'm CEO and President of Management Board. I'm joined by Magdalena Jurewicz, our CFO.

Good afternoon.

Janos Janusz Dziemidowicz, CTO; and as always, Nina Grabos, responsible for contacting our investors. Allow us now to move to our priorities and the performance of the group in Q2 2025.

We wish to bring closer to you a few aspects. Q2 saw a very consistent following of our strategic plan. At the basis of the plan, we intend to increase our revenue. The transformation of the product is strongly based on data, hard data, not belief, not opinions. And the data begin to demonstrate that we are following the right path. On top of that, we have started scaling Wings of Heroes since Q3 this year. We've had a great start of Trophy Hunter. And all these components brought together demonstrate that Ten Square Games is capable of creating new games. We know how to market these games, and we know how to scale them. We have a full package under our wings.

We believe that each of these elements brings us closer to achieving our main goal, which is, of course, increasing our revenue. Concentrating now on the performance of our key products, which is Fishing Clash and Hunting Clash. As we said in the previous conference, we had a very limited marketing budget, which was obviously intentional.

We reduced our revenue base. Why we decided to decrease our expenditure on marketing? Well, simply because we believe that the changes in our games that are taking place are going to have a very positive impact on marketing in quarters to come. Additionally, given the ongoing numerous tests, we have a much more stable marketing base or foundation, if you like, the mix month-to-month of players is very similar. The mix is almost identical, allowing us to be much more precise in our determination of whether these changes have a positive impact on the performance of our games.

After we have concluded all our A/B tests, our marketing expenditure is going to be increased gradually. Moving on, allow me now to speak about some practical examples. I would like to devote some attention to segmentation. We have reached a third iteration of segmentation. Why is it so important? First of all, as you remember, employing new people responsible for the product, changing our way of thinking about the product, working with the product is an ongoing constant change in Ten Square Games.

Looking back in time on our way of working with the product, we had a somewhat start-up approach. We had an idea; we tested the idea. If it worked, we would apply it. If it didn't, we would move to another one. We've completely changed our way of working with products. In the first assessment run by persons responsible for the product, we defined a few areas for improvement. One of these rooms was segmentation. In the first iteration, we saw a 21% uplift in bookings for the group participating in the test.

However, we weren't shy by the fact that we didn't improve in this field. Nonetheless, the team consistently continued in the test because they were -- didn't understand why they saw the uplift in only one of the segments. In the following iteration, we saw an uplift in 2 segments. I believe that in next iterations to come, similar changes will follow. So once again, we are shifting our start-up-like approach to an iteration-based approach, where on a daily basis, we look for answers to why some things work and why others don't.

All that in order to make sure that these results improve iteration by iteration. Obviously, segmentation is not everything. There are hosts of other smaller or bigger projects such as the segmentation or the ones that you are looking at on the screen. Some of these initiatives are very bullet oriented on much smaller groups of players. In other cases, segmentations concern entire games. However, -- the reason why we believe this is the right thing to do is that although we work with mature products, products that have been present on the market for many years, we still see that the increases or the improvement of performance in particular segments or features are not single digits. This proves that there is still a lot of potential in our games.

As we look at Wings of Heroes, you might remember that in the second quarter, we concentrated on adding depth to the game. We have concluded this stage by increased marketing expenses starting in Q3. This increase in marketing expenditure has translated into a 30% increase of our revenue. Scaling of Wings of Heroes is not only increasing our marketing expenses, also reaching higher [indiscernible] fees with this project. We have started this project as a flight game set in the reality of World War II. Now we are concentrating on an action games segment. We are leading the segment of flight simulators. So we see broader segments where we can offer our game to a bigger pool of players.

In the third and fourth quarter, we count on increased revenue from this game, followed by increased marketing expenditure, but also at the same time, we are going to look for bigger blue oceans for this product.

Allow me to say a few words about our new title, which is Trophy Hunter. Trophy Hunter has had a great debut. It's our third hunting type game. It's the best-looking product in the market. Why is it important? It's mostly due to the fact that our players are looking for realistic settings, realistic animations, realistic animals where the feeling of shooting is very accurate. And this game has demonstrated that the players are very happy with it. It's very playable and enjoyable to play.

One more important piece of information, it's a hybrid game. This means that these games also provide revenue from advertisement. This is important because some of the revenue might not be reflected in our financial data. What is important with Trophy Hunter is that Ten Square Games is capable of creating new games and releasing new games. This skill is in great demand in our market. We are happy with the fact that after Wings of Heroes, Trophy Hunter is another game demonstrating that we are capable of creating new products.

