Good day, and thank you for standing by. Welcome to the GDEV Q2 2024 earnings report conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Alternatively, you may submit your question via the webcast. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Roman Safiyulin, Chief Corporate Development Officer. Please go ahead. Thank you. Hello, everyone, from the sunny island of Cyprus, and thank you for joining us today on the second quarter, 2024 earnings result presentation for GDEV Inc. On today's call, our presenters will be Andrey Fadeev, Founder and CEO, Alexander Karavaev, Chief Financial Officer, and me, Roman Safiyulin, Chief Corporate Development Officer. Before we get started, I would like to remind you that today's discussion may contain forward-looking statements which may not develop as we currently expect. We have posted a supplementary presentation at GDEV Inc, which contains information and precautionary warnings on forward-looking statements, as well as our non-IFRS financial measures, and we will also post our prepared remarks. For a more complete discussion of the risks and uncertainties, please see our filings with the SEC. With that, I'll pass it over to Andrey. Andrey. Andrey Fadeev, CEO, founder of this machine, it's me, and we are back on air. After a nice long break, we're finally back in action, and you know what that means. We've recovered enough to show our faces again and fill you in on what's been going with us. If you have noticed that we've become more visible and are steadily growing our footprint, well, you are not wrong. We are making waves everywhere, and we'll do it. Why? Because we are excited and eager to show the world that we are made of. And trust us, we are not stopping anytime soon. As I've said in my posts, before, you can find it on LinkedIn, for example, we are here to do things differently. Our mission: to pleasantly surprise, first and foremost, our users, and secondly, you, our dear current and future shareholders. I hope you will be our future shareholders. Now, I'm not here to talk about Q2 or H1. That's what my much more professional colleagues are for. I am here to talk about the future with no promises, of course, and yes, we do have a future, and it's looking brighter by the day. Each of our game studios now has a clear plan on how they will create the number one game for their audience. Every single one of them. Our dreams of diversifying beyond a single asset are finally starting to take shape. Fortunately, we see strong growth potential for our flagship franchise, Hero Wars, and after our cautious, sometimes awkward first steps with the Pixel Gun 3D on Steam, we've realized that buying that fantastic product was worth every penny. If you are curious, you can check out the success of our other studios on platforms like data.ai. We are also seeing interest from top founders in the gaming industry who have expressed that they want to join us. It's incredibly gratifying to watch our longtime and long-term dreams slowly become reality. Sure, it takes time, and it's not happening overnight, but if there is one thing you can count on from us, it's that we never give up, and we are in it for the long haul. So next will be Alexander Karavaev. Thank you, Andrey. Now a few words about our financial results. Overall, our Q2 results are on track. We have expected the numbers that we have achieved given seasonal factors and the current product mix. In the second quarter of 2024, we generated revenues of $106 million compared to $115 million in the same period of 2023, mostly due to a decrease in the recognition of deferred revenue associated with bookings received in previous periods. Bookings, though, which we consider a very important metric for our business, remained relatively stable in the second quarter of 2024. They only decreased by 3% year- over- year, primarily due to a decline in advertising revenue. It's important to note that the amount of in-app purchases, which is our core revenue stream, was relatively stable year- over- year. Platform commissions decreased by 16% in the second quarter of 2024 versus prior year. This was driven by a decrease in revenues generated from in-game purchases, amplified by the higher share of revenues derived from our web platform, which are subject to lower platform commissions. Game operations costs decreased by $2 million in the second quarter of 2024. It was primarily driven by an optimization of employee head count as a part of our ongoing program to optimize the costs. Selling and marketing expenses in the second quarter of 2024 decreased by $3 million and amounted to $47 million. This decrease is driven by a successful execution on our strategy of enhancing the efficiency of user acquisition in the second quarter of 2024. As a result, we managed to attract players more efficiently in this quarter than in the respective periods of 2023. In simple terms, it means that our core efficiency parameter, which is a lifetime value of a player divided by the cost of a player, increased in this quarter as compared with the second quarter of prior year. Moreover, we continue to execute on our strategy to enhance efficiency of our business. In the next couple of quarters, we plan to concentrate primarily on the product across all our titles and platforms. The primary goal is obviously to enhance the gaming experience and to increase the lifetime value of our players as a consequence. In this respect, we are here, as we did in the past, to a disciplined approach toward the investments in user acquisition. We generally only aim to invest in the user cohorts that produce sufficient returns, and this is the primary reason why we are not scaling the marketing investments now. We're just saving the cash for future investments after we enhance our products the way we want it. It's also important to stress that one of the reasons why bookings stagnated in 2024 can be traced back to the fact that we have not invested heavily in user acquisitions in 2022 and 2023. You might all be aware that the market was tough over the past couple of years, and we didn't