Flexion’s quarterly revenue grew by 54% to £16.3m ($20.3m) quarter-on-quarter according to their Q1 financials.
The company’s gross profit also increased by 72% to £2.5m ($3.1m), and their EBITDA by 125% to £0.7m ($0.8m). Flexion, who publish games to alternative app stores such as the Huawei AppGallery, had previously established record revenue in Q4 of £21.7m ($26.6m) with an increase of 108% quarter-on-quarter, and although the latest numbers do represent a continued growth, it also shows that growth is slowing. However, this is not unexpected and there are a number of factors that can see publishers such as Flexion face lower revenue at the start of the year.
CEO Jens Lauritzson said as much spelling out their performance during the quarter. “We had another exceptionally busy quarter in which we focused on some of the new, major distribution opportunities that are emerging in the market. Adding distribution power to our platform and ramping up sales activities across the organisation to capture the increased interest in alternative distribution is a priority for us in order to continue capturing market share. We have also signed several major titles that we will launch in the next few quarters and have been busy preparing these campaigns.”
“I am very pleased with our overall growth of 54% compared with last year, considering that Q1 is our weakest quarter of the year, due to the seasonal effects of app store promotions. We also continued our strong organic revenue growth related to Distribution, reporting an increase of 37%. This is in line with our market guidance which is 20-40% for 2023. Gross profit grew by 72% and adjusted EBITDA by 125%.”
Important events
It’s also worth noting that, beyond app store promotions, many other companies have seen slower growth. Most notably EA where their Q4 mobile growth slumped to only 1% after a previous 48% in August of 2022. Macroeconomic circumstances, a post-Covid slump and many other factors can contribute to this lower revenue growth. Meanwhile, as highlighted by Lauritzson, Flexion is sitting on a number of upcoming releases and high-profile partnerships.
In particular they picked out the signing of Hill Climb Racing 1 and 2 by Fingersoft and Vikingard with NetEase and their strategic partnership with Digital Turbine all of which occurred relatively recently, meaning they have not fully borne fruit yet. Not only that but Lauritzson notes there are at least seven new titles either in ramp-up or pending launch, meaning that the company is poised for a further shot in the arm as these titles hit the market.
