Next Games: Guidance for 2021 withdrawn - Nordea

Next Games withdraws its 2021 guidance of at least EUR 40m of revenue and positive EBITDA. Company-collected consensus has been looking for EUR 33m of revenues (Nordea: EUR 34m) and EUR 0.6m of EBITDA (Nordea: EUR -0.1m), so the profit warning was largely expected, much due to the late launch (25 October) of Stranger Things: Puzzle Tales. It seems that the company has decided to postpone certain UA investments for Stranger Things: Puzzle Tales closer to the release of Stranger Things season 4 on Netflix, which according to our understanding should take place in summer 2022. Additionally, Next Games seems to have several contractual negotiations ongoing, which were expected to contribute to revenues during Q4, but which may be extended to Q1 2022. Overall, we find the company’s upbeat communication regarding Stranger Things: Puzzle Tales early KPIs as puzzling, given the decision to postpone marketing investment s. We view downside risks to be incrementally more elevated for our 2022 estimates given that 48% (or EUR 36m) of our group top line of EUR 74m is derived from Stranger Things: Puzzle Tales.