2019 Ten Square Games financial results

23 March 2020

Ten Square Games Capital Group, a producer and publisher of Free to Play (F2P) games, published a financial report for the year 2019. The Group’s consolidated revenue last year amounted to PLN 241 million, up 109% compared to 2018, when it amounted to PLN 115 million. EBITDA for 2019 reached nearly PLN 86m (PLN 45m in 2018, +90% y/y). Ten Square Games’ net profit in 2019 was PLN 76m vs. PLN 36m in 2018. 

The net result for 2019 included the effect of IP Box relief affecting the effective tax rate, which in 2019 was 9.7% for the Group. 

In Q4 2019 alone, Ten Square Games revenue amounted to PLN 78M (+88% y/y and 16% q/q), EBITDA was
PLN 34.7M (+57% y/y and +108% q/q), and net profit was PLN 34.8M (+92% y/y, +154% q/q). 

The Group’s flagship game, Fishing Clash, generated PLN 206M in revenue last year, up PLN 117M compared
to 2018, when it amounted to PLN 89M. The average monthly number of active users (MAU) of the game in 2019 was approximately 1.8M users, compared to approximately 1.5M in the same period last year. 

In Q4 2019, revenue generated by Fishing Clash in each month exceeded PLN 20M (PLN 22M in October,  PLN 23m in both November and December 2019). Marketing expenses for the game amounted to PLN 6.1M  in October, PLN 3.6M in November and PLN 3.5M in December. 

After a seasonal reduction in marketing expenses in Q4 2019, the company has returned from January to higher expenditures. In January and February 2020, marketing expenses on Fishing Clash amounted to PLN 5.6M and PLN 5.9M, respectively, while estimated revenues rose to 24,4M PLN and 28,6M PLN respectively.

Let’s Fish generated a similar level of revenue in 2019 as last year (PLN 15.2M vs. PLN 16.4M in 2018). Wild Hunt generated PLN 9.6M revenue in 2019 (vs. PLN 4.9M a year earlier). 

The geographical structure of revenues of Ten Square Games in 2019 was as follows: North America 42%, Europe 40% and Asia 14%, other markets 4%. The largest part of Ten Square Games’ revenue is generated from micropayments in games (In App Purchases). 

„Fishing Clash revenues continue to grow and currently exceed PLN 28m per month. The game is constantly being developed and new elements are being added to it, both increasing the fun opportunities for Players
and improving monetization. – says Maciej Popowicz, CEO of Ten Square Games. 

„In 4Q 2019 we soft launched three of our new games – two women’s games: Flip This House and SoliTales
and a new hunting game – Hunting Clash, based on our outdoor and simulation experience and Fishing Clash mechanics. We are satisfied with the performance of these games at this stage – they receive great ratings
in the Google Store, build a player base and grow very fast. We are currently introducing improvements and new elements. Decisions about hard launch will depend on the KPIs achieved – if they are satisfactory, the games will make their world debut in due course. However, at this stage I wouldn’t want to give you more precise guidance as to the schedule. Last year’s soft launched golf game was redirected back to the production phase after the first tests – we decided that it is worth investing in it further, but the mechanics and graphics need to be completely redesigned. – adds Maciej Popowicz. 

 „As of today, we do not feel the negative aspects of the coronovirus situation for the company and business. Our employees work remotely, the company’s life goes on normally. Our games grow organically and are constantly developed and enriched with new gameplay elements. Currently, our largest market is the United States, while
in China we are still waiting for Fishing Clash certification – we are in constant contact with our Chinese partner Netease and the Chinese regulator. At the moment we do not generate revenues from the Chinese market.” – says Arkadiusz Pernal, COO of Ten Square Games. 

„In the coming quarters, our results will be influenced mainly by further development of Fishing Clash. We still have ideas on how to make the game more attractive and develop it through optimized live-ops or extending
the functionality. We also devote a lot of attention to new titles in the soft launch phase – rather not in the nearest future, but ultimately they may completely change the image of the Company and its results.” – sums up Maciej Popowicz. 

„We have completed work related to the implementation of the IP BOX relief, thanks to which the effective tax rate for 2019 was below 10% instead of the standard 19% – this means a jump in net profit and a very significant cash flow improvement for the Company” – says Magdalena Jurewicz, CFO of Ten Square Games S.A.

At the end of 2019, the Group had over PLN 75 million in cash, which gives it a very high comfort for further business development and responding to potential business opportunities in the dynamic F2P market.  

 

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Ten Square Games S.A. is one of the largest mobile game producers and publishers in Poland. The company was founded
in 2011 by Maciej Popowicz and Arkadiusz Pernal.. 

Ten Square Games specializes in hobby games. It produces and publishes free-to-play games, earning money
on micropayments (for obtaining paid functionalities in the game) and advertisements. Ten Square Games products are available on the most important mobile platforms – iOS and Android – as well as through Internet portals. 

Ten Square Games has developed over 200 games so far. The best known projects are Fishing Clash – currently the most popular fishing game in the world – and Let’s Fish. 

In April 2018 Ten Square Games conducted a public share offer (IPO) on Warsaw Stock Exchange. The value of the offering was over 94 million PLN. On 11 May 2018 the shares of Ten Square Games debuted on the Warsaw Stock Exchange. On June 15, 2018, the company joined the sWIG80 index, and on March 18, 2019, a new sector index on the Warsaw Stock Exchange, bringing together game producers – WIG.Games. Since 23 September 2019 the shares of Ten Square Games S.A. are included in the mWIG40 index..

More information: https://tensquaregames.com/investors/

Twitter @TenSquareGames

Contact for the media: Piotr Piotrowski, cc group
tel. +48 697613010, piotr.piotrowski@ccgroup.pl 

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