G5E Q2 2026 EN
Interim Report January – June 2026
“In the second quarter of 2026 we executed the decisions taken in the first quarter as we worked to bring the organization size in line with the realities of a challenging market, while at the same time continuing to make strategic progress on G5 Store, third-party game distribution, direct payment processing, and new games. Our gross margin increased to a new record level of 73.1% (70.0%), driven by continued growth of the G5 Store and a growing share of revenue we process directly. The redundancies we communicated with the Q1 report and identified later were completed during and after the quarter, taking the workforce from approx. 830 at the beginning of the quarter to around 550 as of the beginning of August. These numbers include a second wave of optimizations we have identified as necessary after a further review of the portfolio and the projects being run across the company. The total run-rate decrease on an annualized basis will be USD 11 M.” said Vlad Suglobov, CEO of G5 Entertainment. “Distribution of third-party games on G5 Store is going well. We launched 3 new games in the quarter and of the games in negotiations during the second quarter 5 have been signed. As of now, the negotiations are underway on 9 more games. While third-party games revenue grew almost 100% sequentially in the quarter, G5 Store overall grew 15% year-over-year and 5% sequentially. We have also made progress in adding more advertising monetization to our portfolio: ad revenue reached 2.3% of total revenue (1% last year, 1.4% last quarter). We experienced certain difficulties in portfolio performance during the quarter. After positive development in the last few quarters, in Q2 Hidden City declined 10.5% year-over-year and 8.0% sequentially; its performance suffered due to new functionality that had negative effects, but we have since taken measures and it is now gradually trending back. Sherlock declined 16.4% year-over-year and 7.6 sequentially; the game did not perform strongly in the period and revenue fell, though we are working on stabilizing it with some success. Jewels declined 29.5% year-over-year and 11.2% sequentially. While experiments we ran on the Jewels family of games produced certain improvements, they are not enough to restore the games' scalability in this difficult market, and we cannot justify investing further in the attempt to change them. We are therefore putting Jewels into what we call Harvest Mode, to maximize the profit from the long tail of sales.”
April – June 2026
- Revenue for the period was USD 20.1 M (24.0), representing a 16% year-over-year decline compared to the same period in 2025.
- Gross margin increased to 73.1% (70.0%) as a larger share of revenue was coming from G5’s direct-to-consumer channels.
- EBIT for the period was USD -0.2 M (0.6). The quarter was negatively impacted by severance payments amounting to USD 0.8 M (0.0) and positively impacted by fx revaluations of USD 0.5 M (-1.0) reported as other income and expense. Adjusting for fx and severance payments the EBIT would be USD 0.1 M (1.6) corresponding to an EBIT margin of 0.4% (6.8%).
- Net result for the period was USD 0.6 M (0.7), positively impacted by the finance net of USD 0.8 M (0.2).
- Earnings per share before and after dilution amounted to USD 0.08 (0.09), an 18% decline year-over-year.
- Cash flow before financing activities was USD 0.7 M (2.2). The company maintained a strong liquidity position with USD 24.4 M in cash and cash equivalents at the end of the quarter.
- G5 Store gross revenue increased 14.8% year-over-year and 4.6% sequentially, reflecting continued progress in direct-to-consumer initiatives.
- Average Monthly Active Users (MAU) declined 9% year-over-year to 3.5 million, while Average Daily Active Users (DAU) decreased 15% year-over-year to 1.0 million. Similarly, Average Monthly Unique Users (MUU) saw a 10% reduction, totaling 2.4 million. Average Monthly Unique Payers (MUP) declined 20% year-over-year to 90.7 thousand. However, this was significantly offset by a robust increase in monetization quality; Average Monthly Gross Revenue per Paying User (MAGRPPU) rose by 15% year-over-year to USD 79.0 (up from USD 68.9). This substantial growth in MAGRPPU highlights the increasing concentration of high-value users and the continued effectiveness of our monetization strategies.