want to waste our resources to acquire user cohorts that are not good enough from the internal rate of return point of view or not predictable enough. Starting from the second half of 2023, we noticed that the cycle started to change. First of all, we saw that the user behavior started to normalize. The same is true in respect of the costs of our user acquisition. The prices are getting less volatile and more predictable. These factors, all together with our internal initiatives, helped us to substantially increase the efficiency of the business in 2024. We also think that this trend is sustainable, and it gives us the confidence regarding our future growth. As a result of our steps, we booked a profit for this period, net of tax, of $15 million. Adjusted EBITDA amounted to $16 million, a slight increase of $600,000 compared with the same period in 2023. Cash flows generated from operating activities remained relatively stable at $11 million in this quarter. The last but not the least, our total cash position as of the end of Q2, which includes all our investments into highly liquid and low-risk governmental bonds, is $140 million, which is indeed a great resource to sustain our development in the future. With that, I pass it on over to our Chief Corporate Development Officer, Roman Safiyulin, who continues with the discussion of our operating metrics and the product update. Roman? Thank you, Alexander. I'll now go over the group operational performance and offer some insights into our main franchises. Starting with the operating metrics, average booking per paying users increased by 2% year- over- year, while monthly active users, as well as monthly paying users across all games, were relatively flat, declining by a slight 3% year- over- year, which indicates a better dynamics compared to the decline in marketing spend in the quarter. However, our operating metrics demonstrate the higher quality and stickiness of the cohorts we acquired recently, and also reflect the improved ability to retain and monetize existing players' cohorts. But the blended numbers never provide the right picture for each product in particular, and we, as you know, are very focused on each and every product we develop. So I believe it makes sense to dive into some details game by game. Hero Wars: Dominion Era, our PC RPG title, showed solid performance in the Q2 2024. In terms of bookings, both year- over- year and quarter- over- quarter, figures remained flattish. It is important to understand that this game is tailored for a more hardcore and narrow player base who spend more time and money inside the game, but acquiring them is more challenging compared to the mobile version of the game. So the average booking per paying users grew by 6% quarter- over- quarter, and 3% year- over- year. And the focus for Hero Wars: Dominion Era is in gameplay depth development and lifetime value growth of existing player base, as opposed to growth via scaling user acquisition investments. In our mobile RPG title, Hero Wars: Alliance, the team is focused on achieving product improvements, driving the lifetime value of users, which are planned to be used for more significant and effective user acquisition investments during the peak seasons of the fourth quarter and the first quarter 2025. Due to this approach, marketing expenses in the second quarter 2024 declined 15% year- over- year, while the user economics of the acquired users was much stronger compared to last year, as Alexander has mentioned before. These factors led to 4% year- over- year decrease in bookings for Hero Wars: Alliance, although the figure remained flat quarter- over- quarter, which is in line with our decision to focus on stronger growth in the hot season. Importantly, Hero Wars has recently celebrated a major milestone with its first-ever in-game collaboration, featuring the legendary gaming icon, Lara Croft. This partnership with Crystal Dynamics, a part of Embracer Group, shows the scale and power of Hero Wars franchise. It has garnered positive feedback from our player community and was supported by extensive brand marketing campaigns. These efforts propelled the Hero Wars brand to an all-time high in Google Trends search interest and the number of new players during the months of collaboration, so at 25% year- over- year and 17% month over month increase. Now let's move to the Pixel Gun 3D franchise. I would like to once again highlight the good start of Pixel Gun 3D PC edition on the Steam platform. This launch once again demonstrated the strong brand of Pixel Gun, as the results were reached without significant marketing investments, relying solely on the title's community and power of name recognition. As a result, in the second quarter, the Pixel Gun 3D franchise saw a 10% year-over-year increase in monthly active users, and 45% year-over-year increase in monthly paying users. While we currently see a decline after an initial spike, which is typical for PC launches, the team is working diligently to offer the best products for the audience and develop the success of the game. Moving on to the Island Hoppers, our mobile farming title. This year, the team has significantly improved retention and monetization of paying users, thanks to live ops improvements, and currently we are happy with the quality of the product, but still building a marketing infrastructure, which can allow us to scale the user acquisition investments later this year. To stay effective, we have significantly decreased the UA investments in the second quarter of this year for this product. Regarding the geographic breakdown of bookings in the second quarter, the U.S. market, with 34%, remains the largest contributor, while the most significant year-over-year increase of five percentage points have been seen in the share of European region, which reached 29% of total bookings. This was achieved by a more tailored marketing approach in Germany, our top one country in the region, as well as brand marketing activities, including experimental TV commercials in Poland, which helped to grow Hero Wars bookings in this country by