Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- G5 Store continues to show strong growth, now making up 17.1% of total net revenue, up from 12.1% a year ago.
- Gross margin reached an all-time high of 68.8%, driven by the growth of G5 Store and lower processing fees.
- The company maintains a strong cash position with a record high of SEK246 million and zero debt.
- Monthly average gross revenue per paying user increased to USD64.9 from USD63.2 a year ago.
- The company has a robust pipeline with 30 game ideas in preproduction and early development stages.
Negative Points
- Revenue decreased by 17% in Swedish Krona and 14% in USD terms compared to last year.
- Active games revenue fell by about 14% in USD terms.
- Earnings per share dropped to SEK3.14 from SEK3.83 last year.
- The company stopped the development of one game during the quarter.
- The overall audience has been declining, impacting the company's revenue.
Q & A Highlights
Q: Can you provide more details on the substantial revenue growth in October? Was it driven by a specific game or region?
A: The growth in October was broad-based across most games, with a slight emphasis on our own games. It wasn't due to any specific game or region, and September wasn't unusually low, making the October growth noteworthy.
Q: Are there any improvements in user acquisition (UA) returns that are contributing to growth?
A: Not necessarily. We are seeing a divergence in UA, with more budget allocated to the G5 Store, which is growing. The mobile UA situation remains stable, with no significant changes in day-to-day performance.
Q: Is the growth in G5 Store driven by new players or existing players moving to this channel?
A: It's a mix. G5 Store attracts players who prefer playing on PCs and have experience with casual games. We also acquire new players through cross-promotion and organic search, alongside a loyal audience that prefers direct play from the store.
Q: What is the long-term vision for G5 Entertainment? Where do you see the company in 5-10 years?
A: Our vision is to operate a portfolio of games, evolving them and creating new successful games. We aim to launch new games on the platform of our existing audience, focusing on longevity and profitability. We aspire to find a game that can significantly grow the company, similar to past successes.
Q: How is the shift in resources out of Russia affecting the company?
A: Relocations are ongoing, with movements within Europe. This poses challenges but also serves as an exercise in remote work. We continue to adapt and manage these changes effectively.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
