Hi, everyone. We are taking this from the start because we had a problem with the sound. Apologies for that. We are just going to do a restart. Good morning, everyone. Thanks for joining us today to go through our results for the second quarter and first half of 2025. My name is Anton Gourman, and I'm the VP of Investor Relations at MTG. With me and hosting this call is our CEO, Maria Redin, and our CFO, Nick Hopkins. After the end of this presentation, there'll be an opportunity to ask questions. If you're dialing in, please follow the instructions from the operator. Otherwise, please use the online form for your questions, as always. Thank you. Apologies again for the restart. I hand back over to Maria and Nick. Maria, please go ahead.
Thank you, Anton, again. Hello, everyone. Sorry for the trouble on the sound, but thank you for joining us on our call. Before we get into the numbers, I also again want to welcome Nick to joining MTG and our team. It's truly great to have him on board, and he's already proven to be a great addition to our team. Having said that, let's now dive into the results. For Q2, I'm very happy to deliver another quarter of exceptional business momentum, in which we doubled our total revenues year- over- year. While our total revenues, of course, were indeed driven by the acquisition of Plarium, we also continue to see great and accelerated momentum from all our original studios. As a result, we delivered organic growth of 9% in the quarter and 8% for the first half of the year.
Our strong organic performance was driven by a combination of both our casual and mid-core games. On the casual side, our word games grew from both geographic expansion and the new games. On the mid-core side, we delivered growth in several of our mid-core strategy and simulation titles, as well as the racing franchise. This demonstrates the quality of the games and the teams we have across our portfolio and our focus on product innovation to deliver the greatest player experiences. This, in turn, enables us to continue to invest in disciplined marketing to fuel profitable growth. As we look at the results now in the quarter, we have delivered again consecutive solid organic growth in our three quarters in a row, and we are very confident, therefore, in our ability to invest in our growth. For the quarter, we reported SEK 640 million in adjusted EBITDA for Q2.
That represents a 50% increase year- over- year, and this is mainly as a result from the consolidation of Plarium. We report a healthy operating margin of 22% in the quarter, with our margin levels reflecting the significant increase in user acquisition spend to drive current and future growth. Our operating margins were therefore down from the elevated levels we saw in the second quarter of last year, but you may also remember that our UA spend in our original studios was at an all-time low in Q2 last year, and that our UA spend has gradually been accelerated since the end of Q2 2024. We generated SEK 325 million in cash flow from the operations in Q2, with an unlevered cash conversion of 48% for the rolling 12-month period.
These cash conversion levels reflected the recent higher M&A costs, as well as withholding tax payments in PlaySimple, both in the first and the second quarter of 2025. Moving on, let's have a look at our net sales. We reported total net sales of SEK 2.9 billion in Q2. As mentioned, this was a doubling year- over- year, and that reflected not only the consolidation of Plarium from the 1st of February 2025, but also the 9% organic growth for the quarter, and then 8% as I said for the first half of the year. In total, net sales were up 117% in constant currency year- over- year in Q2, and were up by 98% for the first six months of 2025. The significant weakening of the U.S.
dollar and the overall strengthening of the Swedish krona resulted in a material negative currency impact of negative 14% in the second quarter, and minus 8% for the first six months. Despite this, our reported net sales were still up 103% year- over- year in Q2, and by 90% for the first half of the year. Let's now take a little bit more granular look into the performance of our different gaming franchises and key titles. As we already mentioned in April at the Q1 call, we plan to announce a new reporting structure at the Capital Markets Day coming up now in October.
However, in order to keep it consistent in our reporting structure, we've taken a decision to continue to report our franchise as is for the remainder of the year, and rather introduce a new reporting, which we will present at the CMD, that we will start reporting accordingly in Q1 2026. Therefore, you'll see and continue to see for the rest of the year Plarium as a separate franchise. Starting then on Plarium, revenues were down in the single digits on a like-for-like basis in constant currencies. However, looking at the largest games, Raid: Shadow Legends, which is also now the largest game in our portfolio, were up by single digits year- over- year. This was driven by very strong in-game events and the continued focus on live ops from the team, and June being particularly strong thanks to the summer campaigns.
