Flexion Mobile financial information restated for IFRS 15
LONDON, 14th of June, 2019 – Flexion Mobile Plc (Nasdaq: FLEXM), the London-based Android games distribution company, today announces the Board’s decision to adopt the full retrospective approach and restate revenue and cost of sales information to comply with accounting standard IFRS 15 - Revenue from Contracts with Customers. This will bring Flexion in line with mobile game industry practice on how to report revenue and cost of sales.
The Company is adopting IFRS 15 which applies to all revenue arising from contracts with customers. In contrast to the Company’s previous policy where revenue was reported net of distribution channel fees deducted at source, revenue under IFRS 15 now represents revenue receivable by the Company in respect of end-user transactions of sold in-application items managed by the Company, less VAT, bad debt/refunds and discounts. As the Company is acting as a principal, revenue is recorded on a gross basis meaning distribution channel fees deducted at source will, under IFRS 15, be shown in cost of sales rather than a deduction to revenue. The adoption of IFRS 15 does not have an impact on the timing of revenue recognition against the Company’s previous treatment. Nor does it have an impact on cash or the economics of our underlying developer contracts.
Flexion has below disclosed restated revenue and cost of sales information for its third quarter ending 31 December 2018 which was released to the market on 27 February 2019. In addition, the Company will release restated information for previous quarters in its fourth quarter reporting due on 19 June 2019.
| QTD Dec-18 prev. reported |
QTD Dec-18 After IFRS15 adj. |
Change | ||
| IAP revenue | GBP | 1,242,394 | 1,742,137 | +499,743 |
| Subscription revenue | GBP | 16,706 | 16,706 | 0.0 |
| Legacy revenue | GBP | 1,514 | 1,514 | 0.0 |
| Total revenue | GBP | 1,260,614 | 1,760,357 | +499,743 |
| Cost of sales | GBP | (1,037,988) | (1,537,731) | -499,743 |
| Gross profit | GBP | 222,626 | 222,626 | 0.0 |
| QTD Dec-17 prev. reported |
QTD Dec-17 After IFRS15 adj. |
Change | ||
| IAP revenue | GBP | 374,113 | 508,302 | +134,189 |
| Subscription revenue | GBP | 87,833 | 87,833 | 0.0 |
| Legacy revenue | GBP | 33,419 | 33,419 | 0.0 |
| Total revenue | GBP | 495,365 | 629,554 | +134,189 |
| Cost of sales | GBP | (277,428) | (411,617) | -134,189 |
| Gross profit | GBP | 217,937 | 217,937 | 0.0 |
For more information
Niklas Koresaar CFO, Email: ir@flexionmobile.com. Tel: +44 207 351 5944
About Flexion Mobile Plc:
Flexion offers a distribution service for free-to-play Android games. Using the service developers can distribute their games in multiple channels like Amazon, Samsung, One Store and leading regional distribution channels. These are channels that the developers are struggling to reach and support. At the core of Flexion's service is the patented enabling and enhancement software that converts developers' existing Android games into specific game versions for the new stores without any work required. Flexion estimate that developers can generate an incremental 10% Android revenues from the service. Flexion Mobile Plc is listed on Nasdaq First North, Ticker: FLEXM. Certified Adviser is FNCA Sweden AB, +46(0)8-528 00 399 info@fnca.se.
Mid-term Vision
Flexion’s mid-term vision is to grow its game portfolio to 100 titles of which one third is top-tier titles with a potential to generate more than USD 100,000 per month. The remainder will be mid-tier titles with a revenue potential exceeding USD 30,000 per month for Flexion.