In await of the upcoming game launches, Sozap remained cautious about user acquisition costs, which resulted in sales of SEK3.8m in the quarter, corresponding to a y/y decline of 16% but an increase of 15% q/q. This was somewhat higher than our estimate of SEK3.6m. EBIT for the quarter was SEK-2.1m, compared to our estimate of SEK-2.8m. The higher sales and higher capitalized costs mainly explain the deviation. The operating cash flow amounted to SEK0.4m and was positively affected by lower working capital. Notably, after four consecutive quarters of declining quarterly revenues, the stabilization witnessed in this quarter is a positive development.

Hopefully, this was the last quarter with a focus on maximizing net contribution from Armed Heist in awaiting upcoming game launches. The company stated in the report that it intends to globally launch Fishing Tour at the end of Q3. Moreover, it highlights that the evaluation phase of Questopia by Voodoo is expected to conclude during the current quarter, raising hopes for a global launch of the game. Although we expect at least one of the games to be globally launched in the current quarter, this is more likely to occur in the latter part of Q3. As a result, its contribution to Q3 sales is expected to be modest.

On the back of the Q2 report, we have made limited estimate revisions as both sales and opex came in roughly in line with expectations. As such, we leave our base case unchanged. However, we lower our bear case from SEK3 to SEK2 and bull case from SEK20 to SEK18 to reflect the higher downside risk and somewhat softer overall mobile gaming market. Our base case implies an EV/EBITDA (2025e) multiple of 6x.