Earnings Call: Q2 2019

Aug 15, 2019

Welcome to our Q2 presentation. We start with Slide number 2. So just briefly present our company, and then we will walk through the performance during the Q2 and both the business side, operational side and the financial side. Still front, we focus on a particular part of the gaming market, and that is free to play online strategy games. We think for many reasons that is the most interesting sector of the gaming market, and we should touch upon why we think so during this presentation. We have a strong position in this market, in this particular market, part of the market with 12 studios that has in common, we have 5,900,000 active monthly active users, where 1,300,000 play our games every single day. We have a track record, which we think is quite massive in terms of the number of players that have played our games that have half a 1000000000 registered users in our games. And the lifetime revenues from our studios now exceed the €2,000,000,000 We also have on the first slide, on the upper right corner, you can see the geographical distribution, both of our offices, but also of our revenues. And we have one clear change from previous quarter, and that is that Asia now is up to 23% from previous 17%. So that is something we will come back to during the presentation. Also note that the user data on this slide is excluding KickSight since we consolidate KickSight from Q3 and forward. Let's go to Slide number 3. There you see the highlights for the quarter. We are happy to record a record in terms of revenues and profitability. So our revenues grew by 46% year on year, and our EBIT grew by 110% and amounted to 32% EBIT margin. And also for the first time, we have reached our long term financial goals, which were that we should grow at market, at least at market pace. We have now organic growth, which is at least 3x that organic growth, the market growth. And also, we have last 12 months, 31% EBIT margin. So we have reached our long term financial targets. During the quarter, we had SEK 99,000,000 in user acquisition costs, which represent 21% in relation to our net revenue. And we also established new debt financing. And also, we conducted a new share issue to support our further growth as well as the Kixai acquisition. Operational wise, I would like to highlight that we are very pleased with the way that we have developed this growth, mainly through a very successful rewarding live ops. And for all our most of our products, that means that we have had a lot of updates. We have had a lot of activity of events and similar that has been very rewarding for our for the user numbers in our products and very appreciated from our loyal user base. We also have paired that with very solid profitability of our marketing campaigns, and we are pleased to see that Nidahave has become the largest single product in our portfolio during Q2. And as mentioned, we also made an acquisition of KickSci, which is an industry leader and a strategy game pioneer, truly, which we will come back to. That also was concluded in Q2. And also, finally, the operational highlights that we within the area of LiveOps, we have been able to see that a lot of synergies taking place where one studio elaborate on how to configure certain events or similar, and that knowledge is really part of currency for other studios and other games as well. So we can really see that synergies are coming into play. Turning to Slide number 4. To look into our portfolio and update you the performance of the Q2. We have a very good balance in our portfolio. We think it has improved even further during the quarter, both in terms of the different areas, which all three areas are growing for the Q3 in a row. And that, of course, in itself gives a good balance, but also the fact that our largest product now is 18%, even though it has been growing, it's still not more than 18%. So we have a good balance amongst our largest products, but also that several midsized products are growing and that is important and promising for several quarters to come. And also, we have a good balance between more mature products as well as younger products. Looking at the whole portfolio before going into each area, we can also conclude that we are now up to 59% mobile share of our revenue. Looking into the Empire brand, which deposits represent 36% of the total. Empire has 4 products as of today, EUR 153,000,000 in deposits, which is more or less on par with last year, with only SEK 13,000,000 in UAC, so quite a large small portion in relation to deposits. But as mentioned, we can again see sequential growth. And since Q3 last year, the Empire brand has been growing by 18%, which is a factor we think. And again, we can see in our numbers, and we will come back to that, that we have a very, very strong monetization through effective LiveOps. And since also the UAC is quite low, it's a very strong EBIT contribution from the Empire brand. Looking to the big brands, which consists of 3 products, the profit, EUR 80,000,000, so it has really contributed to growth, 9% up. The UAC is lower than last year, dollars 32,000,000 still decently high. And the sequential growth of 1.5%, which also since Q3 represents 19% growth, which is a stable and good number. And Big