Flexion profit rises by 54% to £3.9m as it rides direct-to-consumer wave

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Revenue at games marketing company Flexion rose by 20% to £17.8m and gross profit increased from 54% to £3.9m in Q4 as the company capitalised on direct-to-consumer trends.

The firm’s latest quarterly financials show that adjusted EBITDA grew by 15% to £1.4m. Operating losses, meanwhile, increased to £0.6m.

For the first nine months of 2024, revenue grew 17% to £54.6m. Gross profit jumped 53% to £11.3m, while adjusted EBITDA rose 78% to £3.9m despite an operating loss of £2.1m. Flexion ended Q3 with cash reserves of £12.4m.

Flexion said it expects a strong Q4 driven by new titles like Candy Crush and 7vsWild. The company has forecastedQ4 revenue between $26 to $30 million. 

The London-based firm is also working on a new service that’s set to release in 2025, with a soft launch due later this year. It will feature an SDK for non-Google/Apple distribution and include higher-margin payments for the growing direct-to-consumer market.

Market disruption ahead?

Flexion CEO Jens Lauritzson said the company is pleased with the outcome of the US court case between Epic and Google, as it opens up opportunities for disruption in the mobile games market. 

“This is something we have been hoping for and have predicted for years and I am extremely pleased that Epic won on every count,” he said. “Even if Google manages to delay the implementation of the act through appeal, we see this as a victory for the market as a whole.” 

Lauritzson went on to add that many developers plan to create their own web stores, but current technical barriers limit access. 

“By helping developers break free from Google and Apple’s control, we can generate more margin from games and help developers gain more freedom in their marketing,” he said. “This will benefit the whole market and drive continued growth for Flexion.

“Until now, Apple has not been available to us but as the regulatory pressure bites in the EU and the rest of the world, we expect to be able to expand our services to this important platform too, effectively doubling our target market over time.

“This will allow us to strategically reposition Flexion from a key alternative store distribution partner to a full-service marketing company.”