Sozap: Back to growth
Research Update
2024-02-16
07:25
Redeye updates its estimates following Sozap’s Q4 report. The Q4 figures surpassed expectations in terms of sales primarily driven by the launch of Questopia.
Anton Hoof
As expected, Q4 marked a transformative quarter with an uptick in sales and UA spending with the launch of Questopia. Net sales came in at SEK4.7m for the quarter, representing a y/y growth of 34% and 50% q/q, above our estimate of SEK4.2m. However, UA spending came also in higher than expected, resulting in an EBITDA of SEK-1.6m and EBIT of SEK-3.4m, lower than our estimates of SEK-0.9m respective SEK-2.5m.
The highlight of the quarter is the launch of Questopia which also was the primary reason behind the impressive q/q growth of 50%. Early KPIs seem promising, where accumulated sales from the game consistently surpass accumulated UA throughout the quarter. The management also expressed confidence in extending UA spend, which is encouraging.
Following the Q4 figures, we make limited revisions to our estimates, increasing 2024e sales by 6%, driven by stronger sales in the quarter, while leaving sales for 2025e-2026e unchanged. We have also considered further dilution in our valuation scenarios, negatively impacting our fair value range and base case. Our new base case stands at SEK7 (SEK8), and the fair value range is SEK1-15 (SEK1.5-16).
| SEKm | 2022 | 2023 | 2024e | 2025e | 2026e |
| Revenues | 29.4 | 29.3 | 34.0 | 43.0 | 50.6 |
| Revenue Growth | 9.4% | -0.3% | 16.4% | 26.3% | 17.7% |
| EBITDA | -2.7 | -3.0 | 5.4 | 10.0 | 13.8 |
| EBIT | -14.3 | -9.0 | -0.49 | 3.1 | 5.7 |
| EBIT Margin | -86.0% | -60.0% | -2.3% | 10.5% | 16.0% |
| Net Income | -14.3 | -8.9 | -0.61 | 2.5 | 8.5 |
| EV/Revenue | 2.0 | 1.4 | 1.7 | 1.4 | 1.2 |
| EV/EBITDA | -21.7 | -13.2 | 10.6 | 6.2 | 4.2 |
| EV/EBIT | -4.1 | -4.5 | -116 | 20.0 | 10.4 |
As expected, Q4 marked a transformative quarter with an uptick in sales and UA spending with the launch of Questopia. Net sales came in at SEK4.7m for the quarter, representing a y/y growth of 34% and 50% q/q, above our estimate of SEK4.2m. The deviation is primarily attributed to higher ARPDAU (average revenue per daily active user), which came in 34% higher than expected.
Disclosures and disclaimers