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Flexion produces report outcomes: 52% progress in income, 63% progress in gross revenue and 163% progress in EBITDA

October 2021 to December 2021 efficiency

• Whole income elevated by 52% to GBP 10.5m (GBP 6.9m)*
• Gross revenue elevated by 63% to GBP 1.5m (GBP 0.9m)
• Adjusted EBITDA^‡ elevated by 163% to GBP 0.33m (GBP 0.13m)
• Working revenue elevated to GBP 0.63m (GBP 0.06m)
• Earnings per share amounted to GBP 1.28 pence (GBP 0.13 pence)
• Money amounted to GBP 14.5m (GBP 12.4m)

April 2021 to December 2021 efficiency

• Whole income elevated by 46% to GBP 26.1m (GBP 17.9m)*
• Gross revenue elevated by 43% to GBP 3.4m (GBP 2.4m)
• Adjusted EBITDA^‡ elevated by 68% to GBP 0.43m (GBP 0.25m)
• Working end result elevated by 734% to GBP 0.56m (GBP 0.07m)

Vital occasions throughout the quarter

• Launch of Evony: The King’s Return from Prime Video games Inc.
• Launch of The Ants: Underground Kingdom from StarUnion
• Launch of Puzzles & Survival from 37Games
• Signing of Mahjong Treasure Quest from Vizor

Vital occasions after the quarter

• Strategic funding in cellular sport influencer, Liteup Media UG
• Alignment of the monetary yr with the calendar yr by closing the present monetary yr after 9 months in December 2021

* Comparable quantity for a similar quarter of the earlier monetary yr in brackets
‡ The Firm defines adjusted EBITDA as earnings earlier than curiosity, tax, depreciation, amortisation, finance prices, impairment losses and different earnings. Adjusted EBITDA (adjusting working revenue for a number of non-cash gadgets) is utilized by the Firm for inside efficiency evaluation to evaluate the execution of our methods. Administration imagine that this adjusted measure is a extra acceptable metric to know the underlying efficiency of the Firm

Notes from the CEO

What an incredible quarter we had – our greatest to date! We entered the 4^th quarter with three new high titles main as much as the essential Christmas interval and I’m actually happy that we managed to launch all of them and profit from retailer promotions throughout the festive season.

Evony: The King’s Return, The Ants: Underground Kingdom and Puzzles and Survival are a few of the greatest titles out there and generated greater than USD 40m in Google Play throughout December. These are actually a part of our portfolio and contributed to our sturdy efficiency in This autumn. We skilled 52% progress in quarterly income in contrast with the identical interval final yr and a rise of 46% for the entire yr, which was according to our steering. The sturdy efficiency can be seen in gross revenue and EBITDA, up 63% and 163% respectively.

In 2021, we reached essential mass on the platform, and that’s why we now see a constructive impact on our EBITDA for every new sport we launch. I’m additionally very comfortable that we generated GBP 0.6m in web revenue for the interval partly because of the restoration of GBP 0.4m from the impairment write-down we made in March 2020. These titles carried out higher than anticipated and are actually producing constructive contribution.

We added yet another main developer throughout the quarter, Vizor Video games, and we’re getting ready to launch their title Mahjong Treasure Quest. On the again of our present sturdy efficiency and rising portfolio, we’re actively phasing out low performing titles. This may assist us enhance the general portfolio’s efficiency and enhance the typical income per sport. Our top-tier month-to-month common has improved from USD 560K in Q3 to USD 730K. This may be seen in our KPI part on web page 12.

We’ve got now began to spend money on new strategic initiatives inside paid user-acquisition, with concentrate on influencer advertising and efficiency advertising to help our core enterprise and to increase our footprint into the sport companies market as beforehand introduced. The plan includes acquisition of expertise via investments and acquisitions, however we’re additionally strengthening our improvement and product groups to help these new initiatives. Our first step into influencer advertising was the funding made in January 2022 in Liteup Media. Liteup Media is a promising German start-up that has got down to disrupt influencer advertising and make it extra mainstream and accessible to cellular sport advertisers. This funding is engaging to us as we get a foot within the door in influencer advertising, whereas we’ve got the choice to accumulate the corporate.

Wanting on the wider market, we are able to see some clear market tendencies in favour of latest companies comparable to influencer advertising. That is partly attributable to privateness modifications comparable to deprecation of IDFA by Apple, which makes it harder to focus on and observe customers. Google have additionally introduced that it’ll make comparable modifications including to the issues for conventional efficiency advertising. In parallel, we’re seeing new demand for influencer advertising from blockchain-based video games and NFTs. New marketplaces outdoors the standard app shops are evolving for these video games, including to extra market fragmentation. This in flip will drive new tendencies in person acquisition which we wish to capitalise on. Different attention-grabbing current strikes that may increase our market is Microsoft’s help for Android on Home windows 11, via their Amazon Appstore partnership. This venture is now publicly launched by Microsoft, and Flexion is already supporting it. As well as, Netflix has entered the general video games market principally to help their core enterprise and lately introduced it stepped up its push into gaming by buying Subsequent Video games, a NASDAQ First North listed sport developer.

We are actually coming into a brand new monetary yr and the historically weaker Q1 interval. Our efficiency has to date been according to expectations, we’re specializing in rising income and audiences for our new high titles. On the again of our sturdy momentum coming into the brand new yr, we count on our annual income to develop with 40-60% and our workers price by 8-12% throughout 2022. This progress is pushed by our core technique, whereas new initiatives are ramping up throughout 2022. General, it ought to set us up for one more sturdy and thrilling yr.

I’d additionally wish to touch upon Flexion’s publicity to the horrible occasions taking place in Ukraine and our ideas are with all these affected. As an organization with enterprise in international markets, we’ve got so far not seen any political occasions the place cellular video games have been sanctioned and we don’t foresee that taking place right here both. We’re very lucky that our workers haven’t been uncovered to the area, none of our developer contracts are with Russian corporations and our settlement construction is comparatively properly protected towards cost freezes or delays. The dangers we see lie throughout the extremely risky Russian Ruble and the flexibility of our channel companions to switch funds out of Russia. To this point, the consequences on Flexion have been restricted and in February lower than 10% of our international income was generated within the Russian market. The state of affairs may be very fluid, and we’re monitoring it intently.

Lastly, I want to thank all Flexion workers for a unbelievable yr and welcome our new colleagues at Liteup Media to the Flexion Group.

Jens Lauritzson – CEO

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