It is worth mentioning in general for Raid, since it is such a large game, the in-game events calendar and live ops calendars are key to the performance of Raid. As we look forward, it's really exciting to see that the team has a very strong pipeline for the second half of the year. Moving to our word game franchise, they delivered an outstanding quarter, revenues being up 16% year- over- year in constant currency. The performance reflected two broadly equal factors. The first was a continued strong momentum from the geographic expansion of our word games, and in particular, Word Search Explorer and Crossword Jam and Word Tour, where we continue to see good results in key European and Latin American markets. The second one was the successful scaling of new titles like Jigsaw and Time Match.
They are successful both in the core English, but also in selected non-core English markets. Here it's worth mentioning that the core gameplay on these titles was not dependent on language in the same way as the word games are, and therefore the team can more rapidly scale them on a global basis rather than a local basis. Our strategy and simulation franchise revenues were up 7% year- over- year in constant currencies in Q2. The growth here came both from Heroes of History, launched by InnoGames in Q3 last year, as well as Warhammer 40,000: Tacticus, where Snowprint Studios continued to scale with great effort. The growth in these two titles was offset by the revenues in Forge of Empires.
This is our second largest ever green franchise in our portfolio, but in the quarter, we saw revenues slightly down year- over- year, and this was due to the lower than expected performance in one of the game events in the quarter. Zooming in then in the growth game in the franchise, Heroes of History continues to expand, and they launched both new heroes to collect, as well as live ops and events, and was supported by focused marketing investment. We're therefore very excited about the growth trajectory we're seeing for the game. Next, Warhammer 40,000: Tacticus continues to deliver a strong growth in the quarter. The game team has been focusing on boosting organic installs. They introduced a new popular in-game faction and also launched a new event.
On top of this, the team has also further diversified the game's revenue mix more towards direct-to-consumer sales through the launch of the Tacticus Web Store. As for icing on the cake, I'm also very proud to say that both Snowprint Studios and Warhammer 40,000: Tacticus received a lot of recognition at the upcoming 2025 Focus Game and Mobile Games Award this year. Snowprint Studios has been nominated in the Best Developer category, while Warhammer 40,000: Tacticus received nominations both in the Best Marketing Campaign and the Best Forever Franchise category. On top of this, also from Ninja Kiwi, Bloons Card Storm was nominated in the People's Choice Award at the Pocket Gamer Award as well. I think it's fantastic to see the success across the group, and a huge congratulations to everyone at Snowprint Studios and Ninja Kiwi who has contributed to this well-deserved and recognized success.
Moving on to our franchise revenues, we had a very strong Q2, delivering 14% year-over-year growth in constant currencies. This was predominantly driven by the exceptional performance of Formula One Clash from the season reset in May. Thanks to a focused effort by the team, the new season included the biggest campaigns to date and features new drivers, new stats for players to unlock, and updated core game systems and mechanics. It's worth noting that in addition to the great work done by the team, there is also an increase in elevated interest around Formula One, given that the season this time is more exciting, and the recent Formula One movie release adds to the interest. Finally, Tower Defense franchise revenues were down 17% year- over- year in constant currencies, and that is mainly reflecting declining DAU levels in Bloons TD6.
The game team continues to focus on new in-game content and launched seven new towers, a new map, and additional content for the Rogue League Legends Tate DLC game in the quarter. The game has, however, active content for the pipeline for the rest of the year, as well as a Nintendo Switch launch in the works, so the momentum in the studio remains high. As a result of the consolidation of Plarium, our top three games, which are Raid: Shadow Legends, Forge of Empires, and Warhammer 40,000: Tacticus, now represent 50% of our total revenues. Of note, our top three games are all developed by different studios, and the same can be said if you're looking at our top five games, where the top five are also including both mid-core and casual titles. I do believe this really highlights the creativity, diversity, and our resilience of our portfolio.
Looking on the user acquisition, we invested 36% of our total revenues in UA in Q2, which was an increase from 33% of the total revenues in Q2 last year. It's worth noting two things. The first is that 36% in this quarter represents the total combined UA invested by both our original studios and Plarium. Our total UA spend amounts to just over SEK 1 billion, and that is materially over double our spend for Q2 last year, in part due to the consolidation of Plarium. The second is that Q2 last year represents a historically low level for our UA spend, as several of our studios in Q2 were still working on the games that were due to launch in the second half of 2024.
