Thank you, and welcome to our Q3 presentation. We will just briefly on the first slide in the presentation give an updated overview of our group. As from this company inception, we focus on free-to-play online strategy games, and we continue to do that through our quarter through the latest acquisitions. We have now passed more than 600 million registered accounts lifetime, so we have a quite massive track record from Empire being one of the largest strategy games down to more niche games. We will look further into our portfolio. Notable could also be on the upper right corner of that slide, you can see that we have a slight change in the revenue distribution as a consequence of the KIXEYE consolidation.
We increase in North America up to 31%, and Europe goes down from 49 to 44%, and Asia goes down from 23 to 20% of the group's combined revenues. We are now more than 650 employees in 10 different countries and 16 different offices. That is basically the glance over our 12 studios that the group consists of. Moving into the quarter on next slide. We will highlight during this call, obviously the quarter but also touched upon the year. We have taken very important steps in this quarter as well as during this year in several different aspects, which we will touch upon during the call. Let's start off with the highlights for the Q3.
Our net revenue grew by 64% year-on-year. That was mainly or partly through the acquired growth, but also with the strong organic growth of well over 20%, which we think is a strong number, especially as we relate them to the UAC that we have spent during the quarter, which amounted to SEK 83 million or 16% in relation to our net revenues. We combine this, what we think is strong growth with an adjusted EBIT of 34% in relation to our net revenues, as a percentage. That is very much due to the strong monetization and very efficient user acquisition. I would like to just briefly mention also that we have defined our adjusted EBIT slightly different now.
As being a company working with a lot of acquisitions, and we hope to do so in the future, we have adjusted that to better reflect our operational business, mainly through excluding amortization of acquired assets. We will come back to that naturally during the presentation. If we look into the operational highlights during Q3, of course, that KIXEYE is now a part of the group is a key element. We can also conclude that it's as usual, and as expected, it's the slowest quarter of the year, which means that we have a lower pace of live operation and events going on in our game portfolio. Also, as mentioned, we have a lower marketing spend than we've had previously. We have had very low user acquisition cost in KIXEYE. We'll come back to the reasons for that in more particular.
BIG FARM: Mobile Harvest shows an impressive growth, we think, which is very satisfactory, 45% year-on-year. It's also important to note that we have no new titles released in the quarter. However, after the quarter ended, EMPIRE: Age of Knights was launched globally, and the initial response is positive. Early but good response. So moving to next slide to look into our portfolio. This is one of the areas where I think we have taken very important steps, not only in Q3, but during the full nine months that are left in this year. We improved the balance of our portfolio, and we improved the size of our portfolio.
Now we have 36 products live, and we have added the products from large ones like Battle Pirates and War Commander: Rogue Assault, but also we have seen a strong development for mid-size products, which I will touch upon later as well. Not the least, it's an improved balance in our portfolio, meaning that the largest product now is approximately 14% of our total portfolio. We have a better balance between larger and mid-size and smaller. We have more products, so it's more diversified, but also a good balance between young products and more mature products. Looking into the different product areas, the Empire brands, which during Q3 represented 26% of our total revenues.
The Empire franchise or the Empire brand are represented by four products currently, but five including the product that was launched after the end of Q3, EMPIRE: Age of Knights. The deposits amounted to SEK 135 million, which is a stable level compared to last year, slightly lower, but very stable. The UAC has continued to be kept on a quite low level, approximately 10% in relation to the deposits. That means that the Empire brand and the business behind that, it represents a very strong EBIT and cash flow contribution to the entire group. Also we are enthusiastic, as mentioned, about EMPIRE: Age of Knights and what that could bring the next coming 12 months and onwards. Early, that's looking good. Going over to the Big Farm brand, which represents 70% of the total revenues, consists of three products as earlier.
The deposits amounted to 85%, which is a 26% growth year-on-year. The user acquisition is lower slightly year-on-year, 9%. It's amounted to 28%, which is 33% in relation to deposits. It's quite significant in relation to deposits, but also it drives the growth that it should do, considering the user acquisition costs. The sequential growth was, for this quarter, 6%, and this is the fourth consecutive sequential growth that this area has. In total, the last four quarters, we've had grown by 26%, which is of course satisfactory. Also as mentioned in the beginning that Big Farm Mobile Harvest is really contributing according or better than our expectations with 45% year-on-year growth. We are optimistic that this could contribute for a long time going forward.
