Modern Times Group MTG AB

STO:MTG B

Earnings Call Analysis

Positive momentum and strategic investments signal growth for the future.

In the recent earnings call, the company reported a Q3 revenue of SEK 1.4 billion, a slight year-over-year decline but a sequential increase of 1%. User acquisition (UA) spending rose by 17% from Q2, reflecting strong marketing efforts. The adjusted EBITDA was SEK 390 million with a stable operating margin of 27%. Guidance for Q4 indicates expectations of organic growth, despite a delay in third-party revenue bookings affecting Q3 performance. The full-year forecast remains positive with a growth range of 1-5% in sales and an adjusted operating margin between 26-29%. Free cash flow was remarkably strong, at SEK 334 million, showcasing solid cash conversion levels.

Solid Q3 Performance Amidst Challenges

In the third quarter, the company reported sales of SEK 1.4 billion. This signifies a 1% increase in constant currency compared to the previous quarter, although there is a 2% decline year-over-year. The sales performance was bolstered by strong showings from the game 'Warhammer 40k: Tacticus' and the popularity of localized word games. This indicates a cautious yet encouraging recovery in a market that has been challenging, evident from previously low user acquisition levels in Q2.

Operational Improvements and Future Strategies

Despite the tough market landscape, the company emphasizes a notable improvement in user acquisition this quarter. The organization is focusing on operational efficiency and cost control, which should enable them to resume organic growth by Q4 and into 2025. The launch of the new game, 'Heroes of History', is also a strategic move aimed at capturing more player engagement. With the holiday season approaching in Q4, the company is well-positioned to leverage this period for enhanced performance.

Financial Metrics: EBITDA and Cash Conversion

The company reported an adjusted EBITDA of SEK 390 million in Q3, marking a 27% operating margin. While this represents a 13% decrease from last year's figures, it is crucial to note that the previous year included three significant events that drove browser revenues steeply. Nonetheless, the organization has maintained a strong cash flow with a free cash flow of SEK 334 million in the quarter and a remarkable cash conversion rate of 70% over the last year, exceeding their long-term target of 50% to 60%. This indicates robust financial health.

Forward Guidance and Expectations

Looking forward, the management is confident in their full-year guidance for both sales and operating margin. They are well aware of previous one-off effects impacting results and anticipated delayed revenue bookings sliding into Q4. The company plans to sustain their marketing initiatives to engage players and brings forth new and exciting content, further expecting to return to above-trend growth in the near future.

Earnings Call Transcript 2024-Q3

[Anton Gourman, executive]

Good morning, everyone, and thank you for joining the live stream for our third quarter results. My name is Anton Gourman, and I'm the VP of Investor Relations at MTG. With me and hosting this call is our President and CEO, Maria Redin.

After the presentation, there will be an opportunity to ask questions. And if you're calling in by phone, please follow the operator's instructions when it's time. Otherwise, please feel free to use the comments section in the webinar.

And with that, I now hand over to our CEO, Maria. Please go ahead.

[Maria Redin, executive]

Thank you, Anton, and hello, everyone, and thank you for joining us. We had an active Q3 with good momentum and increasing marketing spend, and that's thanks to a busy schedule of live ops and new game initiatives.

I'm also excited that we launched our new strategy and character collection game, Heroes of History in September. And also going into Q4, we continue to build on the operational traction, and we are confident in our full year guidance for both sales and operating margin.

We reported sales of SEK 1.4 billion in Q3, which in constant currency was up 1% increase versus the second quarter this year. There was a 2% decline year-over-year. Our game, Warhammer 40k: Tacticus continued to deliver record sales, and our localized word games gained tractions in the quarter.

The overall market environment has remained challenging. We've been discussing it previously throughout the year, although we have seen a clear improvement this quarter in our UA levels compared to the all-time low levels we had in Q2 this year.

We also continue to see lower CPM levels year-over-year in our ad-driven business. But this trend is increasingly improving as we now move into the seasonally strong Q4. This all coming together means that, of course, we have to stay focused when it comes to operational efficiency, cost control and marketing discipline, but also that we now more than ever, have to focus on making sure that we bring our players, content that they love and give them ample reasons to continue to stay with our games for the long-term.

We reported SEK 390 million in adjusted EBITDA in Q3, and that comes with a 27% operating margin. If we compare year-over-year, our EBITDA was down 13%, and this was mainly due to that we had 3 strong events last year, driving browser revenues as well as some one-off effects that last year and that combined with a third-party revenue booking that got delayed, we anticipate to see it in Q3 this year, but it slipped into Q4.