Moving on, these are just a number of KPIs we want to share with you, but others, they look very promising as well. We have a greater -- much greater retention, much greater conversion. This game, as I said, started off really well. We have a solid product with a lot of potential for the future. The one thing we need to do now is to work with this product in such a way so as to make sure that the early-stage KPIs show an even higher figure to make sure that the later-stage KPIs do not deviate strongly from the early-stage ones. How to do that, how to achieve it. This is something we excel at as well. So the upscaling of our products.

The third and the fourth quarter are the quarters where our road map in Trophy Hunter is very, very packed. We have a lot of content. We have new, well-tailored features. And those are the elements that are meant to make sure that KPIs over the 7th and the 30th day will look very good, and we'll be able to effectively upskill this project and the product.

When we move on to Real Combat Simulator, one information for starters, this will be a subscription-based game. So therefore, we will see whether or not this product could be comparable to Real Flight Simulator at the end of the day.

A bit of a commentary on TSG Store. In terms of Fishing Clash, the share is over 32% currently, and this is the share that we want to maintain definitely. We keep working on new initiatives in order to increase this share if possible. For Hunting Clash, it's more than 21% currently. And here, we also are rolling up our sleeve in order to increase it. We want to catch up with Fishing Clash. All in all, we're talking about 23% versus the total revenue of the company. There are a couple of initiatives in Hunting Clash, for instance deer bucks, which is the same as fish bucks for Fishing Clash. So we have a special currency, loyalty currency in our store.

We are fine-tuning the interface. We are working with commission providers. And one more thing, which calls for a longer commentary, your questions concerning the regulatory environment and the background. A lot of things has been going on -- a lot of things have been going on. Let me go back to the past a little bit to discuss the most important events that had an impact on our store. Last year, we had the DMA -- the so-called DMA EU directive, which enforced certain changes on Apple. Apple did follow up. However, most of these changes had a high entry level in our opinion. For instance, we had to resign from the bookings via Apple platform. So we decided not to use it this opportunity. We didn't know any company who would actually go towards that direction. What we decided to do is to lower a little bit of our commission on the European platform from 30% to 20% according to the Apple's recommendation. And thanks for those very subtle tweaks in the definition in practice, we saw a change from 30% to 24%. We're talking about Apple platform only and European Union only, which happened in June last year.

During the spring break, May spring break last year, we saw ruling in the Epic versus Apple case. And it turned out in the end that we are able to advertise alternative payment methods or booking methods via Apple's platform. And again, we're talking about Apple platform only, and we immediately started tapping into this opportunity, advertising our options via Apple platform in the United States of America.

In June, we had yet another stage of this type of war between Apple and the European Union. Again, we had some new changes, which theoretically were supposed to adjust Apple's ways to the European Union regulations, and we had certain newspapers headlines that Apple would change commissions, and we looked into this subject. We are keeping a watchful eye on these developments. And again, we believe this is just to make believe. If we were to tap into those new opportunities and lower down our commission, we would, first of all, need to switch off Apple payments.

We would know how to survive without the app because we live off the app. So we would have to actually switch off certain search options and there were a number of other difficulties that it would pose for us. So in our opinion, this would be to the detriment of our company, and we decided not to use that option because the losses would actually exceed the profits or the benefits. We don't know of any company in the market that would actually go for this particular option.

So the European Union, obviously, will continue to work in this area. We have just been asked by the European Commission about our assessment or evaluation of those changes concerning Apple platform. We will definitely voice our feedback here. And we believe that the legislation and the legislators in the U.S. are introducing certain changes, which will affect us, and those changes will definitely persist in the future as well. We lowered the commission on Apple in the European Union from 30% to 24%, as I said before. And this year, we started to advertise our store in the United States really without any restrictions. However, other options that are on the table are not to our benefit. So we decided not to use them.

Moving on to the summary and the financial facts and figures. First of all, we would like to focus on a bigger picture because we're talking about quarter-on-quarter results, we're talking about quarter 2, but we should also look at the year-to-date results or even a larger window. Obviously, quarter-on-quarter results in terms of adjusted EBITDA and net profit have gone down a little bit. As we said before, this came from lower marketing spend in the middle of the quarter, and we'll see the full effect of those lower payments will be -- this will be visible in the second quarter.

But invariably, we are generating solid results. We're generating strong cash flows, and the adjusted EBITDA indicator went up 5% year-on-year and 18% or 18.5% actually 7% in terms of net profit. Looking at our iterations and any changes in the games that we are introducing, we need a longer time for those effects to be visible. What makes us really happy always is the fact that we are stable in our performance. We are able to manage this company in a safe way, in a secure way, and we are able to generate strong cash and strong results, but we're also able to share our profits with our shareholders. We're talking about a dividend of PLN 100 million. And looking at our entire company, our entire track record, we're talking about a total of PLN 485 million distributed to our shareholders. So we do generate cash, and we do hope that it will not change in the future.

