Hello. My name is Vlad Suglobov. I'm the CEO of G5 Entertainment. Thank you for dialing in today for our second quarter earnings call. Let's begin the presentation. Let's move on to slide two or the one with the Hidden City picture, anyway. We had really good revenue growth year-on-year, 164%, and a little bit slower sequential growth compared to the first quarter. It was 18%, a little bit below last quarter's. Very strong development in audience metrics year-over-year. Monthly active users up 120%, monthly paying users up 140%. We had about 11% increase in the gross average revenue per paying user, year-over-year. Hidden City, the licensed game in our portfolio, continued to be number one by revenue, and also led in terms of growth. Our own games kept about the same pace of growth.
We were just adding revenue pretty much across the board in the portfolio. Our user acquisition team did a great job with spending even more on user acquisition, in line with our strategy to continue growing. In combination with the improvements to the games and releasing new updates, that's what has driven the growth during the quarter. Let's move to the next slide, financial summary. The revenue was about SEK 276 million in a quarter. Once again, it's Hidden City that was leading the growth, and in terms of own games, we would highlight Mahjong Journey, Supermarket Mania Journey, and Survivors. We have a higher revenue percentage coming from Asia compared to a year ago, about 23% of total revenue compared to 10% a year ago.
When I say Asia, the biggest contributor there is actually Japan, disproportionately so, but we're also looking to increase revenue in China and South Korea, where we think our games have a lot of potential. There is a continuing trend, a higher revenue share coming from small screen devices, phones and phablets, compared to tablets than a year ago. That's in line with the trends in the market that the sales of the tablets are stagnating and sales of phones are going up, and the larger phones and phablets are cannibalizing sales of tablets. We see more and more players being comfortable playing on their larger screen phones. That's what's driving this change, I think.
Another way to put it is that as manufacturers increase the sizes of the screens on the phones, they open up a larger market for our games because our games are better played on large screen devices. The bigger the screen, the better it is for us. The bigger the screens of the phones are, the better it is for us, and people everywhere are gradually upgrading to larger phones and that basically increases our potential market with hidden object games and other games that we have. Operating profit was SEK 32.1 million, EBIT margin of 11.6%. EBIT was heavily impacted by user acquisition costs which were all-time high, and were about 26% of the gross revenue in the quarter.
I think that's about the same that we had in the first quarter. That's the level of aggressive user acquisition spending where we are trying to keep the growth going basically. As you can see, it increased about 300-plus % year-over-year and about 18% in line with the revenue quarter-over-quarter. This stark difference with the level of spending compared to last year is explained by the fact that last year at about the same time, the growth in the company was about zero. That's why this disproportionate change. We basically put user acquisition spending on a much higher level as % of revenue compared to last year. On top of that, we had much higher revenue. That's why there's such a big difference. We certainly had increases in the costs. We kept adding staff and development capacity.
We have opened a new office in Lviv, Ukraine. That also affected the net result. Another thing was our corporate event in Malta where we bring people from different offices for a few days of meetings and discussions and team building. That is an event that we have every second and fourth quarter and we started it last year. We see very good practical results from it and better communication between the offices so we will continue doing that. In this case, it hit the Q2 a little bit. There is the positive effect from capitalized development costs that we had during this quarter as we've gone through Some major development milestones and capitalization was higher than amortization in the quarter. Another boost that we had with the EBIT margin this quarter is the currency exchange rate effects.
Swedish krona strengthened during the second quarter. In a reversal from a year ago, we've had a positive contribution from that to our earnings this quarter, which basically reverses the effect from a year ago. Whenever krona strengthens, we have this boost in earnings. Whenever it weakens, we have extra expenses in our earnings because of the intragroup loans. This is not a cash expense or income. It's more of just an accounting thing. Cash flow was SEK 0.4 million in the quarter, kind of low. You have to keep in mind that we paid a dividend during this quarter. We also paid quite a big amount of taxes during the quarter, part of which is going to come back to us later in the year. If you adjust for that, we had a really positive and healthy cash flow.
Let's move on to the next page and talk in more detail about our revenue share in Asia. As you can see on the chart here, over the last two years, the situation with our revenue distribution by geography has changed a little bit. U.S. was the dominant market for us at about 65% two years ago. Now it's down to 50% something. In absolute terms, it kept growing over the last two years. You can see we've had disproportionate growth in our sales in Asia. Year-over-year, it stands at about 500% growth right now and accounts for 23% compared to 10% just a year ago. There was a little bit of growth in % of the rest of the world, and Europe was actually shrinking a little bit, but again, growing in absolute terms. This continues to be very exciting for us.
The fact that Asia keeps growing, not only in absolute terms, but also as a percentage of our total revenues. It makes our revenue mix by geography much more healthy, because we were overly dependent on U.S., and now less so. With that, let's move on to the next slide, revenue. All the same points we've discussed already. Worth saying that if we take away unlockable games and look at free-to-play games only, that year-on-year growth is not about 164%, it's 182%. The unlockable games are now down to 2% of our total sales. Again, you can see that the sequential growth is going down just a little bit in this quarter compared to the previous quarter. On to the next slide, operational costs. Admin costs are going up gradually as we are increasing our organization.