On a positive note, however, we saw, as I said, strong traction for our user acquisition in the quarter, and I'm glad that, we can now again invest more in our future, which will help us to come back to organic growth in Q4 and onwards into 2025.

We also continue to deliver a strong free cash flow of SEK 334 million in the quarter. This meant that we delivered a 70% cash conversion for the last 12-month period. These are, of course, higher level than what we guided. And I would say these high levels shouldn't be seen as a new baseline, but it does reflect where we currently are in our operational business and development cycle and also timing of certain payment flows.

As I said, the 70% cash conversion is higher than our long-term outlook of 50% to 60% for the group. But we do believe this guidance for the long term is still the right one as we look forward, but we will see the short-term fluctuations as we move forward.

If we then look to our momentum in Q3, it puts us on track to deliver on our full year commitments. We, therefore, happy to reiterate our full year outlook as reported currency adjusted sales growth between 1% to 5%. We also continue to expect to deliver an adjusted operating margin between 26% and 29%.

As we have noted before, both in these type of calls and other settings, we do have a healthy optionality in our business model. This means that, we will deliver higher margins when we see less opportunities to invest in future growth, but that also means that our ambition remains to pursue growth, and that is what we have in focus.

We have always said that, we would be happy to invest, if we see these tractions in our marketing. And on a good note, this quarter, we were able to do exactly that. And that's also why we're really happy to see our business starting on a good momentum also in Q4.

So if we then look to see our sales, our revenues were down 2% year-over-year in Q3, but importantly, they were up 1% sequentially versus Q2. Our portfolio of live games currently comprise of 39 live games with 2 more games due to be launched before the end of the year. The decline of our Q3 sales reflected a mix of factors. Snowprint on a good note continues to deliver very strong growth, with sales were down year-over-year in the other studios.

We also had tough comps from last year, mainly due to the highly successful events we saw in Forge of Empires. I already mentioned that before. And this is also the first quarter in a while actually where we've seen our results being negatively affected by currency as the Swedish krona strengthened throughout Q3.

If we then drill further down, we have a look at the performance of our different franchises. Sales for the word game franchise were down 6% year-over-year in constant currencies, and this primarily reflected the weaker ECPM levels that we are seeing this year after the Google switch to real-time bidding earlier this year.

Franchise revenues were, however, up 1% on a sequential basis, and this is a very encouraging development and reflect the positive momentum that we see especially in our localized word games. Now, we have Word Tour, Crossword Jam and Word Search all available in up to 28 languages, even though German, Spanish and Portuguese are still the most important non-English language titles for our games.

Sales for Strategy and Simulation franchise were up 21% year-over-year, and it was up 4% of sequential basis. The growth for both comparison periods reflected the outstanding performance of our game Warhammer 4k: Tacticus, which continues to deliver an all-time high revenues and players numbers.

Snowprint has continued to deliver a strong pipeline of updates to the game and content. In Q3, this included the celebration of a 2-year anniversary of Tacticus with in-game events and content in a new playable fashion.

Forge of Empires did have tough comps due to the 3 very successful events in Q3 that I mentioned, while none of these events this year in Q3, even though we had 2, managed to generate comparable levels of uplift.

At the end of the quarter, in the end of last quarter, InnoGames launched a new guild raid feature with a goal to try to even out the in-game revenues and engagement between the events. This is something the team has continued to calibrate also in Q3 to make sure the 2 features work well together, and I do believe that we continue to see improved tractions on these features.

So while Q3 for Forge of Empires was somewhat weaker than what we wanted, I'm happy to say that Q4 has kicked-off with a very strong event. The 1st of October was the second strongest day of the year for Forge of Empires, and that was also the first day of the fall event.

If you look into the Racing franchise, revenues were down 4% in constant currencies, both year-over-year and sequentially. The 2024 season reset of Formula 1 Clash was launched in May and performed well in the quarter. We've seen a very clear positive impact on the average spending per player, and I'm happy to see the improved momentum in our most important racing games.

We've also talked about the new games that Hutch has launched. Unfortunately, neither Forza Customs or NASCAR Manager has so far delivered in line with our expectations, which means that we are now together with the team looking into these games and start to examine the future option for the 2 games.

Moving then to the Tower Defense franchise. Revenues were down 4% year-over-year, and it was sequentially down 2% from Q2. This Bloons TD6 continue to be our flagship title and received 3 updates during the third quarter. This included a new Hero, a new Tower and a second team event. And the exciting part is now the team is working on a major update that will go live during the second half of Q4, and this update has been designed to significantly extend the game content for players, and to offer established players increased opportunity to engage differently with the game.