To summarize the quarter in a nutshell, our performance explains our results. So the following bookings, mainly on the back of lower marketing spend. This was a deliberate decision. We do believe that in the reporting periods to come, these investments will be more fruitful over the longer term. In terms of our operating expenses, the costs, everything is under control. We have a lot of cost discipline, and it's very strong. We maintain it.

Let me just remind you that the second quarter always has a bit of a higher cost of our employees and incentive program. We reported it in the second quarter because it was adopted in May 2025 only. However, these figures, these amounts are not very significant in terms of their impact on our financial results. At the level of adjusted EBITDA, we are closing the quarter at PLN 27 million, which is pretty comparable to the result we reported last year. So year-on-year, it is pretty flat, which makes us really happy, and the net profit is at PLN 20 million. So all in all, from the results perspective, a bottom-line perspective, we are faring pretty well.

It's important to remember that the decreasing exchange rate of the U.S. dollars against the Polish zloty affects our reported cost of marketing. However, as an exporter, we like -- we are impacted by the exchange rate of the U.S. dollar against the Polish zloty. Another thing which has been disclosed in our report is the famous tax control. It has been extended until October this year. We are expecting further extensions. We are not likely to close this subject this year. It is outside of our control. All the files that we need to file with the tax office are immediately reviewed. We provide ongoing support to the tax auditor. We do cooperate with the office.

However, we have no way of affecting the end date of the audit. A few words about our cash position. As you can see, our cash position is stable. We are capable to finance everything from our own financial resources. There have been major outflows, which is dividend, which is recorded in our cash flow. When it comes to investment activity, we can see earn-out payment to former owners of RORTOS. This is under our contract for the acquisition of this company. This year, we have paid earn-out for 2024. A similar situation will be repeated next year. It will be this last part of earn-out for 2025.

This quarter, we have concluded with PLN 83.4 million in cash in our bank accounts. Everything is fine. Our business is stable. As far as more information goes, in the beginning of October, we are going to publish a report announcing preliminary revenue in Q3 as well as the final financial report, which is due on November 12.

In the meantime, you might expect to hear from us in the product news later, which we have been sharing for some time now in the newsletter, you will find more information on our progress on particular products and what to expect from them. As a company, we are going to be present at a few of incoming conferences. If you are capable of joining us, please be with us there, you'll have an opportunity to ask more questions to inquire about our progress. The nearest such date falls on the 2nd of September, followed by October 9 and December 4. All those of you who are interested are encouraged to subscribe to our newsletter through which we will share with you latest updates, including links to our future conferences.

I believe this will allow you to easier obtain information from the company, which are always verified and up to date. Thank you so much.

Now I understand time has come to entertain the questions from the investors. Before this happens, I would like to leave you with a few important messages about Ten Square Games.

Thanks to our precise measurements, we know how our games and products perform. We see that our strengthened product team is tackling every challenge head on. We see how it is reflected in our products. We also know what works and what doesn't. We see a lot of potential for improving our results. We just need time. As you have seen, all these iterations have been balanced, and we are planning to conclude them and translate them into our full population of players. We've had Wings of Heroes, which we started scaling in terms of marketing. Real Flight Simulator is increasing in scale. We are planning to add a Real Combat Simulator, and we are growing really big in the entire flight simulator segment.

We have added an additional game with very good early KPIs, thus demonstrating that we know how to create new games. We know how to add depth to these games, and we know how to scale them. Ten Square Games has a full package with everything we need to grow and to achieve success. Having said that, I wish to conclude the official part of the presentation. Thank you for your attention, and I wish to give the floor to Nina, who is going to read questions from the chat with the investors.

[Interpreted] Thank you so much for giving me the floor. The majority of these questions confirm Trophy Hunter. So why don't we start with these questions? Could you tell us a bit more about what percentage of revenue in Trophy Hunter comes from advertisements and what percentage of the payment -- from the revenue comes from payment -- bookings in the game?

[Interpreted] The market benchmark is more or less 20% advertising. In our case, it is slightly more than that. And it's to be precise, well, it's around 25%, but still, it's a very immature product. It's just July and half of August. So the data are very early, and this product is going to stabilize later in the year. Obviously, it's going to be affected by marketing expenditure depending on each particular market. This will also fluctuate over the months to come.

[Interpreted] Do the current expenditure on user acquisition exceed the revenue achieved by the game?

[Interpreted] We are not offering any comment on that.

[Interpreted] Could you tell us a bit more about the scale of revenue and marketing for this game? What levels could we expect in August?