Several of those games are now scaling, and as I said before, from Q2 last year and starting Q3, we have been ramping up marketing, and now these are among the main drivers of our organic growth in Q2 this year. Our total UA spend in our original studios is therefore up 52% in constant currencies in Q2 year- over- year, and this was driven by the geographic expansion of our word games, the growth of our casual titles, the rapid expansion of our new titles, Heroes of History, and the continued scaling of Warhammer 40,000: Tacticus. We continue to be very happy with the positive momentum we are seeing in our marketing and the growth that it is enabling us across our businesses. I will now hand over to Nick to discuss our profits, KPI, and the financial position.
Thank you, Maria, and hello everyone. It's a pleasure to join the team and to deliver such a strong performance as my first set of results as CFO. We reported SEK 640 million in adjusted EBITDA in Q2, which represented a 50% year-over-year increase in absolute terms. If we adjust for translation currency effects, our adjusted EBITDA was up by 63% year-over-year in Q2. The year-over-year increase was driven by the contribution from Plarium after the consolidation in February, as well as our organic growth, but it was partly offset by the investment in UA to scale the current new games that Maria just discussed. We therefore delivered a solid operating margin of 22% in the quarter, with the delta to last year's operating margin primarily reflecting our increased UA spend. Our adjustments to reported EBITDA in Q2 amounted to SEK 44 million.
The vast majority of this was attributable to M&A transaction costs related to the Plarium acquisition and also performance-based payments related to the acquisition of Snowprint Studios. Our depreciation and amortization costs amounted to SEK 373 million in Q2. Of this, just over SEK 320 million came from the amortization of PPA from the Plarium acquisition. This was driven by the fact that around 70% of the PPA for the Plarium acquisition was allocated to intangible assets, with Raid: Shadow Legends containing the key assets. This is the first quarter where we've had a full three-month contribution from the consolidation of Plarium, and the levels that you are seeing here should represent somewhat of a new baseline going forward. Now let's look at our operational KPIs for the second quarter. The consolidation of Plarium has shifted the composition of our revenues and of our operational KPIs.
We generated 79% of our revenues from in-app purchases in the second quarter, with 19% coming from advertising and a further 2% from third-party platforms. This primarily reflects the scale of Raid: Shadow Legends and that it is primarily IAP monetization. We now have 9 million DAU, stable from the first quarter and up from 5.8 million in Q2 last year. This year-over-year increase in the DAU reflected both the consolidation of Plarium and also the successful geographical expansion of our word games and growth of key new casual titles in more or less equal measure. Our DAU also grew in the quarter, both year -over- year and sequentially, driven primarily by the consolidation of Plarium and also a mix shift with growth in higher ARPDAU franchises such as racing. Now let's take a look at our cash flow for the quarter and also our leverage position.
We generated SEK 512 million in income before tax, adjusted for items not included in cash flow. We reported cash flow from operations of SEK 325 million with a positive working capital inflow in the quarter and free cash flow of SEK 280 million. This enabled us to deliver levered cash conversion of 50% for the 12-month period ending 30th of June 2025 and an unlevered cash conversion of 48%. It's worth noting that our levered cash conversion was lower than our unlevered cash conversion, as whilst on a quarterly basis we now have net interest expense given the financial debt from the Plarium acquisition in February, on an LTM basis we still had a net interest income given we were in a cash position prior to that acquisition.
Cash conversion in the quarter was also lower than the levels we've historically reported in recent quarters, primarily reflecting two main effects. The first is the M&A cost that I already mentioned incurred in both Q1 and Q2, which predominantly related to the acquisition and integration of Plarium. The second is the payment of withholding tax in PlaySimple in both Q2 and Q1 this year, which were the first two quarters where we have upstreamed cash out of India. It's worth noting that our underlying cash conversion was therefore materially higher and remained very strong if you adjust for these M&A costs and if withholding tax had been spread out as if we had been moving money out of India on a more continuous basis over the last few years.
