GDEV Inc 6-K, filed Sep 4, 2024
GDEV Inc. (GDEV)
About this 6-K
GDEV Inc filed this 6-K on September 4, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September, 2024
Commission File Number: 001-40758
(Translation of registrant’s name into English)
55, Griva Digeni
3101, Limassol
Cyprus
Telephone: +35722580040
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
EXPLANATORY NOTE
On September 4, 2024, GDEV Inc. (NASDAQ: GDEV) (the “Company”) issued a press release announcing its results for the three and six months ended June 30, 2024. A copy of this press release is attached to this Form 6-K as Exhibit 99.1.
The Company’s unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2024 is attached to this Form 6-K as Exhibit 99.2.
INCORPORATION BY REFERENCE
The information included in this Report on Form 6-K (including Exhibit 99.1 and Exhibit 99.2) is hereby incorporated by reference into the Company’s Registration Statement on Form F-3 (File No. 333-280580) (including any prospectuses forming a part of such registration statement) and to be a part thereof from the date on which this Report on Form 6-K is filed, to the extent not superseded by documents or reports subsequently filed or furnished.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: September 4, 2024 | |
| GDEV Inc. | |
| | |
By: | /s/ Alexander Karavaev | |
| | Name: Alexander Karavaev |
| | Title: Chief Financial Officer |
Exhibit 99.1
GDEV announces unaudited results for the second quarter and first half of 2024
September 4, 2024 – Limassol, Cyprus – GDEV Inc. (NASDAQ: GDEV), an international gaming and entertainment company (“GDEV” or the “Company”) released its unaudited financial and operational results for the second quarter and first half-year ended June 30, 2024.
GDEV CEO, Andrey Fadeev stated:
“Over the past months, we’ve been refining our strategic vision, and now we’re prepared to push forward with renewed confidence. Despite the temporary decline in some of our key operational and financial metrics, our ability to maintain a robust revenue mix between PC and mobile platforms — where PC has grown to 42% of our total bookings — underscores our adaptive strategy and resilience. Additionally, our strong cash flow trends, the significant reduction in platform commissions and the reduction of the game operation costs reflect the operational efficiencies we’ve been able to achieve, reflected in our recording a net profit in Q2 2024 versus a net loss in Q1 2024 and an improvement in Adjusted EBITDA year over year. Each of our studios is laser-focused on delivering the top game for their audience. We are bringing in top talent from the gaming industry, which is helping us turn our long-held ambitions into reality. This journey is driven by strategic growth and a commitment to excellence in everything we do. This isn’t just about quick wins; it’s about building a strong, sustainable future. We’re here for the long haul, dedicated to creating experiences that will impress our players and solidify our position in the market.”
Second quarter 2024 financial highlights:
| ● | Revenue of $106 million decreased by 8% year-over-year. |
| ● | Bookings of $108 million decreased by 3% year-over-year primarily due to decrease of advertising bookings while the bookings from in-app purchases remained relatively stable, demonstrating continued user engagement. |
| ● | Selling and marketing expenses of $47 million decreased by 7% year-over-year driven by our successful shift in user acquisition strategy, focusing on enhancing efficiency and long-term value generation. |
| ● | Platform commissions decreased by 16% year-over-year, driven by strong performance of our PC platforms, which carry lower commissions. |
| ● | Profit for the period, net of tax of $15 million in Q2 2024 vs. $20 million in Q2 2023. |
| ● | Adjusted EBITDA of $16 million in the second quarter of 2024 staying at the same level compared to the second quarter of 20231, highlighting our operational resilience amidst market fluctuations. |
| ● | Cash flows generated from operating activities were $11 million, demonstrating strong cash management and operational efficiency. |
| ● | European share of bookings increased to 29%, reflecting our growing presence and successful marketing activities in the region. |
Product updates:
| ● | Hero Wars, our flagship global mid-core franchise, recently celebrated a major milestone with its first-ever in-game collaboration featuring the legendary gaming icon, Lara Croft. This partnership garnered overwhelmingly positive feedback from our player community and was bolstered by extensive brand marketing campaigns. These efforts propelled the Hero Wars brand to an all-time high in Google Trends search interest. |
| ● | Pixel Gun 3D, our pixel shooter franchise, successfully expanded to the PC platform with its launch on Steam. The game made an impressive debut, ranking among the Top 20 best-selling and Top 50 most-played games and peaking at 25,000 concurrent players. Remarkably, these achievements were secured with minimal marketing spend, enabling us to recover development costs on the very first day of release. |
Second quarter and first half 2024 financial performance in comparison
US$ million |
| Q2 2024 |
| Q2 2023 |
| Change (%) |
| H1 2024 |
| H1 2023 |
| Change (%) |
|
Revenue |
| 106 |
| 115 |
| (8) | % | 213 |
| 234 |
| (9) | % |
Platform commissions |
| (23) |
| (27) |
| (16) | % | (46) |
| (56) |
| (18) | % |
Game operation cost |
| (12) |
| (14) |
| (13) | % | (25) |
| (29) |
| (12) | % |
Selling and marketing expenses |
| (47) |
| (51) |
| (7) | % | (111) |
| (129) |
| (14) | % |
General and administrative expenses |
| (9) |
| (8) |
| 14 | % | (16) |
| (16) |
| 2 | % |
Profit for the period, net of tax |
| 15 |
| 20 |
| (25) | % | 13 |
| 11 |
| 17 | % |
Adjusted EBITDA |
| 16 |
| 16 |
| 4 | % | 14 |
| 4 |
| N/M | |
Cash flows generated from/(used in) operating activities |
| 11 |
| 12 |
| (5) | % | 12 |
| (0.1) |
| N/M | |
N/M: not meaningful
1 For more information, see section titled “Presentation of Non-IFRS Financial Measures” in the last two pages of this report, including the reconciliation of the profit for the period, net of tax to the Adjusted EBITDA.
Second quarter 2024 financial performance
In the second quarter of 2024, our revenue decreased by $9 million (or 8%) year-over-year and amounted to $106 million. While bookings for the second quarter of 2024 remained relatively stable, decreasing by $3 million, the decrease in revenue compared to Q2 2023 was primarily driven by a decrease in the recognition of deferred revenues associated with bookings recorded in periods prior to Q2 2024: in Q2 2024, $63 million of revenues resulted from the bookings recorded prior to Q2 2024 compared to $70 million of revenues booked in Q2 2023 which resulted from bookings recorded prior to Q2 2023. Revenues reported in Q2 2023, in turn, were impacted by the recognition of record high bookings generated in 2021. The decrease in revenues also reflects the increasing portion of our bookings in Q2 2024 that are required to be recognized as deferred revenue in later periods, as a greater proportion was generated from our PC platform, where players’ lifespan tends to be higher compared with other platforms.
Platform commissions decreased by $4 million (or 16%) in the second quarter of 2024 compared to the same period in 2023, driven by a 7% decrease in revenues generated from in-game purchases, and amplified by growth of revenues derived from PC platforms which are associated with lower commissions.
Game operation costs decreased by $2 million, reaching $12 million in the second quarter of 2024, driven mostly by a decrease in employee headcount in our office in Armenia compared with the same period in 2023.
Selling and marketing expenses in the second quarter of 2024 decreased by $3 million, amounting to $47 million. The decrease is attributed to a shift in user acquisition strategy focused on enhancing efficiency in Q2 2024 vs. the same period in 2023.
General and administrative expenses were $9 million in Q2 2024 compared with $8 million in Q2 2023. The increase was primarily due to the consulting fees related to investor relations activities.
As a result of the factors above, together with other diverse factors (including, principally, a change in fair value of share warrant obligation of $0.4 million in Q2 2024 vs. $5 million in Q2 2023), we recorded a profit for the period, net of tax, of $15 million compared with $20 million in the same period in 2023. Adjusted EBITDA in Q2 2024 amounted to $16 million, an increase of $0.6 million compared with the same period in 2023.
Cash flows generated from operating activities were $11 million in the second quarter of 2024 compared with $12 million in the same period in 2023.
First half 2024 financial performance
In the first half of 2024, our revenue decreased by $21 million (or 9%) year-over-year and amounted to $213 million. While bookings for the first half of 2024 remained relatively stable, increasing by $2 million, the decrease in revenue compared to the first half of 2023 was primarily driven by a decrease in the recognition of deferred revenues associated with bookings recorded in periods prior to in H1 2024: in the first half of 2024, $138 million of revenues resulted from the bookings recorded prior to 2024 compared to $155 million of revenues booked in the first half of 2023 which resulted from bookings recorded prior to 2023. Revenues reported in the first half of 2023, in turn, were impacted by the recognition of record high bookings generated in 2021. The decrease in revenues also reflects the increasing portion of our bookings in Q2 2024 that are required to be recognized as deferred revenue in later periods, as a greater proportion was generated from our PC platform, where players’ lifespan tends to be higher compared with other platforms.
Platform commissions decreased by $10 million (or 18%) in the first half of 2024 compared to the same period in 2023, driven by a 9% decrease in revenues generated from in-game purchases, and amplified by growth of revenues derived from PC platforms which are associated with lower commissions.
Game operation costs decreased by $3 million, reaching $25 million in the first half of 2024, driven mostly by a decrease in employee headcount in our office in Armenia compared with the same period in 2023.
Selling and marketing expenses in the first half of 2024 decreased by $19 million, amounting to $111 million. The decrease is attributed to a shift in user acquisition strategy focused on enhancing efficiency in the first half of 2024 vs. the same period in 2023.
General and administrative expenses remained relatively stable at $16 million for the first half of 2024 and 2023.
As a result of the factors above, together with other factors (including, principally, (i) a change in fair value of share warrant obligation of $0.3 million in the first half of 2024 vs. $11 million in the first half of 2023, and (ii) other financial income related to the write-off of put option liability of $4 million in the first half of 2024 vs. nil in 2023), we recorded a profit for the period, net of tax, of $13 million compared with $11 million in the same period of 2023. Adjusted EBITDA in the first half of 2024 amounted to $14 million, an increase of $10 million compared with the same period in 2023.
Cash flows generated from operating activities amounted to $12 million in the first half of 2024, an increase from negative $0.1 million in the same period of 2023.
