SOZAP (SOZAP) Q3 2024 earnings summary

Executive summary

• Net revenue for Q3 2024 increased 21% year-over-year to MSEK 3.8, driven by Questopia, while Armed Heist revenue declined due to reduced user acquisition.

• EBITDA improved to MSEK 0.5 from MSEK -0.1, but EBIT remained negative at MSEK -2.4 versus MSEK -1.6 last year.

• Cost savings program achieved full impact, delivering MSEK 2 in quarterly savings.

• Cash flow from operations was negative at MSEK -0.6, with cash and cash equivalents at MSEK 5.7 at quarter-end.

• Strategic partnership with Supersonic (Unity) to develop mobile game prototypes, expected to positively impact Q4 2024 earnings and beyond.

Financial highlights

• Q3 net revenue: MSEK 3.8 (up 21% year-over-year), 33% growth in comparable currency.

• Q3 EBITDA: MSEK 0.5 (vs. MSEK -0.1); Q3 EBIT: MSEK -2.4 (vs. MSEK -1.6).

• Q3 net result: MSEK -2.4 (vs. MSEK -1.6); EPS: SEK -0.11 (vs. SEK -0.15).

• 9M 2024 net revenue: MSEK 13.2 (up 29% year-over-year); EBITDA: MSEK -0.5 (vs. MSEK -1.4); EBIT: MSEK -9.0 (vs. MSEK -5.5).

• Cash flow from operations for Q3: MSEK -0.6 (vs. MSEK 0.7); cash and cash equivalents: MSEK 5.7 (vs. MSEK 11.6).

Outlook and guidance

• Questopia's revenue and marketing are being optimized to improve cash flow; Fishing Tour shows strong potential in soft launch.

• Company aims for cash flow neutrality in Q1 2025, adjusting resource allocation from Fishing Tour to Questopia.

• Board assesses current funding is sufficient for the next four quarters following a rights issue in June.