Financial

Interim Report: January – June 2025

Summary

The interim report for January to June 2025 documents a sharp contraction in G5 Entertainment’s top line, with revenue falling 20 % year‑on‑year to SEK 231.6 million (US$38.8 million). The decline is attributed to a weaker U.S. dollar and reduced spend on user acquisition, while the company’s gross margin improved to 70.0 % from 67.8 %. Earnings before interest and taxes slipped 74 % to SEK 5.6 million (2.4 % margin), largely due to a SEK 10 million foreign‑exchange revaluation and a substantial dividend payout. Adjusted EBIT, excluding finance items, would have been SEK 6.8 million. Net profit dropped to SEK 6.9 million (EPS SEK 0.88) from SEK 23.5 million the previous year, and cash flow turned negative at SEK 38.8 million after a SEK 62.2 million dividend; operating cash flow before financing stood at SEK 25.7 million. Despite these setbacks, the company remains cash‑positive on a pre‑dividend basis and continues to invest in user acquisition and third‑party store expansion, particularly through its direct‑to‑consumer G5 Store. The report confirms that it presents a true and fair view of the company’s operations, financial position and results for the first half of 2025. It is filed under Swedish securities law, published in both Swedish and English, and has not yet been audited; the Swedish version prevails over any translation discrepancies. Operating expenses are broken down into marketing (general, branding, advertising and public relations) and general & administrative costs (salaries, bonuses, benefits, consulting, legal, accounting and depreciation). Key performance metrics such as Monthly Average Gross Revenue Per Paying User (MAGRPPU) and Monthly Unique Payer figures are also disclosed, providing insight into revenue generation per user and payer volume trends.

From the report

INTERIM REPORT JANUARY - JUNE 2025 April - June 2025 FINANCIAL KEY RATIOS • Revenue for the period was SEK 231.6 M (287.9), a decrease of 20 percent KSEK Apr-Jun Apr-Jun Change Jan-Jun Jan-Jun Change Jul-Jun Change compared to the same period in 2024 in SEK terms. In USD terms revenue Revenue 2025 2024 % 2025 2024 % 24/25 2024 % decreased 11 percent year-over-year. Sequentially revenue decreased 1.7% in USD 231,633 287,866 -20% 491,906 585,275 -16% 1,041,160 1,134,529 -8% • terms. Commission to distributors¹ -46,423 -63,494 -27% -98,379 -128,240 -23% -216,074 -245,935 -12% Gross margin increased to 70.0 percent (67.8 percent), as a larger share of revenue Royalty to external developers² -23,013 -29,313 -21% -49,744 -59,494 -16% -102,747 -112,497 -9% • is coming from G5’s direct to consumer channel. EBIT for the period was SEK 5.6 M (21.8), a decrease of 74%, corresponding to an Gross profit 162,197 195,059 -17% 343,783 397,540 -14% 722,340 776,097 -7% EBIT-margin of 2.4% (7.6). EBIT was negatively impacted by revaluations related Gross margin 70.0% 67.8% 69.9% 67.9% 69.4% 68.4% to fx, primarily the USD, recorded in other income and expense amounting to SEK -10.0 M (-3.4). Adjusting for the negative impact from other income and expense Operating costs excluding costs for the EBIT margin would be 6.8 (8.8) percent. Compared to Q1, EBIT was impacted user acquisition -114,289 -123,029 -7% -245,805 -236,038 4% -470,852 -461,085 2% as user acquisition has been increased from 15% to 18%, back in the previously EBIT excluding costs for user 47,908 72,030 -33% 97,978 161,502 -39% 251,488 315,012 -20% • communicated range.

