Nitro Games: Executing on its multi-platform strategy
Research Update
2025-02-18
07:28
Analyst Q&A
Closed
Anton Hoof answered 4 questions.
Redeye provides an update following Nitro Games’ Q4 2024 report, which came in slightly better than expected. With the Q4 results, we can conclude that Nitro Games had a strong 2024 in a tough market. With ongoing projects with Digital Extremes and Netflix, the company has a solid foundation for 2025, which we hope will be the year we see growth in the self-publishing business.
Anton Hoof
Nitro Games ended a strong year with a solid Q4 report, with net sales coming in 10% above our expectations at EUR3m, with a y/y growth of 5%. Growth, similar to previous quarters, was driven by the Service business. Regarding profitability, EBITDA and EBIT landed at EUR0.6m and EUR0.1m, respectively, both exceeding our expectations.
The highlight since the last report is, in our view, the expansion of Autogun Heroes to both the browser through CrazyGames and PC through Steam. As we have argued previously, although we take a conservative approach in terms of financial expectations, as it is still in an early phase, we believe it is a symbolic move and illustrates Nitro Games' willingness to expand to additional platforms beyond mobile.
Following the Q4 report, we have made smaller estimate revisions, , lowering sales by 5% for 2025e-2026e and by 4% for 2027e. The downward adjustment is due to the Service business, as we expect revenue recognition to slow somewhat in 2025 compared to 2024. On the back Nitro Games' recent profitable quarters, we no longer factor in any capital injections in our valuation scenarios. We reiterate our base case of SEK5, with a fair value range of SEK2–12.
| Key Financials | |||||
|---|---|---|---|---|---|
| EURm | 2023 | 2024 | 2025e | 2026e | 2027e |
| Net Sales | 8.8 | 11.4 | 12.3 | 13.1 | 13.8 |
| Sales Growth | 22.0% | 28.8% | 7.7% | 7.1% | 4.7% |
| EBITDA | -1.7 | 2.4 | 2.6 | 2.6 | 2.8 |
| EBIT | -3.0 | 0.65 | 1.4 | 1.6 | 1.7 |
| EBIT Margin | -34.2% | 5.7% | 11.0% | 12.0% | 12.1% |
| Net Income | -3.3 | 0.47 | 1.2 | 1.4 | 1.5 |
| EV/Sales | 0.8 | 0.3 | 0.3 | 0.2 | 0.2 |
| EV/EBIT | -2.4 | 8.8 | 5.7 | 4.4 | 3.7 |
• Net sales amounted to EUR3.0m (2.9), up 5% y/y and 10% above our estimates of EUR2.8m. In terms of revenue split, EUR2.90m came from the service business, while EUR0.146m came from the Publishing business.
• Total Opex amounted to EUR-2.9m (including depreciation), somewhat higher than our estimates of EUR-2.7m.
Disclosures and disclaimers