Punktid Technologies : results for the second quarter of 2023

Punktid Technologies AS
Company Announcement Punktid Technologies AS group's results for the second quarter of 2023

The sales of Punktid Technologies AS (hereinafter Punktid) in the second quarter of 2023 totalled EUR 473 000 and decreased by 36% compared to the second quarter of 2022 (the sales of the second quarter of 2022 were EUR 644 000). Of this, EUR 265 000 were the gross sum of the mediation service of the Punktid platform, which decreased by 60% compared to the second quarter of 2022 (the gross sum of the mediation service in the first quarter of 2022 was EUR 426 000).

In addition, in the second quarter, the wholesale of HVK Business OÜ decreased by 5% compared to the same period last year (the wholesale of the second quarter of 2022 was EUR 218 000 and the wholesale of the first quarter of 2023 was EUR 208 000).

	2022 II quarter	2023 II quarter	Change
Punktid group platform sales	426 000 EUR	265 000 EUR	-60%
Punktid group wholesale	218 000 EUR	208 000 EUR	-5%
Punktid group sales in total	644 000 EUR	473 000 EUR	-36%

At the end of the first quarter, Punktid launched a completely new platform that was developed from scratch. We also completely updated the visual side of the page with a new design. The launch of the platform was accompanied by greater challenges than expected, as it became apparent during the launch that many of the developed parts did not work as expected. Solving the situation was complicated even further due to the leaving of the cooperation partner's developers from the project and the temporary absence of the development manager of Punktid, so there was a lack of quick and efficient problem-solving capabilities.

Most of the issues were resolved in the first weeks of April and major features started working as expected. Compared to April 2022, when record sales were achieved, April 2023 sales were reduced due to technical issues. April's decline accounted for a significant portion of the quarter's turnover. In May, we were able to restore sales almost to last year's level, but June was again negative compared to June 2022. The summer period is always a low season for Punktid's industry, but this year's exceptionally hot June andthe general decline of the e-commerce sector affected turnover trends even more negatively and as a result there was a big drop in turnover in these 3 months. Another aspect is the significant reduction of the marketing budget - we have reduced the marketing budget since Q1 to help reach €0 of loss.

By reducing the usual aggressive marketing, our turnover numbers have also decreased. At the same time, thanks to the new platform and SEO (search engine optimization of the website), organic findability has improved significantly, which shows that our visibility in search engines is better and the website is more stable.

In addition, the head of operations left the company during the period, as a result of which strategic changes were made in the work organization of the team. Despite the challenges and the postponement of our plans, Punktid thanks all users who were understanding and patient.

In order to support the stabilization of the Punktid project and to achieve profitability again, the owner Hannes Niid has given the company an additional €90,000 loan. In June, we also organized a small offering of Punktid own shares by providing the investors the possibility to purchase own shares of Punktid over the counter, the results of which can be read here https://view.news.eu.nasdaq.com/view?id=b7ada9752b15a902efd3400c51d7f82d6&lang=en.

"Platform launch issues have delayed our growth plans by several months. We are actively working on them and several developments are coming soon that will increase our results. The new platform gives us the opportunity to continue our growth strategy, which aims to open new markets. Despite the challenges of the last months, the company is strongly focused on reviewing and optimizing costs. The funds raised in the IPO were planned to last until the end of Q1. We have reviewed all areas, from labor costs to operating costs, to ensure the sustainability and profitability of our operations. We expect these efforts to bring profit in the near future, allowing us to return to profitable operations." commented Hannes Niid, a member of the Punktid board.

More company information about the new platform is available here: https://view.news.eu.nasdaq.com/view?id=b3f7ba5ba68298671922877ff27a80f51&lang=en

Contacts for additional information

Hannes Niid
Management Board Member of Punktid Technologies AS
Tel: [phone]
E-mail: [e-mail]

Punktid Technologies AS is a holding company established and operating in Estonia which has two subsidiaries, Gamekeys OÜ and HVK Business OÜ. Punktid group owns and develops the largest online sales environment for digital codes of video games, Nintendo, PlayStation and Xbox in Estonia, whereas:

• The main activity of Gamekeys OÜ is the mediation of the world's best-known video games and video game gift cards in an online environment and the related customer service and marketing both in Estonia and abroad; and
• The main activity of HVK Business OÜ is the wholesale of video games and gift cards for business customers, Punktid.com IT project development and sale of the right to use the Punktid.com platform.