Farm Mobile Harvest is one of the top three growing products organically in our portfolio. And then into core products, which represents 46% of the deposits during the quarter, it continued to deliver very high growth, 133% year on year. And we have a UAC, which also is growing, but still is very sound in relation to the deposit numbers. So it amounted to SEK55 1,000,000. And as mentioned, MINA Hydro is now the largest or during Q2, the largest product in our portfolio recorded SEK88 1,000,000, which is a fantastic sequential growth as well. And then we have Shakes and Sages and Striker Nations, which for the first time is part of our top product in core. And we also launched in mid late June a new product called Game of Trenches from EU Republic Labs. Looking on next slide, Slide number 5 into some user data and comments on that. For the different, both the number of monthly active and the daily active, and on next slide, monthly paying users, It's important to notice as we have decline in year on year, in particular, for some of our products, that we had a really, really high intake in Q2 'eighteen, which is the comparison quarter. Actually, Q2 'eighteen was the quarter where we had the highest UAC in relation to our net revenues ever since we made the merger with Goodgame. So that is important to notice. And also, we had high intakes in Q4 and Q1. So that is in the perspective you should see how these user data has developed. But still, even though we have this effect, we can see that the monthly active users are on all time high and the daily active users are on nearly all time high. So we are pleased with that. And we can also just comment that Game of Thrones's launch was not contributing so much since it was in the end of the quarter. And again, no kick sign numbers in this. Turning to next slide, Slide number 6, the paying user base. Also in as mentioned on the previous slide, also the comparison and the fact that we have had high intakes also have an impact, however, less on paying users. And you can see that we have a stable year on year growth of 15%, But we do have a decline in Empire, which is 20%, quite high number, but we have analyzed that. And we are not so concerned about that because looking at the data, we can see that the users of that typically have come in, which is a usual pattern when you increase the total amount of users rapidly, that you can see that some users come in, they pay 1 or twice once or twice or three times for a short period and then they leave the game. And that is that kind of users that have left. And as we have seen many times, the loyal users are still there, and they really enjoy the new content that we have provided. So we are not concerned about that number, and we are confident that, that will be stable going forward. And that is also why we are I think we have a receipt of that analysis that it's really it's the fact as we see how the average revenue per monthly paying user has developed, where we by far have the highest number ever. And it's very pleasing to see that Empire is contributing with a significant step upwards. So the new content has been really appreciated amongst our loyal users. Also, with Lime, we have a very overall product areas, we have a very good development sequentially over making the total being at all time high levels of 7.82 pegs per paying user and month. The main reason to conclude and to connect to the operational highlights for the whole group is that LiveOps, not only new releases, but also very successful events, not the least events for Nida Harb during Ramadan and other holidays, but overall, and also it's very pleasing to see that we can draw a lot of synergies between the different studios, how to make the live ops more efficient. And that is basically what the average revenue per monthly paying user development proves. Turning to Slide number 7. A few words about kick side, but as you I think you easily understand, we're not reporting as we're not consolidating Kixai. We're not reporting any new numbers. But before just going into some to repeat some while we think this is a very interesting and important acquisition, just repeating the Q1 numbers that we announced in conjunction with the acquisition. The acquisition that was at Kixa in Q1 had 128,000,000 in revenues with an adjusted EBITDA of €65,000,000 So a very strong profit margin. We said then and we say again that we think that was a representative quarter. We also expect them to have some seasonality just as we have in our other studios. But we're very pleased to see that already we can we have started to work on several synergies, on marketing, on distribution and on several other areas as well. So that is very pleasing. And in general, regarding Kixar, I just would like to repeat that this is a type of company which is bullseye for us when we look into the market to find new students to join. They are pioneering in the areas, which is really, really what we know. We understand their business very well, but they also add value in terms of high production value products that are really appreciated by a loyal user base. So we are at least we were when we announced it, we are still definitely still at this point in time. We turn to Slide 8, which is the operational update