So as you can see, as we walk through our different studios, we have a high level of activity across all of them. We have a very attractive IPs that continue to engage players and ambitious plan for the future. And as we now look at what we're doing with established games, I want to bring you then forward to what are we doing with the new and the early scaling titles.

Today, we have 18 games in our early scaling and new games pipeline. More than half of these titles are fully available today on all platforms and some are more to come. And together, they represent 16% of our total revenues in Q3 as we continue to develop them and deploy selective UA to increase scaling. Of course, as always, when you launch them, you need to assess the UA performance before we move on to full commercial launch.

As I mentioned earlier, here is some histories, which is the latest title from InnoGames, which launched globally in September. It's clearly very early days, but the game's early reception has been really great. It's also outperforming InnoGames previous launches, if we compare on a like-for-like basis.

We're also about to shortly enjoy the global launch of Bloons Card Storm. This is coming out from Ninja Kiwi. And the launch comes about 1.5 months after a very successful Alpha test, which received positive feedback from both players and the gaming media community. We then continue to expect a soft launch of yet another unannounced title from Ninja Kiwi at the end of the year.

And to add to the news also yesterday, Ninja Kiwi announced that they are currently also developing the next game in the successful SAS Zombie Assault franchise. So it's a busy day within our Ninja Kiwi studio.

PlaySimple continues to involve several new titles, and they soft launched a brand-new title called Cryptograph on Android in the quarter. It's still very early days for this title, but we do expect it to launch on iOS in due time. Further, PlaySimple also continued to evolve their soft launch titles, adding content, localized languages and live ops in the quarter.

I also mentioned earlier that neither Forza Customs nor NASCAR, unfortunately, has been able to perform in line with our expectations. And therefore, the team at Hutch is now deciding on how to bring these games forward.

And last but not least, our Warhammer 40k: Tacticus continues to shine. The game just celebrated its second-year anniversary, and I'm very excited to see that Snowprint has delivered revenues and operational KPIs that were better than what we anticipated each month in the quarter was an all-time high.

So we now look forward and we look at our performance indicators in Q3. We generated 62% of our revenues from in-app purchases and 32% from in-app advertising. The in-app advertising revenues as a proportion of our total revenues has come down year-over-year, which reflects Google shift to real-time bidding in the ecosystem of the start of the year.

Our revenue streams were stable quarter-on-quarter. Our daily active users were down year-over-year, but up sequentially. The year-over-year decline mainly reflected the sale of Kongregate in Q1 this year, and it was up slightly on an underlying basis.

The sequential increase in DAU was driven by healthy player intake from, in particular, PlaySimple, thanks to the localized version of the key games and also higher sequential DAU in Ninja Kiwi and Snowprint.

Average revenue per daily user, or ARPDAU, was up slightly year-over-year, which also reflected the increasing ARPDAU in our Racing and Tower Defense franchise and continued healthy levels in the Strategy and Simulation segment, being offset by lower ARPDAU in our word games.

Our ARPDAU was slightly down from Q2 this year, and this was driven by lower payment levels per player in our localized word games, which was almost offset by the higher levels that we saw in the Strategy Simulation and Racing, where the season reset of Formula 1 Clash continued to improve the average revenues per player.

Now, it's time to take a look at our UA spend, profitability and financials, and I will let Anton take us through this.

[Anton Gourman, executive]

Thank you very much, Maria. So we spent just under SEK 550 million on user acquisition in Q3 and over SEK 1.5 billion for the first 9 months of the year. This represented 38% of our total revenues in the quarter, and was up slightly from 37% in the third quarter of last year. We spent 36% of our revenues on user acquisition in the first 9 months of the year compared to 39% last year.

Our UA spend was up by 17% in constant currencies from the second quarter, which reflected continued high levels of UA in Snowprint, increased marketing from PlaySimple on the back of their successfully localized word games and higher UA in InnoGames. It's also worth mentioning that our UA spend in the quarter was backloaded, which means that we expect to see the growth benefits of these investments in Q4 and beyond.

We continue to have a disciplined approach to marketing that focuses on profitable user acquisition, and we're happy to see that the traction we observed at the end of Q2 continued throughout Q3.

While total UA spend for the quarter was somewhat higher than we initially anticipated, this is well aligned with our ambition to drive organic growth. These investments in future growth also set us up to deliver on our Q4 plans and on our full year guidance, as Maria noted.

