G5 Entertainment (G5EN) Q2 2024 earnings summary

Executive summary

• Q2 revenue was SEK 287.9 million, down 13% year-over-year, mainly due to weaker performance in the actively managed portfolio.

• Gross margin improved to 67.8% from 67.4% last year, supported by the growth of G5 Store.

• G5 Store revenue grew 42% year-over-year and now represents 15.2% of total net revenue, up from 9.4% a year ago.

• EBIT was SEK 21.8 million, with an EBIT margin of 7.6%; FX revaluations negatively impacted EBIT by SEK -3.4 million.

• Cash position at quarter-end was SEK 196.3 million, up from SEK 173 million a year ago, after paying an annual dividend of SEK 62.4 million.

Financial highlights

• Revenue for Jan–Jun 2024 was SEK 585.3 million, a 13% decrease year-over-year; gross profit was SEK 397.5 million, down 13%.

• Operating costs excluding user acquisition fell 7% year-over-year; user acquisition costs dropped 18%.

• Cash flow before financing activities in Q2 was SEK 6.5 million (down from SEK 45.7 million last year).

• Equity/asset ratio improved to 83% (from 74%).

• Earnings per share for the quarter were SEK 3.02, down from SEK 4.96 year-over-year.

Outlook and guidance

• Expect to work on 30-36 new game ideas in 2024, soft launch 5-6, and aim for at least one global launch, most likely in Q4.

• G5 Store is expected to continue growing and boosting gross margin and profitability.

• User acquisition spend will remain in the 17%-22% range.

• Management remains optimistic about strategic direction, focusing on sustainable growth, operational efficiency, and a robust game development pipeline.

• No formal forecasts are published.