Stillfront Group showed yet another record both in terms of revenue and profits. The net sales came in 5% above our projection, Core and Big especially impressed us. When we break down the revenue-generating components, the net sales growth of 64% (Y/Y) seems healthy. There are many KPIs to track, but the main components are users that pay and how much those pays. MPU (Monthly -Paying-Users) came in at 211k, corresponding to a growth of 38%. The most substantial increase of MPUs was, obviously, within Core as KIXEYE was consolidated during the quarter. For the Group, the ARPMPU (Average-Revenue-Per-Monthly-Paying-User) landed at 800 SEK, an increase of 21% compared to a year ago. Looking at the product segments; then Big showed the highest growth in ARPMPU.
What’s even more impressing was that the UAC came in at SEK 83m, which was only amounted to an annual increase of 32%. The almost double growth in revenue compared to UAC shows increasingly efficient marketing spend from Stillfront, with the most significant rise within Core thanks to the KIXEYE acquisition and earlier improvements in live-ops. The marketing was more effective than we had projected, so the adjusted EBIT came in 18% above our forecast. As KIEXEYE now has been consolidated, we can look into the OPEX levels in more detail post the acquisition; we will get into more detail about that in the upcoming research update.
Q3 is Stillfronts’ weakest quarter due to the summer holiday, and now we are moving into high-season. We expect to see an increase in UAC a continued sequential growth. All in all, we can definitely say that the future looks bright for Stillfront. Our Base-case amounts to 380 SEK per share.
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