Second quarter and first half 2024 operational performance comparison
|
| Q2 2024 |
| Q2 2023 |
| Change (%) |
| H1 2024 |
| H1 20232 |
| Change (%) |
|
Bookings ($ million) |
| 108 |
| 111 |
| (3) | % | 216 |
| 214 |
| 1 | % |
Bookings from in-app purchases | | 101 | | 102 | | (1) | % | 201 | | 198 | | 2 | % |
Bookings from advertising | | 7 | | 9 | | (23) | % | 15 | | 16 | | (5) | % |
Share of advertising |
| 6.2 | % | 7.7 | % | (1.5) | p.p. | 6.9 | % | 7.4 | % | (0.5) | p.p. |
MPU (thousand) |
| 381 |
| 392 |
| (3) | % | 381 |
| 387 |
| (2) | % |
ABPPU ($) |
| 88 |
| 87 |
| 2 | % | 88 |
| 85 |
| 3 | % |
2 The previously released preliminary bookings for Q1 2023 as a part of our Q1 2024 press release have been adjusted to reflect the final amounts. The previously released preliminary bookings for Q1 2023 as a part of our Q1 2024 press release have been adjusted to reflect the final amounts.
Bookings stayed relatively stable at $108 million and $216 in the second quarter and first half of 2024, respectively, compared with the same periods of 2023.
The share of advertisement sales as a percentage of total bookings decreased in the second quarter and the first half of 2024 to reach 6.2% and 6.9%, respectively, compared to 7.7% and 7.4% in the respective periods of 2023. This decline was primarily driven by a global trend of declining CPM rates for advertising in 2024.
Split of bookings by platform |
| Q2 2024 |
| Q2 2023 |
| H1 2024 |
| H1 2023 |
|
Mobile |
| 58 | % | 62 | % | 60 | % | 63 | % |
PC |
| 42 | % | 38 | % | 40 | % | 37 | % |
In the second quarter and first half of 2024, the share of PC versions of our games increased by 4 p.p. and 3 p.p. respectively, compared with the same periods of 2023.
Split of bookings by geography |
| Q2 2024 |
| Q2 2023 |
| H1 2024 |
| H1 2023 |
|
US |
| 34 | % | 36 | % | 34 | % | 36 | % |
Asia |
| 22 | % | 24 | % | 22 | % | 25 | % |
Europe |
| 29 | % | 24 | % | 29 | % | 24 | % |
Other |
| 15 | % | 16 | % | 15 | % | 15 | % |
Our split of bookings by geography both in the second quarter of 2024 and first half of 2024 vs. the respective periods of 2023 remained broadly similar, with a certain increase in the share of Europe bookings.
Note:
Due to rounding, the numbers presented throughout this document may not precisely add up to the totals. The period-over-period percentage changes are based on the actual numbers and may therefore differ from the percentage changes if those were to be calculated based on the rounded numbers.
The figures in this release are unaudited.
Webcast details
To listen to the audio webcast with supplementary slides please follow the link. Prepared remarks are available on gdev.inc.
To listen to the audio webcast please follow this link. To participate in the conference call, please use the following details:
US toll-free dial: +1 844-543-0451
US local: +1 864-991-4103
United Kingdom toll-free: +44 808 175 1536
United Kingdom local: +44 1400 220156
Conference ID: 886570
For additional dial-in options, please use this link.
About GDEV
GDEV is a hub of gaming studios, focused on development and growth of its franchise portfolio across various genres and platforms. With a diverse range of subsidiaries including Nexters and Cubic Games, among others, GDEV strives to create games that will inspire and engage millions of players for years to come. Its franchises, such as Hero Wars, Island Hoppers, Pixel Gun 3D and others have accumulated hundreds of millions of installs worldwide. For more information, please visit gdev.inc.
Contacts:
Investor Relations
Roman Safiyulin | Chief Corporate Development Officer
investor@gdev.inc
Cautionary statement regarding forward-looking statements
Certain statements in this press release may constitute “forward-looking statements” for purposes of the federal securities laws. Such statements are based on current expectations that are subject to risks and uncertainties. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.
The forward-looking statements contained in this press release are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that the Company has anticipated. Forward-looking statements involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions. You should carefully consider the risks and uncertainties described in the “Risk Factors” section of the Company’s 2023 Annual Report on Form 20-F, filed by the Company on April 29, 2024, and other documents filed by the Company from time to time with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should any of the Company’s assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Presentation of Non-IFRS Financial Measures
In addition to the results provided in accordance with IFRS throughout this press release, the Company has provided the non-IFRS financial measure “Adjusted EBITDA” (the “Non-IFRS Financial Measure”). The Company defines Adjusted EBITDA as the profit/loss for the period, net of tax as presented in the Company’s financial statements in accordance with IFRS, adjusted to exclude (i) goodwill and investments in equity accounted associates’ impairment, (ii) loss on disposal of subsidiaries, (iii) income tax expense, (iv) other financial income, finance income and expenses other than foreign exchange gains and losses and bank charges, (v) change in fair value of share warrant obligations and other financial instruments, (vi) share of loss of equity-accounted associates, (vii) depreciation and amortization, (viii) share-based payments expense and (ix) certain non-cash or other special items that we do not consider indicative of our ongoing operating performance. The Company uses this Non-IFRS Financial Measure for business planning purposes and in measuring its performance relative to that of its competitors. The Company believes that this Non-IFRS Financial Measure is a useful financial metric to assess its operating performance from period-to-period by excluding certain items that the Company believes are not representative of its core business. This Non-IFRS Financial Measure is not intended to replace, and should not be considered superior to, the presentation of the Company’s financial results in accordance with IFRS. The use of the Non-IFRS Financial Measure terms may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures.
Reconciliation of the profit for the period, net of tax to the Adjusted EBITDA
US$ million |
| Q2 2024 |
| Q2 2023 |
| H1 2024 |
| H1 2023 |
Profit for the period, net of tax |
| 15 |
| 20 |
| 13 |
| 11 |
Adjust for: |
|
|
|
|
|
|
|
|
Income tax expense |
| 1 |
| 0.3 |
| 2 |
| 1 |
Adjusted finance (income)/expenses3 |
| (0.4) |
| (0.7) |
| (5) |
| (3) |
Change in fair value of share warrant obligations and other financial instruments |
| (0.4) |
| (5) |
| (0.3) |
| (11) |
Share of loss of equity-accounted associates |
| — |
| — |
| — |
| 0.5 |
Depreciation and amortization4 |
| 1 |
| 1 |
| 3 |
| 3 |
Share-based payments |
| 0.2 |
| 0.5 |
| 0.4 |
| 1 |
Adjusted EBITDA |
| 16 |
| 16 |
| 14 |
| 4 |
GDEV Inc.
Contents
2
GDEV Inc.
Interim Condensed Consolidated Statement of Financial Position
As at June 30, 2024 (unaudited) and December 31, 2023
(in thousands of US$)
|
| Note |
| June 30, 2024 |
| December 31, 2023 |
ASSETS | | | | | | |
Non-current assets |
|
|
|
|
|
|
Property and equipment |
| 13 |
| |
| |
Right-of-use assets | | 17 | | | | |
Intangible assets |
| 14 |
| |
| |
Goodwill |
| 3 |
| |
| |
Investments in equity accounted associates |
| 15 |
| — |
| — |
Long-term deferred platform commission fees |
| 25 |
| |
| |
Deferred tax asset |
| 12 |
| |
| |
Other non-current investments |
| 22 |
| |
| |
Other non-current assets | | | | | | |
Total non-current assets |
| | | |
| |
Current assets |
|
|
|
|
|
|
Indemnification asset |
| 14,15,20 |
| |
| |
Trade receivables and other current assets |
| 18 |
| |
| |
Loans receivable |
| 16 |
| |
| |
Other investments | | 22 | | | | |
Prepaid tax |
| 12 |
| |
| |
Cash | | 23 | | | | |
Total current assets |
| | | |
| |
Total assets |
| | | |
| |
| | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Share capital | | 24 | | — | | — |
Additional paid-in capital | | 24 | | | | |
Share-based payments reserve | | 24 | | | | |
Treasury share reserve | | 24 | | ( | | — |
Translation reserve | | 24 | | | | |
Accumulated deficit |
| 24 | | ( |
| ( |
Equity attributable to equity holders of the Company |
| | | ( |
| ( |
Non-controlling interest |
| | | — |
| — |
Total equity |
| | | ( |
| ( |
Non-current liabilities |
|
|
| |
| |
Lease liabilities - non-current |
| 17 |
| |
| |
Long-term deferred revenue |
| 25 |
| |
| |
Share warrant obligations |
| 21 |
| |
| |
Total non-current liabilities |
| | | |
| |
Current liabilities |
|
|
|
|
|
|
Lease liabilities - current |
| 17 |
| |
| |
Trade and other payables |
| 19 |
| |
| |
Provisions for non-income tax risks |
| 3,20 |
| |
| |
Put option liabilities - current | | 3,14,15 | | | | |
Tax liability |
| 3,12 |
| |
| |
Deferred revenue |
| 25 |
| |
| |
Total current liabilities |
| | | |
| |
Total liabilities |
| | | |
| |
Total liabilities and shareholders’ equity |
| | | |
| |
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
3
GDEV Inc.
Unaudited Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the three and six months ended June 30, 2024 and 2023
(in thousands of US$)
|
| |
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | Note | | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
Revenue | | 7 | | | | | | | | |
Costs and expenses | | | | | | | | | | |
Cost of revenue: | | | | | | | | | | |
Platform commissions |
| 7,25 | | ( |
| ( |
| ( |
| ( |
Game operation cost |
| 8 |
| ( |
| ( |
| ( |
| ( |
Other operating income | | | | | | | | | | |
Selling and marketing expenses |
| 9 |
| ( |
| ( |
| ( |
| ( |
General and administrative expenses | | 10 | | ( | | ( | | ( | | ( |
| | | | | | | | | | |
Impairment loss on trade and loan receivables and change in fair value of loans receivable | | 16,18,28 | | ( | | ( | | ( | | ( |
Total costs and expenses |
| | | ( |
| ( |
| ( |
| ( |
Profit from operations |
| | | |
| |
| |
| |
Other financial income |
| 14,24 | | |
| — |
| — |
| — |
Finance income |
| 11 |
| |
| |
| |
| |
Finance expenses | | 11 | | ( | | ( | | ( | | ( |
Change in fair value of share warrant obligation and other financial instruments |
| 21,28 |
| |
| |
| |
| |
Share of loss of equity-accounted associates |
| 15 |
| — |
| ( |
| — |
| — |
Profit before income tax |
| | | |
| |
| |
| |
Income tax expense |
| 12 |
| ( |
| ( |
| ( |
| ( |
Profit for the period net of tax |
| | | |
| |
| |
| |
Attributable to equity holders of the Company | | | | | | | | | | |
Other comprehensive income | | | | | | | | | | |
Items that are or may be reclassified subsequently to profit or loss | | | | | | | | | | |
Foreign currency translation difference |
| | | |
| |
| |
| |
Other | | | | ( | | | | ( | | ( |
Total comprehensive income for the period, net of tax | | | | | | | | | | |
Attributable to equity holders of the Company |
| | | |
| |
| |
| |
|
| | | |
| |
| |
| |
Earnings per share: |
| | | |
| |
| |
| |
Earnings attributable to ordinary equity holders of the parent, US$ - basic | | 6 | | | | | ||||
Earnings attributable to ordinary equity holders of the parent, US$ - diluted |
| 6 |
|
|
|
|
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
4
GDEV Inc.
