GDEV

Key Points

• Andrey emphasized a long-term product focus, with studios implementing thoughtful, long-term changes across game play mechanics, monetization, etc., to foster sustained growth. Appointed Olga Loskutova as Chief Operating Officer.
• Alexander discussed financial results, disciplined cost management, marketing investment increase, and the impact of under-investment in marketing in 2022 on bookings. Highlighted Europe bookings growth.
• Roman mentioned executing a one-for-ten reverse stock split and an at-the-market offering to boost liquidity and market appeal.

Forward-Looking

• Focus on product evolution and marketing investments. ATM offering is for bolstering liquidity and potential M&A opportunities, but no immediate specific plans for M&A at present.

In Q3 2024, revenue was $111 million, a 5% quarter-over-quarter growth but a 9% year-over-year decline. Bookings were $93 million, down 8% year-over-year. Platform commissions decreased by 13% year-over-year or $4 million. Game operation costs were stable at $13 million. General and administrative expenses declined slightly to $7 million from $8 million in Q3 2023. Marketing investments increased by $9 million year-over-year to $52 million. Net profit in Q3 2024 was $15 million, down from $24 million in the same period last year. Adjusted EBITDA was $16 million, down $13 million year-over-year. Cash flows from operating activities increased to $12 million from $8 million in Q3 2023. Geographically, Europe bookings grew, increasing their share of total bookings to 30%.

Risks

• Forward-looking statements may not develop as expected. Impact of under-investment in marketing in 2022 on bookings. Intensifying competition in the gaming landscape may affect performance.

Q: How much success has Pixel Gun on Steam had and impact on user growth?

A: Launch was successful, initial spike settled, average concurrent users around 2,500-3000 and growing. Looking at product improvements for Steam audience.

Q: Update on capital allocation and ATM?

A: ATM for liquidity, cash cushion available, primarily for potential M&A but no immediate plans.

Q: Exciting pipeline for new games?

A: R&D teams working on games, some showing good metrics, in scaling mode with details to be shared later.

Q: User acquisition efficiency and UA spend trend in Q4?

A: Market not changed much, still investing with decent IRR/ROAS. Q4 marketing spend expected to be similar to Q3 with focus on product improvement first.

Q: Diverging performance between Hero Wars: Alliance and Hero Wars: Dominion Era?

A: Different strategies; web version has limited scalability, mobile version is core with majority focus, expecting product updates here for scaling.

Q: Synergy between games and cross-promotion?

A: Cross-promotion not effective due to different audiences; synergies exist between teams in terms of knowledge transfer for cost reduction, prototyping speed, etc.

Q: Geographic expansion focus?

A: Focus on expanding to Latin-America, Asia, India, etc. Product updates adapting to younger audiences; marketing strategies to be developed for these markets, longer term boost expected.

Q: Diluted share count in Q3?

A: Virtually unchanged since Q2 report.

Q: New territories, M&A thoughts?

A: M&A is opportunistic; looking at buying studios in new geographies to position for entry, product needs adaptation for younger generations, M&A could be helpful but carefully analyzed.