on our business and the numbers. And as mentioned, we have revenues of SEK 4 80,000,000 during the quarter with an EBIT of adjusted EBIT of SEK 153,000,000, which represents 32% EBIT margin. And that growth of 46% year on year, we are very pleased with that. And that is mainly organic. So the organic growth are in well in the 30s, which we think is a very strong number for the organic growth. The profitability of 32% is, of course, a good number as we have 30% of our long term target. But we are also very pleased to reach that level, even though we have a higher portion of mobile revenues since they have lower gross margin. And also regarding Midaharb 3, which has grown tremendously well for us and developed well, also have the royalty cost that is developed by a Chinese developer. So even though we have those two circumstances, we still manage to reach the 32% EBIT margin with paired with the 4% to 6% growth. And as mentioned for the first time, we have exceeded our long term financial target. Also, I would like to emphasize that if you look at the upper right rolling 12 month revenues, you can see that it's actually not only in a very stable and predictable growth rate, it's actually exponentially growing, which is for us very important to pair the predictability and the stability in the revenue development with, of course, having a strong growth rate. And you can also see below that how our EBIT has developed, also in a progressive curve and with a steady increase of our EBIT margin. And we are also very happy to see how the different products in our portfolio from one quarter to another, some of the products have stronger development, but all 32 gains are contributing with revenues and profitability every single day, and that is what explains much of the predictability and stability in our portfolio and our financial performance. So with that, I will hand over to my colleague Andreas, CFO, to go deeper into the numbers. Thank you. Good morning, and thank you for joining us this morning. I will go into Slide number 9. That's the income statement for Q2. We had deposit of SEK 451,000,000. Then we had a IFRS effect of SEK 19,000,000, which relates to in game currency being consumed during the quarter. The full year effect of the year is SEK 6,000,000, so we had a negative effect of this in Q1 of SEK 13,000,000. Other games related revenues is SEK 10,000,000, and that gives us a total net revenue of SEK 480,000,000 for the quarter. Platform fees amounted to SEK 122,000,000, which gives a gross margin for the period of 75%. Own work capitalized, I. E, the staff cost that we activate is SEK 38,000,000 And in total, we spent SEK 43,000,000 in Q2, which is a total CapEx of 9% over net revenue. This number, as you have seen before, fluctuates over time, but this is representative and in line with our target. Other costs, it totaled SEK 328,000,000, whereof, for the ordinary quarter of the business, this represents SEK 248,000,000. Depreciation and amortization in total of SEK 43,000,000 with the following breakdown, SEK 14,000,000 related to PPA items SEK 22,000,000 related to capitalized product development costs and SEK 7,000,000 related to IFRS 16, I. E. Leases, treatment and tangible assets. We had a very busy Q2, and we had items affecting comparability in the quarter with a net effect affecting EBIT of SEK 26,000,000. This is impacted by transaction related cost of acquisition of SEK 20,000,000 and a net effect on the assessment on earn outs provisions of negative SEK 5,000,000, which is driven by mainly better business performance in some studios. Net financial items for the period was 23,000,000. Of these, 11,000,000 were interest net, 6,000,000 was noncash charge on earnout and FX impact for the period. And then we had 6,000,000 recurring items that relate to the bridge facility in regards to the Kixa acquisition and the bond issuance. Unadjusted EBIT of SEK 105,000,000 for the quarter. And taxes for the period, slightly lower in previous quarter, but it's still in the higher range because we have more profits on higher rate tax countries. We end the period results with a net result of SEK 73,000,000. Moving over to Slide 6, sorry, Slide 10, balance sheet. Intangible assets contains mainly goodwill from acquisition of SEK 1,600,000,000, SEK 1,700,000,000. And then we have SEK 5.50 3,000,000 of capitalized development products. The cash in transit that was in transit for acquisition of Kixai has been booked as an accounts receivable on the balance sheet and has an investment in the cash flow. The discounted bond, we discount that outstanding by the end of the period was SEK 1,000,000,000 or SEK 1,100,000,000 almost. The most important thing here is that we did strengthen our financial position in the period with first direct share issue of SEK500 1,000,000. And then we additionally raised a new 5 year bond of SEK 500,000,000. The combination of the already existing bond maturing in 2022 and the new bond maturing in 2024, coupled with our sort of bank facility structures, gives the company a good maturity profile as well as the strength in balance sheets. End of the period, the company had SEK 444,000,000 unutilized credit facilities as well as SEK324,000,000 in cash, which creates further financial flexibility