GlobeNewswire Inc | Sep 22, 2021 07:00AM EDT

September 22, 2021

LIMASSOL, Cyprus, Sept. 22, 2021 (GLOBE NEWSWIRE) -- Nexters Inc. (NASDAQ: GDEV), an international game development company which strives to introduce the joy of core gaming experiences to casual players, today announced its unaudited financial and operational results for the first half year and second quarter ended June 30, 2021.

First Half And Second Quarter 2021 Highlights

-- Record high bookings of $268 million for H1 2021 and $154 million for Q2 2021, with 40% YoY growth in Q2 -- Record high quarterly revenues in Q2 2021 of $110 million, up 73% YoY -- Record high monthly paying users of 395 thousand in Q2 2021, with 43% YoY growth -- Record high daily active users of 1.2 million in Q2 2021, with 35% YoY growth -- Record high marketing investment of $155 million in H1 2021 into expanding the player base -- Chibi Island, a new mobile casual game, was officially released on iOS and Android

We are very happy to kick off our life as a public company with such a strong set of financial and operating results, Nexters Co-founder and CEO Andrey Fadeev said. Our fantastic team has made an enormous effort, which led to Nexters becoming as we believe the fastest growing gaming company among public peers. Our record-high bookings and other achievements in the first half of this year inspire us to proceed delivering great games to players around the world. After becoming the public company, we now have all the full set of instruments to execute our growth strategy.

First Half 2021 financial and operational performance

In the first half of 2021 our revenue increased by $74 million (or 61%) year over year and amounted to $196 million, driven mainly by an increase in bookings in the amount of $60 million.

Platform commissions increased by 51% in the first half 2021 compared with the same period in 2020, driven primarily by the increase in revenues.

Game operation costs and general and administrative expenses (hereinafter referred to as Operation and G&A expenses) expenses increased by $8 million (or approximately 2 times) in the first half of 2021 vs. the same period in the prior year to reach $16 million. The increase was primarily due to:

-- Preparation of the Company for its listing on the NASDAQ, which resulted in substantial legal and consulting expenses incurred in the first half of 2021, and increased personnel and related share based compensation expenses resulting from new personnel hired at the end of 2020 and over the course of 2021; -- Increase in personnel and other expenses resulting from the increase in the scale of the Groups operations.

Selling and marketing expenses in the first half 2021 increased by $82 million (more than doubling year over year), and amounted to $155 million. The increase was due to the massive scaling of the investments into new players.

Net loss in the first half of 2021 amounted to $32 million vs. net income of $4 million in the respective period of 2020. The net loss in the first half of 2021 originated primarily from the substantial increase in marketing investments, increase in Operation and G&A expenses as well as platform commissions, and was partially offset by an increase in revenues.

Our substantial investments in marketing in 2021 resulted in a substantial increase in monthly paying users (MPU), which reached 356 thousand in the first half of 2021 vs. 283 thousand in the respective period of 2020, a growth of 26%.

Average bookings per paying user (ABBPU) remained relatively stable in the first half of 2021, at $120 in comparison to $118 in the respective period of 2020. Though we witnessed a generally increasing trend in our ABBPUs over the past several quarters, the stabilization of the ABPPU in the first half of 2021 vs. the respective period in the prior year was due to the substantial inflow of new paying users in the first half of 2021 and especially in Q2 2021, as paying users tend to have lower ABPPUs at the inception of the paying cohort.

The substantial increase in MPUs accompanied by a relatively stable level of ABPPU resulted in record high bookings of $268 million in the first half of 2021, which grew 29% year over year from $208 million in the first half of 2020.

Second Quarter 2021 financial and operational performance

In the second quarter of 2021 our revenue increased by $46 million (or 73%) year over year and amounted to $110 million, driven predominantly by an increase in bookings in the amount of $44 million.

Platform commissions increased by 60% in the second quarter of 2021 compared with the same period in 2020, driven primarily by the increase in revenues.

Operation and G&A expenses increased by $5 million (or 2.3 times) in the second quarter of 2021 vs. the same period in the prior year to reach $9 million. The increase was primarily due to same factors mentioned above in respect of the first half of 2021:

-- Preparation of the Company for its listing on the NASDAQ; -- Increase in personnel and other expenses resulting from the increase in the scale of the Groups operations.

Selling and marketing expenses in Q2 2021 increased by $60 million, or 193% year over year, and amounted to $91 million. The increase was due to the massive scaling of the investments into new players.

Net loss in the second quarter of 2021 amounted to $20 million vs. net income of $10 million in the respective period of 2020. The net loss in the second quarter of 2021 originated primarily from the substantial increase in marketing investments, increase in Operation and G&A expenses as well as platform commissions, and was partially offset by the increase in revenues.

Our substantial investments in marketing in 2021 resulted in a substantial increase in MPUs, which reached a record high of 395 thousand in the second quarter of 2021 vs. 277 thousand in the respective period of 2020, a growth of 43%.