We reported total net income of negative SEK 61 million, but when we look at the underlying number without non-cash items and amortization related to our M&A activities, we delivered SEK 317 million in operational net income for the period. I believe this clearly demonstrates the underlying health of our business and the strong position we have today. Our financial net debt at the end of the period amounted to SEK 3.2 billion, which mainly comprised our external financing of SEK 4.4 billion, less the SEK 1.2 billion in cash and cash equivalents at the end of the period. Our cash and cash equivalents reduced quarter on quarter primarily as a result of a SEK 1.1 billion earnout payment in relation to PlaySimple. Our financial leverage ratio therefore amounts to 1.1x based on EBITDA for the rolling 12-month period ended the 30th of June 2025.
Our total net debt amounted to SEK 4.6 billion, which is down SEK 0.5 billion quarter on quarter. This comprised the SEK 4.4 billion in external financing that I just mentioned, SEK 1.1 billion in earnout liabilities, SEK 300 million in put call options, and then reduced by cash and cash equivalents of SEK 1.2 billion. We therefore had a leverage ratio of 1.6x based on net debt over the 12 months rolling EBITDA including Plarium. That concludes the financial part of our presentation, and now let's have a look at our pipeline of games. Our model is delivering fun and engaging games to our players, and as Maria mentioned, our financial performance has been developing and scaling new games. It's therefore crucial for us to continue to get more shots on goal in order to deliver sustained future organic growth and value for our shareholders.
Maria has already called out the success and the rapid scaling of Heroes of History, which was launched by InnoGames in Q3 last year, and also that about half of PlaySimple's growth was from new titles with games like Tower Match and Jigsaw Puzzle showing very strong growth. As we look at the broader pipeline, two days ago, InnoGames publicly announced Cozy Coast, which will launch globally on iOS and Android later this year. This is a new casual title in the merge genre, and InnoGames just concluded the successful test phase. Hutch Games has continued to evolve Matrix Motors, adding new features and content to drive engagement and retention. Ninja Kiwi continued to focus on Bloons Card Storm, which is in soft launch, and also has three additionfal titles in development.
While Plarium's Elf Island is still in soft launch, it also has two additional titles in development, which are yet to be announced. Given the financial performance in the first six months of the year and our continued good momentum and visibility, we have full confidence in reiterating the full-year outlook we provided in April. We continue to expect full-year organic sales growth of between 3% and 7%. For the avoidance of doubt, organic sales growth are our sales in constant currencies from our original five studios. We also intend to continue investing in efficient marketing behind key established and new games in order to drive this growth. We therefore reiterate our outlook for the full-year total reported adjusted EBITDA margin to be in the range of 21%- 24%. Again, to avoid any confusion, this includes both our original studios as well as Plarium.
The exact level of our margins will depend on our ability to continue to invest in UA at the right return levels. Thank you for your time, and I'll hand back over to Maria for our summary.
Thank you, Nick. Before we move into the Q&A, I just want to briefly summarize where we are as we now move into the summer period and then the second half of the year. I'm very happy to have delivered strong organic growth both in Q2 and for the first half of 2025. I'm also very happy to see that the growth is coming from so many different games, both on the casual and the mid-core side of our portfolio. The growth was enabled by our increased UA spend in our original studios, and we continue to invest in a disciplined manner with a clear focus on future returns. As Nick just mentioned, we are therefore confidently reiterating our outlook for the rest of the year.
One thing that we haven't spent a lot of time on in these results, which is, however, very important, is the work that we've done post the acquisition of Plarium to evolve our business and operating model and to deliver what we have as a vision of a group-wide commercial take and toll and to increase our efficiency. This is something that we now close the first phase of. We're now preparing to have a good Capital Markets Day where we would like to tell you more about it, the progress and the ambition levels, and how we see to create value in the years to come. I hope to see you all there in person, and the event will also, of course, be live streamed. With that, I want to thank you for joining in today, and we are ready to take your questions.
Thank you.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Jacob Edler from Danske Bank. Please go ahead.