Unaudited Interim Condensed Consolidated Statement of Changes in Equity
For the six months ended June 30, 2024 and 2023
(in thousands of US$ except number of shares)
|
| |
| |
| |
| |
| |
| |
| |
| |
| Equity |
| |
| | | | Number | | | | Additional | | Share-based | | | | | | | | attributable to | | |
| | | | of shares | | Share | | paid-in | | payments | | Treasury share | | Translation | | Accumulated | | equity holders of | | |
| | Note | | outstanding | | capital | | capital | | reserve | | reserve | | reserve | | deficit | | the Company | | Total |
Balance at January 1, 2024 | | | | | | — | | | | | | — | | | | ( | | ( | | ( |
Profit for the period |
| | | — |
| — |
| — |
| — |
| — |
| — |
| |
| |
| |
Other comprehensive income |
| 24 | | — |
| — |
| ( |
| — |
| — |
| |
| — |
| |
| |
Total comprehensive income for the period |
| | | — |
| — |
| ( |
| — |
| — |
| |
| |
| |
| |
Issue of shares to Cubic Games Studio Ltd’s previous shareholders | | 24 | | | | — | | — | | — | | — | | — | | — | | — | | — |
Share-based payments and exercise of options |
| 29 |
| |
| — |
| |
| |
| — |
| — |
| — |
| |
| |
Repurchase of shares to Cubic Games Studio Ltd’s previous shareholders |
| 24 | | ( |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
Repurchase of shares resulted from Tender offer |
| 24 | | ( |
| — |
| — |
| — |
| ( |
| — |
| — |
| ( |
| ( |
Total transactions with shareholders | | | | ( | | — | | | | | | ( | | — | | — | | ( | | ( |
Balance at June 30, 2024 |
| | | |
| — |
| |
| |
| ( |
| |
| ( |
| ( |
| ( |
|
| |
| |
| |
| |
| |
| |
| |
| Equity |
| |
| |
| | | | Number | | | | Additional | | Share-based | | | | | | attributable to | | Non- | | |
| | | | of shares | | Share | | paid-in | | payments | | Translation | | Accumulated | | equity holders of | | controlling | | |
| | Note | | outstanding | | capital | | capital | | reserve | | reserve | | deficit | | the Company | | interest | | Total |
Balance at January 1, 2023 | | | | | | — | | | | | | | | ( | | ( | | — | | ( |
Profit for the period |
| | | — |
| — |
| — |
| — |
| — |
| |
| |
| — |
| |
Other comprehensive income |
| 24 | | — |
| — |
| |
| — |
| |
| — |
| |
| — |
| |
Total comprehensive loss for the period |
| | | — |
| — |
| |
| — |
| |
| |
| |
| — |
| |
Share-based payments and exercise of options |
| 29 |
| |
| — |
| |
| |
| — |
| — |
| |
| — |
| |
Total transactions with shareholders |
| | | |
| — |
| |
| |
| — |
| — |
| |
| — |
| |
Balance at June 30, 2023 |
| | | |
| — |
| |
| |
| |
| ( |
| ( |
| — |
| ( |
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
5
GDEV Inc.
Unaudited Interim Condensed Consolidated Statement of Cash Flows
For the six months ended June 30, 2024 and 2023
(in thousands of US$)
|
| |
| Six months ended |
| Six months ended |
| | Note | | June 30, 2024 | | June 30, 2023 |
Operating activities | | | | | | |
Profit for the period, net of tax | | | | | | |
Adjustments for: |
|
|
| |
| |
Depreciation and amortization |
| 8,9,10 | | |
| |
Share-based payments expense |
| 29 |
| |
| |
Income from share and put option forfeiture and cancellation | | 14,29 | | ( | | ( |
Share of loss of equity-accounted associates |
| 15 |
| — |
| |
Impairment loss on trade and loan receivables and change in fair value of loans receivable |
| 16,18,28 |
| |
| |
Change in fair value of share warrant obligations and other financial instruments |
| 21,28 |
| ( |
| ( |
Change in fair value of other investments | | 11 | | | | ( |
Unwinding of discount on the put option liability |
| 11,14 |
| |
| |
Trade and loan receivables write-off | | 16,18 | | | | |
Interest income |
| 11 |
| ( |
| ( |
Interest expense |
| 11 |
| |
| |
Dividend income | | 22 | | ( | | ( |
Foreign exchange loss |
| 11 |
| |
| |
Income tax expense |
| 12 |
| |
| |
|
| | | |
| |
Changes in working capital: |
|
|
| |
| |
Decrease in deferred platform commissions |
| 25 |
| |
| |
Increase/(decrease) in deferred revenue | | 25 | | | | ( |
(Increase)/decrease in trade and other receivables |
| 18 |
| ( |
| |
Decrease in trade and other payables |
| 19 | | ( |
| ( |
| | | | ( | | ( |
Income tax paid |
| | | ( |
| ( |
Net cash flows generated from/(used in) operating activities |
| | | |
| ( |
| | | | | | |
Investing activities |
|
|
| |
| |
Acquisition of intangible assets |
| 14 |
| — |
| ( |
Acquisition of property and equipment |
| 13 |
| ( |
| ( |
Acquisition of right-of-use assets |
| 17 |
| ( |
| ( |
Investments in equity accounted associates |
| 15 |
| — |
| ( |
Loans granted |
| 16 |
| ( |
| ( |
Proceeds from repayment of loans |
| 16 | | |
| |
Acquisition of other investments | | 22 | | ( | | ( |
Proceeds from redemption of investments | | 22 | | | | |
Interest received | | 22 | | | | |
Dividends received | | 22 | | | | |
Net cash flows generated from/(used in) investing activities |
| | | |
| ( |
| | | | | | |
Financing activities |
|
|
| |
| |
Payments of lease liabilities |
| 17 |
| ( |
| ( |
Interest on lease |
| 17 |
| ( |
| ( |
Buy-back of the shares resulted from Tender offer |
| 24 |
| ( |
| — |
Payments from exercise of put option liability of Cubic Games Studio Ltd’s previous shareholders |
| 24 | | ( |
| — |
Net cash flows used in financing activities |
| | | ( |
| ( |
Net decrease in cash for the period |
| | | ( |
| ( |
Cash at the beginning of the period |
| | | |
| |
Effect of changes in exchange rates on cash held |
| | | |
| |
Cash at the end of the period | | | | | | |
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
6
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
1.Reporting entity
GDEV Inc. (formerly, Nexters Inc.) (the “Company”) is a company incorporated under the laws of the British Virgin Islands on January 27, 2021, which was formed for the sole purpose of effectuating a merger with Kismet Acquisition One Corp (“Kismet” a Special Purpose Acquisition Company (“SPAC”)).
The mailing and registered address of GDEV Inc.’s principal executive office is 55, Griva Digeni, 3101, Limassol, Cyprus.
GDEV Inc. is the direct parent of Nexters Global Ltd, which was incorporated in Cyprus on November 2, 2009 as a private limited liability company under the Cyprus Companies Law, Cap. 113. Nexters Global Ltd’s registered office is at Faneromenis 107, 6031, Larnaca, Cyprus. Nexters Global Ltd generates the majority of the Company’s revenues.
These interim condensed consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at June 30, 2024 and December 31, 2023 and for the three and six months ended June 30, 2024 and 2023.
The principal activities of the Company and its subsidiaries (the “Group”) are the development and publishing of online games for mobile, web and social platforms. The Group also derives revenue from advertising services. Information about the Company’s main subsidiaries is disclosed in Note 27.
The Company’s ordinary shares and warrants are listed on Nasdaq under the symbols GDEV and GDEVW, respectively. Effective August 28, 2024, the Company effected a
The Group has no ultimate controlling party.
2.Basis of presentation
2.1.Statement of compliance
The accompanying interim condensed financial information that refer to the period ended on June 30, 2024, have been prepared in accordance with the International Accounting Standard (IAS) 34 “Interim Financial Reporting”.
These interim condensed consolidated financial statements were authorized for issue by the Group’s Board of Directors on September 4, 2024.
2.2.Basis of presentation
These interim condensed consolidated financial statements have been prepared based on historical cost basis unless disclosed otherwise and are presented in United States Dollars ($) which is also the functional currency of GDEV Inc. and Nexters Global Ltd. All amounts are presented in thousands, rounded to the nearest thousand unless indicated otherwise.
2.3.Basis of consolidation
The Group controls the entity when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group has:
| ● | Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee), |
7
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
| ● | Exposure, or rights, to variable returns from its involvement with the investee, and |
| ● | The ability to use its power over the investee to affect its returns. |
When the Group has less than a majority of the voting or similar rights of an investee, where control is exercised through voting rights, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
| ● | The contractual arrangement with the other vote holders of the investee, |
| ● | Rights arising from other contractual arrangements, |
| ● | The Group’s voting rights and potential voting rights. |
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of an investee begins when the Group obtains control over the investee and ceases when the Group loses control over the investee. Assets, liabilities, income and expenses of an investee acquired or disposed of during the year are included in the interim condensed consolidated statement of profit or loss and other comprehensive income from the date the Group gains control until the date the Group ceases to control the investee. The financial statements of the investees are prepared for the same reporting period as the parent company, using consistent accounting policies.
All intra-group balances, income, expenses and unrealized gains and losses resulting from intra-group transactions are eliminated in full.
3.Summary of material accounting policies
The accounting policies have been applied consistently throughout the periods presented in these interim condensed consolidated financial statements and were the same as those described in the Group’s consolidated financial statements for the year ended December 31, 2023
4.Accounting judgments, estimates and assumptions
In preparing these interim condensed consolidated financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets, liabilities, incomes and expenses. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those described in the Group’s consolidated financial statements for the year ended December 31, 2023.
Reclassifications to Prior Period Financial Statements and Adjustments
Reclassifications have been made in the Group’s consolidated statement of profit or loss and other comprehensive income of the comparative period to correct an immaterial classification error, with regards to depreciation and amortization expense. As of June 30, 2023, the total balance of
8
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
5.Segment reporting
A.Basis for segmentation
The Group operates through
The following summary describes the operations of the reportable segment:
Reportable segments |
| Operations |
Nexters Global Ltd | | Game development and publishing |
B.Information about reportable segments
Information related to the reportable segment is set out below. Segment Management EBITDA is used to measure performance because management believes that this information is the most relevant in evaluating the results of the respective segments relative to the segments that operate in the same Group and is the primary measure reviewed by our Chief Operating Decision Maker.
