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G5 Entertainment AB (SE:G5EN)
:G5EN
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G5 Entertainment AB
(G5EN)
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Rating:61Neutral
Price Target:
kr52.00
▼(-44.92% Downside)
Action:ReiteratedDate:02/19/26
The score is driven by financial stability (strong balance sheet and resilient cash generation) but weighed down by material revenue and margin deterioration and very weak technical momentum. Valuation and a high dividend yield provide support, while the latest earnings call suggests a credible turnaround effort but with near-term profitability and execution risks.
Positive Factors
Very strong, low‑debt balance sheet
A minimal debt position and sizable equity give the company durable financial flexibility. This reduces refinancing risk, supports sustained investment in UA and product initiatives, enables dividends/buybacks, and provides a multi-quarter buffer to execute a turnaround without needing external financing.
Resilient cash generation and free cash flow
Consistent positive operating and free cash flow provide a reliable funding source for growth initiatives and capital returns. Strong cash conversion in 2025 helps absorb earnings volatility, funds higher UA spend from operations, and reduces reliance on capital markets over a multimonth horizon.
Strategic revenue diversification: G5 Store and G5 Pay
Scaling G5 Store and G5 Pay shifts mix away from platform‑processed flows and lowers processing fees, expanding margins and diversifying distribution. Early third‑party distribution adds a new revenue channel and can sustainably boost unit economics for quality titles as these initiatives scale.
Negative Factors
Sustained top‑line decline and margin compression
Multi‑year revenue erosion and sharply lower net margins indicate deteriorating core monetization and weakened operating leverage. Persistent top‑line weakness constrains reinvestment, limits margin recovery even with cost discipline, and raises risk to dividend and buyback sustainability over coming quarters.
Franchise concentration and underperforming key title
Heavy dependence on a few flagship franchises increases structural revenue risk. A 19% YoY drop in the Jewels portfolio, with fixes only expected by mid‑year and potential harvesting, shows recovery uncertainty; a failed scalability test (Twilight Land) highlights pipeline and development execution risks.
Cash flow volatility and working‑capital drag
Quarterly cash flow swings and notable working‑capital outflows make funding higher UA and initiatives riskier. With management increasing UA to stabilize growth, short‑term cash needs rise and operational volatility could pressure liquidity and margin recovery if revenue stabilization takes longer than planned.
G5 Entertainment AB (G5EN) vs. iShares MSCI Sweden ETF (EWD)
Market Cap
kr415.79M
Dividend Yield9.28%
Average Volume (3M)19.19K
Price to Earnings (P/E)23.6
Beta (1Y)0.66
Revenue Growth-14.68%
EPS Growth-29.97%
CountrySE
Employees845
SectorCommunication Services
Sector Strength97
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)-0.29
Shares Outstanding8,383,650
10 Day Avg. Volume17,432
30 Day Avg. Volume19,188
Financial Highlights & Ratios
PEG Ratio-0.32
Price to Book (P/B)1.55
Price to Sales (P/S)0.75
P/FCF Ratio5.03
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)5.36
Revenue Forecast (FY)kr847.09M
G5 Entertainment AB Business Overview & Revenue Model
Company DescriptionG5 Entertainment AB (publ) develops and publishes free-to-play games for smartphones, tablets, and personal computers in Sweden. Its primary portfolio of games includes Hidden City, Jewels of Rome, Sherlock, Jewels of the Wild West, Mahjong Journey, The Secret Society, Jewels of Egypt, Homicide Squad, Sheriff of Mahjong, and Match Town Makeover. The company distributes games through Apple App Store, Microsoft Store, Google Play, Amazon Appstore, and Mac App Store, as well as its proprietary store.G5 Entertainment AB (publ) was founded in 2001 and is headquartered in Stockholm, Sweden.
How the Company Makes MoneyG5 Entertainment generates revenue primarily through in-app purchases within its free-to-play games, allowing players to buy virtual goods or enhancements that enhance their gaming experience. The company also earns income from advertisements placed within its games, which can be monetized through various advertising networks. Additionally, G5 has established partnerships with other developers and publishers to co-promote games and expand its user base, further contributing to its earnings. The company's focus on user retention and engagement through regular updates and new content also plays a crucial role in sustaining its revenue streams.
G5 Entertainment AB Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: significant operational and top-line challenges (notably the 9% USD revenue decline, a 19% YOY drop in the Jewels portfolio, an operating loss and cash-flow volatility) were contrasted with meaningful positives (record gross margin of 71.6%, record monthly gross revenue per paying user, strong G5 Store traction and growth, rising direct payments/G5 Pay, a healthy cash position and a proposed dividend). Management is investing in user acquisition and new distribution initiatives (G5 Store third-party distribution and G5 Pay) to stabilize and grow revenue, but those investments pressure near-term profitability and results carry execution timing risk. Given the balance of pronounced near-term headwinds and clear strategic progress on margin expansion and new revenue channels, the overall tone is balanced.Q4-2025 Updates
Positive Updates
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.
