M.O.B.A. Network AB (publ)

Good morning and welcome to this Q4 Q&A. We are here today with Anders Ribbing, the CEO of MOBA Network. But before we dive into the numbers, Anders, can you please give us a short introduction of MOBA Network?

Sure. Mova Network, we operate a diverse portfolio of gaming community platforms, in-game apps, and a creator network with a vision to become the go-to destination for gamers and creators worldwide. We engage millions of users across many of the world's most popular games, and we monetize our business mainly through advertising, but also we're increasingly focused on adding subscriptions to the revenue mix.

And you released your interim report this morning. Are you happy with the results?

Yes, it's a strong quarter. We had organic growth. Revenues grew by 13%. Cash flow before changes in working capital improved to 10 million, up from three. Adjusted EBIT arrived at 20, up from 18. We continued our bond buybacks as well. We purchased bonds for 1.1 million euros. So we now own 20% of the outstanding nominal amount of our bonds. So yeah, I'm happy with the quarter, happy with the year. Very proud of the team and what we've achieved and looking forward to a really, really exciting 2025.

Congrats on a good quarter. You mentioned in the CEO statement that you are reviewing your core holdings to optimize the business. Can you provide us with more details?

Yeah, sure. It's about delivering great user experiences and valuable insights to gamers. Essentially, we're in the business of making gamers better. And it's also about focus. So strategically prioritizing how we invest our resources is really, really key, especially when we have a diversified portfolio with 25 websites, two in-game apps, and the YouTube creator network. So just doubling down on the assets where it makes most sense with the highest growth potential is key. So we're investing a lot in product and tech. We are doing that to improve the products, to innovate, make them better all the time, and also organically launch new products as well. So what we're trying to achieve is essentially a growing user base and increased website traffic. These two will inevitably drive ad revenue, but they also serve as the upper funnel for subscription models. So both those business models work perfectly with that aim. We're mainly focusing on our, when it comes to product and tech, on our websites and our apps that definitely have the highest growth margins and that makes the most sense to focus on.

And if we take a quick look on your balance sheet, I know you're working very hard to optimize your financial position and have repurchased bonds in the quarter, actually to discount to face value. Are you planning further repurchases going forward?

It's likely. It's about for me, it's about, you know, gaining the best return at the lowest risk for our shareholders. Inevitably, lowering net debt is a number one strategic priority for us. So it's I would say it's highly likely that we will be repurchasing bonds during 2025.

And I also want to discuss the earn out related to the acquisition of WarGraph. Can you describe a little bit what happened there? I read in the report that you didn't have to pay out the earn out in the end.

That's correct. WarGraphs and its main asset, Porefessor, performed quite well. We did set really ambitious targets that would trigger their earn-out mechanics, and we didn't quite reach them. I'd say the main cause of that is that League of Legends saw a downturn when it comes to their active users during 2024, and that directly correlates with the Porefessor's user base. It's also worth noting that this are not would have been issued in shares or handled in shares, which means that this cancellation just eliminates any delusion for our shareholders, which is a good thing. And also want to just emphasize that WarGraphs and PowerFest remain the most strategic asset that we have. So we're we have a great plan and we are focusing on it. So we're going to be driving profitability and growth throughout 2025.

And speaking of acquisitions, it's been very important for mobile in the past. Can you give us a short update on your M&A agenda today?

Yeah, sure. We're constantly evaluating possible target companies. We're much more picky. They have to be very, very close to our core business. They have to have clear synergies, both when it comes to financial, commercial, operational synergies. and they have to also come at an attractive price point. So we remain open to acquisitions and that's pretty much what we're working on.

And I understand you put a lot of effort into product development and have appointed a new product owner in the quarter. Can you describe his background and why are you doing this right now?

Yeah, and it's obviously focused to improve our products. So I'm really happy that Alex chose to join the team. He's a great guy. Also brings a wealth of experience to the table. His experience is deep tech expertise. He's a really structured guy when it comes to problem solving. He understands users, user needs. He's a gamer at heart as well. So he's just a perfect fit to be a critical part of our mission to empower both gamers and creators worldwide. So he'll be focusing on the entire product portfolio, but with specific focus on Porefessor and Valorfessor, so the in-game apps. Yeah, he's going to be a critical resource for shaping the future of our products.

And in addition to your increased product focus, I understand that you're aiming to grow the subscription business. How is this being done?

Well, we started out analyzing the full portfolio of products, where it makes the most sense, and digging deeper in the in-game app space is where we think that we have the highest potential, and Porefessor specifically. So Porefessor has a subscription live already today, but it only contains ads-free, which is a quite weak value proposition, and it's not enough to be able to scale. So what we need is, and which we have done, is that we have identified a number of key features that we are now in the phase of prototyping, asking users, they're trying out prototyping, et cetera, analyzing, and the next phase is to package that into a subscription offer, and then prior to that, start development, which we're starting now during Q1. I have scaled subscriptions in the past within the sports media business. So I can tell that there's potential here. So I'm really, really excited about these developments.

Interesting. And summarize, now you have your growing and profitable business. And looking ahead, is the focus on profitability or growth?

I think the answer has to be both. I'd like to see that we make all of our decisions based on that we have a growth mindset, but also with a profitability first approach. So I have to say both, and both are equally important. I think it's achievable. But if you would twist my arm and say, what do you have to achieve, then profitability is a must. We can't improve our balance sheet without it, and that's a top priority for us.

Thank you, Anders, for joining us here today and look forward to speak again soon.

Thank you very much.