for growth. Non current liabilities is in total SEK319,000,000. This is mainly attributable to provision for earn out and the utilized credit facility. Net debt, NOK 904,000,000 and this yields us an adjusted leverage ratio pro form a of just under 1.4 and then adjusted interest coverage ratio pro form a of 6 0.5. However, it's very important to note here that we, in the EBIT contribution, have not included kick dive, but we have fully included the depth of completing the acquisition. Jumping into Slide 3, sorry, 11, cash flow. Cash flow from operations. We have a healthy cash flow generation in this quarter, But we are still slightly impacted, still impacted by the increase of mobile game. The cash from operations was SEK 135,000,000. Investments, quarter that was fueled by heavy investments, primarily the KIXTA acquisition, SEK 878,000,000 and payments for earnouts in the quarter of SEK 116,000,000 and investments in intangibles and tangible assets of SEK 43,000,000. In terms of cash flow from financing, as previously said, we did a direct share issue of SEK 500,000,000 and a bond issuance of SEK 500,000,000. We also reduced some credit facilities during the quarter, and we had issued costs of SEK 17,000,000. Net cash flow for the period, SEK 62,000,000 positive and a cash balance by the end of the period of SEK324 1,000,000. Then I will hand over to Jorgen. Thank you, Andreas. So to finalize the presentation, we think we have a very strong position in the games market. And the games market is large, and it's growing. So the fastest growing actually and already largest in several years in the entertainment market. So we are very pleased for being a leading player within free to play online strategy games. We have been able to build and constantly expand our portfolio of products, which diversify our revenue streams in a very good way. And we've also been able to do that with a very capital efficient growth. As Andreas elaborated on, our investments for the period in gains are approximately €43,000,000 which is 9% in relation to our net revenue. We have BNA's in the same range. So we're not expanding our balance sheet in same way that we expand our revenues and profitability. So also, in addition, I think that we have proven that we have a good track record when it comes to M and A, and we are absolutely confident that Kixai will contribute for a long time, not only with its own performance, but also with synergies going forward. So we can combine high profitable growth, strong financial position, and we do it with leverage, but a conservative leverage. And I think that is very good for the strong shareholders. So also concluding then the presentation with, again, see that we have reached our long term financial target, But that is in any way, not in any way, some kind of end station. It's just a platform and the new beginnings for taking silicon to completely different levels of size and further profitability. So that was the last thing from our side, and I think we open up for questions. The first question comes from the line of Oskar Eriksson from Carnegie. Please go ahead. Good morning, guys. Thank you. I have a few questions from me. First of all, really strong performance from Core Products and the Niner HARB 3, really impressive sequential growth there. Can you give some flavor on that, what is happening, frankly, because sequential growth is really strong. Has anything particular happened? Or yes, some more input on that would be great. Thank you, Oscar. Well, I think the it is exactly what we spoke about. It has been a very successful and intense intensified live operations that the team has been conducting. And it's very, very clear that they have been excelling and learning and and being improved their operations significantly through the help of other studios. So in particular, Goodgame Studios have been supporting them. We know since earlier with marketing and distribution or primarily marketing to get the growth from previous quarters. But now that has extended to also be support and both on data and advice on what kind of events to arrange and how to do that in a very, very efficient way. So I'm very pleased to see that both the tremendous good work that Fabil has done, the understanding they have, which is unique for their region, which is very hard for someone else to do from outside, but also that we they take in advice and experiences and data from our other studios. So that is basically it. It's not so much driven by user acquisition as it is from Livebox. Okay, great. That's very helpful. I want to ask on Empire and Big Farm because I think you touched upon that quite well. But I have to ask about the ad revenues that you discussed in the presentation. What I mean, what has changed your view there with regards to ad revenues? Because typically, when you have high monetization gains, you would tend to not have ad revenues. But it would be great to hear your thinking there behind that. Thank you. Yes. Ad revenues is a revenue stream, which I think we have not utilized that opportunity fully. But still, even though it has increased, it's still quite a small portion of our total revenues. And I think it will be a small but important contribution rather than being a main revenue driver. But I