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Swedish mobile games maker G5's Q3 revenue falls, margin hits record on cost cuts, direct payments

By Reuters News


Overview

  • Sweden mobile game developer's Q3 revenue fell 20% yr/yr

  • Gross margin reached a record 74.1% as direct-to-consumer share increased

  • Adjusted EPS rose 70% yr/yr, aided by cost savings and higher monetization per user


Outlook

  • Company expects annualized run-rate savings of about $14 mln from recent redundancies

  • G5 Entertainment anticipates team size to stabilize at around 450 by year-end

  • Company expects continued progress in advertising revenue growth going forward


Result Drivers

  • COST SAVINGS - Co said leaner organization and redundancies led to annualized run-rate savings of around USD 14 mln, per CEO Vlad Suglobov

  • DIRECT-TO-CONSUMER INITIATIVES - Co said increased revenue from G5 Store and direct payment processing contributed to record gross margin

  • MONETIZATION QUALITY - Co said average monthly gross revenue per paying user rose 6% yr/yr, reflecting increased concentration of high-value users


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Gross Margin

74.10%


Analyst Coverage

  • Wall Street's median 12-month price target for G5 Entertainment AB (publ) is SEK124.00, about 89.9% above its November 3 closing price of SEK65.30

  • The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 11 three months ago


Reuters Recommended Reads

  • Nov 3 - Swedish game developer Hacksaw Q3 revenue rises 12%

  • Nov 3 - Zalando Q3 revenue slightly beats estimates on B2B expansion


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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