Hi, Maria, Nick, and Anton, and thanks for taking my questions. I just have two or three questions to start with. I'll start with on the asset side, - 14%. In my book, it sounds quite hefty. I mean, if you look at the dollar, it's probably one of the currencies that has had the biggest move year- over- year. When I look in my model, the average rate is down some 10%. Are there any other major currencies I'm missing here, or can you add some flavor on how you have calculated and got to the 14% number? Anything to do with Plarium? I just want to make sure I get it.
Sure, I'm happy to. Thank you for the question. The reported FX impact of 14% year- over- year relates to the absolute impact from FX movements year- on- year to our total Q2 2025 revenue, which includes Plarium, relative to our reported revenue in Q2 2024, which excludes Plarium. This absolute FX impact to 2025 revenue, which is based on Q2 2024 rates, in absolute terms, is around SEK 200 million versus our revenue in Q2 2024 of SEK 1.4 billion. That derives that 14%. You're correct that the underlying FX movement in the U.S. dollar is in line with what you just said, at the close to 10%. Given the acquisition of Plarium essentially doubled our revenue, the reported FX impact therefore also is layered on top of that 10% that you mentioned there.
The underlying FX movement is lower than the 14%, which is not a pro forma number; it is a reported number. Clearly, we also do have other FX exposure to other currencies, and we did see an overall strengthening of the krona as Maria alluded to, with U.S. dollar being the main contribution.
Perfect. Thank you, Hopkins. Thanks so much. Just hopping a bit onto Plarium, and even if we were to, I guess, you know, adjust for FX, the run rate seems a bit lower here in Q2 compared to Q1. Can you just briefly talk about, I don't know, the sequential development within Plarium? Maybe also when you're talking about single-digit numbers here, both for Raid but also for Plarium, you know, is it a mid-single-digit number, a low single-digit number? We're seeing you. Yeah, any more flavor there?
Yeah, hi. I can take the Plarium one. I think we said, as far as I recall, at least in Q1, that Q2 is normally their season weaker quarter, and it bounced back in Q3. Q4 and Q1 are strong quarters for Plarium. Also, because Raid: Shadow Legends has their annual anniversary in March, that's what boosts Q1 in isolation for Plarium, which is a different seasonality compared to what you see for the other studios that we have. I think that is one factor. What we are really excited about is, as we said, I mean, Raid: Shadow Legends was growing 2% in the quarter. That was something that is really good for us because Raid: Shadow Legends is the biggest part of Plarium. Also, as I noted, there is a very exciting pipeline for the second half of Raid: Shadow Legends.
However, as a total, given the performance of the other games, Plarium's combined NDC was actually declining, and I would say it's more low single-digit. That is how the performance is in the quarter.
Perfect. I think those were my questions. Thanks so much for the answers.
Thank you.
The next question comes from Simon Johnson from ABG Sundal Collier. Please go ahead.
Good morning all. First, I want to start with a few questions on the segments and specifically around the UA. Can you please share how the UA develops sequentially in the different areas and where you are currently increasing the investments? Also, how much of the sequential increase is targeting new games where we have, I guess, more limited sales right now versus the older titles?
Yeah. Hi. I think that if you look at the UA, I think the increase in investment goes to our original studios, as we called out. I think it also goes to the areas where we also call out the growth levels. That is in the strategy simulation franchise where you have both Heroes of History and you have Warhammer 40,000: Tacticus. I think it's important when you look in particular at Heroes of History, which is, yes, it's soon coming into its one-year anniversary, but we're not yet there. As we are seeing scaling new mid-core titles, that takes until sort of in the second year where they're actually turning profitable. I think that's just important to bear in your mind. The other part where we see a big scaling up is, of course, in our word games category where we're also launching games outside of the word games.
I think the scale up there is equally followed to some degree, not one-to-one perfect, but on the growth levels and growth levers. As we've called out, that is 50% driven by the geo-expansion of existing franchises, but also 50% of launching new games. That is both new word games, but also games outside the word category.
All right, makes sense. Comparing to on word games, comparing to Q1, has that sort of mixed change in a way? Was it more geo-expansion before? Was it?
I think this quarter, what we've seen is a slight increase in some of the new games, which is really exciting. Also, what we've seen in the quarter compared to Q1 to some degree is the scaling of the non-word games, which is equally exciting. I think that is probably the shift in spend to call out. If you elevate, it is largely similar levels and similar structures.