As I mentioned, we have been adding more people into the team in order to have enough project development teams to take care of all the projects that we are actively developing. That means that we are actively supporting them, making updates or developing, and we haven't yet released them. Basically, every time we start a new project in the company, if we don't shut down a project or our support for a project, we have to add a new team to the company. That drives our expansion in terms of the development team and development costs. Admin costs were also impacted by the event in Malta that I have mentioned. Research and development amortization was about the same because no new games have exited the soft launch period. We have increased costs for hosting and server capacity.
Not a major part of it, but still a contributor. User acquisition, once again, was at 26% of sales, compared to 20% a year ago, as we are still in the mode where we are spending aggressively on user acquisition, driving the growth in the future. If we exclude new acquisition expenses, there were only slight increases in sales and marketing costs. Overall, if you look at the growth of our costs, the rate of growth is much lower than the rate of growth of our revenue. It's unavoidable that costs are going up gradually. What's important is that they're growing much slower than our revenue and than our earnings. Let's move on to the next slide, EBIT and EBIT margin. You can see the profit margin is going up sequentially.
Once again, there is a number of different factors here, and it was affected positively by the currency exchange effects. At the same time, there were also negative effect like that Malta event and expenses associated with opening a new office in Lviv, Ukraine. UA was basically the same as last quarter. Compared to the situation in the last quarter, it doesn't affect the result positively or negatively. We can talk about some margin expansion here, but probably if you take away all the specific things in the quarter with currency exchange and capitalization and not so regular events like Malta, there will still be a profit margin expansion, but it would be not as dramatic as what we see here according to the accounting rules. Let's move on to the next slide, net capitalization.
You can see the net capitalization has actually increased compared to the last quarter, the Q1. That is because we have passed through some large milestones on the upcoming games that we are about to release, which I have mentioned in the quarterly report. Amortization only slightly have changed. As I can see, we had one game exit the soft launch mode, so there wasn't a lot of change there. In terms of our games portfolio and its value on the balance sheet, the value associated with unlockable games that are not yet released went down all the way to 0. We have SEK 0.7 million attached to the unlockable games that have been released, and as I mentioned, the revenue from unlockable games is only 2% now.
There's a probability that we will stop talking about unlockable games altogether very soon, as soon as it drops below 1%. It's insignificant at this point. There is a larger amount associated with released free-to-play games compared to last year. That's because we have released many games that we've been working on. The amount associated with the games that we have not released accordingly has decreased. It doesn't mean we are not starting new games, but we are definitely smarter about how much money we're spending when developing new games. The difference here doesn't really reflect the difference in the number of games, but certainly the difference in how much we are willing to spend to get the game to the market before we're able to put it in the market and see some results and see some data on how people are using it.
Let's move to the next slide. That is cash flow. Cash flow before changes in working capital was at SEK 30 million. From operating activities, SEK 26 million. After financing activities, basically with everything, it was only SEK 400,000. Again, keep in mind that we've paid taxes of about SEK 8.3 million, of which SEK 1.4 million we're going to be getting back. We've also paid a dividend of about SEK 6.6 million in this quarter. These items have certainly negatively affected the cash flow. If you take that into account, you can see that the business is cash flow positive, and it produces very healthy cash flow and very healthy free cash flow as well. With these two items, we are down to a small cash flow for the quarter.
Nevertheless, I think it's a very good situation where we're able to grow really fast and finance all aspects of the company development from the cash flow. We can end up the quarter with positive cash flow after paying all the taxes for the year and paying the dividends as well. To me, that's a good situation. All right. With that, we move on to the next slide. Questions and answers. If you have questions, please go ahead and ask them.
Ladies and gentlemen, we are now ready to take your questions. If you wish to ask a question, please press 01 on your telephone keypad. That's 01 on your telephone keypad to ask a question. Please stand by while we take the first question. There are no questions in queue. Ladies and gentlemen, as a reminder, please press 01 on your telephone keypad if you wish to ask a question. Please stand by. We have a question coming in from the line of Stefan Wikstrand with EMEA Please go ahead. Your line is open. Mr. Wikstrand, perhaps you are on mute. Your line is open.
Sorry. Yeah, I'm here now. Hello, Vlad. Congratulations to a good report. I have one question regarding the Malta development office. How much cost did you have in the quarter for that?
Thank you, Stefan. Thanks for the question. I don't have a number in my head, but basically the costs for Malta office are rather reasonable. It's salaries of people working there, and those are employees that we would have even if we didn't have Maltese operation. Some of them have moved from Moscow office, and additional admin staff that we have there is really minimal. Our extra expense just because we have a separate office there is really nothing to talk about, and rent is reasonable, et cetera. In terms of even the salary levels of the employees there, Malta creates certain incentives for people to come and live to Malta, and I would say they have very good conditions there in terms of their personal situation, and that helps us maintain reasonable salaries for the staff in the office.
We have actually a line of people willing to relocate to Malta for the weather, and that also helps keep it very reasonable. I'm very certain that the net effect of having a Malta office is very positive, and it's actually growing along with the growth of the company.
Okay. Thank you very much.
Thank you.
Thank you, no further questions in queue. With that, I would like to return the conference call to the speakers.
All right. Thank you for dialing in. That's the end of our call for today. Thank you.