mean, we are a couple of percent of our revenues during this quarter. So I think it's important and good add ons, but it's not the main driver and will not be the main driver. In terms of potential, well, there is nothing I see it would be possible to get up or add revenues to maybe 5% of our total revenues or even 6%, 7%, but that will be what I expect, not higher than that. Okay, great. Is this for specific gains? Or is this broader? And then secondly, also with the difference between deposits and revenues. Could you please explain maybe it's for Andreas to explain the IFRS effect, which I find yes, I don't entirely understand given the strong growth. Yes. No, they are impressive facts. It relates to the I mean, that in game currency have been spent or consumed. So it is and it shows that people have bought in previous quarters. And we saw that in Q1, we had a negative IFRS effect of SEK 13,000,000. And then they are consuming what they have paid for. There are many different sort of angles to this, sort of, it depends on how we run our campaigns in live ops. It depends on the each game, etcetera. But if you look at over a period, then you see that these numbers sort of reconcile. If you look at Q4, for example, we had a, in last year, we also had all met a negative effect. So they sort of net each other out over the period. And I would like to emphasize what Andreas said that this is really consumed from the players in our game during the quarter. So it's not completely strange or something which is odd. Basically, what the users have bought earlier quarters in game currency, they have a balance, and they utilize that during the quarter. So it's really represent activity from our users. Got it. And I mean, very strong quarter, and I'm interested also in hearing sort of your view on the outlook you wrote in the presentation that you had solid profitability on marketing campaigns. Can you please explain that? And also compare it to Q2 last year, where you said that it wasn't really a strong marketing profitability and how that plays out or might play out now in Q3 and Q4? Yes. We, as you know, we don't give forecasts for many reasons, but I would still comment on the marketing and so on. We have and we have always had and we will continue to have a very EBIT oriented and profit oriented view on marketing campaigns. So we target over all products, all quarters, all markets and everything that we should recoup net marketing money in 180 days. And we have been able to achieve that for very long time. And we also achieved that in we have achieved that this year. As you know, we pointed out in Q4 and especially in Q1 that we significantly overperformed during compared to that. But we are conservative in terms of spending and completely data driven. So when we said solid, we think that we are in the range of what we target, of course. So that is important to understand that we are very EBIT oriented and we have been able to achieve 180 days net return on marketing spend. Having said that, of course, as always, different quarters are differently strong, so to speak, in general in the market. That has been the case for a long time. So usually Q4 and Q1 are the strongest quarter, Q2 are neutral and Q3 is a bit weaker due to seasonality and the vacations. It's warmer outside and you're maybe not playing as much as you do otherwise. So that pattern, there's no reason to expect that, that pattern will be different this time. What we did that was interesting that you raised that question also in Q2 'eighteen, where we had very high spend, as I mentioned, the highest spending ever in relation to net revenues. Well, in hindsight, maybe that were it was still profitable, but it was maybe on the as the summer became very warm last year, that was maybe, if we knew that, we maybe would have spent a bit less then. But nevertheless, really important that we are very disciplined and we have still, including Q2 last year, been able to reach 180 days money netback. Great. That's very helpful. A final question for me. I want to touch upon the Kicksai acquisition as well and especially War Commander Rogue Resolve, which I understand you have high hopes for. What is the status of that game now? And is it fair to assume that you will begin a heavier user acquisition spending now in, say, September or, I mean, the autumn, the strong period of the year? Yes. We are still as enthusiastic about rogue assault as we were when we announced, I mean, we have followed the product and the company for more than a year. And we think we have seen, we have received confirmations on the opportunities with that product. What we usually do and we have done in this case is that we analyze what we did prior to the acquisition. We have analyzed the product, and we know with our expertise from the other studios, we go in and we think that we can improve the product. It's a really, really high production value of product, but we still think that some bits and pieces could be improved, and that is what is in the making now. And we do that since we know or it's very likely that, that will have a positive impact on further to get into that growth, the planned user acquisition spending to achieve higher growth. So that is in the making. So I would also expect with