Interim report January - September 2014

PRESS RELEASE 2014-10-31 08:00

July-September 2014

• Consolidated revenue for the period is 44 653 (21 910) kSEK, an increase of 104% compared to the same period 2013
• Operating result for the period is -846 (-4 637) kSEK. Excluding write-downs and re-listing expenses the operating result was 1 966 kSEK.
• Net result for the period is -2 209 (-3 595) kSEK
• Earnings per share for the period before and after dilution is -0.25 (-0.41) SEK.
• Cash flow before financing activities during the period is 7 527 (-5 231) kSEK.
• The result for the period is affected by write-downs of capitalized development costs and advances to external developers in the amount of 2 443 kSEK.

January-September 2014

• Consolidated revenue for the period is 124 399 (71 289) kSEK, an increase of 74% compared to the same period 2013.
• Operating result for the period is 6 663 (8 692) kSEK. Excluding write-downs and re-listing expenses the operating result is 10 884 kSEK.
• Net result for the period is 3 559 (7 635) kSEK.
• Earnings per share for the period before and after dilution is 0.40 (0.88) SEK.
• Cash flow before financing activities during the period is 5 349 (-13 693) kSEK. This includes fees of 1 778 kSEK to advisors in connection with the listing on Nasdaq Stockholm.
• The result for the period is affected by write-downs of capitalized development costs and advances to external developers in the amount of 2 443 kSEK.

Important events during the third quarter

• G5 has during the quarter shown substantial and profitable growth, and generated record monthly and quarterly revenue.
• Revenue from free-to-play games grew 147% compared to 13Q3, and accounted for 77% of total revenue in 14Q3 (54% in 13Q3).
• Revenue from unlockable games was slightly lower than in 14Q2 but stable.
• The accumulated number of downloads of the group’s games (not counting updates) surpassed 180 million.
• The group continued working on improving free-to-play games in its portfolio and working on new free-to-play games.

Important events after the end of the period

• In free-to-play business model, the group’s increased marketing spending allows balancing the inflow of new users during the “low” season in the application stores and accelerate user acquisition during the “high” season. During 14Q3 and after the end of the period, many new great hardware devices, smartphones and tablets, were announced and/or launched to the market in time for the holidays, which should benefit the installed base of devices G5 games are addressing. With the new higher level of marketing expenses and new game updates and releases coming out, the management is looking forward to 14Q4 and 15Q1, historically the strongest quarters in the year.
• The company continues to work on upcoming new free-to-play games, with the aim to have more than 10 free-to-play games in the portfolio before 2015. Most of new games that are scheduled to come out before the end of the year are owned by G5 and developed either internally or by 3rd party studios under work-for-hire contracts.
• The group’s office in Kharkov continues business as usual. It is the group's policy to keep critical code and materials backed up outside Ukraine, keep intellectual property rights in EU entities, and transfer funds to subsidiaries on as-needed basis.