The Company defines Management EBITDA as the net income/loss before income tax as presented in the Group’s interim condensed consolidated financial statements in accordance with IFRS, adjusted to exclude (i) goodwill and investments in equity accounted associates’ impairment, (ii) finance income and expenses, (iii) share of loss of equity-accounted associates, (iv) depreciation and amortization, (v) share-based payments expenses, (vi) net effect from recognition of deferred net revenues, (vii) impairment loss on trade receivables and loan receivables, (viii) change in fair value of share warrant obligations and other financial instruments and (ix) certain non-cash or other special items that we do not consider indicative of our ongoing operating performance.
For the six months ended June 30, 2024 |
| Nexters Global Ltd |
| All other segments |
| Total |
Segment revenue |
| |
| |
| |
Segment Management EBITDA |
| |
| ( |
| |
For the six months ended June 30, 2023 |
| Nexters Global Ltd |
| All other segments |
| Total |
Segment revenue |
| |
| |
| |
Segment Management EBITDA |
| |
| ( |
| ( |
For the three months ended June 30, 2024 |
| Nexters Global Ltd |
| All other segments |
| Total |
Segment revenue | | | | |||
Segment Management EBITDA |
| |
| ( |
| |
For the three months ended June 30, 2023 |
| Nexters Global Ltd |
| All other segments |
| Total |
Segment revenue |
| |
| |
| |
Segment Management EBITDA |
| |
| ( |
| |
9
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
C.Reconciliation of information on reportable segment to the amounts reported in the financial statements
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
Profit before income tax |
|
| | | | |
|
|
Management EBITDA for reportable segments |
| | | | | |
| |
Management EBITDA for other segments |
| ( | | ( | | ( |
| ( |
Net effect from recognition of deferred net revenues |
| ( | | | | ( |
| ( |
Depreciation and amortization |
| ( | | ( | | ( |
| ( |
Finance income |
| | | | | |
| |
Finance expenses |
| ( | | ( | | ( |
| ( |
Share-based payments expense1 |
| ( | | ( | | ( |
| ( |
Impairment loss on trade receivables and loans receivable |
| ( | | ( | | ( |
| ( |
Change in fair value of share warrant obligation and other financial instruments |
| | | | | |
| |
Other financial income |
| | | — | | — |
| — |
Share of loss of equity-accounted associates |
| — | | ( | | — |
| — |
Other operating income |
| | | | | |
| |
Consolidated profit before income tax |
| | | | | |
| |
1 The change was made to share-based payment expense for the three and six months of 2023 to show the correct amount of share-based payment expense and Management EBITDA for reportable segments.
We disclose the geographical distribution of our revenue in Note 7. We do not have the ability to track revenue deferral on a by-country basis therefore we applied average deferral rate to in-game purchases disaggregated by geography.
6.Earnings per share
Basic earnings/(loss) per share amounts are calculated by dividing profit/(loss) for the period net of tax attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings/(loss) per share amounts are calculated by dividing the net profit/(loss) for the period net of tax attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the potentially dilutive instruments into ordinary shares.
10
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
The following reflects the earnings and number of shares used in basic and diluted loss per share computations for the three and six months ended June 30, 2024 and 2023:
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
Profit for the period net of tax attributable to ordinary equity holders of the parent for basic earnings | | | | | | | | |
| | | | | | | | |
Weighted average number of ordinary shares for basic earnings per share | | | | | | | | |
Weighted average number of ordinary shares for diluted earnings per share | | | | | | | | |
Earnings per share: | | | | | | | | |
Earnings attributable to ordinary equity holders of the parent, US$ - basic |
|
| |
| |
| | |
Earnings attributable to ordinary equity holders of the parent, US$ - diluted |
|
| |
| |
| |
The Company does not consider the effect of the warrants sold in the Initial Public Offering and private placement in the calculation of diluted loss per share, since they do not have a dilutive effect as at the reporting date as they are out of the money. Deferred exchange shares are also not considered by the Company in calculation of the basic and diluted earnings per share, as the instrument is neither vested at the reporting date nor would have been vested if the reporting date was the end of the contingent period, due to the fact that the vesting conditions in relation to the entire number of
7.Revenue
The following table summarizes revenue from contracts with customers for the three and six months ended June 30, 2024 and 2023:
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
In-game purchases | | | | | | | | |
Advertising |
| |
| |
| |
| |
Total | | | | | | | | |
The following table sets forth revenue disaggregated based on geographical location of our payers:
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
US | | | | | | | | |
Europe |
| |
| |
| |
| |
Asia |
| |
| |
| |
| |
Other |
| |
| |
| |
| |
Total | | | | | | | | |
The amount of revenue recognized at a point in time was
11
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
2024 and
8.Game operation cost
Game operation cost consists of employee benefits expenses, technical support services and the depreciation and amortization of the relevant assets. The following table summarizes game operation cost for the three and six months ended June 30, 2024 and 2023.
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
Employee benefits expenses | | ( | | ( | | ( | | ( |
Technical support services | | ( | | ( | | ( | | ( |
Depreciation and amortization |
| ( |
| ( |
| ( |
| ( |
|
| ( |
| ( |
| ( |
| ( |
Technical support services mainly relate to maintenance and upgrades of the Group’s software applications provided by a third party and costs associated with hosting services.
9.Selling and marketing expenses
The following table summarizes selling and marketing expenses for the three and six months ended June 30, 2024 and 2023:
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
Advertising costs | | ( | | ( | | ( | | ( |
Employee benefits expenses | | ( | | ( | | ( | | ( |
Depreciation and amortization |
| ( |
| ( |
| ( |
| ( |
|
| ( |
| ( |
| ( |
| ( |
10.General and administrative expenses
The following table summarizes general and administrative expenses for the three and six months ended June 30, 2024:
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
Employee benefits expenses | | ( | | ( | | ( | | ( |
Professional fees | | ( | | ( | | ( | | ( |
Insurance liability expense | | ( | | ( | | ( | | ( |
Other operating expenses |
| ( |
| ( |
| ( |
| ( |
Depreciation and amortization | | ( | | ( | | ( | | ( |
|
| ( |
| ( |
| ( |
| ( |
12
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
11.Finance income and finance expenses
The following table summarizes financial income and expenses for the three and six months ended June 30, 2024 and 2023:
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
Interest income under the effective interest method on: | |
| |
| | | | |
- Debt securities - at amortised cost | | | | | | | | |
- Debt securities - at FVOCI | | | | | | | | |
- Loans receivable | | | | | | | | |
- Tax refund | | | | — | | — | | — |
Total interest income arising from financial assets | | | | | | | | |
Dividend income: | | | |
| | | | |
- Equity securities at FVTPL | | | | | | | | |
Financial assets at FVTPL - net change in fair value: | | | | | | | | |
- Mandatorily measured at FVTPL - held for trading | | — | | | | — | | ( |
Finance income ‑ other | | | | | | | | ( |
Financial assets at FVTPL - net change in fair value: | | | | | | | | |
- Mandatorily measured at FVTPL - held for trading | | ( | | — | | ( | | — |
Interest expense | | ( | | ( | | ( | | ( |
Bank charges | | ( | | ( | | ( | | ( |
Unwinding of discount on the put option liability | | ( | | ( | | — | | ( |
Net foreign exchange loss | | ( | | ( | | ( | | ( |
Finance expenses | | ( | | ( | | ( | | ( |
Net finance expense | | ( | | | | | | ( |
12.Taxation
For the six months ended June 30, 2024 and 2023 the Group recognized income tax expense in the amount of
The applicable tax rate used for reconciliation of the effective tax rate below is
(a)Cyprus IP box regime
In 2012, the government of Cyprus introduced a regime applicable to Intellectual Property (IP) (the ‘Old IP Regime’). The provisions of the Old IP regime allow for an
In 2016, the House of Representatives passed amendments to the Income Tax Law (the ‘New IP Regime’) in order to align the current Cyprus IP tax legislation with the provisions of Action 5 of the OECD’s Base Erosion and Profit Shifting (BEPS) project. The amendments apply retroactively, from July 1, 2016, but according to transitional arrangements, companies benefiting from the Old IP Regime could continue to apply its provisions until June 30, 2021, as long as the IP assets either generated income or their development was completed as at June 30, 2016. Therefore, the Group continued to benefit from the Old IP Regime up to June 30, 2021.
Starting from July 1, 2021, the Group applies the provisions of the New IP Regime, which are based on the nexus approach. According to the nexus approach, for an intangible asset to qualify for the benefits of the regime, there needs to be a direct link between the
13
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
qualifying income and the qualifying expenses contributing to that income. An amount equal to
Under both the Old and the New IP Regimes, in case a loss arises instead of profit, the amount of loss that can be set off is limited to
(b)Reconciliation of the effective tax rate
The reconciliation of the effective tax rate to a statutory tax rate is presented in a table below:
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
Profit before income tax | | | | | | | | |
Tax calculated at the applicable tax rate |
| ( |
| ( |
| ( |
| ( |
Effect of different tax rates in other countries |
| ( |
| ( |
| ( |
| ( |
Tax effect of expenses not deductible for tax purposes and non-taxable income |
| ( |
| |
| ( |
| |
Tax effect of deductions under special tax regimes |
| |
| |
| |
| |
Tax effect of tax losses brought forward |
| |
| |
| |
| |
Tax effect of not recognised deferred tax asset regarding the loss carryforward |
| ( |
| ( |
| ( |
| |
Overseas tax in excess of credit claim used during the period |
| ( |
| ( |
| ( |
| ( |
Underprovision of prior year tax liability | | — | | ( | | — | | — |
Income tax expense |
| ( |
| ( |
| ( |
| ( |
Income tax liability as at the balance sheet date is
(c)Uncertainty over the income tax treatment and unrecognized deferred tax asset
Starting from January 1, 2019 the Group has changed its tax reporting principles, judgments and estimates in a few areas including, among others, revenue recognition for in-game purchases and software development costs, which resulted in a substantial amount of revenues related to in-game purchases made by Group’s consumers in 2019 being deferred to 2020 and beyond (see Note 25 for details), as well as software development costs being expensed as incurred. As a consequence, the Company’s major operating subsidiary has booked substantial tax losses in 2019, 2020 and 2021.
