MAG Interactive (MAGI) Q1 24/25 earnings summary

Executive summary

• Net sales grew 4% sequentially in Q1, reversing prior declines, supported by increased user acquisition for QuizDuel and investments in platform and new games.

• Divestment of Primetime effective January 1 is expected to improve annual EBIT by SEK 5 million and reduce sales by SEK 7 million, with seven employees transferred.

• Board proposed a dividend of SEK 1 per share, totaling SEK 27 million, pending AGM approval.

• Continued investment in a unified, modular game platform to accelerate new game development and improve code quality.

• Earnings per share were 0.10 SEK, down from 0.17 SEK year-over-year.

Financial highlights

• Net sales declined 10% year-over-year but grew 4% sequentially, with healthy underlying cash generation and a cash balance of SEK 119 million.

• Adjusted EBITDA margin remained solid at 25% for seven consecutive quarters.

• User acquisition spend increased to SEK 13.2 million, up 18% year-over-year and quarter-over-quarter.

• Game contribution was SEK 45.3 million, down 17% year-over-year.

• Free cash flow for the quarter was -833 KSEK, compared to 9,443 KSEK in the prior year.

Outlook and guidance

• Expectation of audience growth in QuizDuel due to higher UA and new features, with Crozzle anticipated to launch globally in 2025 after ongoing optimization.

• More new games expected to enter market testing this year, leveraging the new platform for faster development.

• Management remains focused on reinvesting profits in new games, technology, and user acquisition to drive long-term growth.

• Plans to expand the portfolio through organic growth and M&A.