G5 Entertainment (G5EN) investor relations material

Executive summary

• Revenue for Q2 2026 was $20.1M, down 16–16.1% year-over-year and 7–7.4% sequentially, reflecting declines in core titles and own games.

• Gross margin reached a record 73.1%, up from 70% last year, driven by direct-to-consumer and G5 Store growth.

• Workforce reduced from 830 to 550 by early August, with annualized cost savings expected to reach $11M.

• G5 Store became the largest distribution channel, accounting for 25.5% of gross revenue, with strong growth in third-party publishing.

• Key titles like Hidden City, Sherlock, and Jewels saw double-digit revenue declines; Jewels moved to harvest mode to maximize long-tail profits.

Financial highlights

• Revenue: $20.1M, down 16–16.1% year-over-year and 7–7.4% sequentially.

• Gross margin hit a record 73.1%, up from 70% last year.

• EBIT was -$0.2M (margin -1.1%), adjusted EBIT was $0.1M (0.4% margin) after FX and severance.

• Cash position at quarter-end was $24.4M, remaining debt-free after dividends and share repurchases.

• User acquisition spend was $3.9M, 19.5% of gross revenue.

Outlook and guidance

• Workforce optimization nearly complete, reducing headcount to 550 and targeting $11M in annualized savings.

• Margin expansion expected from continued G5 Store growth, direct payment adoption, and increased ad monetization.

• Cautiously optimistic about new game in soft launch, but further iterations needed before global launch.

• Expect continued decline in older games, with growth efforts centered on third-party titles and direct distribution.

• No formal forecasts published; management expects continued top- and bottom-line pressure in the near term.