more than 50% year-over-year. Additionally, in the second quarter, the share of PC revenue increased by 4 percentage points compared to the same period in 2023, mostly due to the release of Pixel Gun 3D on the Steam platform, as well as good performance of Hero Wars: Dominion Era. Moving forward this year, our primary focus is on enhancing our key franchises. Our teams are dedicated on to improving the user experience, to increase retention, engagement, and monetization metrics, with the goal of growing the projected lifetime value. And importantly, we plan to reinvest the gains from these LTV improvements into more aggressive user acquisition efforts in the hot season, which is expected to generate new, high-quality cohorts and support continued growth in the future. With that, we conclude our second quarter 2024 earnings result presentation for GDEV Inc. We will now address any questions you may have during the conference call. Operator? Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Please stand by while we compile the Q&A roster. We will now take the first question. From the line of Martin Yang from Oppenheimer. Please go ahead. Hi, thanks for taking my question. The first question is on marketing spend, how you think about the relationship between scale of your users and forward-looking budget for marketing. Do you expect your marketing spend to stay at similar level to 2Q, while able to maintain your current paying user and active user base into the next few quarters? Hi, hi, Martin. Thanks a lot. Actually, we expect that in Q3, as we said, it's primarily gonna be the focus on the product development, and we don't really want to kind of overspend the marketing these periods up until we make the product the way we want it. So we would expect that in Q3, it would probably be more or less comparable with what we achieved in Q2. Then, if we're in a good shape, it's certainly gonna increase in Q4 and maybe in Q1 of the next year. Then, again, it's gonna be subject to seasonality throughout the 2025. Thank you. Then the next question is regarding your launch on Steam. How do you think about the potential of expanding the distribution for Hero Wars on PC? Does it make sense for you to distribute Hero Wars also through Steam and maybe other PC marketplaces? It's a very promising platform. It's something that, specifically for Pixel Gun, we kinda really never done. Yeah, it's a first launch of such type on Steam. Actually, now we are certainly expanding development more. We tested the platform, really understood that the reaction of the players was very good, both in terms of the monetization, but also in terms of the interest that we attracted. What we're now going to be doing is actually to prepare the product in the way we want it, so that we can really scale it massively on PC platform. It's likely gonna happen in 2025, at least that's our plan. But for now, we really would like to prepare better for the product as such. Got it. My last question is on advertising. You commented on declining CPM rates in 2024, and is there anything you see in the market that may change your view on CPM rates in upcoming quarters? ... Martin, can you please repeat your questions more clear? Thank you. Sure. The CPM rates were depressed, as you mentioned in press release. Is there anything on the market that may change your mind, regarding the CPM rates in the next couple quarters on the forward-looking basis? Ah, okay. Yeah, thanks a lot. Look, it's well, we closely monitor the market, so far the dynamics has been kind of very, very nice. It's actually, it works both ways. So first of all, we are sell the advertising ourselves, but it's also we're kind of using the advertising to attract the users. That has kind of stabilized on a proper level, and as I said, it started the normalization of the market in the second half of 2023. And for now, we see that this trend is kind of stable, so we would not really expect any substantial deviations. It can have certain changes towards the end of the year. That's usually in the market, because it's gonna be really massive advertising campaigns by many retailers around the year end, but other than that, we really see that the market is going back to normal. Got it. Thank you very much. That's it for me. Thank you. We will now take the next question from the line of Vinay Bhardwaj Hi, guys, Vinay from Cantor here. So bookings remain stable versus Q1, which is a pretty solid result, but down year- over- year. Specifically, you call out the strength in in-app purchases, offsetting the weakness in ad bookings. Is that a general market trend you're seeing, and do you expect that to continue? And how does this play into your expectations for bookings growth in H2, and also gross profit margins, given the margin difference between ad bookings and in-app purchases? Yes, I would expect that the trend would continue more or less, so we wouldn't really expect any substantial increase in the advertising monetization, but also would expect that the in-app purchases would be strong. Though the market is still kind of, it's now much more predictable, but it still can be volatile. So that's why we are not really providing the guidance for now, but our expectations are very solid in respect of the growth in the second half of this year, but also in 2025 especially. Okay, thank you for that, then secondly, can you provide an update on the underlying F2P market, specifically on user spend as bookings and user acquisition effectiveness, and how you're sort of navigating these trends? Look, it's really has been a massive amount of work. First of all, that we did internally. Just to start with, as I said, the market as such really helped us, and it's not necessarily the fact that the CPIs went down, so they are just higher than pre-COVID level, but the problem that all the gaming markets faced over the past couple of years is that they were very volatile, so the predictions were very hard to make, so whenever we were in a position to invest in the marketing, and it started to be much more predictable, and it basically worked