[Interpreted] Well, we are not planning to comment on something which hasn't happened yet. August hasn't finished yet. And still, we would like to leave something to comment on in the next quarter. So we'll tell you more about that in a few months' time.

[Interpreted] What is your assessment of the risk of closing Trophy Hunter? Are you -- do you consider the game to be a 100% confident product and element of the company's portfolio?

[Interpreted] As of now, we treat it as a safe bet. It's a shot. We know -- we will know with time. But for now, it looks like a shot.

[Interpreted] What KPIs of Trophy Hunter are you happy with? And which of these areas you believe could improve?

[Interpreted] It's hard to answer this question because this game has been on the market for 7 weeks. Marketing hasn't started from day 1. So as you know, we have still around 4 to 5 weeks' worth of data to collect. So we don't know a lot. However, for the time being, we know that we need more content. That's the start is. The rest of the game looks exceptionally good. It has exceeded my expectations, to be honest.

[Interpreted] Are you planning to expand the team working on Trophy Hunter? What would be the scale of expansion? Are you planning to move employees from one project to another? Are you planning to hire some people externally?

[Interpreted] It all depends, as you might expect. Every team has what they need to achieve success. If we are -- if we have our internal resources, we will use them. However, we know we might need some additional workforce because some people might not be simply with us. It all differs situation to situation. Still, our teams receive full support. It's all about success, not about hiring 2 or 3 or 4 more people.

[Interpreted] There are some more questions flowing from the chat. However, let us move now to Real Combat Simulator. When can we expect a global launch of the game?

[Interpreted] RORTOS has a different start of working. They are never fixed on a particular deadline. Nothing has changed in this field. We do not want to impose our will on the team of RORTOS. We wouldn't like to distort their style of working. Their job is to create the best possible product, and this is what we are intending to achieve together.

[Interpreted] The next group of question concerns marketing expenditure. So let's start with a general question and not focusing on any particular game. So I expect it applies to general marketing spend across the company, across the board, to which level would you be willing to increase your marketing spend in the current conditions, assuming that you have a satisfactory return on the acquired cohorts of players.

[Interpreted] Again, we have never worked based on budgets. We always work based on rates of return. And again, if it turns out that we need PLN 1 million, we'll spend PLN 1 million. If PLN 10 million will be necessary, we'll spend PLN 10 million. And this is how we work. Again, coming back to the rates of return and the times for return, we can extend -- we can juggle it. So we don't have a specific set limit.

In fact, we would rather spend more and more -- acquire more and more players at the cheapest price possible. But we don't have any budgets, and we'll stick to it. This is our way unless, obviously, we run out of cash because we spend so much on marketing, but this problem appears, we'll talk about it, and we'll handle it.

[Interpreted] Have you managed to increase marketing spend over the past weeks for your flagship titles? Should we expect any increases in marketing spend in the third quarter versus the previous quarter?

[Interpreted] As you saw, A/B tests are not concluded yet. The changes are still in progress, so I wouldn't expect that. We wouldn't like to rush too much, whether it happens a few weeks later or earlier does not have a major impact on our performance. We want these changes to be measured precisely. We want them to get tested thoroughly before we actually decide on any marketing spend.

[Interpreted] What would you expect? When will you go back to the scaling of marketing spend in Fishing Clash and Hunting Clash? And how long could it take to test new features, segmentation and monetization for these 2 games?

[Interpreted] Well, we winked at you a little bit here. We showed you how much time it takes, assuming that everything runs smoothly. So you can imagine how long it will take. However, a bit of a disclaimer here. It doesn't always run smoothly. So we managed to improve our segmentation in 2 segments going up by 20% is a great, great achievement, more than expected. So we've outperformed our assumptions.

But what will look like in the future, it's difficult to say at that point because the beauty of this business is the fact that players can always catch us by surprise with their erratic, sometimes erratic behavior.

[Interpreted] A couple of questions on your core products. Do you assume that in your core products, can you see any potential improvement already this year? Still anything can happen.

[Interpreted] We're working -- we have been working on free-to-play business for years now. And the beauty of this business is the fact that you have to adapt your ways quickly. You have to react and think on your foot -- on your feet. You can expect everything. You can expect the unexpected. So all the product work. And we are -- we have been talking about a number of initiatives, but we have more. So it may turn out that one of those major initiatives will become a huge success in the very first iteration, and we will not need the second one at all. So a lot can happen product-wise.

But what is really important and what makes us really happy is the new product know-how that we captured from the market, the new ways of work, the higher product standards. because they are higher. We have raised the bar. The teams are working in a totally different standard, totally different manner. And we do hope that you will soon be able to enjoy the better performance and higher marketing spend with us.

[Interpreted] What will you do in a scenario if you do not manage to improve your performance on your flagship titles?

