G5 Entertainment (G5EN) Q1 2025 earnings summary

Executive summary

• Revenue declined 12% year-over-year to SEK 260.3 million, with a 13% drop in USD terms, reflecting ongoing market challenges and a shorter quarter.

• Gross margin reached a record 69.8%, driven by a growing share of direct-to-consumer sales via the G5 Store, now 21% of revenue.

• EBIT fell 73% to SEK 10.7 million, impacted by SEK -14.6 million in FX revaluations and a SEK 1.3 million one-time legal expense from a failed acquisition; adjusted EBIT margin was 9.7%.

• Net profit was SEK 11.9 million, with EPS before dilution at SEK 1.53, down from SEK 4.76 year-over-year, mainly due to SEK-USD exchange rate effects.

• Cash position reached a record SEK 295 million, with zero debt and continued positive cash flow.

Financial highlights

• Gross profit: SEK 181.6 million (down 10% year-over-year); gross margin 69.8% (up from 68.1%).

• Monthly average gross revenue per paying user hit a record $65.4, up 3% year-over-year.

• User acquisition costs were 15% of revenue, below the long-term range of 17%-22%.

• Cash flow before financing: SEK 33.2 million, down from SEK 84.7 million last year.

• EBIT margin: 4.1% (reported), 10.2% (adjusted for one-offs and FX).

Outlook and guidance

• Focus remains on cost control, operational efficiency, and sustainable growth, with plans to return user acquisition spend to the 17%-22% range.

• G5 Store continues to grow, up 35% year-over-year, and is expected to become a more significant revenue channel.

• Expecting global launch of new game, Twilight Land, later this year.

• Strategic hires made to strengthen product development, business expansion, and marketing.

• Anticipates further growth and margin improvement from G5 Store and web shop initiatives.