ed to Q1, EBIT was impacted user acquisition -114,289 -123,029 -7% -245,805 -236,038 4% -470,852 -461,085 2% as user acquisition has been increased from 15% to 18%, back in the previously EBIT excluding costs for user 47,908 72,030 -33% 97,978 161,502 -39% 251,488 315,012 -20% • communicated range. acquisition Net result for the period was SEK 6.9 M (23.5), positively impacted by the finance EBIT margin before costs • net of SEK 2.2 M (2.6). for user acquisition 21% 25% 20% 28% 24% 28% • Earnings per share for the period, before dilution, was SEK 0.88 (3.02). Costs for user acquisition³ -42,259 -50,199 -16% -81,623 -100,467 -19% -179,391 -198,235 -10% Cash flow amounted to SEK -38.8 M (-56.3), impacted negatively by dividends • paid during the quarter amounting to SEK 62.2 M (62.4). Costs for user acquisition as G5 Store grew 38.5% y-o-y and 8.4% sequentially in USD terms in the quarter. percentage of revenue -18% -17% -17% -17% -17% -17% • Efforts are ongoing to bring 3rd party games for distribution in G5 Store. EBIT 5,649 21,831 -74% 16,355 61,036 -73% 72,097 116,778 -38% Average Monthly Active Users (MAU) was 3.8 million, a decrease of 20 percent compared to the same period in 2024. Average Daily Active Users (DAU) was 1.2 EBIT margin (%) 2.4% 7.6% 3.3% 10.4% 6.9% 10.3% million, a decrease of 17 percent compared to the same period in 2024.

-73% 72,097 116,778 -38% Average Monthly Active Users (MAU) was 3.8 million, a decrease of 20 percent compared to the same period in 2024. Average Daily Active Users (DAU) was 1.2 EBIT margin (%) 2.4% 7.6% 3.3% 10.4% 6.9% 10.3% million, a decrease of 17 percent compared to the same period in 2024. Average Earnings per share before dilution 0.88 3.02 -71% 2.41 7.79 -69% 9.85 15.22 -36% Monthly Unique Payers (MUP) was 113.8 thousand, a decrease of 17 percent while Cash flow before financing activities 25,653 6,459 58,868 91,109 131,768 164,009 Average Monthly Average Gross Revenue Per Paying User (MAGRPPU) was USD 68.9, an increase of 8 percent compared to the same period last year. Cash and cash equivalents 246,963 196,280 246,963 196,280 246,963 275,539 1 Variable costs paid to distributors. Main stores have the following fees: Apple App Store, Google Play, Amazon Appstore etc. have a fee of 30 percent, Microsoft Store has 12 percent, G5 Store has single digit percent. 2 Royalties to external developers are costs to third party developers when there is a contractual obligation to pay royalty. 3 User acquisition is a marketing cost for acquiring new users. The costs are fully variable and are spent on advertising campaigns that are targeted at acquiring loyal players. The campaigns can be stopped at a very short notice.

Comment from the CEO: Improvements in games drive UA spend increase In the second quarter of 2025, we continued solid operational control despite unfavourable executing on our long-term strategy while weakening of USD (impacting top-line) and navigating a challenging market environment. strengthening currencies in which we have our Revenue amounted to SEK 231.6 M, representing cost base. In addition, we increased our user a 20 percent decline in SEK terms and an 11 percent decrease in USD terms compared to the same quarter last year. The quarter-to-quarter G5 Store grew 38.5 percent decline was marginal in USD terms at 1.7 percent year-over-year and 8.4% despite the second quarter being a seasonally weaker quarter. This better dynamic (compared to sequentially in USD terms, previous quarter) was driven by the improvements bringing up the gross in games, especially Sherlock, as well as increased margin to 70.0%, the highest UA spending during the quarter. As a result, in USD terms, sequentially, Sherlock’s revenue grew recorded level yet. 2.4% from Q1 to Q2. Year-over-year, Sherlock declined only marginally by about 3% in the quarter, also in USD terms. We are pleased to report an increase in gross acquisition spend during the quarter to 18 percent margin to 70.0 percent, the highest recorded of revenue - back within our communicated range level yet, driven by the continued growth of our - by expanding the number of UA channels and on direct-to-consumer channel.