All right, thank you. Yes, to follow up on Heroes of History, can you say anything about the levels you're investing there currently to drive the growth, give anything?
No, I would say we follow the same discipline as we always do to understand what are the expected sort of lifetime value of the customers and thereby what are the ROAS that we are comfortable to invest in. I think that's something that we are tracking and following the same discipline as we do for all the games, to be fair. The difference is in other games, you already have cohorts that are in the game, that are spending money in the game. In Heroes of History, we are just now building up the customer base. I think that's the way to look at it differently. We follow the same sort of ROAS rigidness.
Could you say like it's closer to SEK 50 million on a quarterly basis or close to SEK 100 million?
We don't give out the breakdown of U.S. spend per title, but I think we are happy to see that we are able to scale up. We always scale up gradually, so you never see us jumping significantly levels up because you need to make sure that as you scale up your ROAS, the incremental customers you come in are on the same value as the previous. Therefore, we have been doing gradual scale-up since we launched it, and that has been on a sequential basis, basically on a month-by-month basis.
Okay, thank you.
Thanks.
Moving to PlaySimple, more specifically on the revenue side, up organically. If you look at the sales in the core markets, looking before the EO expansions where you had the lower sales last year, are those also back, you think, or are those still trending at the lower level?
No, I think what I said, if I remember right, last Q1 and Q2, as we saw the changes in the sort of ad bidding at Google side, we said there were two ways to mitigate that factor, the fact that we are going to just see lower monetization per eyeballs. We may have the same DAU, but we're going to monetize them lower. The two ways we said was either we find a new way to improve the DAU or we are adding more people. We're adding a broader audience base. I think what we have successfully done, if we're looking one year down the road, is that we have been very successful in getting a broader audience, which has mitigated the lower monetization per customer. We've done it both through the geo-expansion and launching more games.
Also, important to call out, two of the new games are also non-word games, which also means that they're by default actually global in a different way compared to word games. I think it's fair to say that monetization per eyeball hasn't changed for our core markets, unfortunately. How we have mitigated that is that we have added a more global and a larger audience. Of course, there's an upside if we can then also improve the monetization in our core audience. That is, of course, something we're still working on. That is a longer journey.
Okay, so taken together now, which one is the bigger effect, the lower revenue per user or the higher DAU?
The higher DAU.
The DAU, no revenue.
What is important to note is also as we are moving outside of the U.S., in general, the monetization is also lower because the U.S. does have the highest ECPM levels.
Okay, they're still below sort of the organic sales in the core markets then.
We don't comment on that isolated, and also remember we are growing audience in our core markets, both by launching new word games and sort of non-word games. I think that as a total revenue, we are happy with the performance. I think your question was more about the isolated monetization per DAU. I think what we have focused instead on is to increase the DAU, and that's what's driving our growth.
Okay, thanks.
Thank you.
One last thing from me here about the buybacks. You haven't really said anything new, but you have said that you plan to use around a third or something of the cash flow for buybacks on an ongoing basis. When do you think you will provide some more clarity around the future for buybacks?
Yes, I think that the intent we also called out before Plarium, and I think as we are writing in the report, the balance we are now trying to strike together with our board, because share buyback is also a board decision at the end of the day, is how to best leverage our position today, whether we should execute share buyback, if we should look into M&A, or if we should improve the balance sheet strength. Yes, we still have underlying very strong cash flow. I think different to where we announced that ambition is that we're now in a net debt versus a net cash position. I think it's fair to assume that we will give you an update at the Capital Markets Day. I think it's also very fair to say that this is a topic that is high on our board's agenda.
Okay, thanks so much. That's all for me.
Thank you.
The next question comes from Jesper Stugemo from Handelsbanken. Please go ahead.
Yes, hello, Maria and Anton. Could you comment a little bit on Plarium and then especially Raid here on the user acquisition level this year compared to the relation in the last year in Q2 2024?
Yeah, I think when it comes to Raid: Shadow Legends, we're first of all very happy with the performance. It's an amazing game, and I think that's what we said when we initially announced the transaction as well. It's great to see the game also growing through amazing live ops. I think marketing is always something you look at based on the return levels, and I think it is rather stable year- over- year. The increase, as we said, has been driven by the organic studios.