the seasonality taken into account that it's very likely and we still expect that in Q4, we will be able to grow War Commander Roegas out from the levels where we are today. So that is correct, and we feel very enthusiastic about those opportunities. I can also add one thing because that was not so clear, I think, when we presented Kicksai, is that Kicksai also have a distribution capability through kicksai.com, which is one thing we also look in. So it's not only the synergies are not only going in one direction, they are going for sure in 2 directions, both on LiveOps, but also on distribution. So kicksai.com is a very good portal for browser game. So we're looking into distributing other film from products on the kick side distribution platform. We have strong distribution capabilities at Goodgame on browser products, but here we add another channel. So that is something which we didn't emphasize or mention, I think, during presentation of TIGSIGHT. But that is also a value that we see now. The next question comes from the line of Lars Olar Hellstrom from Pareto Securities. Please go ahead. Hi, Jorgen, hi, Stijn or hi, Andreas. First of all, the monetization was very, very strong in all three segments. Have we reached a new level in all segments due to live ops, frequency of content updates, etcetera, can these levels be sustained? It's a very hard question to answer because very short answer, I don't know. If someone asked me, when we had this call 1 year ago, I think we were very strong in average revenue per paying user. So to be bluntly honest, I think that we have achieved a lot of things which I don't really expected a couple of years ago. And it's really striking me how much the value of a loyal user base, how high that value is. Since we can conduct this LiveOps and we get so good response on new feature updates and events and similar things of LiveOps. And also, as mentioned several times already, I also would like again to emphasize how much Synagis lies in this area because you test out a lot of things. And instead of doing that by singular studios, we share all those experience across our all our 12 studios. And of course, that is creating more precision. It's creating more effectiveness in how each of them conduct LiveOps. So and what that means in terms of average revenue per paying users going forward is hard to say, but I'm sure that we will continue to be strong and even stronger in this area. But also, you must factor in, if we grow very fast and increase the intake of users rapidly, then just by mathematics, the average revenue goes down for a short while before we refine those new base of users and they come further into the game. But to conclude, what this really tells us is that this is a super important and strong area for us, and it has synergies. That's one thing. And on the other side, the value of a loyal existing user base are much higher than we expected, say, 1.5, 2 years ago. And going to paying users, we the largest drop was for the Empire segment. Is it reasonable to assume that as it's the most mature segment, that is also the segment that is most affected by seasonality? Well, I haven't learned yet that, that would correlate. But of course, our we have a seasonality. But to correlate it to the different individual gains is difficult. Of course, we can, there are correlations to regions. In Europe, we take more clear vacations than in the U. S. And in Asia, for instance, that kind of effect. But the most impacting factor on that is whether the sun shines and it's warm outside. And weather forecasting is much more difficult than game forecasting. So that is the difficult one. But as I mentioned, we are not so concerned about that drop. We know based upon data what users it is that has left as paying 1. As mentioned, it's users that have not been so deep into the game and it's users in territories where we don't have the largest average revenues and similar. So we are not so concerned about that. And again, the product area, all product area has 3 sequential quarters of growth. And Empire, for instance, has 18% growth since Q3 last year. And also on the seasonality, should we expect the seasonality effect will be higher in Q3 than in Q2? And if I connect it to user acquisition also, is it reasonable to assume that user acquisition costs in total should be lower in Q3 than in Q2? As I mentioned several times previously and also today, seasonality is usually in Q3, so that is correct. How much it will be? I don't know how the weather will be. That's the next coming weeks. And of course, it usually the traction in the market increases quite rapidly in September, but that also depends on weather in Europe, in particular. So it's very hard to say how that plays out. It's impossible, I would say. But nevertheless, that don't take away the general traction we have in the company. I mean, we grow by 4% to 6%. When we look at all the 12 month numbers, we are very pleased to see how the company develops. But of course, it will be differences from 1 quarter to another. And again, I expect there's no reason to expect otherwise that Q4 and Q1 are stronger than we expect, but not know that Q3 is a bit weaker. But it's the usual pattern we expect. And another question on user acquisition costs. On