Negative Updates
Top-Line Decline and Currency Headwind
Revenue declined 9% year-over-year in USD and fell 21% when expressed in SEK to SEK 221 million for the period. Sequential revenue was down 2% in USD. The weakening USD vs SEK materially pressured translated results.
Significant Decline in Jewels Portfolio
The Jewels family of games was the main driver of the revenue decline, falling 19% year-over-year in USD and 12% sequentially. Management expects fixes to take time (improvements targeted by mid-year) and may 'harvest' the game if recovery is insufficient.
Operating Loss and EBIT Margin Pressure
Operating loss was SEK 6 million versus profit of SEK 32.8 million a year ago; reported EBIT margin was -2.7% (vs +11.8% prior year). Management noted FX revaluations and higher UA spend as major drivers; adjusted for FX the EBIT margin would be +0.8% (vs 9.6% adjusted prior year).
Higher UA Spend Pressures Profitability
User acquisition spend increased materially (to ~23% of revenue, a 6 percentage-point increase vs Q4 2024), which while intended to stabilize revenue also depressed earnings in the quarter.
Cash Flow Volatility and Working Capital Drag
Total cash flow for the quarter was negative SEK 31.1 million (compared to positive SEK 18.9 million last year). Working capital movement was a negative SEK 26.4 million (vs -21.5m prior year), driven by large counterparty and year-end effects, creating quarter-to-quarter volatility.
Live-Ops Incident Hurt Sherlock in November
Sherlock's performance was negatively affected by several live-ops incidents in November that caused material short-term revenue loss; management implemented corrective actions.
Failed Scalability Test and Title Closure
The game Twilight Land failed the scalability test and was discontinued, indicating pipeline risk; resources were reallocated but this represents a lost development investment and opportunity cost.
Company Guidance
Guidance focused on stabilizing and turning around top-line growth by staying at the higher end of UA investment (increasing UA to 23% of revenue this quarter, up from 17% a year ago and +6 pp vs Q4 2024; management will remain in the 17–22% target bracket’s higher end), scaling the G5 Store and G5 Pay initiatives (G5 Store was 23.4% of gross revenue vs 16% last year, with G5 Store gross revenue +20% YoY and +3% sequentially; directly processed mobile payments rose to 6.4% of mobile net revenue from 3% in Q3), and improving underperforming titles (Jewels family was down 19% YoY in USD and -12% sequentially, with planned fixes by mid‑year or harvesting if not recovered). They reiterated financial discipline—aiming to fund initiatives from operations while remaining debt‑free (cash SEK 216m / USD 23.5m vs USD 25.0m a year ago), highlighted strong unit economics (monthly avg. gross revenue per paying user USD 71.7, +1% q/q, +9% YoY; gross margin a record 71.6% vs 69.1% last year) and cautioned that third‑party G5 Store distribution could be accretive but is likely to be low– to mid‑single‑digit contribution to revenue in 2026 (early launches showed up to +15% incremental mobile revenue for quality titles after one month).G5 Entertainment AB Financial Statement Overview
Summary
Financial profile is stable but pressured: a very strong, low-debt balance sheet supports flexibility, and cash generation remains solid. However, revenue has been declining and profitability deteriorated sharply, with net margin compressing to ~3% in 2025 and weaker operating leverage.Income Statement
Profitability has deteriorated materially: revenue declined across the last several years and fell again in 2025, while net margin compressed sharply to ~3% in 2025 from ~10% in 2023–2024 and ~15% in 2021. Gross margin remains solid (~60%+), but operating leverage has weakened meaningfully, with EBIT and EBITDA margins also down versus prior years—pointing to higher costs and/or softer monetization.46
Neutral
Balance Sheet
The balance sheet is a clear strength. Debt is minimal with an extremely low debt-to-equity ratio across all periods, indicating very low financial risk and strong flexibility. Equity remains sizable relative to assets, though returns have cooled—return on equity fell notably in 2025 versus the very strong levels seen in 2020–2021, consistent with the earnings slowdown.88
Very Positive
Cash Flow