Tax losses may be carried forward for five years. Group companies may deduct losses against profits arising during the same tax year. As at June 30, 2024 the Group did not recognize a deferred tax asset of
(d)Prepaid tax
As at June 30 2024, prepaid tax amount relates to overpaid corporate income tax by Cubic Games Studio Ltd. As at December 31, 2023, prepaid tax amount mainly related to overpaid corporate tax of Nexters Global Limited. On February 16, 2024, the tax examination of Nexters Global Ltd was finalised and the refund was approved and used to offset the tax liability for the years 2022 and 2023.
14
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
13.Property and equipment
During the six months ended June 30, 2024, the Group acquired property and equipment with a cost of
14.Intangible assets and goodwill
Intangible assets
During the six months ended June 30, 2024 the Group has
Business combinations and goodwill
Acquisition of game development studios
On January 25, 2022, Company’s Board of directors approved the acquisition of interest in
The Company acquired
On January 27, 2022, the Company entered into a share purchase agreement to acquire
Based on the Share Purchase Agreement at the date of acquisition the sellers received the option to require GDEV Inc. to acquire back the Company’s shares issued or to be issued to the seller as part of the acquisition for a price of US$
The option is recognized on the acquisition date in the amount of
15
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
The Group also recognized tax uncertainties and risks regarding the determination of taxable income, tax positions, and the calculation of tax liabilities resulting from the acquisition of Cubic Games Studio Ltd. The Group considered a range of possible outcomes and probability-weighted amounts associated with the tax risks to determine the expected value of the recognized tax risks in the amount of
The Group also recognized a liability in respect of Cubic Games Studio Ltd in relation to indirect taxes (VAT and withholding/sale taxes), as it considered that there is a present obligation as a result of past events with the probable outflow of resources. The Company recognized the indemnification asset in the amount equal the total liability of the mentioned risks, as such indemnification was provided in the share purchase agreement.
As at December 31, 2023 the amount of the mentioned liability was decreased by
15.Investments in equity accounted associates
MX Capital Ltd
On January 27, 2022, the Company entered into a share purchase agreement to acquire
Further earn-out payments of up to
On the same date, the Company entered into a shareholders’ agreement with the remaining shareholder of MX Capital Ltd, which provided for a put and call options allowing the Company to obtain control over
Also, depending on the achievement of another set of KPIs by MX Capital Ltd, the Company must pay the remaining shareholders an amount not exceeding
The sellers earn-outs (contingent consideration) meet the definition of financial liabilities on the basis that they shall be settled in variable amounts of shares and/or cash depending on the achievement of certain targets by the relevant associates and are recognized within the line Other non-current liabilities in this interim condensed consolidated statement of financial position. As at June 30, 2024 such liabilities are amounted to 0.
The MX Capital group’s loss net of tax for the six months ended June 30, 2024 amounted to
16
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
Castcrown Ltd
On January 27, 2022, the Company entered into a share purchase agreement to acquire approximately
The Castcrown group’s loss net of tax for the six months ended June 30, 2024 amounted to
LEVELAPP Ltd
On October 23, 2023, the Company entered into the share purchase agreement with Applife Limited to acquire 1 ordinary share for the consideration of
Carrying amounts of investments in equity accounted associates
The carrying amount of investments in our consolidated statement of financial position as at December 31, 2023 being equal to
16.Loans receivable
Loan provided to MX Capital Ltd.
As part of the share purchase agreement with MX Capital Ltd, the Company entered into a loan agreement with the associate for a total amount of up to
The second tranche of the loan for an amount of
17
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
Loan provided to Castcrown Ltd.
As part of the share purchase agreement with Castcrown Ltd, the Company entered into an unsecured convertible notes agreement on March 30, 2022 for the amount of up to
Based on the new convertible note agreement signed on February 15, 2024 the Group acquired additional tranche of the Castcrown Ltd’s convertible notes in the amount of
On May 14, 2024 the new convertible loan agreement was signed in the amount of
The fair value of conversion feature amounted to
The loan is accounted at fair value through profit or loss as the criteria for “the contractual terms of the financial asset give rise to cash flows that are solely payments of principal, and interest on the principal amount outstanding” isn’t met as the interest rate on convertible bonds is lower than market rate because the holder of the bond gets the benefit of choosing to take redemption in the form of cash or shares. The contractual cash flows are therefore not solely payments of principal and interest on the principal amount outstanding.
On March 26, 2024 the new loan agreement was signed in amount of
On May 23, 2024 the new loan agreement was signed in amount of
Management has evaluated the remaining undrawn commitments under the loans to Castcrown Ltd and MX Capital Ltd and given that the conditions of the remaining tranches were not expected to be met by the borrowers, the respective traches have not been recognized given that their fair value is
Loan provided to LEVELAPP Ltd.
On June 20, 2023, the Company entered into the loan agreement with LEVELAPP Ltd for
As part of the share purchase agreement with LEVELAPP Ltd, the Company entered into a secured convertible notes agreement on October 23, 2023. The first tranche of the notes amounting to
On February 16, 2024 the Group acquired additional notes of LEVELAPP Ltd amounting to
On June 7, 2024 the Group agreed to move the repayment date of the convertible loan note to October 30, 2025.
18
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
Carrying amount of Loans receivable
|
| June 30, 2024 |
| December 31, 2023 |
Balance at January 1 | | | ||
New loans granted |
| |
| |
Repayments of principal |
| ( |
| ( |
Interest charged |
| |
| |
Foreign exchange (gain) / loss |
| ( |
| ( |
Expected credit losses |
| ( |
| ( |
Write-off of loans receivable |
| ( |
| ( |
Balance at June 30/December 31 |
| |
| |
For the six months ended June 30, 2024,
The change in fair value on the loan receivable to Castcrown Ltd was estimated based on provisions of IFRS 9 on an individual basis as
The amount of ECL on the loan receivable to Castcrown Ltd was accrued based on provisions of IFRS 9 on an individual basis as
The amount of ECL on the loan receivable to MX Capital Ltd was accrued based on provisions of IFRS 9 on an individual basis as
The amount of ECL on the loan receivable to LEVELAPP Ltd was accrued based on provisions of IFRS 9 on an individual basis as
17.Leases
|
| Right-of-use assets |
| Lease liabilities |
Balance at January 1, 2023 |
| |
| |
Additions |
| |
| |
Depreciation | | ( | | — |
Interest expense | | — | | |
Payments |
| — |
| ( |
Effect of foreign exchange rates |
| ( |
| |
Balance at June 30, 2023 |
| |
| |
| | | | |
Lease liabilities - current |
| |
| |
Lease liabilities - non-current |
| |
| |
19
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
|
| Right-of-use assets |
| Lease liabilities |
Balance at January 1, 2024 |
| |
| |
Additions |
| |
| |
Loss on modification |
| |
| |
Depreciation |
| ( |
| — |
Interest expense |
| — |
| |
Payments |
| — |
| ( |
Effect of foreign exchange rates |
| — |
| ( |
Balance at June 30, 2024 |
| |
| |
| | | | |
Lease liabilities - current |
| |
| |
Lease liabilities - non-current |
| |
| |
The amounts reflected in the line General and administrative expenses of this interim condensed consolidated statement of profit or loss and other comprehensive income other than depreciation in relation to leases are presented in the table below:
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
Expense relating to short-term and low-value leases |
| |
| |
| |
| |
Interest expense on lease liabilities |
| |
| |
| |
| |
|
| |
| |
| |
| |
On June 1, 2019 Nexters Global Ltd entered into a new lease agreement for the office spaces with a new owner in Larnaca, Cyprus. On June 1, 2021, the lease was renewed for another
On March 24, 2020 Nexters Global Ltd entered into a new lease agreement over the office spaces in Limassol, Cyprus with a new owner. The lease runs for
On October 4, 2021 GDEV Inc. entered into a new lease agreement over the office spaces in Limassol, Cyprus. The lease original term was
On December 1, 2021 and October 4, 2022 Nexters Global Ltd entered into new lease agreements for vehicles. As the terms of the contracts were the same and were entered into at the same time with the same counterparty, the contracts were accounted for as a single contract. The lease original period was
On August 9, 2022 Nexters Studio Armenia LLC entered into a new lease agreement over the co-working spaces in Yerevan, Armenia, the lease runs for
20
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
On March 1, 2023 Nexters Studio Armenia LLC entered into a new sub-lease agreement over the office spaces in Yerevan, Armenia, the lease runs for
On June 22, 2023 Nexters Studio Armenia LLC entered into a new lease agreement over the warehouse spaces in Yerevan, Armenia, the lease runs for
On July 7, 2023 Nexters Global Ltd entered into a new lease agreement over the office spaces in Limassol, Cyprus with a new owner. The lease runs for
The Group measures the lease liability at the present value of the remaining lease payments as if the acquired lease were a new lease at the acquisition date. The Group measures the right-of-use asset at the same amount as the lease liability.
Other than the office and car leases discussed above the Company has no other material leases.
Total cash outflow for leases recognized in the interim condensed consolidated statement of cash flow is presented below:
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
Сash outflow for leases |
| |
| |
| |
| |
Cash outflow for short-term and low-value leases |
| |
| |
| |
| |
Total cash outflow for leases |
| |
| |
| |
| |
All lease obligations of Cypriot companies are denominated in €. The rate of
18.Trade and other receivables
|
| June 30, 2024 |
| December 31, 2023 |
Trade receivables |
| |
| |
Deposits and prepayments |
| |
| |
VAT refundable | | | | |
Other receivables |
| |
| |
Total |
| |
| |
The Group does not hold any collateral over the trade receivables balances, nor is there any related financing component.
The fair values of trade and other receivables approximate to their carrying amounts as presented above as they are mostly of a short-term nature.
The exposure of the Group to credit risk and impairment losses in relation to trade and other receivables is reported in Note 28 to these interim condensed consolidated financial statements.
The amount of ECL balance in respect of trade and other receivables is
21
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
19.Trade and other payables
|
| June 30, 2024 |
| December 31, 2023 |
Trade payables |
| |
| |
Accrued salaries, bonuses, vacation pay and related taxes |
| |
| |
Provision for indirect taxes | | | | |
Accrued professional services |
| |
| |
VAT payable |
| |
| |
Indirect taxes payables |
| |
| |
Other payables and advances received |
| |
| |
Total |
| |
| |
The Group recognized a liability in respect of Cubic Games Studio Ltd and Nexters Global Ltd of
The exposure of the Group to liquidity risk in relation to financial instruments is reported in Note 28 to the interim condensed consolidated financial statements.
20.Provisions for non-income tax risks
The provisions consist of probable tax risks of Cubic Games Studio Ltd of
It is mainly related to the acquired company’s indirect taxes risks together with the interest and penalties accrued which could be claimed by the relevant tax authorities.
