Record Gross Margin and Higher ARPPU
Gross margin reached an all-time high of 71.6% (up from 69.1% a year ago). Monthly average gross revenue per paying user hit a record USD 71.7, up 1% sequentially and 9% year-over-year, reflecting higher-quality audience and G5 Store mix.
G5 Store Traction and Revenue Growth
G5 Store became the company's second-largest distribution channel, accounting for 23.4% of total gross revenue (vs 16% last year). G5 Store gross revenue grew 20% year-over-year in USD and 3% sequentially, with lower processing fees materially supporting margin expansion.
Growth in Direct Payments (G5 Pay)
Directly processed payments (G5 Pay) on mobile platforms rose to 6.4% of total net revenue from mobile platforms, up from 3% in Q3, reducing third-party processing fees and improving profitability potential.
Stabilization of Key Games
Two of the three main games showed stabilization: Hidden City grew sequentially by 8.3%, and Sherlock showed an underlying stable trend (only ~5% year-over-year decline when excluding November live-ops incidents).
Strong Balance Sheet and Capital Return
Cash at period end stood at SEK 216 million (USD 23.5m vs USD 25.0m a year ago), the company remains debt-free, executed SEK 2.7 million in buybacks in Q4, and the Board proposed a dividend of SEK 2 per share (~SEK 15 million).
Increased UA Investment and Promising Pipeline
User acquisition was increased to 23% of revenue (vs 17% last year) to stabilize top line and support scale testing; management plans to remain at the higher end of the previously communicated UA range. Management highlighted a promising soft-launch title with best metrics seen and formation of agile teams to accelerate concept testing.
Early Success with Third-Party Distribution
First two third-party games launched on G5 Store late in Q4; initial results suggest quality third-party titles can earn up to an additional ~15% of their mobile revenues via G5 Store after one month, and management expects to scale the initiative carefully.