Looking into our core product area, which is 57% of our total revenues, consists of 29 products now, as we have also included the four products from KIXEYE in the core product area. Deposits amounted to SEK 289 million, which is a 193% growth year-on-year. The UAC for that area was SEK 41 million. We can achieve that growth, which is both organic and non-organic, with a very efficient UA. The largest products in Q3 were Nida Harb, keeping the leading position, even though it was a decline from the record-breaking Q2 due to seasonality and due to that Ramadan is in Q2 and unfortunately not in Q3 as well. Nevertheless, amounting to SEK 72 million, a strong number we think. Then we have Battle Pirates and War Commander: Rogue Assault on SEK 35 million each, approximately representing 7% each of our total revenues.
It's also worth mentioning Strike of Nations, which is one of the top three products driving organic growth year-on-year. Strike of Nations are really starting to contributing to our total growth indeed. Moving to next slide, looking into our user base. So we have, of course, it reflects the seasonality that we have in Q3, it's reflected in our user base, and also that we have the very efficient and lower UA in Q3 than we had in the previous quarters, where the MAU is decreasing by 9% sequentially, and the BAU is decreasing 1%, which obviously results in a higher stickiness. It's important to note here that there is a natural higher fluctuation pattern in monthly actives, whereas it's lower in daily actives, and it's even lower in the number of paying users. That is a very important dynamic to understand our business, that is naturally fluctuating.
That goes both for when we increase the number of users as well as when it decreases. MAU is moving faster than BAU, which is moving faster than paying users. On a year-on-year basis, we have a strong growth with 37% in BAU and 30% in MAU. I would like to add also that we'll come deeper into that later, KIXEYE has a more condensed user base, meaning that the stickiness is higher than the average on our portfolio, and the portion of paying users and how much they pay are on very good levels than we have as market so much yet, we will come back to that in a second. Moving down to the paying user base. We are happy to see again that our loyal paying user base is very stable year-on-year.
Also when we exclude the acquired studios and the user bases that they represent, it's a very stable, loyal paying user base. We're also, of course, happy to conclude that we have an all-time high in the absolute numbers of paying users amounting to 211,000 paying users, and also that the average revenue per monthly paying user is on all-time high levels, amounting in total to SEK 800 over the whole portfolio and all studios. Notably is that core increase is significant, which is tightly connected to the fact that KIXEYE is higher than the average revenue per paying user. You can also see that the Empire brand bounces back in terms of average revenue per monthly paying users from the extremely high activity we saw in Q2. It's back to more of a normal level for a Q3.
We think it could be higher than what it is going forward. It's also important to note that it's actually increasing by 2% the number of paying users for Empire. We have the loyal core still there. BIG and Core products are on all-time high in monetization. Moving over to looking a bit further into KIXEYE on next slide. So we mentioned as we announced the acquisition of KIXEYE that the Q1 numbers, which was revenues of SEK 128 million and EBITDA of SEK 65 million, we regarded that as representative for that business. We can now see that it was representative as well because Q2 are very similar to those numbers, and Q3 are very much following that pattern with, of course, the natural seasonality that they have similar to what we have in the group in general, they have as well.
We are satisfied with seeing that they are following the metrics which we saw when we acquired and assessed the company that we acquired at KIXEYE. If we look into the Q1 when they are in the group, as mentioned, they have the sequential seasonality impact. We have spent very little in marketing for KIXEYE during the quarter, and the reason is that we have been focusing on a couple of other things, namely to prepare ourselves and the products for scaling up. What we've done is that we have, it's basically two things. The first thing is that we have improved the funnel of KIXEYE.
Looking and comparing with the data from other similar products that we have in our portfolio, we can see that they are very strong in parts in the funnel, and other parts could be improved, and that is exactly what have been worked upon from the strong team on KIXEYE. The other thing is that we have implemented tools also necessary for marketing the product, which we will do going forward with the products, but War Commander: Rogue Assault in particular. And we also have prepared the KIXEYE organization for future growth. For instance, operational things like they have shared services that were shared with the previous company, part of KIXEYE that is situated in California. We have separated that so that we are in a good shape for also organizational-wise grow the KIXEYE business going forward.
We are, we also, before going into that, as mentioned previously, the loyal and the condensed user base is very impressive, we think, looking further into it. It's on or better than our expectation. As mentioned, the average revenue is definitely higher than the average, which is a good sign that also the high production quality and product quality of KIXEYE is appreciated among the consumers. What is very important to mention and emphasize is that the synergies are starting to materialize, and I think that which is one of the important steps I mentioned initially, that we see throughout the years that we are getting better and better, meaning that we are seeing clearer synergies and also faster than we did just one year ago. We have really improved our capabilities of finding and materializing synergies in general, but not the least that goes for KIXEYE.