21.Share warrant obligation
The fair value of Private and Public Warrants as at June 30, 2024 and December 31, 2023 is determined using Level 1 inputs and is measured using the quoted market price.
As at June 30, 2024 and December 31, 2023 Warrants’ price was taken from the market. The terms of the Private Warrants are identical to the Public Warrants with the exception that they are not redeemable under the Barrier Call provision, where the Company can call the Public Warrants if the traded Common Stock price equals or exceeds $
22
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
Given the similar terms of the Public Warrants and the Private Placement Warrants, the value of the Public warrants is a adequate point of reference for valuing the Private Placement Warrants and also represent a minimum value of the Private Placement Warrants. Moreover, the Private Placement Warrants actually become Public Warrants, if the Private Placement Warrants are transferred to certain parties who are not designated approved transferees, under the warrant agreement language.
|
| Public Warrants |
| Private Warrants |
| Total |
Balance at January 1, 2023 |
| |
| |
| |
Fair value adjustment |
| ( |
| ( |
| ( |
Balance at June 30, 2023 |
| |
| |
| |
|
| Public Warrants |
| Private Warrants |
| Total |
Balance at January 1, 2024 |
| |
| |
| |
Fair value adjustment |
| ( |
| ( |
| ( |
Balance at June 30, 2024 |
| |
| |
| |
The change in fair value of share warrant obligation is included in the line Change in fair value of share warrant obligation and other financial instruments in the interim condensed consolidated statement of profit or loss and other comprehensive income.
22.Other investments
Other investments consist of the following:
|
| June 30, 2024 |
| December 31, 2023 |
Other investments - current |
|
|
|
|
| |
| | |
| |
| | |
| — |
| | |
|
| |
| |
Other investments - non-current |
|
|
|
|
| | | — | |
| |
| | |
iShares 20+ Year Treasury Bond ETF (TLT) - at fair value through profit or loss |
| |
| |
|
| |
| |
Debt securities classified as fair value through other comprehensive income, denominated in EUR mature in 2032.
Debt securities classified as amortized cost investments are zero-coupon treasury notes or have a coupon rate of
23.Cash
|
| June 30, 2024 |
| December 31, 2023 |
Current accounts |
| |
| |
Bank deposits |
| |
| |
Cash |
| |
| |
23
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
Impairment on cash and cash equivalents has been measured on a 12-month expected loss basis and reflects the short maturities of the exposures. The Group considers that its cash has low credit risk based on the external credit ratings of the counterparties. Therefore,
Currency | | June 30, 2024 |
| December 31, 2023 |
United States Dollars | | | | |
Euro | | | | |
Russian Ruble | | | | |
Armenian Dram | | | | |
Kazakhstani Tenge | | | | |
United Arab Emirates Dirham | | | | |
Total | | | | |
24.Share capital and reserves
Nature and purpose of reserves
Additional paid-in capital
The additional paid-in capital is used to recognize equity contributions from shareholders, Cubic Games Studio Ltd put option, exercise of share-based payments options and changes in fair of other investments measured at FVOCI, see Note 15 for further details.
Cubic Games Studio Ltd’s sellers put option exercise notice
In February, 2024 certain sellers of Cubic Games Studio Ltd, i.e. Fat Slice Ltd, True Solutions Investments Ltd and Orly Holdings Ltd issued repurchase notices as per SPA for the total number of shares
No similar notice was issued for an amount of
Share-based payments reserve
The share-based payments reserve is used to recognize the cost of equity-settled share-based payments provided to employees, including key management personnel and one service provider performing similar functions, as part of their remuneration, see Note 29 for further details.
Treasury share reserve
When shares recognized as equity repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity and the resulting surplus or deficit on the transaction is presented within share premium.
Tender offer
On December 19, 2023 GDEV Inc announced the commencement of a tender offer by the Company to purchase for cash a minimum of
24
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
Shares acquired pursuant to the tender offer will be held by the Company as treasury shares, and will remain available for the Company to issue in the future. In particular, subsequent to the completion of the tender offer, the Company intends to reintroduce all or a portion of the shares tendered in the tender offer into the securities markets with the aim to bolster the trading liquidity of the shares by increasing its public float.
In accordance with the terms and conditions of the tender offer listed above, and based on the final results reported by the Depositary, the Company has accepted for purchase
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations into the presentation currency of these interim condensed consolidated financial statement, see interim condensed consolidated statement of changes in equity.
Share capital
Share capital as at June 30, 2024 and December 31, 2023 consisted from the following:
|
| 2023 |
| 2023 |
| | Number of shares | | US$ |
| | | | |
Ordinary shares of $ |
| |
| — |
|
| |
| — |
| | | | |
Issued and fully paid | | | | |
Balance at January 1, 2023 |
| |
| — |
Issue of shares resulting from options exercise |
| |
| — |
Balance at December 31, 2023 |
| |
| — |
|
| 2024 |
| 2024 |
|
| Number of shares |
| US$ |
| | | | |
Ordinary shares of $ |
| |
| — |
|
| |
| — |
| | | | |
Issued and fully paid |
| |
|
|
Balance at January 1, 2024 | | | | — |
Issue of ordinary shares related to business combination | | | | — |
Issue of shares resulting from options exercise | | | | — |
Repurchase of shares to Cubic Games Studio Ltd’s previous shareholders | | ( | | — |
Buy-back of the shares resulted from Tender offer |
| ( |
| — |
Balance at June 30, 2024 |
| |
| — |
25.Deferred revenue and deferred platform commission fees
Deferred revenue is associated with the portion of in-game purchases revenue that is recognized over time and is expected to be recognized over an estimated average playing period of the paying users.
25
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
The tables below summarize the change in deferred revenue and platform commission fees for the six months ended June 30, 2024 and 2023:
|
| 2023 |
Liabilities (Deferred Revenue) |
|
|
January 1,2023 |
| |
| | |
Deferred during the year |
| |
Released to profit or loss |
| ( |
| | |
June 30, 2023 |
| |
| | |
Current portion |
| |
Non-current portion |
| |
| | |
Assets (Deferred platform commission fees) |
|
|
January 1,2023 |
| |
| | |
Deferred during the year |
| |
Released to profit or loss |
| ( |
| | |
June 30, 2023 |
| |
|
| 2024 |
Liabilities (Deferred Revenue) |
|
|
January 1,2024 |
| |
| | |
Deferred during the year |
| |
Released to profit or loss |
| ( |
| | |
June 30, 2024 |
| |
| | |
Current portion |
| |
Non-current portion |
| |
| | |
Assets (Deferred platform commission fees) |
|
|
January 1,2024 |
| |
| | |
Deferred during the year |
| |
Released to profit or loss |
| ( |
| | |
June 30, 2024 |
| |
The Company uses statistical estimation model to arrive at the average playing period of the paying users for each platform. As at June 30, 2024 and 2023 player lifespan for Hero Wars averages
The estimated player lifespan in the Company’s other games as at June 30, 2024 and 2023 averages
26
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
26.Related party transactions
As at June 30, 2024 the Company’s key shareholders are Andrey Fadeev owning
The transactions and balances with related parties are as follows:
(i)Directors and key management’s remuneration
The remuneration of Directors and other members of key management was as follows:
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
Directors’ remuneration |
| |
| |
| |
| |
-short-term employee benefits |
| |
| |
| |
| |
Other members of key management’s remuneration |
| |
| |
| |
| |
-short-term employee benefits |
| |
| |
| |
| |
-share-based payments |
| |
| |
| |
| |
Total |
| |
| |
| |
| |
(ii)Interest income
|
| Six months ended |
| Six months ended |
| Three months ended |
| Three months ended |
| | June 30, 2024 | | June 30, 2023 | | June 30, 2024 | | June 30, 2023 |
Castcrown Ltd |
| | | | | |
| |
MX Capital Ltd |
| — | | | | — |
| |
|
| | | | | |
| |
(iii)Loans receivable
|
| June 30, 2024 |
| December 31, 2023 |
Loan to Castcrown Ltd - net (Note 17) |
| |
| — |
|
| |
| — |
The amount of ECL in respect of loans receivable from related parties is
27
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
27.List of subsidiaries
Set out below is a list of subsidiaries of the Group. Ownership interest corresponds to voting rights.
|
| Ownership Interest |
| Ownership Interest |
| | June 30, 2024 | | December 31, 2023 |
Name | | % | | % |
Flow Research S.L. |
| |
| |
NHW Ltd | | | | |
Nexters Global Ltd |
| |
| |
Dragon Machines Ltd |
| |
| |
Cubic Games Studio Ltd |
| |
| |
Nexters Studio Armenia LLC |
| |
| |
Nexters Studio Kazakhstan Ltd | | | | |
Nexters Studio Portugal, Unipessoal LDA | | | | |
Nexters Midasian FZ LLC | | | | |
Nexters Finance Ltd |
| |
| |
Nexters Lithuania UAB |
| |
| |
GDEV Investments Ltd | | |
| |
Flow Research S.L.
Flow Research S.L. was incorporated in Barcelona, Spain, on November 10, 2017. The registered office of the company is at CL Fontanella 4, Orihuela Alicante, 03189 Spain. The company’s principal activities are creative design of online games. As at the date of these interim condensed financial statements the company has ceased its operations and is dormant.
NHW Ltd
On April 5, 2021, Nexters Global Ltd acquired
Nexters Global Ltd
Nexters Global Ltd was incorporated in Larnaca, Republic of Cyprus on November 2, 2009. The registered office of the Company is at Faneromenis 107, 6031, Larnaca, Cyprus. The company’s principal activities are game development and publishing.
Dragon Machines Ltd (previously SGBOOST Limited)
Synergame Investment Ltd was incorporated in Limassol, Republic of Cyprus on September 1, 2021. The registered office of the company is Griva Digeni, 55, P.C. 3101, Limassol, Cyprus. The company’s principal activity are game development as well as the provision of independent developers with expertise and funds needed to launch their games and build successful international businesses. The company was renamed on May 12, 2022 to SGBOOST Limited and to Dragon Machines Ltd on July 18, 2023. As at the date of these interim condensed financial statements the company has ceased its operations and is dormant.
Cubic Games Studio Ltd (previously Lightmap Ltd)
The group encompasses
28
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
intellectual property (IP) rights. Cubic Games Ltd and Kadexo Ltd are the publishers of the games Pixel Gun 3D (“PG3D”) and Block City Wars (“BCW”), respectively. The publishers pay
Nexters Studio Armenia LLC
Nexters Studio Armenia LLC was incorporated in Yerevan, Armenia on April 8, 2022. The registered office of the company is Arabkir 23, Yerevan. The company’s principal activities are game development and support.