A similar growth has been achieved in monthly active users (MAU) with a 42% increase year over year, reaching 7.6 million in the second quarter of 2021 after 5.3 million MAU in the prior year period. While the amount of daily active users reached its all-time record of 1.2 million in the second quarter of 2021, which is a 35% growth compared to the same period last year.

ABBPU remained relatively stable in the second quarter of 2021, at $125 in comparison to $128 in the respective period of 2020, which we attribute to the factors mentioned above in respect of the first half of 2021.

The substantial increase in MPUs accompanied by a relatively stable level of ABPPU resulted in record high quarterly bookings of $154 million in the second quarter of 2021, which grew 40% year over year from $110 million in the second quarter of 2020.

Recent developments

Closing of the business combination

On August26, 2021 the Company consummated the previously announced business combination with Nexters Global Ltd. and Kismet Acquisition One Corp. Following the closing of the business combination, the Companys ordinary shares and warrants started trading on the Nasdaq Global Market under the symbols GDEV and GDEVW, respectively. Please refer to the Form 20-F filed on the August 26, 2021 with the Securities and Exchange Commission (the SEC) for the details of the transaction.

Official Release of Chibi Island

On July 28, 2021 Nexters officially released Chibi Island, a new farm and adventure mobile game, after a successful soft launch in December 2020. Chibi Island has been in live testing since its soft launch with a limited set of features and content. It has been continuously updated since then with improvements to the game coming via player feedback and analysis of internal game performance metrics. Chibi Island succeeded Island Experiment, a casual farm game first launched on social media channels back in 2014, with nearly 30 million installs to date.

Interim Condensed Consolidated Statement of Financial Position

As at June 30, 2021, as at March 31, 2021 and December 31, 2020(in thousands of US$)

NOTE June 30, March 31, December 2021 2021 31,2020ASSETS Non-current assets Property and equipment 946 713 171Intangible assets 128 129 76Goodwill 1,473 1,465 ?Long-term deferred platform commission 105,227 95,117 89,562feesRight-of-use assets 1,921 2,275 1,044Deferred tax asset 17 ? ?Total non-current assets 109,712 99,699 90,853Current assets Trade and other receivables 64,882 45,845 32,974Loans receivable 282 ? 8Other current assets 5 Cash and cash equivalents 40,898 99,912 84,557Prepaid tax 3,083 3,074 3,137Total current assets 109,145 148,836 120,676Total assets 218,857 248,535 211,529 LIABILITIES AND SHAREHOLDERS' EQUITY Equity Share capital 27 27 27Other reserves 8,112 8,329 8,289Accumulated deficit (193,500) (123,289) (111,451)Total equity (185,361) (114,933) (103,135)Non-current liabilities Lease liabilities - non-current 568 499 818Long-term deferred revenue 105,597 90,774 78,985Total non-current liabilities 106,165 91,273 79,803Current liabilities Short-term loans ? 46 49Lease liabilities - current 1,274 1,593 293Trade and other payables 36,424 40,370 19,502Tax liability 534 391 306Deferred revenue 259,821 229,795 214,711Total current liabilities 298,053 272,195 234,861Total liabilities 404,218 363,468 314,664Total liabilities and shareholders' equity 218,857 248,535 211,529

Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive IncomeFor the three months ended March 31, 2021 and March 31, 2020 and three and six months ended June 30, 2021 and June 30, 2020(in thousands of US$)

Six months ended Three months ended Three months June 30, June 30, ended March 31, 2021 2020 2021 2020 2021 2020Revenue 196,333 122,035 109,644 63,260 86,689 58,775Costs and expenses, excluding depreciation andamortizationCost of revenue: Platform commissions (53,990) (35,774) (29,510) (18,418) (24,480) (17,356)Game operation cost (8,159) (7,251) (4,222) (3,612) (3,937) (3,639)Selling and marketing (155,472) (73,353) (90,745) (30,973) (64,727) (42,380)expensesGeneral andadministrative (7,638) (563) (4,829) (305) (2,809) (258)expensesTotal costs andexpenses, excluding (225,259) (116,941) (129,306) (53,308) (95,953) (63,633)depreciation andamortizationDepreciation and (1,068) (232) (609) (150) (459) (82)amortization(Loss)/income from (29,994) 4,862 (20,271) 9,802 (9,723) (4,940)operationsNet finance (costs)/ (1,247) (354) 633 816 (1,880) (1,170)income(Loss)/income before (31,241) 4,508 (19,638) 10,618 (11,603) (6,110)income taxIncome tax expense (554) (389) (370) (209) (184) (180)(Loss)/income for the (31,795) 4,119 (20,008) 10,409 (11,787) (6,290)period net of taxOther comprehensive (250) 2 (199) 3 (51) (1)(loss)/incomeTotal comprehensive(loss)/income for the (32,045) 4,121 (20,207) 10,412 (11,838) (6,291)period net of tax (Loss)/earnings per share:Basic and diluted(loss)/earnings per (1,590) 206 (1,000) 520 (589) (315)share, US$

Interim Condensed Consolidated Statement of Cash FlowsFor the three months ended March 31, 2021 and March 31, 2020 and three and six months ended June 30, 2021 and June 30, 2020