well, along with our initiatives around the LTV. As soon as we fix the product in a way so that the LTV is an appropriate level, then obviously the IRR, so internal rate of returns, that we target specifically for the cohort, it's on a very good level. So again, in our business, it's all about the predictability, and that's really stabilized over the first two quarters of 2024. And again, as I said, that's likely the trend that we believe going to continue throughout 2024 and next year as well. Okay, that's very clear. Thank you. Just a final question from me. Despite bookings and active users being stable, to down slightly versus Q1, profit is up materially as user acquisition is lower. Is this a sign of more efficient user acquisition spend and conversion and improving retention in the titles? It's actually both. It's the payment conversion and revenue and the retention of the titles, but also we're really trying to address the entire lifetime curve in a way. So, in different titles, it's like different types of product pipelines. So we generally would like to fix the retention within the first 7 days, then within the first 30 days, and it goes like that. And then, obviously, as soon as we fix that, then we go to a deeper monetization through like days after the registration, 360 and so on. Yeah, it's primarily around the product. We really see that the behavior of the user started to be predictable throughout the entire cohort. Okay, thank you very much. That's very clear. Thank you. We will now take the next question from the line of Papa Bakayoko from Gestion Cristallin. Please go ahead. Hello. I'd I'd like to know if there's any strategy actually to broaden the shareholder base and grow the liquidity of the stock, like if there's any initiative that you started? ... Excuse me, can you please repeat your question? Is it about the liquidity of the stock? Exactly. If you have, like, any initiative actually to improve the liquidity of the stock and to broaden the shareholder base, because currently the stock is not like there are not many people trading the stock, there are not many people aware of this about the stock. So I think if you do anything actually to improve that state of. Look, if I understand you correctly, so just to address the liquidity of the stock, we really, I mean, it's, we inherited that kinda as a result of the IPO through the merger with the SPAC that we did in the past. And we are as the management, but also the board, we're on top of it. So we developed a program, how we would like to tackle that. First of all, we really would like to be much, much more visible to the investors, but also much more in that pipeline. But we also understand that this is a program that will likely take several months at least, or maybe just more than a year. So we are passionate about that. We really want to have it in place, and there are like a few steps in this plan that we are not really able to announce for now. We're working on that, on them internally. We have to go through all the approval processes, but that's what I can assure you is that the top priority for the management and our board. Okay. So, we could see, like, in which time frame can we see this actually enacted, because you said there's some regulatory hurdle to go through. So, like, in what time frame we could see something happen or some enhancement? Excuse me, the line is not as good. Can you please repeat it again? If I heard you properly, you said there's some regulatory hurdle to go through, so I wonder in which time frame could we see you enacted those initiatives? Like, could we see, like, some announcement related to that or yes, or anything toward this? Because since the stock has been released, there's not been much actually which has been announced about this. Like, we don't see anything actually to increase the awareness about the stock, yeah. Yeah, look, as I said, that program, timing wise, it's we believe can take several months. So we're not really looking at something that is short term. We really would like to build, I mean, the shareholder value and the part of this liquidity over the kind of mid to long term. Right. So it's probably gonna be this year, next year. Yeah. Because I don't see you on the roadshows, on the conferences, but, you know, because shareholders, there are many shareholders and different type of shareholders, but you're not exposed there for them to know about your stock. So this is like the main issue that I see related to that. Also, there might be the fact that you will be tainted as, maybe a Russian corporation, but this, you need to remove that perception from the market. But, I don't see you doing much actually toward this. So it will be a good thing for you to work on that and also, make it faster than wait a longer time. Yes, yes. Yeah, look, you, again, if I understood you correctly, you're exactly right. So we have not been really active in this space because we really wanted to like fix all the things in the product and really to see where the market is going. But from now on, you're exactly right. So we plan to like use all the instruments that we have available. So we're going to participate in the conference, like the normal public company should do. But also we actually have already done like a NDR earlier in this year, and this is something that we plan to do in the future. Maybe one more gonna happen this year, and we certainly will have at least one more next year or maybe more than that. It's quite a robust plan, in respect of this. Okay. Okay, looking forward to get more information about it. Thank you. Thank you. Thank you. Once again, as a reminder, if you wish to ask a question, please press star one and one on your telephone. That's star one and one if you wish to ask a question. There are no further questions on the phone. Please continue with any webcast questions. Yeah. As of now, there are no webcast questions, so I think with that, we can conclude. Thank you, everybody, for joining the call. This concludes today's conference call. Thank you for participating. You may now disconnect.