Thursday, September 05, 2024
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Overachieves expectations. Second quarter revenues of $105.8 million was in line with our $105.0 million estimate. Due to lower than expected Selling & Marketing Expenses and efficiency initiatives, adj. EBITDA was $16.2 million, far better than our $0.9 million estimate, illustrated in Figure #1 Q2 Results. Selling & Marketing expenses were roughly $11 million lower than expected, accounting for the largest portion of the sizable “beat”.
PC picking up Steam. Notably, management highlighted the launch of Pixel Gun 3D PC Edition to the Steam platform, the largest digital distribution platform for PC gaming. The launch of Pixel Gun 3D on Steam and a solid quarter for Hero Wars: Dominion Era led to PC revenue accounting for 42% of total revenue, up from 38% in the prior year period. The addition of Steam is viewed favorably given that PC players tend to spend more money and time playing than mobile users.
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