So I would like to emphasize three things. There are also other things, but three things. First, already after a few weeks, Imperia Online was on the distribution platform that KIXEYE has, kixeye.com. Goodgame Studios is now responsible and will conduct the marketing for scaling up War Commander: Rogue Assault, and test campaigns have just commenced. We think that's a very important step to achieve the growth that we think is possible. We have our best team on to support KIXEYE and cooperate with KIXEYE in achieving that. Babil Games and KIXEYE are in cooperation on making a MENA version, an Arabic version of War Commander: Rogue Assault. That work has commenced. It will take additional some time before it could be gained, but nevertheless, we need time to get that work going and very satisfyingly.
So all in all, we think that we are as pleased as we were when we announced KIXEYE, we are still. They are on the levels that we expected, and we are still as enthusiastic about the growth opportunities that comes with KIXEYE and also synergies as mentioned. Moving over to slide number seven. We think this is a very important way of describing our business. It shows clearly what kind of earnings predictability we have been able to perform, what kind of stability we have been able to show for quite some time, and how sustainable our financial performance has been, and we are very convinced it will be going forward as well. Looking into our growth of 64%, it's a strong organic growth, well above the 20% line, and Nida Harb and BIG FARM: Mobile Harvest are the two key drivers to that.
But also very important, which usually doesn't get that much attention, but it is very important for us, is what we call the medium-sized product, that are not the largest four or five products, but the ones that comes in the next layer, so to speak, in size. They represent, as a group, basically an Empire product. They make up a certain size. We can see that many of these products have enjoyed a strong growth. It's really, for us, both important, as well as it has a clear bearing on the core of our business model, is to see that product that are quite mature, such as Supremacy 1914, is contributing with an 80% growth year-over-year, and this is on the 11th year of that product being live. It's really contributing significantly to our growth.
It has its all-time high month in September, which I think is important. Strike of Nations and Conflict of Nations, Siege World War II, and One Piece, all of them, all these mid-size products represent the growth, which is more than 10% of just these mid-size products, organic growth to our total growth. I think that is worth keeping in mind, that the mid-size products is easier to grow in percentage, and they do represent a significant amount of revenues and growth. Besides the organic growth on both the larger product like Mobile Harvest, but also the mid-size I mentioned, we have acquired growth through eRepublik, Playa Games, and KIXEYE. We have a good profitability of 34% adjusted EBIT margin, and that is excluding IACs and amortization of PPA items.
The UAC amounted to SEK 83 million Q2, 16%, and we had a slightly lower share of mobile revenues in the quarter. But also, it's important to note that some of these factors work in different directions, but as always, keeping in mind that the seasonality has a typically a 3% to 4% effect on margin, everything else the same. I think all in all, it follows what we expected and hoped for, and I think 34% EBIT margin is a quite strong number. I would like to finalize this slide with the, I think, one of the most important metrics that we work with internally, and that is the last 12 months development. Of course, that is then we take away the seasonality effects and the different small shifts that could occur from one quarter to another.
As you can see on the upper right corner, we have a strong growth in last 12 months revenue. It is up to SEK 1,782,000,000, which represents a 43% revenue growth year-over-year in last 12 months. More than half of that is organic growth. It is really important to see that we compare this 43% organic growth with a user acquisition cost steadily going down from 29% down to 20%. It is nine percentage points lower or relatively speaking, 30% lower, and at the same time, we increase our top line with 43%, where significantly more than half of that is organic. I think that combination is really a strong KPI for us. Also, along with that we had a 116% growth of EBIT or an EBIT margin improvement of 11 percentage points.
I think that those dynamics is very important to look into to understand our company better, and it's for sure something that we work with in management as we manage and develop the company. So basically, that was my last slide for now. I will hand over to Andreas to go into our financials a bit deeper.
Yes. Thank you. Good morning, and thank you for joining us this morning. I will turn to slide eight the income statement. Start off with top line. We had deposits for the quarter of SEK 509 million, where we had a negative effect of SEK 1 million from IFRS, which relates to in-game currency being consumed. We had a SEK 9 million effect positive of other games related revenues such as ad revenues and royalties. Total net revenues ends up at SEK 517 million for the quarter, which is a 64% increase year-on-year. Platform fees amounted to SEK 137 million, which gives us a gross margin of SEK 74 million for the period. Percent, sorry. Onward capitalized, i.e., the staff cost of SEK 69 million. In total, we spent SEK 71 million in Q3, which is a total CapEx of 13.7% of net revenues.
