We have delivered the best third quarter in M.O.B.A. Network's history. Strong revenue and EBITDA growth, combined with healthy cash flows, have enabled us to strengthen our balance sheet and reduce debt. We have successfully launched the in-game-app, Valofessor, expanding into the first-person shooter market, and our strategy positions us well for sustained growth. - Extract from Anders Ribbing's CEO Comment
SUMMARY OF INTERIM REPORT Q3
FINANCIAL - 1 JUL 2024 - 30 SEP 2024
- Revenue amounted to SEK 80.1 million (71.7), an increase of 12%.
- EBITDA amounted to SEK 15.4 million (11.3), an increase of 35%.
- EBIT amounted to SEK 9.7 million (1.9), an increase of 400%.
- Profit before tax amounted to SEK 1.1 million (-8.5).
- Cash flow from operating activities before changes in working capital amounted to SEK 7.8 million (1.7).
- Earnings per share during the quarter amounted to SEK 0.0 (-0.3).
FINANCIAL - 1 JAN 2024 - 30 SEP 2024
- Revenue amounted to SEK 228 million (191), an increase of 19%.
- EBITDA amounted to SEK 41 million (16), an increase of 165%.
- EBIT amounted to SEK 24 million (3), an increase of 626%.
- Profit before tax amounted to SEK -3 million (-13).*
- Cash flow from operating activities before changes in working capital amounted to SEK 17 million (4).
- Earnings per share amounted to SEK -0.1 (-0.5).
COMMENTS BY THE CEO
RECORD BREAKING EBITDA AND REVENUE GROWTH IN Q3
I am pleased to report that our Q3 is the best third quarter in M.O.B.A. Network's history. Revenue grew by 12% and EBITDA by 35%, reflecting our execution and strategic focus. The strong cash flow strengthened our balance sheet and has positioned us well for future growth opportunities.
GROWTH & NET DEBT REDUCTION
Revenues reached SEK 80.1 million (71.7), and EBITDA totaled SEK 15.4 million (11.3). A positive cash flow from operating activities, before changes in working capital, amounted to SEK 7.8 million (1.7), enabling us to repurchase bonds and cover corporate bond interest payments. Our cash reserves remain stable at SEK 23 million, with an additional unused line of credit of EUR 2.5 million.
During Q3, we repurchased EUR 1 million of corporate bonds at 92.5% of their nominal value, increasing our bond holdings to EUR 3.9 million, 15.6% of the outstanding bonds nominal value. In Q4, we further repurchased EUR 1.1 million, bringing our total bond ownership to EUR 5 million, or 20% of the outstanding bonds nominal value. Reducing net debt remains a priority, and our strong cash flow allows us to target further net debt reduction in 2025. While net debt reduction is our focus, we remain open to organic investments and acquisitions that align strategically and have low balance sheet impact.
THE VALOFESSOR IN-GAME-APP IS LIVE
We have successfully launched Valofessor in October, our second in-game-app. While initially delayed to incorporate high-impact features, this decision has enhanced the app's user experience. We plan to continue iterating this first version of the app based on user feedback. Marketing efforts will purely be based on our organic reach until we see strong user retention. The app can be downloaded at valofessor.gg.
INDUSTRY RECOVERY & STRATEGIC FOCUS
The global gaming industry continues to recover, with major studios like Riot Games doubling down on their key titles. This long-term commitment suggests that League of Legends will remain a core asset, with potential for a resurgence in player engagement over time.
At M.O.B.A. Network, we continue to align our strategy with these industry trends, focusing on building communities around long-lasting games. Additionally, we are diversifying our portfolio with products like Valofessor, our first in-game-app for Valorant players, marking our entry into the first-person shooter (FPS) market. This move will broaden our reach and position us to capture new audiences.
Looking ahead, we will keep expanding our in-game-app offerings and community platforms, ensuring we remain at the forefront of the growing demand for social and competitive gaming experiences.
AD MARKET RECOVERY AND GLOBAL ECONOMIC OUTLOOK
The digital advertising market has rebounded strongly, particularly within the gaming sector, which continues to attract substantial interest from brands due to its highly engaged and hard-to-reach audience. Gen Z and Millennials are increasingly elusive through traditional media, making gaming platforms an ideal environment for marketeers and targeted advertising.
As brands steadily increase their advertising investments, especially across the U.S. and Europe, M.O.B.A. Network stands ready to leverage this momentum. Our diverse portfolio of ad-driven platforms is well-equipped to capture the growing demand and deliver value. The U.S. political campaigns are expected to drive up demand for premium ad inventory in Q4, ahead of the upcoming presidential election.
In light of ongoing economic uncertainty, our focus remains on maximizing ad monetization and diversifying revenue streams, ensuring continued growth even in challenging macroeconomic conditions.
OPERATIONAL EXCELLENCE
Porofessor, our flagship in-game League of Legends app, continues to grow both in terms of revenue, EBITDA contribution and app installs. Our portfolio of niched communities, forums, and data based web brands have seen stable organic growth. M.O.B.A's business area, Advertising Sales, generated revenue of SEK 26.8 million (23.5) and SEK 17.2 million (12.1) in EBITDA.
Union for Gamers (UFG), our YouTube creator network, representing M.O.B.A.'s business area, Video Sales, has continued on the growth path that we witnessed in Q2. Video Sales achieved growth in Q3, both in terms of revenues of SEK 53.3 million (48.1) and EBITDA SEK 1.7 million (1.4). Our cost rationalization program reached full effect in Q3 and we also had yet another quarter with net creator growth. We expect that this positive momentum will continue.
All in all, we are very pleased that all of our asset categories are growing.
ROADMAP FOR 2024/2025
Our team has made substantial progress on the integration of Smite 2 into our web brand Smitefire. Smitefire continues to be one of the highest-performing niched brands in our portfolio, generating the highest RPM's across our website portfolio. We are targeting a Q4 launch for this integration and expect it to drive significant user engagement.
SEO optimization and harnessing network effects across our platforms continue to be focus areas for M.O.B.A. Network. By enhancing search rankings and building synergies across our creator and data driven sites and apps, we are positioning ourselves for sustained growth.
Looking ahead, we are planning further expansions of our in-game app offerings, alongside launching new community-based websites. These initiatives are part of our broader strategy to deepen engagement with our users and expand the reach within the gaming community. Developing new offerings and new business models that can generate recurring revenue streams will be a major focus area for 2025. We are excited about the potential these projects hold for 2025 and beyond.
As we move forward, I am confident in our ability to sustain our momentum and the start of Q4 is above our expectations.
I want to thank our shareholders, our awesome team and the board of directors for their efforts. They have all played a vital role in our momentum and are crucial for our future success.
Anders Ribbing, CEO
October 25th, 2024
M.O.B.A. Network presents a webcast in regards to Interim report Q3 2024. The webcast will be published at 07.30 on October 25th 2024. Watch the webcast through the follwoing link: https://vimeo.com/user8366371/review/1022908339/4fd1d01234
Contacts
Anders Ribbing, CEO
info@wearemoba.com
https://wearemoba.com
Certified Adviser - FNCA Sweden AB
About Us
M.O.B.A. Network is committed to operating and growing gaming communities and innovative products that elevate gaming experiences worldwide. The company is shaping the future of gaming by uniting and elevating gamers & creators. The extensive network spans 25 global niched web brands, cutting-edge in-game-apps, and Union For Gamers (UFG), a leading YouTube creator network. M.O.B.A. Network is present in Sweden (HQ), U.S.A, Canada, and France. The company is listed on NASDAQ First North Growth with the ticker "MOBA".
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 2024-10-25 07:30 CEST.