the Empire segment? I think it's fair to assume that it's lower than the average, yes. But also, we plan not to be we also plan to publish new games within all areas, including Empires. So of course, as launching a new product that will increase the user acquisition cost, but only if it's profitable. So if the data supports that we can scale up a new product, we will do so. If the data that supports that we will not get this product profitable, we will not do so. We have, as mentioned, 32 products in Q2 and adding 4 products from Kixar. We have 36 products to optimize our marketing spend over. So and again, connecting back to Livebox, Livebox is the most efficient and profitable way of growing a game. So we're not saying that we must spend X or Y 1,000,000 in that product or that segment. We optimize LiveOps as well as we optimize marketing over the whole portfolio. That is one of the key strengths of our group, I would say. Thank you. And a question here for maybe for Andreas. The gross margin of 75%, is that boosted by the IFRS effect on the ad revenue? Because is that revenue dropping straight down to gross profit line when it's now it's recognized? Yes, it's because the platform fees are paid on the deposits that are actually being bought. So, and as we have moved into more of a mobile environment, if you take that number over deposits, then it's 2%, which sort of reflects we had a, yes, positive gross margin effect on IFRS. And ad revenue, is that it's 100% gross margin on ad revenue, it's just dropping through? Yes. Thank you. Okay. That's all for me. The next question comes from the line of Christoph Lindstrom from Redeye. Please go ahead. Hi, guys, and congratulations to another great report. I will jump into Nida Harb. You mentioned the, as you discussed many times here, the live ops, but also the events in Ramadan. Would it be safe to assume that the Ramadan event had a I mean, of the growth of the Nidehjar 3 compared to Q1, was the event and income regarding the Ramadan substantial? Yes. As we just as we have I mean, wherever we are in the world, whatever holidays and similar there exist, of course, that is just as Christmas or other holidays in other parts of the world, it's a very good occasion for having special events. So and of course, those are annual. So in that respect, that will not come back in Q3. But there are other holidays and events. But just as we have holiday in December affecting our revenues in Europe, in particular, this is likely to have an effect, correct? But again, we do a lot of things, but Easter, Christmas, Ramadan and other types of special time of year, it's a very good time for making special events. Yes. I mean, if you, but compared to last year's Q2, didn't need a hard, have similar types of events or is the, that type of functionality new in the game? Yes. I think that, that shows, that's a good remark, by the way. So I think it shows how they have improved their operations. As I mentioned previously, they have really learned from Goodgame and other studios on how to optimize their live ops and to be even more sharp and precise. So our team in the Middle East, the Bubble Games, has managed, made a tremendous good job in improving their way of conducting live ops. So I think they, it's a good remark, and that is what you see the difference in the development from Q2 last year. And you stated in the beginning of the report that you had 21% from Asia, up from 17%, I think, only in Q1 also and 17% last year. Could you comment in which of the product segments do you see the search in Asian players? Sorry, I didn't get that question. What's increasing? Asian revenue and in which of the product segments you see the increase of Asian players? Yes. That is primarily its core and Middle East is accounted for as being Asia. So that is the very short answer. But also, we have a quite decent, but not as dramatic curve, but a decent development in Japan as well. Yes. But mainly attributed to Nida hard then. Yes. And Babyl Games, that's correct. Yes, exactly. No, I think that was it. Yes, thank you. No, sorry, sorry. I noticed that the if you deduct the UAC from other OpEx, it was quite an increase in terms of relation to sales. Is that due to increased mobile sales and platform fees? Or is it just an investment in the company size, new operations, maybe offices? No. We had in total SEK 80,000,000 of items affecting the comparability. So the other cost, which is in total, dollars 328,000,000 of that or it's 248 that represents ordinary course of the business. Okay. Yeah, because I am maybe I'm getting wrong, but I have deducted the EUR 26,000,000. So but you said maybe you have mentioned how much other items affecting in part of the SEK 26,000,000. The SEK 26,000,000 is the net effect because we also have a positive effect of our announced provision on other revenue. The SEK26 1,000,000 they are accounted for in 2 ways. In the presentation, we have specified where they are accounted for. Okay. Super then. I will look into that. Okay, great. Thank you. There are no further questions registered at this point. I'll turn the conference back to you. All right. Thank you all for dialing in and having questions. So I think we are ready. And thank you all for listening in and dialing in.