GDEVW

Key Points

• Andrey Fadeev emphasized focus on long-term product changes in games, including game play mechanics, meta progression, etc. Appointed Olga Loskutova as Chief Operating Officer.
• Alexander Karavaev discussed financials: revenue, bookings, expenses, marketing spend growth, cash flow management, and geographic focus on Europe.

Forward-Looking

• Launched a one-for-ten reverse stock split and an at-the-market offering to enhance liquidity. Holding cash for potential M&A opportunities. Focus on product evolution and marketing investments for future growth.

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. Marketing investments increased to $52 million year-over-year. Net profit 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. Geographically, Europe bookings grew, increasing their share of total bookings from 26% to 30%.

Risks

• Forward-looking statements may not develop as expected. Risks detailed in SEC filings. Impact of under-investment in marketing in 2022 affecting recent bookings.

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

A: Launch was successful, initial spike then stabilized with average 2,500-3000 concurrent users growing month-over-month. Working on product improvements for Steam audience.

Q: Update on capital allocation and ATM?

A: ATM launched to bolster liquidity, cash on balance sheet, holding for future developments like M&A with no immediate plans.

Q: Pipeline for new games?

A: R&D teams working on games, some showing good metrics, in development with potential to share details later.

Q: User acquisition efficiency and Q4 spend?

A: Market not improved much, still investing with decent IRR, Q4 marketing spend expected similar to Q3 with focus on product first.

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

A: Different strategies; web version has limited scalability, mobile version is core with majority focus, expecting mobile to scale substantially.

Q: Synergy between games?

A: Cross-promotion not effective, focus on cohort analysis; synergies between teams in areas like AI and production efficiency.

Q: Geographic expansion?

A: Focus on expanding to Latin-America, Asia, India, etc., adapting products for younger audiences, longer-term strategy.

Q: Diluted share count?

A: Little change since Q2, share count remains mostly the same.

Q: M&A and new territories?

A: Constantly looking at M&A, opportunistic, need to adapt products for new geographies, prioritizing product adaptation for younger generations.