Flexion Mobile: More Positive Signals from Management

The result in the quarter was already communicated due to the positive profit warning on July 15. The quarterly record high result is only partly due to a positive impact from COVID-19, more importantly, this strong financial development is due to network effects according to us. A positive momentum from both added games and channels (app stores) are the most important growth drivers in this investment case.

Flexion has accelerated its growth rate in signing new games for its portfolio. Flexion will according to the CEO Jens Lauritzson have at least 20 games live during the quarter ending in September. For this reason, the company now aims to launch 27 games (previous target 23 games) at the end of this financial year.

The other financial target that was communicated in the report is to reach a positive EBITDA (based only on In-App Purchases (IAP)) at the end of this financial year.

Both these targets of course give positive signals from the company that management feels confident in the positive development in the company.

We also much appreciate the increased visibility of KPIs in the report. We now for example know how many games in the portfolio that are past the ramp-up period.  And the numbers are:

Live Top-Tier games past ramp-up: 4 of 6

Live Mid-Tier games past ramp-up: 8 of 10

These numbers are in line with our previous estimates. Adding another 4 games this quarter (ending in September) and another 7 games (at least) this financial year are of course positive signals and improves Flexion’s prospects for the years to come.

We will do some changes in our estimates, mostly from a more long-term perspective. To summarize, Flexion is in a good place right now.

Original Post: Redeye