to report an increase in gross acquisition spend during the quarter to 18 percent margin to 70.0 percent, the highest recorded of revenue - back within our communicated range level yet, driven by the continued growth of our - by expanding the number of UA channels and on direct-to-consumer channel. The G5 Store grew the back of the scalability improvements made to 38.5 percent year-over-year and 8.4 percent the games in the quarter. sequentially in USD, now contributing a growing The net result came in at SEK 6.9 M, supported share of our total revenue and supporting both by a positive finance net, and earnings per share margin expansion and deeper player relationships. amounted to SEK 0.88. Cash flow was SEK -38.8 EBIT for the quarter was SEK 5.6 M, M, impacted primarily by the dividend payout of corresponding to a margin of 2.4 percent. This was SEK 62.2 M during the quarter, a reflection of our negatively impacted by FX-related revaluations of continued commitment to shareholder returns. SEK -10.0 M. Excluding these effects, EBIT margin Cash flow before financial items was a strong SEK would have been 6.8 percent, demonstrating 25.7 M (6.5), positively impacted by movements in

working capital but still showing a good underlying Revenue (MSEK) EBIT (MSEK) cash conversion. Looking ahead, we are During the quarter we continued to work on focused on delivering new 1,600 250 putting together the best management team to take the company into the future. We have made titles from our refreshed 1,400 200 new hires with key expertise in development as development pipeline. 1,200 well as marketing and managing growth, and have 1,000 150 rearranged the reporting structure and the areas of responsibility to give new people the mandate to 800 100 drive change as well as to improve accountability of titles from our refreshed development pipeline. 600 50 their decisions. For the second half of the year we reiterate our 400 We are encouraged by the improvements the expectation to release Twilight Land globally. 200 0 teams have made to the games during the second The team is also working hard to bring more quarter, and the increase in UA spend that we were high-quality games to market, guided by the new 0 2010 2013 2016 2019 2022 2025 -50 2010 2013 2016 2019 2022 2025 able to achieve on the back of these improvements. development funnel that prioritizes scalability Our teams aim to continue making improvements and retention from early stages. We remain Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 that can increase the scalability of our core games confident that this disciplined approach will lay the (Sherlock, the Jewels family of games, and Hidden foundation for future growth. City), in order to achieve higher UA spend and top Development funnel line stabilization.

Pages: 17
Words: 6,512
Type: Financial

Topics

View this document on Game Industry Library.

Related Documents

Financial

Q4 2025 Interim Report

The interim filing presents the fourth‑quarter 2025 financial results for a midcore‑casual gaming group, emphasizing a record‑setting revenue run and the successful execution of a transformation agenda that includes the integration of the Plarium acquisition and the rollout of a new district structure in early 2026. Revenue reached SEK 3,123 million, reflecting 108 % organic growth year‑on‑year and a 25 % increase on a constant‑currency basis, while adjusted EBITDA rose to SEK 717 million, delivering a 23 % margin that matches the full‑year figure. Unlevered free cash flow amounted to SEK 878 million, with a cash‑conversion rate of 66 % and a leverage ratio of five times EBITDA, underscoring robust liquidity and disciplined capital management. User‑acquisition spending accelerated, representing 38 % of quarterly revenue—up from 37 % in the prior quarter—and grew 76 % on a reported basis, driven by heightened investment in original studios, new casual titles, and the racing franchise. The direct‑to‑consumer channel expanded by 600 basis points to 32 % of total revenue, reflecting a strategic shift toward higher‑margin in‑app purchases. Across the fiscal year, the company posted a 9 % organic revenue increase, with word‑games, racing, and RAID franchises delivering the strongest quarter‑end performance. Operating cash flow for the quarter stood at SEK 840 million, while adjusted net income was SEK 1,390 million, translating to an adjusted EPS of SEK 11.33. The financial outcomes exceed guidance and position the firm to meet its medium‑term outlook, with a pre‑IPO study for PlaySimple concluded and the midcore transformation progressing as planned.

