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Modern Times Group Q3 2023 Interim Report

Key insights

6 takeaways

01
Modern Times Group achieved record-breaking adjusted EBITDA of SEK 449 million in Q3 2023, representing a 30% margin.See it on page 1
02
Net sales grew 6% year-over-year to SEK 1,494 million, leading management to raise the full-year adjusted EBITDA margin guidance to 25%–27%.See it on page 1
03
Average revenue per daily active user increased by 12% year-over-year, effectively offsetting a 2% decline in daily active users.See it on page 6
04
The company acquired a 70% majority stake in Snowprint Studios, the developer of Warhammer 40,000: Tacticus, for approximately USD 45 million.See it on page 18
05
Key titles such as Forge of Empires remain central to the company's monetization strategy and sustained financial performance.See it on page 7
06
The company maintains an unmodified audit conclusion, confirming full compliance with international financial reporting standards.See it on page 12

Summary

Modern Times Group demonstrated robust financial health during the third quarter of 2023, characterized by a 6% year-over-year increase in net sales to SEK 1,494 million. The company achieved record-breaking adjusted EBITDA of SEK 449 million, resulting in an impressive adjusted EBITDA margin of 30%. These results reflect a successful operational strategy that has prompted management to raise the full-year adjusted EBITDA margin outlook to a range of 25% to 27%, while maintaining existing revenue growth guidance.

Performance metrics reveal a nuanced landscape within the mobile gaming portfolio. While daily active users experienced a marginal 2% decline attributed to seasonal fluctuations and challenges in mid-core user acquisition, the company successfully offset this through a 12% year-over-year increase in average revenue per daily active user. This growth in monetization was largely anchored by the sustained performance of key titles such as Forge of Empires, confirming the effectiveness of the company’s current engagement and revenue strategies.

Strategic expansion remains a core pillar of the company’s growth trajectory, evidenced by the acquisition of a 70% majority stake in Snowprint Studios, the developer behind Warhammer 40,000: Tacticus, for approximately USD 45 million. This investment, coupled with an unmodified audit conclusion confirming compliance with international financial reporting standards, positions the organization for continued development. Looking ahead, the company maintains a clear corporate governance schedule, ensuring transparency and operational continuity as it integrates new assets and navigates the evolving mobile gaming market.