Note Six months ended Three months Three months June 30, ended June 30, ended March 31, 2021 2020 2021 2020 2021 2020Operating activities (Loss)/income for the (31,795) 4,119 (20,008) 10,409 (11,787) (6,290)periodAdjustments for: Depreciation and 1,068 232 609 150 459 82amortizationShare-based payments 22 705 24 315 12 390 12expenseNet finance costs/(income) excluding bank 1,128 273 (697) (854) 1,825 1,127chargesIncome tax expense 10 554 389 370 209 184 180 (28,340) 5,037 (19,411) 9,926 (8,929) (4,889)Changes in working capital: (Increase) indeferred platform 18 (15,665) (25,950) (10,110) (14,101) (5,555) (11,849)commissionsIncrease in deferred 18 71,722 85,840 44,849 47,140 26,873 38,700revenue(Increase) in trade and (31,602) (14,677) (18,299) (2,323) (13,303) (12,354)other receivablesIncrease/(decrease) in 14,721 (3,535) (4,782) (638) 19,199 (2,897)trade and other payables 39,176 41,678 11,658 30,078 27,214 11,600Income tax (paid)/ (30) - 34 - (64) -receivedInterest paid - (7) - (7) Net cash flows generatedfrom/(used in) operating 10,806 46,708 (7,719) 39,997 18,221 6,711activities Investing activities Acquisition of intangible (90) - (32) - (58) -assetsAcquisition ofproperty and 12 (449) (49) (323) (37) (126) (12)equipmentAcquisition ofsubsidiary net of 3 (1,240) - (23) - (1,217) -cash acquiredProceeds from 13 8 179 - 179 8 -repayment of loansLoans granted 13 (282) - (282) - - -Net cash flows (used in)/ (2,053) 130 (660) 142 (1,393) (12)from investing activities Financing activities Payments of lease 14 (940) (242) (390) (142) (550) (100)liabilitiesInterest on lease 14 (50) (27) (26) (25) (24) (2)Repayment of 17 (49) (3,980) (49) 6 - (3,986)borrowingsDividends paid anddistribution to 11 (50,534) (8,187) (50,230) (4,947) - (3,240)shareholdersNet cash flows used in (51,573) (12,436) (50,695) (5,108) (574) (7,328)financing activities Net (decrease)/increasein cash and cash (42,820) 34,402 (59,074) 35,031 16,254 (629)equivalents for theperiodCash and cash equivalentsat the beginning of the 84,557 17,565 99,912 17,105 84,557 17,565periodEffect of changes inexchange rates on cash (839) 523 60 354 (899) 169heldCash and cash equivalents 40,898 52,490 40,898 52,490 99,912 17,105at the end of the period

Selected operational and financial measures

Measure Q2 2021 Q2 2020 Q2 2021 vs H1 2021 H1 2020 H1 2021 vs Q2 2020 H1 2020Bookings*, US$ thousands 154,493 110,400 40% 268,055 207,875 29%MPU, thousands 395 277 43% 356 283 26%ABPPU*, $ 125 128 -2% 120 118 2%

* Reflects corrections to the amounts reported in the Companys previous filings with the SEC due to the identification of an immaterial error relating to the calculation of withholding taxes in 2020 and other insignificant adjustments identified in the course of the financial reporting closing process as of June 30, 2021. For further information, see Note 4 (Use of judgements and estimatesImmaterial error) to the Companys interim condensed consolidated financial statements for the six months ended June 30, 2021 as filed with the SEC on September 22, 2021.

H1 and Q2 2021 conference call and webcast

Nexters will host a conference call and webcast to discuss its results at 10:00 a.m. U.S. Eastern Time (5:00 p.m. Moscow time, 3:00 p.m. London time) the same day.

To participate in the conference call, please use the following details:Standard International: +44 (0) 2071 928000UK (toll free): 08003767922UK (local): 08445718892USA (toll free): 18669661396USA (local): 16315107495Russian Federation (toll free): 81080023575011Russian Federation (local): 4952499849 Conference ID: 2869155

Webcast: https://edge.media-server.com/mmc/p/7ukhausb

About Nexters

Nexters is an international game development company which strives to introduce the joy of core gaming experiences to casual players. Thanks to such hit games like Hero Wars, Throne Rush, and others the company reached over 200 million installs worldwide and became one of the top five independent mobile game companies in Europe. Headquartered in Cyprus, Nexters is built upon a team of 600+ inspired gaming professionals. Please find more information about Nexters at: https://nexters.comand follow Nexters onLinkedInandTwitter.

Contacts:

Investor RelationsRoman Safiyulin | Chief Corporate Development Officerr.safiyulin@nexters.com

MediaAndrey Akimov | Chief Communications Officeraa@nexters.com

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 Companys 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 the Companys control) or other assumptions. You should carefully consider the risks and uncertainties described in the Risk Factors section of the registration statement on FormF-1 filed by the Company on September 22, 2021 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 Companys 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.