I think as always, what we are reviewing, and the same goes for Raid: Shadow Legends, if we can increase the investment there on healthy ROAS levels, that is also something that we're excited to do because we do believe these evergreen franchises have such a long-time potential, and we want to make sure that Raid: Shadow Legends becomes as relevant as it can possibly be in the years to come as well.
All right, it looks like you're quite optimistic for the events in H2 here. Are there any tougher comparables to be aware of from last year as well?
We didn't consolidate, so you won't see it in our consolidated numbers, but I think as you can see when we closed the transaction, the cash balance was probably slightly higher than what we initially had indicated. They did have a very strong Q4 last year. As we look at the event schedule for the second half of the year and we speak to the team, they are very excited and they have some very interesting collaborations. I think when we look forward to it, we are excited, but as we all know as well, it comes down to the execution and that's what we'll make sure. The team is very focused on delivering great results there, of course.
All right, great. Have you noted yet any positive effects in Q2 related to the ruling in the U.S. between Apple and Epic Games when it comes to PTC and monetization there?
Yeah, I think it's a good question, and I think it's fair to say the effects that we've seen, but I think we've done the first rollout in the U.S. on one of our games, and we are getting the first data points to understand conversion levels in the direct to pay versus in the app store. I think that looks positive. I think we are then gradually during Q3 rolling out most of our other core games. It should be remembered that it is still only, if I can put it that way, only app stores and in the U.S. that we are talking about. That will, of course, limit the implications. I think net-net, we see this as a positive evolution, and of course, it would be great today if that applies for the rest of the world as well.
Yeah, on the invigoration side here, you mentioned in the report that you have implemented some selective initiatives in the group. Could you just give some more color on this if you can?
Yeah, I don't want to spoil the fun too much for the Capital Markets Day because that should hopefully be a great date. I think as we've told you before, what we are aiming to find is a way to have a much more integrated take-and-talk platform for the gaming village. I think we're starting to take the right decision in order to move into that direction, which is very exciting. We're also starting to have some first few collaborations, which is a great initiative for knowledge sharing and some more things. I think there's a lot of exciting things that we now have sort of taken decision upon and that we will start to execute. That will hopefully then be a good day at the Capital Markets Day in October where we can talk in much more detail about that and what that will mean. As I look into the future, I'm quite excited about what the entity plus planning combination will enable.
All right, that's all for me. Thank you. Have a nice summer.
Thank you, likewise.
The next question comes from Rasmus Engberg from Kepler Cheuvreux. Please go ahead.
Thank you, thank you. Nice, nice pronunciation there. I had a question regarding Plarium. Raid: Shadow Legends is a great game, but I seem to recall that there's another big title in development at Plarium. I guess that's not Elf Island, right? When can you say something more about that?
Yes, you're absolutely right. The team that was developing Raid: Shadow Legends is also developing a second title that they're extremely excited about. It still has a work-in-progress title called TPS, and it is a shooter game. I think that we are not at a stage today where we want to tell you too much about it, but it's a bigger title, and I think the ambition level is probably the same as Raid: Shadow Legends. It's further out in the pipeline on when it can be launched, and it has surpassed many sort of tollgates before that as well. As and when we progress further, I think we should definitely come back and talk more about that.
Thank you. With regards to the guidance, you were sort of indicating that you expect a lower organic growth in the second half of the year. Is that mainly Q4, or does it refer to both Q3 and Q4, you think, in your base case or in your thinking?
Yeah, I'm happy to take that one. No, as Maria alluded to, if you look back at also the seasonality that we experienced last year and the momentum that we have going into Q3, I think it's fair to characterize that we still continue to see strong organic growth in Q3, with more of the pressure coming through into Q4. Therefore, overall on a full-year basis, delivering on that full-year guidance.
You have a comment also in the report that you talk about in the H1 skewed UA spend push. Does that mean that you sort of, how should we think about that? Is that suggesting that your base case is a lower UA to sales in the second half of the year? Is that what you're alluding to or?