[Interpreted] Honestly speaking, we do not see it happening at all. We do not allow such a possibility. So we see that we are doing very well in the first iteration and the segmentation is really effective. The team is thinking what to do if we have a performance that is not satisfactory in a given segment and the work brings fruit. So we do not expect anything like that happening. We see how it changes. We see how our teams perform, and we do not see such a risk on the horizon at all.

[Interpreted] Are you considering any reduction in headcount in project or product teams? And if so, when?

[Interpreted] No. We are not talking about any reduction in headcount.

[Interpreted] July was a period of solid results reported for Wings of Heroes. Will you be increasing the marketing spend for this title in August?

[Interpreted] Again, no comment.

[Interpreted] A couple of questions from another area, one of our viewers want to make sure whether data concerning Sensor Tower include TSG Store bookings.

So any platform, data.ai and others only show in-app bookings via Apple platform purchases and pay purchases. So it doesn't include the TSG Store or Apple.

Another question. Did you see any changes in terms of the implementation of the privacy policy at Google?

[Interpreted] Nothing has happened since our last conference call.

[Interpreted] Do you see any new technologies that would allow you to create content and games more quickly?

[Interpreted] It depends what do you mean if you're talking about new technologies. Obviously, generative AI is growing as we speak and growing very fast. So all the models that are used to create text, videos and graphics. Obviously, these technologies will not allow us to replace people who create our games. We use those tools as aids. For instance, people did not have Photoshop in the past. After Photoshop appear in the market, everybody uses Photoshop. So those generative AI tools are the tools that are being used heavily by everybody because they make our work easier, but did not replace people.

What is developing dynamically is creation of video content because this is the element that is really important for us, and we see a lot of progress here, but the costs are there. They're pretty high. We're talking about $6 per each prompt. I think much, but we need a lot of prompts in order to make sure that something reasonable is created. So this is a considerable cost. So we keep experimenting in terms of ad generation, graphics generation, the graphics and content that will be used in our games and also code generation because we have a number of tools such as CourseCore, which is used to support the programming development. So these are the tools that we're using to make our work easier.

We see signals from the market that people are -- companies are letting people go because of AI. Actually, they're not letting people go because of the AI developments. They do it because of the market. And obviously, this is a hot potato and sometimes it shows a wrong and sends a wrong signal and creates a wrong picture. AI will help us to create relatively simple graphics but will not create an animal animation. They will not create an entire game.

So again, it's a hot potato but there is a lot of fake news here and a lot of companies are using AI as an excuse saying that they are dismissing people. They are letting people go because of AI, but that is not true. So I would be very cautious with those comments because it's all fake. Some of them are fake news.

[Interpreted] The next question concerns strategy. Has anything changed in terms of potential acquisitions?

[Interpreted] As I've said, we operate on many fronts. We simply have not enough capacity to think about acquisitions, not to mention post-merger integration. We simply do not have enough time to think about it. Fishing, Hunting, Wings of Heroes, Trophy Hunters, Real Flight Combat Simulator. We have a lot of open subjects, and this is what we are working on for now.

[Interpreted] Have you observed -- have you seen any measured impact of employing specialists at the beginning of 2025?

[Interpreted] As you've seen in the presentation, we are talking about changes in pay slips. We can't say we have revitalized an entire feature, which has increased our pool of players by 20%. These are only fragments of what we do. We have assumed it might look like that. We are taking baby steps in -- especially in complex games and our products are complex games. Segmentation is quite difficult.

Well, you would expect a system to work in every case in the same way, affect every player in the same way. However, in some segments, it equals 0. Understanding why it works on this segment but not on the other is what matters. That's the essence of our work on products, understanding the product, making the necessary adjustments and trying again and again, if necessary. Well, we might have a series of failed iterations, 5, 6 or 7 of them.

However, it's important for you to understand that there are hugely successful companies who perform best when they make a lot of changes in segmentation, for instance.

[Interpreted] There are a few financial questions. Have you got any plans concerning Gamesture?

[Interpreted] We have an agreement -- an investment agreement, which we concluded a few years ago. We have this contract has specified a few investment windows. We do work with Gamesture on a daily basis. However, as of now, we are not considering increasing our share in the company.

[Interpreted] There's also one question concerning the tax audit that you mentioned. What period does it concern? And what exactly -- what numbers are in discussion?

[Interpreted] We always disclose this information in our financial report. However, it concerns our CAT for 2024. It concerns [ IP ] folks. Many companies didn't know how to calculate this relief after a few years, we knew we could -- we were ready to use it to a full extent. And we disclosed a surplus of income tax. We have this cash on our bank accounts. However, the tax office has initiated an audit for 2022, and it concerns PLN 9 million.