Cash generation remains healthy and is a key offset to weaker earnings. Operating cash flow covers net income well, and free cash flow rose strongly in 2025 with free cash flow nearly matching net income. The main weakness is volatility over time (including a notable free-cash-flow decline in 2022 and uneven conversion in earlier years), but overall cash flow resilience looks better than reported profitability.72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 941.58M | 1.13B | 1.32B | 1.40B | 1.32B |
| Gross Profit | 567.26M | 776.10M | 892.37M | 936.42M | 810.45M |
| EBITDA | 153.46M | 262.10M | 294.70M | 227.20M | 215.57M |
| Net Income | 30.02M | 118.97M | 127.57M | 66.95M | 198.21M |
Balance Sheet | |||||
| Total Assets | 543.98M | 666.71M | 610.15M | 657.88M | 625.79M |
| Cash, Cash Equivalents and Short-Term Investments | 224.78M | 275.54M | 182.33M | 185.49M | 162.16M |
| Total Debt | 1.28M | 1.80M | 1.87M | 2.86M | 12.29M |
| Total Liabilities | 86.95M | 112.39M | 118.75M | 158.15M | 133.38M |
| Stockholders Equity | 457.04M | 554.32M | 491.40M | 499.73M | 492.41M |
Cash Flow | |||||
| Free Cash Flow | 141.24M | 178.17M | 130.85M | 129.15M | 188.41M |
| Operating Cash Flow | 143.30M | 283.33M | 241.16M | 304.76M | 360.63M |
| Investing Cash Flow | -98.10M | -119.32M | -113.25M | -176.66M | -208.53M |
| Financing Cash Flow | -76.16M | -76.64M | -119.48M | -108.62M | -192.34M |
G5 Entertainment AB Technical Analysis
Negative
94.40
Price Trends
79.19
Negative
84.74
Negative
93.23
Negative
Market Momentum
-9.54
Positive
18.15
Positive
43.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:G5EN, the sentiment is Negative. The current price of 94.4 is above the 20-day moving average (MA) of 62.31, above the 50-day MA of 79.19, and above the 200-day MA of 93.23, indicating a bearish trend. The MACD of -9.54 indicates Positive momentum. The RSI at 18.15 is Positive, neither overbought nor oversold. The STOCH value of 43.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:G5EN.
G5 Entertainment AB Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | kr415.79M | 23.65 | 12.65% | 9.28% | -14.68% | -29.97% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
56 Neutral | kr134.06M | -84.11 | -3.04% | 13.12% | -3.51% | -192.91% | |
44 Neutral | kr1.34B | -0.62 | ― | ― | 1.74% | -5214.06% | |
41 Neutral | kr130.90M | -3.85 | ― | ― | 32.83% | 13.34% | |
40 Underperform | kr140.44M | -0.40 | -76.88% | ― | 8.38% | -48.41% |
* Communication Services Sector Average
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G5 Entertainment AB Corporate Events
G5 Entertainment Hit by Revenue Drop and FX Headwinds, Cuts Dividend After 2025
Feb 17, 2026
G5 Entertainment reported weaker results for the fourth quarter and full year 2025, with revenue down 21% in the quarter and 17% for the year in SEK terms, reflecting lower user numbers but stronger monetization per payer. Gross margin improved to over 70% as a higher share of sales came via the G5 Store, reducing commission costs and partially offsetting the revenue decline.
EBIT swung to a small loss in the fourth quarter and fell 80% for the year, heavily affected by negative currency revaluations and higher user acquisition spending as a share of revenue. Despite maintaining positive full-year earnings, the board proposed cutting the dividend to SEK 2 per share from SEK 8, signaling a more cautious capital return policy amid softer top-line trends and increased investment in growth and direct-to-consumer initiatives.
The most recent analyst rating on (SE:G5EN) stock is a Buy with a SEK100.00 price target. To see the full list of analyst forecasts on G5 Entertainment AB stock, see the SE:G5EN Stock Forecast page.
G5 Entertainment Sets Date for Year-End 2025 Earnings Presentation
Feb 10, 2026
G5 Entertainment AB will publish its fourth-quarter and full-year 2025 financial results on February 17, 2026, with the report released early in the morning and followed by a webcast presentation. Chief executive Vlad Suglobov and chief financial officer Stefan Wikstrand will brief investors, analysts and media and take questions, underscoring the company’s effort to maintain active communication with the market ahead of a key earnings update.
The year-end presentation signals an important information event for stakeholders tracking G5’s performance in the competitive casual mobile gaming sector. By making the report and webcast materials available on its corporate website, the company aims to provide transparency on its operations and strategic positioning as it navigates industry dynamics and investor expectations.
The most recent analyst rating on (SE:G5EN) stock is a Buy with a SEK100.00 price target. To see the full list of analyst forecasts on G5 Entertainment AB stock, see the SE:G5EN Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.