So we reported an adjusted EBITDA of SEK 390 million in Q3, which was down from SEK 449 million in Q3 last year. The decline mainly reflected tough comps, as Maria mentioned, due to very successful events in Forge of Empires, which drove high-margin browser revenues last year and some one-off effects in Q3 last year.

We delivered strong operating margin of 27% in the quarter. And as Maria also mentioned earlier, our Q3 profits were somewhat lower than expected due to the shift of a booking of third-party income from the third into the fourth quarter this year. This has no effect on our performance for the full year, but does mean that our fourth quarter will be slightly stronger than initially planned.

We continue to have strong cash generation and cash conversion levels in the quarter and reported free cash flow of SEK 334 million in Q3. This enabled us to deliver high cash conversion of 70% in the quarter, above our guided long-term range of 50% to 60%.

We also had positive working capital in Q3, which reflected a bit higher-than-normal operational movements in the quarter in both payables and receivables. This will fluctuate between quarters, as you know, and we expect this to be negative in Q4.

Our CapEx was significantly reduced year-on-year in the quarter, as you can see, which follows the trend we have demonstrated in each quarter of 2024 so far. This reflects where we are in our overall development cycle as more of our developed games go into soft launch, but also the divestment of Kongregate in Q1 this year, which has significantly reduced our overall CapEx levels.

That's all for me. I'll now hand it back over to Maria for a summary and then some questions. Thank you.

[Maria Redin, executive]

Thank you, Anton. So before we move over to our Q&A session, I would like to summarize where we are today as we enter also now the final and seasonally most important quarter of the year.

While our sales in Q3 were slightly lower year-over-year, our sequential performance shows that our momentum is improving. We continue to deliver strong margins, while increasing our investment in user acquisition to drive future growth.

I'm also happy to see that, we can continue to deliver on our live op pipeline for our established games, while also launching new exciting titles across our studio.

At the same time, we are delivering still a 27% operating margin, which shows the quality and the health of our business. And as we mentioned earlier, our profit in Q3 were also affected by the move of a third-party revenue booking into Q4. This doesn't change anything when it comes to the full year as it's purely a timing issue.

We reiterate our outlook, and we are confident about delivering it for the full year. That means that you should expect us to deliver organic growth in Q4. We continue to deliver on our plans and our strategy, and our share buyback program is running until our next AGM, as you know.

So with that, we thank you, and we are now ready to take your questions.

[Anton Gourman, executive]

So operator...

[Operator]

[Operator Instructions] The next question comes from Simon Jonsson from ABG Sundal Collier.

[Simon Jönsson, analyst]

First, a question on the UA spending. Can you maybe walk us through in a bit more detail how the increase was distributed in the quarter? You said that, UA spending was backloaded and that UA was higher for PlaySimple in September. Was that a majority of the increase that PlaySimple increased in September? Or was it broader? And within PlaySimple, where have you deployed the increased UA, new games or existing?

[Maria Redin, executive]

Yes. Simon, thanks for the question. So on a good note, the UA increase was in particular split between Snowprint and PlaySimple, but also InnoGames ramped up their UA spend, not year-over-year, but sequentially. They were on very low levels in Q2. So we're really happy to see that they have gradually during Q3 been able to ramp up their UA, in particular then, of course, for Forge of Empires, but also towards the end of the quarter also for the newly launched game Heroes of History.

I would say Snowprint with Tactus has been on a high level throughout Q3. And I think as they launched the submarine events and had their 2-year anniversary, they ramped up from August and onwards even further. So that's exciting.

And I would say PlaySimple, to your point, we saw the biggest increase in September. And exciting for PlaySimple, yes, it's a lot about the new localized games, but they're also scaling up their existing titles. So it's a combination. So it's not just one thing driving the UA momentum, it's actually broader, which gives me also a good momentum into Q4 overall.

[Simon Jönsson, analyst]

Excellent. And on the back of that UA increase, how has the sequential sales development for PlaySimple specifically during the quarter? And how has October been since you said that, you're now seeing a positive trend?

[Maria Redin, executive]

Yes. No. But I think the -- if you look at PlaySimple in general, of course, the revenue trend also fell off to some degree, the UA spend, even though there is a lag to recoup the full amount, of course. And as we now move into Q4, we are moving into seasonally strong CPM levels as well. So towards the end of October, we start to see that improvement as well. So I would say, in general, we have a very good start in Q4 and also PlaySimple is seeing a better traction also in October. But I think November and December, as you know are the 2 key months when it comes to CPM levels.

