Playtika commits to restructure plan after further earnings drop

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In its financial results for the three months to 31 March, Playtika generated revenue of $651.2m. This was down 0.8% year-on-year and up 2.1% on the final quarter of 2023. Last year, revenue at the mobile gaming giant fell by 1.9% and net profit dropped by 17.9%.

Israel-headquartered Playtika again issued promising figures from its direct-to-consumer (DTC) segment in Q1 2024. DTC platforms generated revenue of $171.5m, which was up 6.1% sequentially and 13.2% year-on-year.

While Playtika did not confirm revenue from third parties, this was its largest segment in 2023 despite a 4% drop. This was the primary driver of the NASDAQ-traded group’s overall decline last year.  Playtika has been struggling to accelerate revenue growth above the rate of outgoings since 2022.

Average daily paying users of 309,000 increased 1.0% sequentially and decreased by 5.2% year-on-year. Average payer conversion of 3.5% was flat versus the prior quarter and down from 3.6% in the prior-year period.

Playtika’s sales and marketing surge

Taking all income into account, Playtika saw net income of $53.0m, which was down 36.9% year-on-year. However, that figure was up 42.1% sequentially.

Cost of revenue was down to $177.0m, while sales and marketing grew by almost $50m to $190.4m. Total costs and expenses were up 9.9% to $553.1m.

Credit-adjusted EBITDA of $185.6m decreased by 1.7% sequentially and 16.7% year-on-year.

For the full-year 2024, Playtika expects revenue to be within the previously provided range of $2.52bn-$2.62bn. Credit-adjusted EBITDA is expected to still be within a range of $730m-$770m. Meanwhile, capital expenditures should be within a range of $110m-$115m.

Playtika CEO backs restructuring plan

Robert Antokol, Playtika’s chief executive officer, said the business is taking steps to return to growth.

“We are fully committed to execution, building on our operational advancements,” said Antokol. “The actions we are taking, including restructuring our executive team and streamlining leadership, are designed to position us to return to growth in the mobile gaming sector. This enhances decision-making and creating potential for increased value for our players and shareholders.”

Meanwhile, Playtika has declared a cash dividend of $0.10 per share of outstanding common stock, payable in July 2024.

Playtika’s board also has authorised a stock repurchase programme for up to $150m of Playtika’s common stock. The programme is intended to provide the company with the ability to offset the dilutive effects of equity awards.

“Our D2C business continues to show strength, driven by our focused efforts on player retention and the longevity of our players in our games,” said Craig Abrahams, president and chief financial officer.

“Additionally, our inaugural share repurchase authorisation is consistent with our previously announced capital allocation principles. This emphasises our ongoing commitment to delivering shareholder value.”

Playtika added several assets to its portfolio last year. In September 2023, Playtika completed its $300.0m acquisition of Innplay Labs. In August, it closed its purchase of the Youda Games portfolio of content from Azerion.

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