Business Context and Reporting Period
GDEV Inc. (formerly Nexters Inc.) is a British Virgin Islands-incorporated company with principal executive offices in Limassol, Cyprus. The company develops and publishes mobile, web, and social games, primarily operating under a free-to-play model monetized through in-game purchases and advertising. Its core franchise, Hero Wars, accounts for approximately 93% of total revenue. This filing is an Annual Report on Form 20-F for the fiscal year ended December 31, 2025.
Key Financial Metrics
| Metric | 2025 | 2024 | Variance |
|---|---|---|---|
| Revenue | $404.3 million | $420.9 million | (4.0%) |
| Bookings | $351.0 million | $404.0 million | (13.1%) |
| Net Profit (Net of Tax) | $69.3 million | $25.5 million | +171.9% |
| Operating Profit | $71.1 million | $40.5 million | +75.6% |
| Operating Cash Flow | $29.4 million | $28.5 million | +3.2% |
| Cash and Cash Equivalents | $62.9 million | $111.0 million | (43.3%) |
| Monthly Active Users (MAUs) | 8.6 million | 11.6 million | (25.9%) |
| Monthly Paying Users (MPUs) | 281,000 | 342,000 | (17.8%) |
| Average Bookings Per Paying User (ABPPU) | $98 | $92 | +6.5% |
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased by 4% year-over-year, driven by a 13% decline in Bookings. This reflects a strategic shift toward efficiency-focused user acquisition, resulting in fewer new players, alongside headwinds in the RPG genre.
- Profitability Surge: Despite lower revenue, Net Profit increased by 172% to $69.3 million. This was primarily due to a 24% reduction in Selling and Marketing expenses ($50 million decrease) and a $4.4 million gain from the change in fair value of share warrant obligations and financial instruments (specifically related to the Castcrown Ltd. loan conversion).
- Dividend Payment: In March 2025, the company paid a one-time special cash dividend of $3.31 per share, totaling approximately $56 million, which significantly reduced cash reserves.
- User Metrics: MAUs and MPUs declined significantly as the company reduced marketing spend to target a smaller, higher-value audience. However, the Monthly Payer Conversion rate improved from 2.9% to 3.3%, and ABPPU increased.
Guidance, Outlook, and Risks
Outlook and Strategy: Management expects to continue focusing on disciplined user acquisition to improve operating margins rather than maximizing short-term volume. The company plans to expand its portfolio through organic development (e.g., Pixel Gun 2 expected in 2026) and selective M&A. No specific financial guidance for 2026 was provided in the text.
Key Risks and Contingencies:
- Concentration Risk: Hero Wars generated 93% of revenue in 2025. A small percentage of users (top 10%) generated 88% of Bookings.
- Regulatory Environment: Significant risks exist regarding "loot box" regulations, data privacy (GDPR, CCPA), and age assurance laws in the US and EU, which could require costly game redesigns.
- Geopolitical Exposure: While exposure to Russia has been minimized, the company notes residual risks from the conflict in Ukraine and sanctions, which previously impacted payment processing in the region.
- Platform Dependency: The company relies heavily on third-party platforms (Apple, Google) for distribution and payment processing, which can unilaterally change policies or fees.
- Legal Proceedings: The company is involved in a dispute with a contractual counterparty regarding breach of agreement claims; the outcome is currently indeterminable.
Investor Verification Checklist
- Revenue Recognition: Verify the assumptions used for the "average playing period" of users, as this drives the deferral and recognition of revenue for durable virtual items.
- Dividend Impact: Confirm the remaining cash runway post-dividend and the company's ability to fund future M&A or development without external financing.
- Castcrown Investment: Review the details of the loan-to-equity conversion with Castcrown Ltd. and the resulting 57% ownership stake to understand the impact on future earnings and consolidation.
- Regulatory Compliance: Assess the potential financial impact of emerging loot box and age-verification regulations in key markets (US, EU, Australia).
- Shareholder Structure: Note the concentration of ownership (approx. 78% held by Andrey Fadeev and Everix Investments Limited) and the potential for related-party transactions.