Nexters reported for the 3rd quarter. The company has a record revenue of $115 million

The publisher of Hero Wars summed up the quarterly results. In July-September, its revenue amounted to $115 million. This is a record figure for Nexters. Previously, the company did not earn so much in three months.

It’s not only about the peak amount of earnings, but also about its significant dynamics. Compared to the same quarter a year earlier, the company’s revenue increased by 77%: in 2020, the company’s revenue for July-September amounted to $65 million.

As for other figures, before approaching them, it is important to note the following: Nexters, like many other gaming companies, distinguishes in the report the official financial and directly operational components of its business.

The fact is that the financial does not take into account such an indicator as deferred revenue (when payments have already been actually made, but their recognition, according to reporting standards, occurs evenly over the duration of the gaming life). This is a necessary measure, since this is the policy of regulators in the United States (recall that Nexters placed shares on the American stock exchange).

If we take into account only financial data, then the true state of affairs may escape the attention of investors and analysts. Therefore, gaming companies, as a rule, also publish so-called receipts (bookings), which reflect, among other things, deferred revenue.

Because of this, the financial and operational components differ greatly, which will be seen a little lower. Now to the numbers.

Financial results:

• revenue reached $115 million, as we have already mentioned;
• on paper, the company ended the quarter in the red, losing $104 million;
• the main item of expenditure, $125 million, is the costs associated with entering the stock market (non—cash one-time losses that did not affect the cash at the disposal of the company – $105 million). Yes, excluding this item, the company’s adjusted net profit was $8 million.

Operational results:

• receipts for the 3rd quarter amounted to $151 million (29% year-on-year growth), this is the second largest result in the history of Nexters;
• revenues from Asia have doubled over the past year (now the region is responsible for 26% of the company’s revenues);
• receipts from desktop platforms also increased by 55% (they now account for 30% of all Nexters receipts);
• thanks to the latter, the share of deductions to platforms decreased by 1 percentage point to a level of 27% (in other words, since more money now goes to the company bypassing the App Store and Google Play, then the share of revenues to platforms decreases);
• monthly number of paying players reached 371 thousand people (annual growth of 30%);
• average receipts from a paying user were $128 ($132 last year);
• advertising revenue doubled compared to the same quarter a year earlier (the company earned $9 million on it in three months).

As for product achievements:

• the new title of the company Chibi Island has collected 1.5 million installations on mobile platforms;
• due to the increased focus on the desktop, Nexters brought the “Battle for the Throne” to the web;
• Hero Wars revenues have reached $1 billion.

The company also noted that the key events for it were:

• the start of expansion into the casual games market (the company launched Chibi Island as the first step in this direction);
• launch of a strategy designed to support independent teams (launch of the Boost program).

Both directions, as Nexters hopes, “will have a positive impact on the company’s performance in the long term.”