However, we corrected the 2019 in the same way. So this audit might concern a longer period in the next year, we have a surplus of PLN 3.3 million. So we are talking about PLN 12.5 million in total. However, we have a tax provision so that we maintain the right amount of cash. And we are talking in total around -- well, let me do the math quick. In total, it's about PLN 23 million. This is our income tax provision. If the audit is positive. We are able to release this tax provision, and it will increase our net result. However, we have this money in our accounts.

[Interpreted] Are you planning to pay dividends in the next year?

[Interpreted] It's far too soon to discuss it. However, allow me to remind you that we want to share our profit with our shareholders. Nothing has changed in our dividend policy. We are going to do it either by means of a dividend or buyback. However, it's far too soon to talk about it.

[Interpreted] We'd also like you to precise something on Real Flight Combat Simulator, the timeline, monetization assumptions and plans of the game.

[Interpreted] Again, it's a subscription-based game. I would suggest you look at RFS on Sensor Tower and similar games. To cut long story short, that's all. It's going to be a spin of Wings of Heroes, something in the type. We'll see how it performs. There isn't a similar product in the market. And therefore, it's difficult for us to say what is the exact potential of the game. We know more about Real Flight Simulator.

But with time, I believe we'll know something more. When it comes to the deadline for the timeline, we are not pushing on RORTOS, it's going to be ready when it's ready, and that's what -- that's the way it is. Nothing has changed in this respect.

[Interpreted] A few questions concerning Trophy Hunter. What is the maximum level to which you would be capable of increasing marketing expenditure, maintaining a satisfactory increase effect of the cohorts.

[Interpreted] The longer the game is present in the market, the more we know about it. It's intentional that we do not spend 4 to 5x more on marketing because we don't know how these cohorts are going to perform. We have some assumptions. These assumptions have been right so far on every stage of development. What is great at Ten Square Games is that we have a high accuracy of prediction even before the product is present for a long time in the market. It usually overlaps with our calculations.

The maximum marketing expenditure would be very hard to determine with each passing month, we'll know more, and we'll be able to discuss increasing our marketing expenditure as long as we run out of cash. Hopefully, we are not facing such problems in the future. Fingers crossed.

[Interpreted] Talking about cash. Given initial data for Q3, could you also say something about revenue from Trophy Hunters?

I understand we are talking about ESPI release at the beginning of the next quarter, and we are planning to release such data. The launch of Trophy Hunter opens a new chapter in the history of the company. What is the potential of the game in global markets?

[Interpreted] I don't know if you remember, but at some of the previous conferences, we talked about why we believe Wings of Heroes was our future, why some KPIs of Wings of Heroes were better than in the case of Fishing Clash or Hunting Clash. And this is exactly the same story. How this game performs? Well, this remains to be seen. No one knows that. We need for the revenue to be visible.

However, the early KPIs are very satisfactory because we -- they demonstrate we know how to create games. We can create games that are better than their predecessors. It's usually a reverse trend because companies tend to follow a downgrading slope. We are basically doing it the other way, and we are creating better games for every new title. We have proved that we can create a game with a lot of quality. We have a team of experts who can deliver the best-looking products, which is appreciated by our players.

Now we just need to follow this path and avoid making the mistakes our competitors have made working on their products. We strongly believe we know how to do it. We know we can follow the path of Ten Square Games. And so far, this has been the path that has brought us to where we are today, allow us to wait a few more months. We'll be able to tell you a bit more. We'll see how the game performs in the longer perspective, how it's created and what is the retention rate of its players. Now we need to do whatever we can to make sure this product is the best, as best as possible. We only need to make sure that our players remain with us for years to come.

[Interpreted] So another question on that product. Where can we expect or if we can expect an update for RFS in this quarter still, quarter 3 or maybe later on into the year.

[Interpreted] Frankly speaking, I don't know. I cannot answer this question. I believe that we will come back with an answer later on. I don't have it on the top of my head, unfortunately.

[Interpreted] So a more general question about the falling revenues. Does this an effect of a lower marketing spend or rather an effect of the ever-evolving situation in the market, the changing expectations of the players or maybe other externalities?

[Interpreted] I would say that it is due mainly to the lower marketing spend because we have lower revenue in first cohort in each month, and they are overlapping. And this is why we see a decline in revenues, and this is why we are struggling to make sure that those positive changes, those A/B tests actually are translated into some benefits. They are directed into a certain cohort population of the players. But yes, basically, it's due to marketing spending, which was it.

[Interpreted] A question on tax authorities and tax audit. Does the tax authority have any limit any deadline to close these proceedings, it's been 6 years already.

