Nitro Games reported net sales of EUR2.7m in the quarter, corresponding to a growth of 54% y/y, in line with our estimates of EUR2.6m. The growth was primarily driven by the B2B segment. In terms of profitability, EBITDA and EBIT landed at EUR0.6m and EUR0.2m, respectively, above our expectations of EUR-0.3m and EUR-0.1m. This deviation is mainly attributed to solid cost control. Operating cash flow was positive, and the company ended the quarter with a cash position of EUR3.3m.

Although the Q1 numbers were solid, the company had only a small contribution from the self-publishing segment, as Supersonic (the game’s publisher) has not yet started to invest in UA on a larger scale. Therefore, we anticipate a gradual improvement in this segment throughout the year, which will support growth, margins, and cash flow. As Supersonic increases its investments in user acquisition, Nitro Games will grow alongside the game due to its revenue share contract.

We leave our estimates roughly unchanged following the Q1 report. We still anticipate the B2B business to constitute the majority of sales in the coming quarters as we await Supersonic to begin scaling up user acquisition for Autogun Heroes. Our valuation remains unchanged, and we continue to see a healthy upside to our base case. Our base case stands at SEK9, with the fair value range being SEK4-22.