The following is a summary of the Stillfront Group AB (STLFF) Q1 2024 Earnings Call Transcript:
Financial Performance:
Stillfront Group displayed organic growth in Q1 2024, with revenues reaching €739 million and gross margins up to 80%.
User acquisition rates stood at 34%.
A 5% year over year increase in gross margin was attributed to a focus on direct-to-consumer efforts.
The company recorded a free cash flow of SEK 828 million over the last 12 months; operating cash flow declines were offset by reduced investments.
Bookings from ad revenue increased to 14%, reflecting adaptability amidst changing ad-bidding systems.
Despite changes in Google's ad bidding system, Stillfront Group increased absolute User Acquisition (UA) spend.
The company experienced a 2% decrease in Absolute due to higher interest costs, partially mitigated by over SEK 200 million decrease in CapEx.
Underlying growth of cash flow was observed, with an increase of approximately NOK 147 million in two periods.
A top-line increase of SEK 80 million was seen in Q2, attributed to a successful launch.
Business Progress:
Disciplined investments in marketing products with strong Key Performance Indicators are poised to fuel growth and margins.
The success of the game 'Jawaker' contributed to increasing ad revenues.
New game 'Sunshine Island' continued successful development, while preparations for another game launch, 'Ellen Garda Restoration', are underway.
A plan to reduce user acquisition spend relative to revenues in Q2 and Q3 is set to boost margins.
A new Europe server for Albion Online launched in April, and ongoing growth is expected from Sunshine Island.
The ad team successfully maintained revenue amidst industry-wide challenges posed by Google's ad bidding changes, demonstrating resilience and adaptability.
Operational traction was noted in several franchises, including Nanobit, Supremacy, and Jawaker.
The company initiated a second buyback program, offering the Board greater capital deployment flexibility.
Overall, Stillfront is confident in its positive Q1 development trend and its ability to continue towards achieving their financial targets.
Tips: This article is generated by AI. The accuracy of the content can not be fully guaranteed. For more comprehensive details, please refer to the IR website. The article is only for investors' reference without any guidance or recommendation suggestions.