Flexion delivers a solid quarter and continues to expand its portfolio of games. During the first quarter of the new financial year, IAP (In-App Purchase) revenue increased by 39% to GBP 1.9m compared to the same period last year and total annual revenue increased by 35% to GBP 1.9m. The Company signed its second biggest top-tier title and one mid-tier game while also launching three of its signed top-tier games.
April 2019 to June 2019 performance
- IAP (In App Purchase) revenue increased by 39% to GBP 1.9m (GBP 1.3m*)
- Total revenue increased by 35% to GBP 1.9m (GBP 1.4m)
- Gross profit fell by 7% to GBP 0.2m (GBP 0.2m)
- Adjusted EBITDA fell by 28% to GBP -0.5m (GBP -0.4m)
- Operating loss increased to GBP -0.5m (GBP -0.3m)
- Earnings per share amounted to GBP -1.16 pence (GBP -0.73 pence)
- Operating cash flow increased to GBP -1.1m (GBP -0.1m)
- Cash amounted to GBP 5m (GBP 7.4m)
* Comparable number for the same quarter of the previous financial year in brackets
Important events during the quarter
- Flexion signed its second biggest game based on Google Play revenues of USD 8m per month
- Flexion signed a new mid-tier title from a Chinese developer
- Flexion launched its first US Top 10 grossing game with Samsung and ONE Store
- Flexion launched two Top-tier games from the US
Notes from the CEO
The first quarter of the financial year was our busiest so far and we have a lot of momentum right now. It was driven by new additions of strong titles to the signed portfolio as well as preparing and launching titles we signed in the last financial year.
We signed our second biggest title ever. This title has a run rate of USD 8m per month in Google Play where it is top ten grossing in several of the biggest markets including Russia, Turkey and Indonesia. The game was signed in April and once live, it will together with the other newly launched games fuel our growth. We also signed a new mid-tier game, in the same period. Both these titles are from highly respected Chinese developers and shows that our sales efforts in this market are paying off.
We launched three high-profile games during the quarter, starting in April with two American top-tier titles we announced last year. Towards the end of the quarter, we launched our first top ten grossing title with Samsung and ONE store. Our live portfolio of games now consists of 6 Top-tier titles and 6 Mid-tier titles, including the games launched this quarter. It is really encouraging to see how we keep adding world class games to our live portfolio and how the organisation manages to deliver on our go to market strategy.
In terms of revenue growth, we have already started to see contribution from the newly launched titles. Our quarter on quarter growth for IAP revenue was 15% accelerating towards the end of the quarter, mainly driven by new games.
The summer period has been very busy as we are continuing to aggressively recruit new channels and developers. In June, we attended E3 in Los Angeles, one of the biggest game developer shows in the world, where we met most of our strategic partners and we are lining up meetings for the other two large games shows during the summer, China Joy and Gamescom.
The product development team has also made some great progress this quarter. We have released new features within gifting and in-app subscription. The gifting feature is a wallet-based solution which allows stores to give away in-game currency as part of their wider market campaigns i.e. “buy a new phone and receive USD 100 of credits in these games”.
More and more games are adding subscription within their games to achieve better monetization through recurring revenues i.e. “get exclusive access to these features when subscribing to our VIP pass”. This a positive trend for Flexion as subscription requires more work for developers in a fragmented market. We want to help developers take full advantage of subscription in the alternative market and have therefore developed platform support for this. These features are strategically important as they support new market trends and reduce the need for traditional store-based user acquisition. By continuously being at the forefront of developing key features supporting these market trends, Flexion will strengthen our position as a strategic partner to our games developers.
For more information
Niklas Koresaar CFO, Email: email@example.com. Tel: +44 207 351 5944
This is information that Flexion Mobile Plc is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CET on August 22nd, 2019.
About Flexion Mobile Plc:
Flexion offers a distribution service for free-to-play Android games. Using the service developers can distribute their games in multiple channels like Amazon, Samsung, One Store and leading regional distribution channels. These are channels that the developers are struggling to reach and support. At the core of Flexion's service is the patented enabling and enhancement software that converts developers' existing Android games into specific game versions for the new stores without any work required. Flexion Mobile Plc is listed on Nasdaq First North, Ticker: FLEXM. Certified Adviser is FNCA Sweden AB, +46(0)8-528 00 399 firstname.lastname@example.org.
Flexion’s go-to-market strategy is to grow its game portfolio to 100 tier titles of which one third is top-tier titles with a potential to generate more than USD 140,000* per month in gross revenue for Flexion. The remainder will be mid-tier titles with a revenue potential exceeding USD 40,000* per month for Flexion.
*Numbers have been updated to reflect changed revenue reporting in accordance with IFRS 15. The numbers now include channel fees deducted at source whereas the numbers in the past were reported net of channel fees deducted at source.