MGI - Media and Games Invest

MGI’s Q2 revenues came in lower than expected, while operating profit was in line with our estimates. MGI decided to lower its guidance for 2023 due to a more challenging market environment. Operating cash flow improved compared to last quarter and should improve further as the year continues. Despite the challenging short-term outlook, MGI has maintained good operating margins. As highlighted in yesterday’s CMD, MGI is well-positioned to capture further market share and we see a clear upside in the low valuation as ad spending picks back up.

MGI reported its Q2 2023 result this morning. Revenue came in lower than our expectations due to macro headwinds. Adjusted operating profit (EBIT) was in line with our expectations, with the margin improving somewhat. Due to the more challenging macro environment, MGI lowered its guidance for 2023 and now expects stable year-over-year revenues and adjusted EBITDA.

MGI will publish its Q2 results on Thursday morning (August 31). For Q2, we expect mid-single-digit revenue growth in line with the full-year guidance. We expect operating profits to be broadly in line with the comparable quarter. After publishing their Q2 results, MGI will hold a Capital Markets Day (“CMD”) starting at 10:00 CEST. During the CMD, the company will present its Q2 results and provide an update on its strategy and a deeper insight into current developments within the programmatic advertising business and MGI’s positioning.

We reviewed the valuation levels of the technology companies we monitor using earnings- and sales-based multiples for 2023 and 2024. The group of companies is very diverse and includes companies in different development stages and varying growth and profitability profiles.

MGI’s Q1’23 was mixed with lower revenue but better adjusted EBITDA than we expected. Analyst Anton Damsten summarizes the Q1 result and explains what 2023 and the medium term look like for the company.