[Interpreted] What can I say? Unfortunately, those proceedings are very lengthy in Poland. The tax audits are extended. Every quarter, there's an extension for the next 3 quarters. So everything is accordance with the regulations, and they can expand and prolong forever.

Actually, let me go back to the RFS update, version 3.0. We have corrected certain errors in terms of this game, and we believe that we have certain problems with a realistic imaging of the ground level. So I would take a cautious approach here.

[Interpreted] A specific question concerning M&A. If you expect potential M&As in the future, do you actually assume such a long-term earn-out just in the case as it happened in RORTOS?

[Interpreted] Well, it will depend on the market situation. It is difficult to say whether we'll have actually any acquisitions in the future. All scenarios are on the table, but we will obviously pick the scenario that will be the most beneficial. It is difficult to discuss it because we haven't discussed it to anybody yet. We haven't started any negotiations. So it's difficult actually to refer to such questions at this point.

[Interpreted] A question on TSG Store, which is growing dynamically. What are your next steps in order to tap into it in order to increase the margins and become more independent of the platforms?

[Interpreted] We are testing booking providers. We're just testing the new one in order to optimize the margins. And if we're talking about margins, we do not see any major fluctuations, and we do not expect them. We are looking at the regulatory environment.

We are keeping a watchful eye of what is going on in the European Union and in the United States, and we are tapping into every opportunity that emerges. We're talking about work related to the offer of the TSG Store and our basic observation is as follows: for a player to actually consider using a store, they need to -- the players need to have any added value.

And the whole secret -- the secret is actually to create an added value. We're not talking about promotions, 80%. This will actually disrupt the economy of the game over the long term. So the trick is to balance it and we're doing our best in order to make sure that the offering in the store is attractive to the players. But -- at the same time, it will not disrupt our game and its economy.

[Interpreted] A question on your strategy. Do you plan to revise the strategy within any timeline?

[Interpreted] Actually, it is being verified, and it is analyzed as we speak. We can analyze the changes that we see whether they're positive or negative. So it is an ongoing verification of the strategy. It's not that we have a fixed point at which we can decide whether or not a game should be continued out or dropped. We are verifying our performance on an ongoing basis. If something is not working, we will drop it. If it works, we'll continue it. And this is what it looks like.

It's a day in, day out work, month in, month out, week in, week out. So it's not that we have set deadlines to meet, for instance, after 14 days to discuss our performance. Everybody has their own opinion. We're looking at the data. We are trying to pin down whether or not something works, whether or not it brings benefits, it brings fruits. If we are testing a big new feature based on the cohort of 5% of our players, then the impact on our overall performance will not be noticeable. But we cannot test it for 100% of our population of players because the risk would be too big. We are talking about a living organism.

If we omit or skip 1 or 2 elements, the whole economy of the game could blow up. So we need to make sure that we are proceeding in a stable manner to make sure that a change, any change actually can be translated into a success.

And let me remind you, if a game change is effective on the most so-called calorific promising players. We're talking about players from the United States, from other countries, European countries. We're talking about Tier 2 and Tier 3 markets that can -- and we can trickle it down in this way. This is why we have a cautious approach. 6 months have passed.

And it's not that we have been working and tweaking something for 6 months. We spent 2 or 3 months at the very beginning in order to make sure that the team is ready and able to work in a different way according to different requirements. If somebody had been working in a totally different standard, totally different manner, then he or she or they need some time to readjust themselves.

And we're not talking about product only. We're talking about R&D, the marketing, any customer support teams and so on. So these standards have been revamped, and they have changed across the board throughout the organization. So the change that we are talking about takes time. We are not replacing a single element or we're not revamping a single method of work. We are reconstructing and rebuilding the entire way of working across the organization.

[Interpreted] Thank you very much. We have a couple of questions. However, I cannot hear the speaker. Yes. The question was about the return to the growth path.

[Interpreted] It depends. The answer is it depends. I want to give you specific examples, such as in the case of segmentation. Each of those tests takes about 6 to 8 weeks. It worked for a single segment. The uplift was noticed in the first segment. It could have been noticed on 4 segments. difficult to say whether we achieve that in the coming 6, 10, 14 weeks because we don't know, honestly speaking, how players will react. We can assume that we will have an uplift of 5% or 15%, but it does happen that we are caught by surprise by players' behavior.

And it did happen in the case of segmentation that the lowest segment, the lowest paying segment actually showed such increases. Honestly speaking, we had assumed that it would be easier to change player behavior in higher segments, higher-paying segments because it usually happens like that. They react to changes quickly, more quickly than lower-paying players. So it's difficult to say what it will look like. We are at the third stage of the segmentation. And maybe we'll have 3 or 4 or maybe 5. So it's difficult to say whether we will close this process in a month or 2 or in 14 months, for instance. So that's where the problem comes from players' behavior.

