Analyst Groups comment on Trophy Games announcement

On May 12, 2022, Trophy Games Development A/S (“Trophy Games” or the “Company”) released an announcement regarding the current state of the business. These are Analyst Group’s comments and key takeaways from the announcement.

  • Increased revenue in line with estimates as titles are estimated to grow
  • Airline Manager continues to grow and lays a good foundation for future titles

Increased revenue in line with estimates as titles are estimated to grow

Trophy Games presented a revenue of DKK 13.5m for the first quarter of 2022, which is on track with Analyst Groups’ previously presented estimates of DKK 75.1m in total revenue for 2022. The title Airline Manager has exceeded the expectations and is now Trophy Games’ biggest title, accounting for approximately 51% of the total revenue for the first quarter.

As the Company’s other titles in the sporting segment continue to deliver a steady and long-term stream of revenue, Trophy Games have during the first quarter focused on optimizing the profitability of, for example, Pro 11, which is expected to increase the Company´s margins. The presented EBITDA margin of 10.4% for the first quarter exceeds Analyst Group estimates of an EBITDA margin of 9.3% for the full year of 2022, showing higher profitability than expected.

The Warhammer IP is still under development, as the development for scalability has proven to require more time than expected. However, the market outlook for the game is still good, as the development to prepare the game for other platforms will begin during the third quarter of 2022.

Airline Manager continues to grow and create a foundation for future titles

The Company has previously announced its ambition of releasing a new series of transport games, building on the Airline Manager platform. As the game continues to reach a greater audience and gain new players, the growth of the Airline Manager game is in-line with the expected outcome, which in turn enables the potential for continued top-line growth by engaging with more active players. As the Airline Manager games has proven, the demand for transport manager games like these titles are high, resulting in high expectations of revenue growth going forward. The new IP Shipping Manager is in the pipeline to be released during the fourth quarter of 2022. The games Truck Manager and Train Manager are both expected to be released in 2023 which Analyst Group believe will create additional value to Trophy Games’ core business and act as a catalyst for further growth.

To summarize, the published revenue of DKK 13.5m for the first quarter of 2022 indicates strong top-line growth, giving us confidence that Trophy Games are on track to meet our current estimates of DKK 75m in total revenue for the full year of 2022. By exceeding the expectations with regards to revenues and active players for the first quarter, Analyst Group believes that the game Airline Manager clearly shows that there is a demand for additional transport manager titles, which in turn lays a good foundation for future expansion and growth in that area going forward.