However, over time, as i.e., year to date, we spent SEK 164 million, which is 11.6%. The increased investment pace, it fluctuates over time, and as you might have noticed and Jorgen mentioned as well, we did a global launch of EMPIRE: Age of Knights in October and prior to a launch date, you tend to increase the investments likely. It's a natural fluctuations between quarters. Other operating expenses, we've broken this down. We had User Acquisition Costs, as mentioned before, of SEK 83 million in quarter. Platform fees, SEK 137 million. We have Items Affecting Comparability of SEK 3 million and other costs, which relate to costs to running the company as a whole in a global environment with offices, et cetera, of SEK 49 million. Staff cost of SEK 100 million, which is an increase from Q2 of 32%.
This is mainly driven by KIXEYE, and it relates very closely to our increase in number of FTEs for the quarter. Depreciation amortization in total, SEK 69 million. SEK 36 million relates to PPA items, which is an increase of SEK 22 million versus Q2. This is driven by a finalized PPA for Playa and a preliminary PPA on KIXEYE. SEK 23 million of the amortization is driven by capitalized product development costs, and SEK 10 million is related to IFRS 16 and the tangible assets being depreciated over time. This gives us an unadjusted EBIT of SEK 136 million for the quarter, and then adding back amortization for PPA items of SEK 36 million, which is part of a new definition of adjusted EBIT and SEK 3 million of IACs. That gives an adjusted EBIT of SEK 175 million for the quarter, i.e., 34% EBIT margin. Net financial items for the period was SEK 3 million.
This consisted of SEK 17 million of interest costs. We had SEK 2 million of FX and non-cash interest charged on earn-outs. We had an offset or a positive offset of the revaluation of provision for earn-outs of SEK 16 million. These kind of revaluations, we have now done a reclassification, and we have now also updated the historical numbers, this will go in the financial deck going forward as well. Taxes, part of our ongoing assessments, we assess our tax rates, we have started to review this more thoroughly in Q3. This gives us a tax expense for the quarter of SEK 22 million, that gives us an isolated Q3 tax percentage of 16%. However, it is important to look at this over the full year to date numbers, there we have SEK 84 million, that gives an effective tax rate of 25%.
So the Q3 lower number it's more a one-off effect, and it's the full year amount that's in question. Net result, SEK 111 million, which is 106% increase year-on-year. Turn now to slide nine, the balance sheet. Intangible assets, the non-current assets of SEK 3.4 billion is an increase from Q2. This is driven by an increase in goodwill items of SEK half a billion due to the acquisition of primarily KIXEYE, and also that we have increased our capitalized development products of acquired products, i.e., PPA items, which amounted to, in total we have intangible assets of SEK 1.1 billion due to this, which has increased almost SEK 600 million due to purely PPA items. At the end of the period, the company had SEK 450 million unutilized credit facilities and SEK 385 million of cash. This creates naturally a financial flexibility for further growth in line with our strategies. Turning to the liability side then.
The book value of our outstanding bonds amounted to SEK 1 billion 84 million. Non-current liabilities, SEK 307 million, mainly attributed to provision for earn-out and the utilization of credit facilities. Current liabilities SEK 534 million. Also here we have a short-term earn-out component and as well some usage of our working capital facilities. Net debt for the period, SEK 851 million. This gives us an adjusted leverage ratio pro forma of zero point nine, and an adjusted interest cover pro forma of six point eight. Turning to slide 10, cash flow. Cash flow from operations, a positive SEK 180 million. We had some seasonality effects there in this Q3 of our larger tax payments of SEK 49 million. And also a reduction in operating liabilities during this period, we had $63 million of our investments, SEK 63 million, primarily product development in this quarter.
Cash flow from financing activities positive of SEK 6 million. I think it's important to note that cash flow has a seasonality effect between quarters. Looking at the year-to-date cash flow excluding acquisition, we had cash flow from operations of SEK 336 million, and we made investments in product development of SEK 164 million. I think that is the more relevant number to look over a longer period. This gives us an end cash balance of SEK 385 million.
All right. Thank you, Andreas. I would just like to conclude this presentation with mentioning a couple words about our Capital Markets Day. As mentioned when we started this presentation, we have taken several very important steps in building this company. This year and the last couple of years, we have reached our long-term financial targets in Q2, which is of course very pleasing. We plan to take Stillfront to a completely new level going forward. We would like to invite you all to the Capital Markets Day on the web or if there's any seat left on the physical venue as well. It's basically these three areas that we will cover. We will share the strategies with which we will take Stillfront to a complete new level.
We will get you insights in the gaming industry, which we think obviously is a fantastic industry to work in. We will also provide you a broader and deeper insight into Stillfront with more people presenting from some of the different studios and to dive deeper into some of the key areas which have been driving Stillfront to where we are today, but even more will drive Stillfront to a completely new level going forward. Thank you very much for listening to that, and now we hand over for questions.