Nexters Studio Kazakhstan Ltd
Nexters Studio Kazakhstan Ltd was incorporated in Astana, Republic of Kazakhstan on May 5, 2022. The registered office of the company is Dinmuhamed Konaev Street, 14, Astana. The company’s principal activities are game development and support.
Nexters Studio Portugal, Unipessoal LDA
Nexters Studio Portugal, Unipessoal LDA was incorporated in Lisboa, Portugal on February 2, 2023. The registered office of the company is Avenidas Novas 1050 046 Lisboa. The company’s principal activities are game support and consulting services. As at the date of these interim condensed financial statements the company has ceased its operations and is dormant.
Nexters Finance Ltd
Nexters Finance Ltd was incorporated in Limassol, Republic of Cyprus on April 7, 2023. The registered office of the Company is at 28 Oktovriou 313, 3105, Limassol, Cyprus. The company’s principal activities are financial activities such as provision of loans.
Nexters Midasian FZ LLC
Nexters Midasian FZ LLC was incorporated in Ras Al Khaimah Economic Zone in UAE on January 24, 2023. As of the date of these financial statements the company has not yet started its active operations.
Nexters Lithuania UAB
Nexters Lithuania UAB was incorporated in Vilnus, Lithuania on June 27, 2023. The registered office of the company is Didžioji, 18, Vilnius. As of the date of these financial statements the company has not yet started its active operations.
GDEV Investments Ltd (previously Tourish Limited)
Tourish Limited was acquired in Nicosia, Cyprus on May 29, 2023. The registered office of the company is Georgiou Griva Digeni, 113, Astromeritis, 2722, Nicosia, Cyprus. As of the date of these financial statements the company has not yet started its active operations. The company was renamed GDEV Investments Ltd on October 26, 2023.
28.Financial instruments - fair values and risk management
A.Accounting classifications
The following table shows the carrying amounts of financial assets and financial liabilities as at June 30, 2024 and December 31, 2023.
The Company’s trade and other receivables, prepaid tax, indemnification asset and related tax liabilities, cash and cash equivalents, treasury notes recorded at amortized cost and trade and other payables approximate their fair value due their short-term nature.
29
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
Company’s investments, current and non-current (other than the treasury notes) are accounted at fair value (either through profit and loss or through OCI). Loans receivable current and non-current are a reasonable approximation of their fair value as they have been impaired to their expected return.
Financial assets are as follows:
|
| June 30, 2024 |
| December 31, 2023 |
Financial assets at amortized cost |
|
|
|
|
Trade receivables |
| |
| |
Cash |
| |
| |
Loans receivable | | | | |
Other investments - current |
| |
| |
Other investments - non-current |
| |
| — |
Total |
| |
| |
|
| June 30, 2024 |
| December 31, 2023 |
Financial assets measured at fair value | |
|
|
|
Other investments - current - fair value through profit or loss - Level 1 | | | | |
Other investments - non-current - fair value through other comprehensive income - Level 1 | | | | |
Other investments - non-current - fair value through profit or loss - Level 1 | | | | |
Total |
| |
| |
Financial liabilities are as follows:
|
| June 30, 2024 |
| December 31, 2023 |
Financial liabilities not measured at fair value |
|
|
|
|
Trade and other payables |
| |
| |
Total |
| |
| |
|
| June 30, 2024 |
| December 31, 2023 |
Financial liabilities measured at fair value |
|
|
|
|
Put option liability - Level 3 |
| |
| |
Share warrant obligations - Level 1 |
| |
| |
Total |
| |
| |
B.Financial risk management
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and in the Group’s activities.
The Group has exposure to the following risk arising from financial instruments:
(i) | Credit risk |
Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the reporting date. The Group’s credit risk arises from Trade and other receivables, Loans receivable and
30
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
Other investments. As at June 30, 2024 and December 31, 2023 the largest debtor of the Group constituted
Credit risk related to trade receivables is considered insignificant, since almost all sales are generated through major companies, with consistently high credit ratings. These distributors pay the Group monthly, based on sales to the end users. Payments are made within 3 months after the sale to the end customer. The distributors take full responsibility for tracking and accounting of end customer sales and send to the Group monthly reports that show amounts to be paid. The Group does not have any material overdue or impaired accounts receivable.
Credit risk related to Other investments is also insignificant due to the fact that they are represented by government bonds and US treasury notes which are rated AAA based on Fitch’s ratings.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
|
| June 30, 2024 |
| December 31, 2023 |
Loans receivables |
| |
| |
Trade receivables |
| |
| |
Cash | | | | |
Other investments - current | | | | |
Other investments - non-current |
| |
| |
Expected credit loss assessment for corporate customers as at June 30, 2024 and December 31, 2023
The Group allocates each exposure a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, audited financial statements, management accounts, and cash flows projections) and applying experienced credit judgment.
Loan receivables
Loan receivables are provided to associates and the Company’s employees. The Group considers that both of its loans provided to associates have increased credit risk based on the weak recent performance of associates due to general market conditions. As a result, the specific provisions for ECL were booked in respect of the loans to both associates. The ECL and change in fair value balance in respect of Loan receivables is
Trade and other receivables
The ECL allowance in respect of Trade and other receivables is determined on the basis of the lifetime expected credit losses (“LTECL”). The Group uses the credit rating for each of the large debtors where available or makes its own judgment as to the credit quality of its debtors based on their most recent financial reporting or the rating assigned to their country of incorporation. After assigning the credit rating to each of the debtors the Group determines the probability of default (“PD”) and loss given default (“LGD”) based on the data published by the internationally recognized rating agencies. The determined amounts of allowances for ECL for each of the debtors are then adjusted for the forecasted macroeconomic factors, which include the forecasted unemployment rate in each of the countries where the debtors are incorporated and forecasted growth rate of the global gaming market from publicly available sources. The amount of ECL in respect of trade and other receivables is
31
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
The following table provides information about the exposure to credit risk and ECL for trade receivables:
|
| |
| Weighted |
| Gross |
| |
| |
| | Equivalent to external | | average | | carrying |
| Impairment loss |
| Credit |
December 31, 2023 | | credit rating | | loss rate | | amount | | allowance | | Impaired |
Low risk | | Aaa – A3 | | % | | ( | | No | ||
Loss | | Ca-C – Aa2 | | % | | ( | | Yes | ||
|
| |
| | | | | ( | | |
|
| |
| Weighted |
| Gross |
| |
| |
| | Equivalent to external | | average | | carrying |
| Impairment loss |
| Credit |
June 30, 2024 | | credit rating | | loss rate | | amount | | allowance | | Impaired |
Low risk | | Aaa – A3 | | % | | | ( | | No | |
Loss | | Ca-C – Aa2 | | % | | | ( | | Yes | |
| | | | | | | | ( | | |
Cash and cash equivalents
The cash are held with financial institutions, which are rated BB- to A+ based on Fitch’s ratings.
(ii) | Liquidity risk |
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s objective when managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group monitors the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other payables over the next 90 days.
Excess cash is invested only in highly liquid triple A rated securities (mainly US treasury notes, bonds and ETFs).
The following are the contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted and include contractual interest payments.
December 31, 2023 |
| Carrying amounts |
| Contractual cash flows |
| 3 months or less |
| Between 3‑12 months |
| Between 1‑5 years |
Non‑derivative financial liabilities |
|
|
|
|
|
|
|
|
|
|
Lease liabilities |
| |
| |
| |
| |
| |
Trade and other payables |
| |
| |
| |
| — |
| — |
|
| |
| |
| |
| |
| |
December 31, 2023 |
| Carrying amounts |
| Contractual cash flows |
| 3 months or less |
| Between 3‑12 months |
| Between 1‑5 years |
Derivative financial liabilities |
|
|
|
|
|
|
|
|
|
|
Share warrant obligation |
| |
| |
| — |
| — | | |
Put option liability |
| |
| |
| |
| |
| — |
|
| |
| |
| |
| |
| |
32
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
June 30, 2024 |
| Carrying amounts |
| Contractual cash flows |
| 3 months or less |
| Between 3‑12 months |
| Between 1‑5 years |
Non‑derivative financial liabilities | |
| |
| |
| |
| |
|
Lease liabilities |
| |
| |
| |
| |
| |
Trade and other payables |
| |
| |
| |
| — |
| — |
|
| |
| |
| |
| |
| |
June 30, 2024 |
| Carrying amounts |
| Contractual cash flows |
| 3 months or less |
| Between 3‑12 months |
| Between 1‑5 years |
Derivative financial liabilities | |
| |
| |
| |
| |
|
Share warrant obligation |
| |
| |
| — |
| — |
| |
Put option liability |
| |
| |
| |
| — |
| — |
|
| |
| |
| |
| — |
| |
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and/or equity prices will affect the Group’s income or the value of its financial instruments. The Company is not exposed to any equity risk.
The objective of the market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
| a. | Currency risk |
Currency risk is the risk that the values of and cash flows associated with financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not the Company’s functional currency. The Group is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Euro, the Russian Ruble, Armenian Dram, Kazakhstani Tenge and United Arab Emirates Dirham. The Group’s management monitors the exchange rate fluctuations on a continuous basis and acts respectively.
33
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
The Group’s exposure to foreign currency risk was as follows:
|
| |
| |
| |
| |
| United Arab |
December 31, 2023 | | Euro | | Russian Ruble | | Armenian Dram | | Kazakhstani Tenge | | Emirates dirham |
Assets |
|
|
|
|
|
| | |
|
|
Loans receivable |
| |
| — |
| | | |
| — |
Trade and other receivables |
| |
| — |
| | | |
| — |
Cash |
| |
| |
| | | |
| |
|
| |
| |
| | | |
| |
Liabilities |
| |
| |
| | | |
| |
Lease liabilities |
| ( |
| — |
| ( | | — |
| — |
Trade and other payables |
| ( |
| — |
| ( | | ( |
| — |
|
| ( |
| — |
| ( | | ( |
| — |
Net exposure |
| |
| |
| ( | | |
| |
|
| |
| |
| | | | | United Arab |
June 30, 2024 | | Euro | | Russian Ruble | | Armenian Dram | | Kazakhstani Tenge | | Emirates dirham |
Assets |
|
|
|
|
|
| |
| |
|
Loans receivable |
| |
| — |
| — | | | | — |
Trade and other receivables |
| |
| — |
| | | | | — |
Cash |
| |
| |
| | | | | |
|
| |
| |
| | | | | |
Liabilities |
| |
| |
| | | | | |
Lease liabilities |
| ( |
| — |
| ( | | — | | — |
Trade and other payables |
| ( |
| — |
| ( | | ( | | ( |
|
| ( |
| — |
| ( | | ( | | ( |
Net exposure |
| |
| |
| ( | | | | |
Sensitivity analysis
A reasonably possible
|
| Strengthening of |
| Weakening of US$ |
December 31, 2023 | | US$ by 10% | | by 10% |
Euro |
| ( |
| |
Russian Ruble |
| ( |
| |
Armenian Dram |
| |
| ( |
Kazakhstani Tenge | | ( | | |
|
| ( |
| |
|
| Strengthening of |
| Weakening of US$ |
June 30, 2024 | | US$ by 10% | | by 10% |
Euro |
| ( |
| |
Russian Ruble |
| ( |
| |
Armenian Dram | | | | ( |
Kazakhstani Tenge | | ( | | |
|
| ( |
| |
34
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
b. | Interest risk |
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates is minimal as it does not have long-term debt obligations with floating interest rates or material fixed-rate debt instruments carried at fair value.