I think the way to look at that is, Q4 is the biggest quarter of the year for us, and that's also when many of our studios have really exciting live ops and event calendars for the customers, which means that you would like to have your DAU base as good as you can going into Q4. In Q4, that's when the marketing prices usually go up as well. I would say the way to look at it is probably more realistic that Q1 through Q3 should be the heavier weighting on the UA spend, and then it should ease down a little bit in Q4.
As a percentage of sales, you mean, or separate, you mean?
Exactly. I don't want to guide too specifically, but it definitely should be.
To try to understand what your base case is. Very good. Can you, for our understanding on the tax rate, how big was the tax effect of taking money out of India? I thought the tax rate looked really high in both Q1 and Q2. Could you give us roughly a number?
I think it's best to write that another way of putting that question back to you is if you were to normalize for that withholding tax impact, then you would have kind of materially improved the cash conversion to the tune of close to 10% points. On an absolute number, I'm not sure that we can provide that level of granularity, but overall to the cash conversion, it would have been that magnitude.
Okay, thanks a lot.
Thank you.
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
No, thank you. We have one question online before we close out, and this relates to the C shares that we hold as part of the original acquisition for PlaySimple. Any news regarding that issue or where we stand?
No, I wish we had some good news. I think the ruling has changed again, so I think we are going to make a last attempt now during the second half of the year to see if we can actually transfer the shares. If not, we need to go back to the default case where it is either a block sale on the market or that we are actually then counting the shares and paying the net proceeds to the founders.
Thank you, Maria.
Thank you very much.
It looks like we have one more question on the call, so please operate and go back to that.
The next question comes from Martin Arnell from DNB Carnegie. Please go ahead.
Hi, guys. Thank you for taking my question here, Andy. I just have a follow-up on the organic growth outlook. We were wondering, you know, how much more benefits can you have in word games from the expansion and localizing the games?
How many countries are there in the world and how many languages? I think the way we look at it and also the way the team looks at it, of course, is the reason they start on the U.S. market is because they have the highest eCPM levels and GDP levels. They go in the ranking, looking at the global world. As they said, we have now done quite a lot of translations. We are scaling some nicely in selected European markets. I think it's fair to say some back of German and Spanish, Portuguese languages. Also, as we look in Latin America, it's the same languages that work there. Can it be further explored? Of course, that's what the team is working on. I think that the further you go away from your core countries, the lower the eCPMs will be, and the money impact will be as well.
The opportunity is, of course, there, and that is something the team is exploring. I think equally, what is exciting is if you look at the non-word games as well, where there's a hold-on-top potential. I mean, now we have two games that are scaling, but of course, the team is working on more games on that.
Perfect. In racing, do you think that this is the start of a period of better progress there? It's been a little bit tough looking back a few quarters.
Yeah, no, I think that's a very fair assessment. I think the team has done great work doing a turnaround of the company and reigniting the focus in the right areas and done an extremely successful relaunch on Formula One Clash. I think it's good to have a game where you get a new shot at the goal each season reset. I think the team did great this year and brought the learnings with them from previous years. It's also equally good to see that it's not just Formula One Clash, it's also Top Drive, even though it's a smaller game nowadays, that they also managed to turn around. On top of that, they also then pivoted Forza, which didn't succeed, and they pivoted that into Match Creek, which they are now successfully scaling, yet still low levels, but it looks very promising.
I think the way we look at it, yes, it's still early days, but I think they definitely are in the right projection to turn it around and to become a growth company again.
Perfect. Thank you, Maria. Just a final question would be on the potential for synergies from the Plarium acquisition. Can you remind us what you've said about that when it comes to margin, perhaps beyond this year?
I don't think that we have said anything, actually. I can't remind you on that, but I think we have said that we do expect synergies to come out of the transaction. As I also said previously on the call, I think that the combination entity plus Plarium will enable us to be a much better company going forward, which I think is truly exciting. I'm not sure if you have any.
That is something which clearly we plan to have more communication in and around at the Capital Markets Day in October as we provide an update more broadly.
Perfect. We look forward to that. Thank you for today.
Thank you.
Thank you.
All right, thank you very much. That concludes our call today. I hope everyone has a good summer, and we hope to see you at our Capital Markets Day in Stockholm if you can attend, and via live stream if you cannot. Thank you.
Thank you.