G5 Entertainment AB: Interim Report January - June 2022

G5 Entertainment AB (OTCQX: GENTF), a leading European casual mobile game developer and publisher, announced today reported results for the second quarter 2022.

"The second quarter remained busy as the company and its employees continued to adapt to the war in Ukraine and the difficult global economic environment. We have made great progress in the relocation of employees and the pace of relocation has increased month by month in the second quarter," said Vlad Suglobov, CEO of G5 Entertainment. "As we flagged previously, we boosted our investment in user acquisition (UA) to stimulate faster revenue growth of Sherlock. The companys UA expenses as a percent of revenue rose to 35 percent as we targeted growth in Sherlock's audience. The boost for Sherlock helped lift the games MAU, MPU, organic downloads and conversions. As a result of this strategy, Sherlock became our top game by revenue on Apple and Google, and the game is now representing 19.5 percent of the net revenue compared to 7.4 percent in the second quarter last year. In total the new generation games grew 24 percent y-o-y, and 5 percent sequentially. In USD terms, the new generation games grew 6 percent y-o-y and were unchanged compared to the first quarter, a strong result given the seasonality and fx development in the quarter. G5 finished the second quarter with a strong cash position after paying out the highest dividend in the companys history. The company remains profitable, cash flow positive and has zero debt. For the rest of the year, UA spend will return to a normal range, and we expect fx pressure to ease. We also expect profitability to rebound to normal levels and the mobile games market to pick up in Q4 and Q1 2023.

• Revenue for the period was SEK 343.5 M (337.0), an increase of 2 percent compared to the same period in 2021. In USD terms revenue declined 13 percent year-over-year.
• Gross margin increased to 66 percent (59 percent), as larger share of revenue is coming from own games and lower store fees, primarily from Microsoft.
• EBIT for the period was SEK 1.0 M (43.2). EBIT was significantly impacted by the temporarily increased user acquisition (UA) investments on Sherlock that was communicated in the Jan-Mar 2022 interim report. UA expenses in percent of revenue rose to 35 percent compared to 20 percent in the previous quarter.
• Net result for the period was SEK -2.6 M (40.2).
• Earnings per share for the period, before dilution, was SEK -0.31 (4.67).
• Cash flow amounted to SEK 33.9 M (-45.1).
• Average Monthly Active Users (MAU) was 6.4 million, a decrease of 5 percent compared to the same period in 2021. Average Daily Active Users (DAU) was 1.8 million, an increase of 1 percent compared to the same period in 2021. Average Monthly Unique Payers (MUP) was 183.9 thousand, a decrease of 9 percent while Average Monthly Average Gross Revenue Per Paying User (MAGRPPU) was USD 64.1, a decrease of 3 percent.

For additional information please contact:
Vlad Suglobov, CEO, [email protected]
Stefan Wikstrand, CFO, +46 76 00 11 115

About G5 Entertainment

G5 Entertainment AB (Publ) (G5) develops and publishes high quality free-to-play games for both smartphones, tablets and personal computers that are family friendly, easy to learn, and targeted at the widest audience of both experienced and novice players. The company distributes its games through the G5 Store, Apple App store, Google Play, Amazon Appstore and Microsoft Store. The companys portfolio includes popular games like Jewels of Rome®, Sherlock: Hidden Match-3 Cases, Jewels of the Wild West®, Hidden City®, Mahjong Journey®, The Secret Society® and Wordplay: Search Word Puzzle.

Through its head entity G5 Entertainment AB (Publ), G5 Entertainment Group is publicly listed on Nasdaq Stockholms main market mid cap segment under trade symbol G5EN.ST. Forsix years in a row, G5 Entertainment was ranked in Deloittes Top 50 Fastest Growing Tech Companies in Sweden.

More information about G5 Entertainment can be found at: https://corporate.g5e.com