G5 Entertainment released this morning its preliminary Q4 2013 revenue numbers which showed that the company is back on its growth track.
Based on the information available, for the period of January-December 2013, the management forecasts revenue of 100 MSEK, which corresponds to achieving 24% revenue growth compared to the same period of 2012, and means that it is likely that October-December 2013 became record quarter for G5, with y-o-y revenue growth of around 39%. Based on the information available, revenue from free-to-play games accounted for over 60% of the group’s revenue during October-December 2013.
Vlad Suglobov, CEO, comments: “Like in previous years, we have seen substantial increase in revenue during the holidays, which so far continued into 2014. During the fourth quarter of 2013, which was likely our record quarter to date, revenue from free-to-play games continued to grow, while revenue from unlockable games was mostly unchanged. Historically, January and February have been very strong months for the group due to holidays and the inflow of new users into smartphone and tablet ecosystem. So far, it looks like we are following this pattern again.”
Following a period of transition away from unlockable more towards free-to-play games, Q2 and Q3 2013 were weaker periods for G5 but the 39% y-o-y growth in Q4 shows how successful the company is with its blockbuster hit Secret Society. We are optimistic that at least one of its recently released or to-be-released F2P titles can match the success of Secret Society which will keep growth rates at high levels.
With the stock being completely out of favour and the upcoming relisting to Nasdaq OMX, we believe there should be a lot of room for a relief rally over the coming weeks.