market-analysis monetization user-acquisition+5

Modern Times GroupFeb 2026

Financial

AppLovin Financial Update: Q1 2026

AppLovin’s Q1 2026 financial update reports a revenue of $1.842 billion, up 59% year‑over‑year, and net income from continuing operations of $1.206 billion, a 66% increase to a net margin of 65%. Adjusted EBITDA reached $1.557 billion, an 85% margin, reflecting a 66% rise from the prior year. Cash flow from operations matched Adjusted EBITDA at $1.556 billion, underscoring strong operating liquidity. Shares outstanding averaged 1.053 million, with diluted earnings per share of $3.56. The company’s balance sheet shows cash and equivalents at $2.759 billion, up from $2.487 billion, and total assets of $7.708 billion versus $7.260 billion a year earlier. Long‑term debt remained stable at $3.514 billion, while equity rose to $2.363 billion from $2.135 billion. Operating expenses grew modestly, with research and development increasing to $94 million from $56 million, while sales and marketing rose slightly to $60.8 million. Methodologically, the update presents both GAAP and non‑GAAP measures; Adjusted EBITDA is defined by excluding items such as stock‑based compensation, restructuring costs, and goodwill impairment. The reconciliation table shows cumulative Adjusted EBITDA margins climbing from 65% in Q1 2025 to 85% in Q1 2026, driven by revenue growth and controlled cost expansion. The update covers the United States market for Q1 2026, with data drawn from audited financial statements and internal reconciliations.

market-analysis monetization mobile+1

AppLovinMay 2026

Report

State of Gaming 2026

The 2026 State of Gaming analysis demonstrates a shifting landscape in which mobile gaming remains the largest driver of downloads—approximately 50 billion in 2025—but its growth rate is slowing. Revenue, however, continues to climb as monetization models mature and lifetime value deepens, especially within hybrid‑casual titles that now generate the most incremental income. In contrast, PC and console platforms experience record revenue growth, with Steam’s premium segment up 32 % and blockbuster releases such as Battlefield 6 capturing significant market share from incumbents. Shooter downloads on these platforms have plateaued, suggesting new titles are primarily cannibalizing existing audiences rather than expanding the category. Genre‑specific dynamics reveal that strategy games are the only mobile genre to grow in downloads, driven by 4X titles from Eastern developers. Action and shooter games dominate PC/console gains, while hyper‑casual remains the largest download engine but shows a notable lift in time spent, particularly in Tier 2 markets. Casual titles face declining day‑7 retention, indicating a stickiness challenge that could erode long‑term player value. Live‑ops and acquisition strategies have evolved toward retention‑focused events, multi‑tier season passes, and expedition‑style rewards. These mechanisms now represent the most reliable revenue drivers across competitive genres such as RPG, action, and simulation. Advertising spend remains concentrated on social channels—YouTube, Facebook/Instagram—and high‑attention formats like video, playable, and rewarded ads. Battlefield 6’s pre‑launch spend surpassed Call of Duty titles, leveraging Facebook, Reddit, and desktop display, while its post‑launch strategy pivoted to YouTube with cinematic, celebrity‑hook creatives. Geographically, the U.S. market shows a skew toward lifestyle and puzzle categories despite lower IAP shares, whereas casino titles exhibit higher spend‑to‑revenue efficiency. Overall, the industry is moving from acquisition toward deeper monetization per user, with indie shooters and simulation titles gaining traction amid intense competition in the shooter segment.

market-analysis monetization mobile+1

Sensor TowerApr 2026

Financial

Q4 2025 Financial Report: Modern Times Group

Modern Times Group delivered a record‑setting performance for the fourth quarter of 2025, underscoring the company’s momentum in the digital entertainment sector. Organic revenue expanded by 8 percent, which translates to a 108 percent increase when measured in constant‑currency terms, and net sales reached SEK 3.1 billion. These figures reflect the strength of the group’s core portfolio and its ability to generate growth despite a volatile macro‑economic environment. A pivotal element of the results was the integration of Plarium, which was completed on 12 February 2025 and consolidated from 31 January. The acquisition contributed SEK 5,384 million in sales for the quarter and produced SEK 495 million of income before tax, after accounting for SEK 786 million of purchase‑price amortisation. When the acquisition is modelled as if it had been in place from the start of the year, total sales for 2025 would have risen to SEK 12,137 million, with pre‑tax income of SEK 398 million, albeit offset by SEK 1,269 million of amortisation. The combined impact of robust organic growth and the strategic addition of Plarium positions Modern Times Group as a leading player in the global gaming market. The financial outcomes demonstrate that the company’s acquisition strategy is delivering immediate scale and profitability, while its underlying business continues to expand at a pace that exceeds prior expectations. This performance suggests a durable growth trajectory for the remainder of the fiscal year and beyond.

investment market-analysis user-acquisition+3

Modern Times GroupFeb 2026