Thank you. Ladies and gentlemen, if you would like to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Once again, it's zero one on your telephone keypad for any questions. There'll be a brief pause while questions are being registered. Our first question comes from the line of Lars Wallin Hultgren from Berenberg Securities. Please go ahead, your line is now open.
Hi, guys. A couple of questions from me, we can start with Goodgame. First of all, impressive to see the paying users actually grew in Empire quarter-on-quarter. Of course, the revenue was down. How should we view Q4? If you make an index, how much more content updates, live ops events will there be in Q4 compared to Q3? What is realistic to assume?
One of the strengths that we have in our operational model is that we can swiftly focus our development resources between different products, and this is exactly what we've done. That's why we timed the final efforts in taking Age of Knights to the market in Q3 because that's usually, as you know, the seasonality makes a high level of live ops not paying off as good as it did in Q2 or Q1. That means that now as we have Age of Knights out, of course, the development team are working with extending that since it shows early and promising KPIs. I also expect us to be able to increase the activity on live ops, basically.
Of course, we don't give forecasts, but considering that we're adding one new product to the Empire brand, we are optimistic about that we will not only be stable going forward, this will be a growth franchise for us. We expect that to happen.
Going for Big Farm that had a good year-on-year growth. If you look on MAU and DAU, it was actually down quarter-on-quarter, paying users was flat, and the monetization improved quite a lot. What's the main reason for that? Has it been a lot of live ops events, or what's the main driver?
The main driver is exactly live ops, that is the big development that we've done in the group. That explains basically that we can grow last 12 months by 46% while at the same time lowering user acquisition costs from 29% down to 20% still growing that much. That is due to that we are more efficient, we have more synergies, we are just better at live ops, including updates. That is what explains that the average revenue per paying user goes up as well. To be completely honest, I think that we are very pleased to pass the SEK 600 mark on Big because usually farming games are not monetizing as strong as the other strategy games, we're very pleased with that. I see that hopefully we can continue on that level or improve it further.
I also think that we can grow the number of users as we go out of the low season into the stronger season.
Okay. On the cost side, on OpEx, I've seen some other analysts also writing about it. It was a bit higher than I expected. Is the OpEx, was there something temporary, or is the OpEx level a representative level going forward?
I think other OpEx fluctuates over time, naturally. We added in KIXEYE with a few offices this quarter, which is the main driver for the increase. Overall, I would say that it's representative, but it will fluctuate between quarters exactly how much that will be. Still, if you look at the total revenues and cost base, it's SEK 49 million that represents the running offices globally in several locations.
Okay. The final two for me, or three questions on games here. First, Age of Knights, you said early promising signs, but if you compare it to BIG FARM: Mobile Harvest, how is it responding? The second question, Clash of Empires, is it still possible that we have a release in Q4? War Commander, when can it be ready for a launch in the main region?
Age of Knights compared to BIG FARM: Mobile Harvest, we think it stands up well in comparison. The volume and the launch strategies, however, are different, if you recall, and I think you do, that it was a trampoline launch, meaning that it was a massive launch with a lot of UA poured in the first month in BIG FARM: Mobile Harvest. We will not do it that way. We take a ladder approach when launching it. The volumes will not explode that way, but not the cost for UA either. I think that's a more balanced approach, but of course, we wouldn't hope and think that we will be able to have that ladder approach if the KPIs were not strong enough. Again, it's early.
Data is always the one that tells us how much we can scale it, and that we have to see as we go along. So far so good. Clash of Empires is in production, in latter stages of its production, so we are not giving exact dates, and we do that not only to try to be secret, we do that because we, again, all the time we optimize between live ops, what pays off the best, and how much we put into the new product development. It is not super far away with Clash of Empires. When it comes to War Commander: Rogue Assault, it's two important things. One is that we touched upon, but I would also like to emphasize that we started the test campaigning for War Commander: Rogue Assault through the GGS capacity with test campaigns.
That is one thing that I would say hopefully gives effect earlier than the MENA version, because then we have some adoption, some development to do. It's not live now, so you shouldn't expect it to have a significant impact or very little impact on Q4, but we hope that we can start to scale it in Q1.
Thank you.
Thank you. Our next question comes from the line of Oscar Erixon from Carnegie. Please go ahead. Your line is now open.
Thank you. Good morning, guys. A few questions from me. First one is, it seems like you are quite confident on the momentum of both Empire and Big Farm, heading into Q4. How should we judge the low user acquisition spending, and may that have an impact on such a slower start in Q4? Are you confident that you will show strong sequential growth given seasonality? Thank you.
