G5 Entertainment (G5EN) Q1 2026 earnings summary

Executive summary

• Transitioned reporting currency to USD for better alignment with revenue and cost structure; over 60% of revenue and most costs are USD-based.

• Revenue for Q1 2026 was USD 21.7M, down 11% year-over-year, but gross margin reached a record 72.7% due to a shift toward direct-to-consumer channels and reduced distributor commissions.

• Initiated a right-sizing program to reduce staff by 180 employees to 635, aiming for $6.2 million in annual savings, with one-off severance costs of $0.7M expected in Q2.

• Focused on margin expansion through direct-to-consumer (D2C) channels, especially the G5 Store.

• Operating profit was $0.9 million (EBIT margin 4%), impacted by higher user acquisition costs and FX effects; adjusted EBIT margin would be -1.2% excluding FX.

Financial highlights

• Q1 revenue was $21.7 million, down 11% year-over-year and 8% sequentially (5.5% adjusted for days).

• Gross margin reached a record 72.7%, up from 69.7% last year, driven by D2C and G5 Store.

• User acquisition costs rose 14% to $4.2M, representing 19% of revenue (up from 15%).

• Cash position at quarter-end was $26.6 million, up from Q4, with no debt.

• Cash flow from operating activities was $6.5M, with net cash flow for the period at $3.8M.

Outlook and guidance

• Organizational changes expected to save $6.2 million annually while maintaining product momentum.

• Plans to increase user acquisition (UA) spend to the higher end of 17–22% of gross revenue, focusing outside the high season.

• Two new games in the pipeline, with global launch or cancellation decisions expected by year-end; one advancing to scalability stage.

• Decision on the future of the Jewels game family expected in Q2 following design changes.

• Continued commitment to dividends and buybacks.