[Simon Jönsson, analyst]

Yes. Got it. And you talked about the shift of a third-party revenue booking from Q3 into Q4. Can you maybe give us some indication of the size of that?

[Maria Redin, executive]

No, we usually don't. But I mean, if we would completely immaterial, we wouldn't have mentioned it. So of course, it made a difference. We're sort of compared to where we expected to land and where we land. But on a good note, it's purely money that came in just after quarter end versus just before quarter end. Those things happen. So at the end of the day, that means that our Q4 will look a little bit stronger and Q3 then looked a little bit weaker.

[Simon Jönsson, analyst]

Okay. Got it. And just one last for me. On UA in Q4, I understand, of course, that it depends on new releases and so on. But do you expect that you can deploy significantly more than last year or more in line with last year? What do you see?

[Maria Redin, executive]

Yes. But I think we are coming in with a good momentum and a good spend levels. Then of course, as you move into November, December also, the cost goes up as such. So I think what we did last year was to try to balance it a little bit more even than what we've done the years before. And I think you're probably seeing a similar trend this year, but we would like to scale as much as we can see the strong rollout that we've seen sort of in September, then we will continue on the same good and positive projection. So that's our ambition level.

[Anton Gourman, executive]

So operator, can we take the next question, please?

[Operator]

The next question comes from Jacob Edler from Danske Bank.

[Jacob Edler, analyst]

Maria and Anton, I hope you can hear me. Just a follow-up there on UA. I remember early in the year, you anticipated UA to be a bit more back-end loaded this year relative to last year. Now, UA was probably a bit higher than you anticipated here in Q3. So are you saying now that we should expect a bit more, kind of, evenly spread Q4, Q3? I mean, maybe some growth sequentially, but not as much as you anticipated early in the year. Is that correct, or?

[Maria Redin, executive]

I would say that, we were able to scale up a bit more in the end of Q3 than what we anticipated, which is great, but then we should hopefully be able to continue on that momentum during Q4. So -- but it also depends on what we're seeing on the CPIs and so forth. But I think it's correct that you should expect us to continue to scale up.

[Jacob Edler, analyst]

Okay. Great. And just a follow-up on that. I mean, historically, elections have kind of inflated UA prices. Will this impact your UA strategy this year? Or what do you say on that point?

[Maria Redin, executive]

No, but that's one of the factors that may impact CPIs. And that's again why it's very difficult to say exactly where we will land on UA because we are extremely rigid on making sure we see the ROAS come through as we would like to see them.

So again, we may have an ambition on what we want to do, but it also needs to work in practice when we are seeing the CPIs compared to our LTVs. So we don't know yet how the ambition will -- or how the election will impact the pricing. But normally, to your point, it does impact the pricing because you see more increased competition during that period of time. But on a good note, we can also hopefully see a good trajectory then in our ECPMs.

[Jacob Edler, analyst]

Yes. Okay. Good. Another question on the pipeline. I mean, Heroes has launched and now Card Storm in a week's time. Do you still expect the undisclosed Ninja Kiwi title to release in Q4?

[Maria Redin, executive]

Yes, I do, but I don't believe it will bring any meaningful revenues. So that's more of a 2025 sort of impact. But we would like to see if we can get it through over the finishing line, before we go for Christmas break.

[Jacob Edler, analyst]

Great. And then just a question on coming back to cash conversion where we started. Obviously, you're at 70% now. You still think that the target of 50% to 60% is valid. But just can you add some flavor on when we should expect the next kind of CapEx cycle to start?

[Maria Redin, executive]

Yes. No, it's a good question. I think just to clarify, I do believe we come in higher for this year than the SEK 50 million to SEK 60 million. So it's more of the long-term that I do believe is correct. And a little bit depends on partially CapEx level, but also in general, the larger payment flows.

So I do believe starting, hopefully, already next year, we can see a beginning of a new CapEx cycle. We now got many games out of soft launch and full commercial launch. And I think that's also when we should start to see new initiatives based on some of the discussions we're having internally.

[Operator]

The next question comes from Rasmus from Kepler. The next question comes from Jacob Edler from Danske Bank.

[Jacob Edler, analyst]

I think was Rasmus turn.

[Maria Redin, executive]

Yes, Rasmus, if you're there.

[Rasmus Engberg, analyst]

Hello?

[Anton Gourman, executive]

Yes, we can hear you. Go ahead, Rasmus.

[Operator]

The next question comes from Rasmus from Kepler.