We don't give forecasts for Q4, as you know, but I think that t here is no reason to expect that the seasonality would be different this year from previous years. There is no structural difference. The lower UA of 16% compared to last year's 20% is completely connected to the lower spending KIXEYE. If you take away that, the rest of the portfolio, so to speak, has the same spending as last year. So of course, it's very hard to judge how it ramps up. The typical pattern is that it's now, and it's up until not the least in December, which is one of the most active gaming months of the year, if not the most active. It could really differs a lot just how much that we perform in December.
So it's hard to say, honestly, because we don't have the facts for it. It's important to note that excluding KIXEYE, we have the same level of UAC for the rest of the portfolio as we had last year. We're not slowing down, but on KIXEYE, that means that it's ramping up slowly as we speak with the test campaigns for the existing War Commander: Rogue Assault with Goodgame at running that. As I mentioned just a second, a minute ago, that War Commander: Rogue Assault, the MENA version will not contribute in Q4, but we hope from Q1. It's also good because as you saw from Nida Harb, Q2 is a very strong period in the MENA region.
Of course, that is one of the hopes that we have that War Commander: Rogue Assault MENA will fit nicely into the strong spring in the MENA region.
Great. Thank you. Two follow-ups there on specific games. First of all, Nida Harb, as expected, a slower quarter now after very strong performance in Q2. Can you elaborate a bit on the seasonality when comparing Q3 and Q4 for Nida Harb? Also, secondly, you have started test campaigns now for War Commander: Rogue Assault. Is it reasonable to expect that full marketing will start in November, December, or what's the latest news there? Thank you.
So looking at the seasonality of Nida Harb, it's slightly different. As I mentioned that the strongest quarter is Q2. Also Q3 is slower, but for slightly different reasons than in Europe or Western countries. That is similar because it follows from Ramadan, et cetera. I expect that Q4, or we have seen that Q4 is stronger than Q3. However, there is, for obvious reasons, not the same kind of holiday effects in the Arabic-speaking world in December like in the Christian. That effect we will not see. In general, I would expect that the activity level is still higher in Q4. I would say that Q1 is stronger. I think that besides that seasonality pattern, there is no reason to expect that Nida Harb has a structural decline or anything like that.
We expect that that is a product that just as many or all of our other products will last for years. It's not over the peak, so to speak. We are still optimistic about that product. When it comes to the test campaigns, it's very hard to say. It's test campaigns just because we would like to be sure that the improvements on the funnel that we spoke about, that those really works the way that we anticipate it. It's an iterative process. When the data is there and we can start to scale, we start to scale. We are very swift and we are also very disciplined, meaning that we're not scaling up just for the sake of scaling up if we don't see that we return the money net in 180 days.
That goes for Rogue Assault as well, that goes for Nida Harb, that goes for all our products. It's very hard to say how fast that ramping up will happen.
Very clear. Thank you. One question on KIXEYE. I might have missed bits of what you said earlier in the presentation. You mentioned some operational improvements in KIXEYE, where you did some office moves and so on. Can you elaborate a bit on what you did, and also if this is something that is now fixed and ready to go in Q4? Thank you.
Yeah, I should clarify that. It's not that we're done and/or should do any dramatic changes. It's just that there have been basically the San Francisco part of previous KIXEYE, they ran a couple of shared services functions supporting the KIXEYE that we acquired, and we think that we can do it better ourselves. Basically what we have done through this, and the team have done, is that we have secured that we have our own people on every shared service area. Also, which is more important and have stronger bearing on the business going forward, is that we have moved the marketing to Goodgame. That we hope and think that will show in the growth. That's why we're saying preparing for scaling up.
It's not overnight, but that is some of the, should we say, plumbing that we've done and the team have done and Clayton has done and his management team has done in a good way. And of course, that took some time. It's not more, not less than that.
Perfect. Thank you. Two final questions for Andreas. Glad to see you moved revaluation of earnouts in net financials. Can you elaborate what it is for this quarter, the SEK 16 million effect, and also if you could elaborate a bit on the working capital movement. It's a big tax impact, I understand. Thank you.
As part of our accounting framework, we constantly assess what kind of liabilities we have on our balance sheet. We did the revaluation last quarter, which was a negative effect, and then we finalized the details of amongst others, PPA. We then did a revaluation of the expected earnouts. We don't necessarily go out and tell exactly which companies we do, actually, what kind of earnouts we hold for each earnout that we have. That is why we also want to move it down to the financial net to take it out of the operational performance. In terms of the working capital, as I mentioned, some quarters are stronger. It is seasonality in this. We have Q3 tends to be a higher tax payment quarter. That impacted the SEK 49 million for the quarter.