This is exactly why we can't say when it's going to happen precisely. And we are impatient just as you are. We want to know here and now, and we want to increase our revenue from day 1, believe me.

[Interpreted] What is your assessment of your competitive advantage in this hobby segment of games?

[Interpreted] Well, we have a very good position. We have the biggest Fishing game, the second, third, fourth biggest Hunting game. Wings of Heroes is doing great compared to its competitors, especially where games in similar segments are simply abandoned by our competitors because they can't maintain the pace of growth. And we, on inverse are increasing our expansion of Wings of Heroes.

So RFS is doing equally well. Our position is very robust. We are happy with the fact that we are capable of acquiring new employees from the market. We are testing new ideas. There are still so many things we didn't know we could improve that we are discovering now. All that has improved our potential, and we are very hopeful about the future.

[Interpreted] There was a question concerning one product by Gamesture, Cooking Wars. Do you know any KPIs for this project?

[Interpreted] It's a very fresh product. Trophy Hunter has been with us for 7 weeks, and we have already told you we know nothing about it. Cooking Wars is even less mature, so we have no data to discuss.

[Interpreted] There are a few more questions we have received before the conference. Given that we are rather limited in time, we are going to brush over them quite quickly. There was one question concerning the company's strategy as well as some framework activity or plan of working, but I believe this has been clarified by the Management Board already. We know what the plan is. We know how much time we need to perform A/B test. However, let's move on to the questions which haven't been repeated yet. Is the company planning to release new titles?

[Interpreted] Always. However, as I've already said now, we are working on what we have at the moment in our portfolio. We are going to think about new projects, especially given that we have been emboldened by the Wings of Heroes and Trophy Hunter. So these are our most promising products.

[Interpreted] Have you identified any offers for acquisition? Is the company still hungry for acquisitions?

[Interpreted] We are always hungry for acquisitions, but we have no resources to work with. At the moment, it's all hands-on desks working on the games that we are currently developing. We do believe in the force of concentration. We don't want to spread ourselves too thin over too many products because we might start considering whether a particular strategy works or doesn't work. We want one person to work on 1 or 2 things, tops. And we want to deliver what we have committed to.

As soon as we have delivered, we are going to think about our next steps. When it comes to Gamesture, we have talked about the schedule of reversing the trend in terms of payments.

[Interpreted] There is one more question concerning games from the Evergreen segment, Wild Hunt and Let's Fish. Is it the end of these games because they haven't performed too well?

[Interpreted] Again, we have a team working on the portfolio of Evergreen. We update content in these games. Sometimes we add new features to them. But indeed, we do not develop these games so aggressively. Well, the Evergreen segments are beautiful products. They are very profitable. And this is the reason why we keep them.

Again, some of our players want to play Let's Fish only. Other players are fans of Wild Hunt. Still, these games allow us to test certain solutions in a safer environment. Therefore, allow me to repeat that these games, although they might be small, they are very profitable, and we are happy to have them.

[Interpreted] Do you have any road map for developing Trophy Hunter and other titles for the next year? Or are you planning month-to-month when it comes to development?

[Interpreted] We have so-called North Stars for every product. We have road maps for a longer perspective, longer than 3 to 6 months. Still, we are not working on 3-, 5- or 15-years road maps as an Airbus. The market changes too rapidly for us to be able to be locked on a 3- or 5-years plan.

Yes, we are working on the long-term perspective. Yes, there are some elements we want to improve with every future. We are testing whether our changes are effective, but we are not Airbus. We do not have 10 to 15 years road maps.

[Interpreted] One more question. This question concerns the valuation of the company. Again, it's at the lowest level in history. It's around PLN 500 million. Do you believe that the payment of a high dividend was a good decision in the context of your shareholders and increasing the value of the company?

[Interpreted] It's a somewhat philosophical question. We believe that if we have cash available and we can finance our operation from our own resources, we wish to share it with our shareholders. I understand somebody didn't want to receive that money, sorry for that, but we do not need to rely on external creditors. We do whatever we want, and we don't think that the payment of dividend prevented us to make some investment decision because we are short of cash. No, this wasn't the case. What we had to do, we did, right? We had alternative of keeping our bank account. So you need to assess what's better. It's a very profitable deposit, as you might believe, of 5% a year.

[Interpreted] We have run out of time. I believe that we have addressed the majority of questions concerning the company's strategy as well as the current progress on our projects, which is why we are going to conclude the meeting. Should you have any more questions, please send them to us directly. We'll be very happy to respond to all of them. Thank you for being with us and see you at the next conference.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]