C.Measurement of fair values
The transfer from Level 3 to Level 1 occurred in 2023 for the valuation of Public and Private warrants which were valued using Level 3 inputs (while from Level 1 to Level 3 in 2022). Due to the fact that the Company’s securities were suspended for trading as at December 31, 2022 and therefore the observable market price was not available, while as at December 31, 2023 and June 30, 2024 management used market price following the resumption of trading of the Company’s securities on March 16, 2023.
The following table shows a reconciliation from the opening balances to the closing balances for financial liabilities based on Level 3 fair values, except for share warrant liability, which fair valuation was calculated based on Level 3 inputs as at opening balance of year 2023 and 2024.
|
| Share warrant |
| Put option |
| Other non-current |
| | obligation (Note 4) | | liability (Note 4) | | liabilities |
Balance at January 1, 2023 | | | | | | |
Net change in fair value |
| ( |
| |
| ( |
Balance at June 30, 2023 |
| |
| |
| |
|
| Share warrant |
| Put option |
| Other non-current |
| | obligation (Note 4) | | liability (Note 4) | | liabilities |
Balance at January 1, 2024 | | | | | | — |
Net change in fair value |
| ( |
| |
| — |
Cubic Games Ltd’s put option exercise | | — | | ( | | — |
Balance at June 30, 2024 |
| |
| |
| — |
As at December 31, 2023 and as at June 30, 2024 there were
29.Share-based payments
In 2016 the Company adopted a Long-Term Incentive Plan (“LTIP”). Under the LTIP key employees and deemed employees (individuals providing similar personal services) rendered services to the Group in exchange for share options (further referred to as “options”). Within the LTIP several tranches of share options for Nexters Global’s Class A shares and Class B shares were issued as stated below.
In addition to the LTIP, in November 2021 the Company approved its 2021 Employee Stock Option Plan (the “ESOP”). Under the ESOP, key staff employed by the Group and our independent non-executive directors have rendered services in exchange for equity instruments.
The Company granted a number of stock options under the ESOP, including:
| ● | Newly granted stock options; |
| ● | Stock options, which represent modification of the outstanding options (see Modified complex options further below). |
35
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
The common condition for both of these stock option types is that they have service condition. The Group’s management believes that all employees, which received share-based compensation will continue to contribute to the Group’s projects and/or be employed by the Group during the respective vesting periods.
Below is the descriptions of the options granted:
Type of options |
| Grant Date |
| No. of options outstanding |
| Vesting period |
| Vesting conditions |
ESOP options |
| November 2021, depending on the employee |
| | * | 2021-2026 |
| Service condition |
LTIP - Modified Class B complex vesting options |
| January 1, 2019 |
| | * | 2022-2026 |
| Service condition |
Total share options outstanding as at June 30, 2024 | | | | | | — |
| — |
| * | Options granted refer to GDEV Inc. shares (considering reverse share split) |
We classified these share-based payment transactions as equity-settled whereby the Group receives services in exchange for its own equity instruments. We recorded share-based payments expense in general and administrative expenses, game operation cost and selling and marketing expenses of our interim condensed consolidated statement of profit or loss and other comprehensive income.
The table below summarizes the share-based payments expense for the six months ended June 30, 2024 and 2023:
| | Six months ended | | Six months ended | | Three months ended | | Three months ended |
|
| June 30, 2024 |
| June 30, 2023 |
| June 30, 2024 |
| June 30, 2023 |
Class B complex vesting |
| |
| |
| |
| |
Employee stock option plan |
| |
| |
| |
| |
Total recorded expenses |
| |
| |
| |
| |
therein recognized: |
| |
| |
| |
| |
within Game operation cost |
| — |
| |
| — |
| |
within Selling and marketing expenses |
| |
| |
| |
| |
within General and administrative expenses |
| |
| |
| |
| |
In relation to the share-based payment expense for the six months ended June 30, 2024 and 2023 we recognized the increase in Other reserves of
The table below summarizes the number of outstanding share options at the beginning and the end of six months ended June 30, 2024:
|
| Employee |
| Class B complex |
| | stock option | | vesting - related to |
| | plan | | GDEV Inc shares |
Outstanding at the beginning of the period 2024 (units) | | | | |
Exercised during the period (units) | | ( |
| ( |
Forfeited | | ( |
| — |
Outstanding at June 30,2024 (units) | | |
| |
During the six months ended June 30, 2024
Stock options granted in 2021 (ESOP options)
The ESOP stock options have only the service condition.
36
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
We have estimated the fair value of granted awards using Black-Scholes-Merton pricing model taking into account the terms and conditions on which the options were granted.
The following table presents fair value per one option and related assumptions used to estimate the fair value at the grant date:
Evaluation date (grant date) |
| November 16-30, 2021 |
Vesting period |
| |
Share market price, US$ |
| From |
Strike (exercise) price, US$ |
| |
Expected volatility |
| |
Dividend yield |
| |
Risk-free interest rate |
| |
Average grant-date FV of one option, US$ |
|
As at December 31, 2023
As at June 30, 2024
Modified complex options
Under the LTIP adopted in 2016, the Company granted Class B share options on January 1, 2019 with a service condition and a performance-based non-market vesting condition (net income thresholds per management accounts). The contractual term of the options was
For the purposes of the valuation each performance condition threshold was treated as a separate option with a separate valuation of the vesting period.
The following table presents fair value of options and related parameters used to estimate the fair value of our options at the grant date and probability of vesting:
Evaluation date (grant date) |
| January 1, 2019 |
Equity value, US$ mln |
| |
Expected volatility |
| |
Dividend yield |
| |
Proxy net income indicator |
| |
Discount for Lack of Marketability* |
| |
Total FV for |
|
*- | applied to the result of fair value estimation. |
**- | total FV of |
Strike price for the above-mentioned option at the beginning of 2021 was US$
37
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
As part of the new ESOP, the Company modified the complex options in November 2021. Under the modified program for a portion of the options the non-market performance condition was eliminated and they include only the service condition. For the remaining options the performance conditions were modified such that only the non-market performance targets were modified. The Company considered the modification to be beneficial to the recipients.
As at December 31, 2023 management reviewed the assessment of future achievement of non-market performance targets and the remaining grant-date fair value was applied to the revised number of share options.
As at December 31, 2023
As at March 31, 2024
30.Commitments and contingencies
Arbitration with MX Capital
On June 30, 2023 MX Capital Ltd together with one of its subsidiaries (“the Claimants”) filed with the London Court of International Arbitration the request for arbitration against the Company. In the request of arbitration the Claimants claim that the Company has breached certain clauses of the shareholder agreement between the Company and the shareholders of MX Capital Ltd. Around the same date MX Capital Ltd served with the District Court of Limassol (Cyprus) a legal claim with the content substantially similar to the request for arbitration. As of the date of these interim condensed financial statements both legal actions referred to above are in the nascent phase and their effects and outcomes cannot be reliably estimated, though the Company intends to rigorously defend its interest.
Taxation
Although the Company generally is not responsible for indirect taxes (VAT and withholding sales taxes) generated on games accessed and operated through third-party platforms, we are responsible for collecting and remitting applicable sales, value added, use or similar taxes for revenue generated on games accessed and operated on our own platforms and/or in countries where the law requires the game publishers to pay such taxes even if games are made available for users through third-party platforms. Furthermore, an increasing number of U.S. states have considered or adopted laws that attempt to impose tax collection obligations on out-of-state companies. This is also the case in respect of the European Union, where value added taxes or digital services taxes were or may be imposed on companies making digital sales to consumers within the European Union. In addition, as taxation of IT industries is rapidly developing there is a risk that various tax authorities may interpret certain agreements or tax payment arrangements differently than the Company (including identification of the taxpayer and determination of the tax residency).
The Company believes that these interim condensed consolidated financial statements reflect our best estimate of tax liabilities and uncertain tax positions, which are appropriately accounted for and/or disclosed in these interim condensed consolidated financial statements. In respect of the above risks, we consider them to be reasonably possible of being materialised, however, the potential financial effects thereof cannot be presently reliably estimated.
38
GDEV Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of US$ unless stated otherwise)
31.Russian Geopolitical and Economic Risks
As a result of the military actions in Ukraine, a number of governments, including those of the United States, United Kingdom and European Union, imposed unprecedented sanctions on specified persons and entities in Russia. While the situation remains highly fluid and additional sanctions are possible, neither we, nor any of our subsidiaries are currently subject to any sanctions that have been imposed. Nevertheless, as result of the ongoing conflict in Ukraine, many U.S. and other multi-national businesses across a variety of industries, including consumer goods and retail, food, energy, finance, media and entertainment, tech, travel and logistics, manufacturing and others, have indefinitely suspended their operations and paused all commercial activities in Russia and Belarus. For example, Apple and Google, two of the primary platforms that distribute the Company’s games, have suspended their respective digital wallet and mobile payment services, Apple Pay and Google Pay, in relation to credit cards issued by Russian financial institutions that are the subject of sanctions. Players who access our games via these platforms in Russia may therefore be disconnected from the primary means to make in-game purchases. Based on our current geographical distribution of Bookings, management believes that the latest geopolitical developments will have certain residual negative effects on GDEV Inc.’s future financial performance, limited to the share of Bookings deriving from the markets of the former Soviet Union (FSU), which stood at
The Group does not expect any material impact of the mentioned risks in 2024 and beyond.
32.Events after the reporting period
Shut down of the subsidiaries
As at the date of issue of these interim condensed consolidated financial statements GDEV Inc. the sole Member of Dragon Machines Ltd has an intention to close all the projects currently being developed by it. The management is in the process of shutting down Nexters Studio Portugal, Unipersonal LDA and Flow Research S.L. The management has assessed the effect of shutting down the mentioned subsidiaries as not material for the Group.
Reverse share split
On August 21, 2024 the Group announced a one-for-
39