We also had some liabilities that were paid off during the quarter. Among them, for example, the transaction cost for KIXEYE, which was accrued on the P&L in Q2, but was paid off during Q3.
Great. Thank you. One final question on the tax to you, Andreas, as well. You were quite clear, I think, that it was sort of a one-off effect now in Q3. What is the full year or year-to-date tax rate? Is that what we should be looking at? Or is there room to take it down further given the low tax for KIXEYE?
It becomes a one-off effect in the quarter. You always assess your tax rate on a year-to-date basis. What I was saying is that for the full year-to-date, we have 25%. Previously, we had around 30 because we continuously assess that. That creates a accounting one-off effect. It's not in the quarter. But I think we have to look at the year-to-date number here, 25% going forward.
Okay, great. Thank you.
Thank you. Our next question comes from the line of Erik Lindholm-Röjestål from Nordea. Please go ahead. Your line is now open.
Yes. Hi, guys. A lot of good questions here already. Just on games, can you mention anything on the performance on Strike of Nations in the quarter? Are revenues going up quarter-over-quarter for Strike of Nations?
We are not presenting because then I think all of you guys would have a long day if we presented all our 36 products and all our 12 studios. However, what we do say is that it's among the top three organic contributors to growth year-over-year, and of course, we're happy with that. We're not presenting each of those products quarter-over-quarter. In general, there is a seasonality effect, so it would not either be, I think, the most meaningful single number to present. However, having said that, it's not the case that we think it's in any way coming to an end as a product. It has all the attributes for continuing to contribute to our growth, so we're optimistic about that.
Okay. Thank you. The level on platform costs you had in the quarter, platform costs, royalties on the payment to providers, is this representative going forward or how should we think about this?
Yeah. The gross margin on the fees were similar as in Q2. It obviously fluctuates where what games, mobile versus desktop, et cetera, but that would be a representative number, has been historically as well.
I think they have been between 73% and 75% in gross margin, and I think that is representative going forward. There is one effect, where we pay also some royalties for Nida Harb. On the other hand, we don't have the development cost at the same level for Nida Harb than Strike of Nations. If those products will go down, which we don't expect and hope, that will have an impact on gross margin.
Okay. Great. Thank you. Just in terms of M&A, what are you seeing in terms of multiples in the market for M&A objects? Any development there? Yeah.
Our view is completely unchanged in terms of the activity level. It's still very high and will be high for the next coming four to five years. So there are great opportunities for value-creating acquisitions to be made. We are very active. We will never try to set up time plans or targets for a time unit, especially when it comes to M&A, because then you tend to compromise too much. The activity level is very strong. The prices or the multiples on which deals are done is not moving that much from our perspective, especially not on the mid-sized potential targets, whereas we have a very unique offer. So it's often a bilateral situation. It's not pushing prices, and it's not optimized upon prices upfront.
Whereas we also would like to pay with, if it's founder-owned and founder-led, we would like to typically pay with 50% equity. Of course, as we also conclude, we are not really at our target price, our counterparts in these discussions also understand that. That means that they could discount and expect the shares that they get to develop nicely, and hence we can negotiate lower multiples because they have an implied increase on what they get paid through the expected increase in share price. There's a quite good environment for negotiating. So it's a long answer to that question, but I think it's important for you to understand how the dynamics around acquisition works.
Yes. Okay. Super clear. Thank you. That was all from me.
Thank you. The next question is a follow-up question from the line of Lars-Ola Hellström from Pareto Securities. Please go ahead. Your line is open.
Yeah. Hi again. I just wanted to follow up on, is there any difference in seasonality patterns for the KIXEYE products compared to the remaining portfolio?
The very short answer is no, we cannot say that. It follows very clearly the rest of the portfolio. We haven't been with KIXEYE for so many seasons yet, but in Q3 it followed the general average pattern.
Disregarding that you will start looking to scale the KIXEYE product, Q4 should be even better than Q1 was on a like-for-like basis?
You know we don't give forecast.
No, now we're talking on like-for-like basis.
That's right. Again, we think that quarter was representative. That tends to support that statement. Again, we deliberately had very low marketing spend, so that could potentially work in the other direction. We're not looking at how to gear up and maximize November or only December. What we always say is a long-term game. We see that the capabilities and the assets on KIXEYE are underexploited long-term. It's a really high-skilled organization. They have four great products and strong franchises, which we can make sequels from. We can scale up the existing one, especially working on the Rogue Assault. If that is done the best way through really scaling up in February or January or December or something else is secondary. The thing that really counts is that we do that with a great long-term effect.
