M.O.B.A. Network delivered its best second quarter in history, driven by record-breaking EBITDA growth of 891% amounting to SEK 15.8m (1.6) and a significant 28% increase in revenue, corresponding to SEK 81.7m (63.6). Our strategic focus on high-impact digital assets, including in-game apps, communities, forums, and our YouTube creator network, has been the key to this success. Despite global economic challenges, we've increased profitability and a strong cash flow, positioning us well for continued growth. With the gaming and advertising markets on the rise, we anticipate sustained momentum in the upcoming quarters - Extract from Anders Ribbing's CEO Comment
SUMMARY OF INTERIM REPORT Q2
FINANCIAL - 1 APRIL 2024 - 30 JUNE 2024
- Revenue amounted to SEK 81.7 million (63.6), an increase of 28%.
- EBITDA amounted to SEK 15.8 million (1.6), an increase of 891%.
- EBIT amounted to SEK 9.7 million (0.1), an increase of 16,407%.
- Profit before tax amounted to SEK 1.3 million (-4.5).
- Cash flow from operating activities before changes in working capital amounted to SEK 7.2 million (0.1).
- Earnings per share during the quarter amounted to SEK 0.1 (-0.2).
FINANCIAL - 1 JAN 2024 - 30 JUNE 2024
- Revenue amounted to SEK 148 million (119), an increase of 24%.
- EBITDA amounted to SEK 25.9 million (4.3), an increase of 507%.
- EBIT amounted to SEK 13.9 million (1.3), an increase of 967%.
- Profit before tax amounted to SEK -4.4 million (-4).*
- Cash flow from operating activities before changes in working capital amounted to SEK 9.7 million (2.7).
- Earnings per share during the quarter amounted to SEK -0.2 (-0.2).
* The profit before tax result is negatively affected by increased amortization and interest costs linked to corporate bonds.
COMMENTS BY THE CEO
A RECORD-BREAKING QUARTER WITH SUSTAINED GROWTH
I am thrilled to announce that M.O.B.A. Network has achieved record-breaking growth in EBITDA this quarter. Our diverse portfolio of digital assets, including in-game apps, gaming community and forum websites, and our YouTube creator network, continues to thrive, leading to significant revenue increases of +28% and an unparalleled EBITDA growth of +891%. We are proud to have navigated and followed our set strategy and managed to grow with profitability, defying the globally challenging economic climate.
SECOND QUARTER FINANCIAL OVERVIEW
Revenues amounted to SEK 81.7 million (63.6) and EBITDA amounted to SEK 15.8 million (4.3). We are also proud of the cash flow from ongoing operations amounting to SEK 7.2 million (0.1). Our cash flow and cash position made it possible for us to pay an additional EUR 1 million for the acquisition of Wargraphs, pay interest payments stemming from the corporate bond of SEK 9 million, and we also repurchased EUR 1 million of our corporate bonds. Our cash position of SEK 36 million remains stable and we also have an unused line of credit.
INDUSTRY RECOVERY AND STRATEGIC FOCUS
The gaming market's recovery has been a crucial growth driver for our communities and products. Major gaming studios are doubling down on their core games, which aligns perfectly with our strategic focus on games with longevity. This renewed emphasis is expected to drive further growth of key titles that serve as underlying drivers of our financial performance.
AD MARKET RECOVERY AND GLOBAL ECONOMIC OUTLOOK
The advertising market is on an upward trajectory. While we maintain a positive outlook on the global economy, we acknowledge the inherent uncertainties. Our business is heavily reliant on advertising, which is influenced by various macroeconomic factors that in turn govern corporate advertising spend. Positive economic tailwinds naturally accelerate our growth, which also clearly indicates the massive potential that our asset portfolio possesses. We also anticipate an increased demand and higher prices in Q3 and Q4 for our dominant U.S. ad inventory, due to the upcoming Presidential election.
OPERATIONAL EXCELLENCE
Porofessor, our flagship in-game League of Legends app, continues to grow both in terms of revenue, EBITDA contribution and in terms of app installs. Despite a lower-than-expected number of active League of Legends players in Q2, we have managed to grow financially. Our portfolio of community and forum websites have seen stable organic growth. M.O.B.A's business area, Advertising Sales, generated revenue of SEK 31 million (14) and SEK 18 million (9) in EBITDA.
The Valofossor.gg website has been launched and will serve as the data backend for our much anticipated Valofessor app. The website represents a milestone and takes us a big step closer to launching the Valofessor app, which we are looking to launch in Q3. We are excited to start engaging Valorant gamers amounting to approx. 20-28 million monthly active users.
Union for Gamers (UFG), our YouTube creator network, representing M.O.B.A.'s business area, Video Sales, has reversed previous declines. Video Sales achieved modest growth in Q2, both in terms of revenue SEK 61 million (49) and EBITDA SEK 1.5 million (1.4). We have successfully reduced costs, managed to add new high-margin revenue streams, and we've connected more content creators in Q2 than we have in any other quarter historically. We expect that our positive momentum will continue in upcoming quarters.
During the quarter we announced a buyback of our own corporate bonds to strengthen our financial position. The repurchase was made at 92.45% of the bonds' nominal value, for a total amount of EUR 924,500. We now own EUR 2.9 million (11.6%) of the bonds' outstanding nominal amount. This was possible due to our positive cash flow and cash position. Further bond buybacks in 2024 is something that we are considering as well as potential acquisitions.
OPERATIONAL INITIATIVES AND FUTURE PROJECTS
We are working on several new traffic-driving initiatives across our network to increase organic search traffic and leverage cross-promotional opportunities. This will be a focus area for us in the upcoming quarters.
We are also investing more in in-game apps as they are gaining in popularity and witnessing improved ad monetization metrics. Valofessor will be our first app that we will launch post Porofessor, and we are further looking to launch more apps on the back of key brands in our portfolio of websites. Apps can serve as new monetization vehicles that can increase our profitability for selected digital assets.
As we move forward, I am confident in our ability to sustain our momentum and Q3 is off to a good start. Our strategic focus and operational excellence will continue to drive M.O.B.A. Network towards new heights.
I want to thank our shareholders, the board of directors and our fantastic team for all of their efforts.
Anders Ribbing
CEO, M.O.B.A. Network AB, Aug 22nd, 2024
M.O.B.A. Network presents a webcast in regards to Interim report Q2 2024. The webcast will be published at 07.30 on 22 August 2024. Watch the webcast through the follwoing link: https://vimeo.com/user8366371/review/1001286707/5cd135adb2
This information is information that M.O.B.A. Network is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2024-08-22 09:55 CEST.