[Rasmus Engberg, analyst]

Yes. PlaySimple, do you feel that you are back to growing that business now? When -- I guess, you can think of it as price and volume and you had a reset in pricing that you will carry into. But are you already back to growth? Or will that take until maybe Q1?

[Maria Redin, executive]

Yes. No, it's a good question. I think when we announced the Google changes and the impact, we said there's 2 ways that we can bring the business back to growth again. One part is, of course, to bring back the competitive advantage we've been having on the pricing level, and that will take longer time. And the other part is to increase outreach.

I think on a good note, which we saw now on the very strong intake of DAUs that we've seen in territories outside the U.S. and English-speaking markets, we are really increasing our DAUs. And the ambition is now during Q4 is also to monetize these DAUs. And that is, of course, one of the drivers to the overall business, as I said, that should return to organic growth in Q4.

[Rasmus Engberg, analyst]

Wonderful. And so that looks good for next year then, obviously. And then the other thing that, I'm thinking is that Snowprint comes out of this year on a different and much higher level than it ended last year. So we go in with very strong momentum, I guess, in the first half there as well. Is that correct?

[Maria Redin, executive]

Yes. No, Snowprint has had an amazing performance. As we said, when we acquired them a year ago that acquiring Snowprint and Warhammer IP even though with Tacticus, even though the title at that point in time was quite limited in revenue contribution, we saw its potential, and we said, this is not going to be EBITDA accretive. It's going to be growth accretive for us as a group. And I think now sort of 12 months down the road, we can clearly see that it has been growth accretive and it's going out on a very strong momentum.

But this is also a mid-core game, we need to remember. And the longevity of the cores are extremely strong. And as you successfully then scale a mid-core game like Snowprint has done, the longevity and the monetization of these cores are extremely long, which means that I do believe they have a very exciting 2025 ahead of them as well.

[Rasmus Engberg, analyst]

And the only -- I'm just only looking quickly on the numbers, but there seems -- it's a bit difficult to grasp fully, but it looks as though InnoGames is kind of sliding sequentially, and that comes into the year on a lower level? Or is it, in fact, stable? It's so difficult to see from the outside and you say that it was a particularly strong Q3 last year, obviously. But do you think it's fairly stable? Or is it still sliding?

[Maria Redin, executive]

No, I would say, it's probably fair to say we would have liked to see better performance in Q3 in isolation. I think one of the drivers was also us calibrating the guild features versus the event, and you only had 2 events also in Q3 versus 3 last year. So there are several reasons to its underlying performance, and it had really tough comps.

I think, as we look forward, which is the exciting part is we were able to scale up UA in Q3. Remember, in Q2 was all-time low to be fair in InnoGames. And in Q3, we actually managed to increase it by quite a bit, which means we go into Q4, both with a higher DAUs in Forge of Empires, but also we found a better balance between the new guild features and the events. And the fall event that, started had actually one of the best performing day of the year, which gives me good feeling as we look into Q4, which is for InnoGames always a very strong quarter.

[Rasmus Engberg, analyst]

Just one more question. If it -- if we do reach organic growth next year, I assume that, we will have higher UA. So we continue to drive growth. It's not kind of a one-off to capitalize next year. That's correct, right?

[Maria Redin, executive]

No. I mean, we would like to continue to invest in UA, because we know that, that drives sort of our cohorts and our organic growth, not just for 2025, but also in '25 and onwards, and that's our ambition. And I think we should have a healthy pipeline and also balance between existing games and new games.

[Operator]

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

[Anton Gourman, executive]

Thank you very much. So we have 2 questions on the chat that we're going to take. The first one is more technical. So when will Snowprint enter the organic growth calculation?

The answer is, that is for the whole of Q4 because we acquired them very early in Q4, and we're just going to -- that's when they were consolidated.

And then a question to Maria. So can you please give more detail on the sudden departure of Nils? What was behind this? And who's going to replace him?

[Maria Redin, executive]

Yes. So we're currently running a search. And as we find the right candidate, we will then close that position. So you will know as we have to issue a press release when we sign that contract. And as it always is, I mean, when you work in management team, sometimes things work out and sometimes it doesn't. And I think in this one, we mutually agreed to part ways. So there's no drama about it. He's a great person. We wish him all the best. But I think we both agree that, that was the best way forward.

[Anton Gourman, executive]

Thank you. So we have no further questions at this stage. I would like to thank Maria. I'd like to thank all our listeners for today. You know where to find us. Follow us for more news as we go into Q4 and beyond. And thank you very much.