Okay. Thank you. A final one for Andreas here. It's on the PPA amortization. I wonder a little bit how it's built up. For example, now, on the acquired games in KIXEYE, are you amortizing the brands of the games or also the earlier investment cost for developing the games? Is that also included in the PPA? Is that in the part that we see that will be included in operational EBIT?
See if I can. The PPA items, KIXEYE is a U.S. GAAP and reporting entity, so they don't capitalize on their acquisition do. The PPA is part of bridging that gap. It depends over what type exactly the business, but if you want a rough estimate, it could be roughly 30% of the purchase price goes into intangibles, and the rest goes into goodwill. It's different. Yes, all the different line items in terms of intangibles are amortized over time, and the time periods might differ depending on what type it is.
Okay.
Did that answer the question?
Yes.
Thank you. Our next question comes from the line of Kristoffer Lindström from Redeye. Please go ahead. Your line is now open.
Thank you. Great report. Just some quick ones. On Big Farm brands, there is a really sharp increase in both engagement ratio and pay conversion to, I think, a record level. Is that due to the refinement of the user base? As it's a little slower on the UAC, or how should we look at those strengthening KPIs?
That's a very good question. I think that it's a combination. We are lowering, but still spending a higher than average level for UA in the Big Farm. I think it's very promising, we're very pleased with exactly what you point out that we have strengthened several of the KPIs that proves that this product will be what we call evergreen or a product that will last for a very long time. Otherwise, you will not be able to achieve exactly what you point out. It's a very good question. That is, of course, giving us confidence that this product will be continued to scale with new UA, but also that the UA and the users that we get in always should be net on the cost payback in 180 days. The real value is also that the users that come in, do they stay?
Do they pay? Do they pay at a certain level? If we have yes on these answers now as we refine the user bases, they will stick for potentially a decade. That is the whole beauty with the part of this market that we're on. The longevity of our franchises and our strong product is really, we think, impressive and convince us in management for every single quarter year that passes that it's a tremendous stability and sustainable asset that they represent. It's a very good question.
Is it then mainly for Big Farm, or is it the whole portfolio, so to speak, within Big?
We have actually improved numbers, but it's more volatile on Big Farm web. For reasons that I honestly don't really understand, it's more fluctuating. Some months are really strong, and some months are a bit slower, whereas it's more a predictable pattern in Mobile Harvest where we more systematically scale, and it's not going up and down as much as we do on the browser version. Both of them are two very healthy products.
Could you elaborate a bit on CPA trends, CPI trends, and the market in general for acquiring customers? What's your feeling there, and is there some difference because KIXEYE it's on a new platform for you guys, so any difference comparing to your other game portfolio?
The general trend is that we're not concerned with average price. It's going up. I have a hard time to see that the cost per install or cost per acquired user could systematically grow much faster than the market. I think it will be between the market growth or two times the GDP or whatever, somewhere in that long term. Of course, from one quarter to another, it could fluctuate, but long term, it will increase indefinitely long. We're not focusing so much on that. We're focusing on that we are able to increase the lifetime value of the customers that we acquire, and that is one of our key strengths.
Then, of course, the relationship between the lifetime value of the customers that we acquire on average, if that exceeds significantly the cost, whatever that is, how much that ever might increase, if we're increasing LTV at the same pace, we still will get back our marketing money in less than 180 days, and the users will be there. The fact is that it's even better that that happens if we're able to increase the lifetime value that we have been able to do since this company's inception, because then they create moats for competition to enter into this market. That is what I think will happen. To have strong strategic products with high LTV is a key competitive means for you to stay in this market on a leading position.
If you look at KIXEYE and the Facebook platform in general, is that even better ratio between CAC and LTV compared to your other products then?
As mentioned, the marketing levels have been quite limited, I think it's a bit mature to say that because at low levels, you shouldn't draw too many conclusions because we know that the tricky thing comes with scale. If you market at low levels, the conclusions will not be the right one. I think we haven't reached those scales yet. In general, and also looking into the history of KIXEYE, which we, of course, have analyzed in detail, I think the approach you should have is that they are similar. It's different channels, it's different way of reaching consumers, but it shouldn't differ in your view on how to market. We're running hundreds of campaigns over a year in not hundreds, many tens of different channels, regional ones and big ones, as you mentioned.
We're very used to work with many channels and many different ways of marketing and vast amounts of different campaigns and A/B testing all the time, and that counts for this product as well.
Okay. Thank you.
Thank you. As we have no more questions registered, I now hand back to our speakers for any closing comments.
Yes, thank you-all for listening in to this and for good questions from all of you. We are happy to conclude the meeting from our side, and we hope that you are in the way that's possible, also joining in on our Capital Markets Day on the 27th of November, also through the Webex link in person. Thank you.