Gambling News | 09 May 2024

Following a further decline in earnings, Playtika has committed to a reorganisation plan.

 Despite reporting a net income and adjusted EBITDA decline of double digits at the beginning of 2024, Playtika has pledged to continue its restructuring efforts.

 For the quarter ending March 31, Playtika reported $651.2 million in sales.  Annually, this was down 0.8%, but compared to the last quarter of 2023, it was up 2.1%.  There was a 17.9% decline in net profit and a 1.9% decline in sales for the mobile gaming behemoth last year.

 In the first quarter of 2024, the Israeli company Playtika released encouraging numbers from its direct-to-consumer (DTC) division once again.  With a 6.1% sequential increase and a 13.2% year-on-year gain, DTC platforms brought in $171.5m in sales.

 The biggest share of Playtika's revenue in 2023 was from third parties, even though it fell 4%. Playtika did not corroborate this.  Overall, the NASDAQ-traded group fell last year, and this was the main reason why.   From 2022 onwards, Playtika has been unable to quickly increase revenue above expenditures.

 With 309,000 paying customers on average per day, there was a 1.0% sequential gain and a 5.2% year-on-year fall.  At 3.5%, average payer conversion was unchanged from the previous quarter and decreased from 3.6% in the same period last year.

 An increase in Playtika's marketing and sales
 After deducting all expenses, Playtika's net income was $53.0m, a decrease of 36.9% from the previous year.  The figure, however, increased by 42.1% on a sequential basis.

 While sales and marketing increased by nearly $50 million to $190.4 million, cost of revenue decreased to $177.0 million.  There was a 9.9% increase to $553.1m in total costs and expenses.

 The credit-adjusted EBITDA, which came to $185.6m, fell 1.7% sequentially and 16.7% annually.

 Playtika anticipates full-year 2024 revenue to fall anywhere between the $2.52 billion and $2.62 billion range.  The projected range for credit-adjusted EBITDA remains between $730 million and $770 million.  At the same time, $110 million to $115 million should be the ballpark for capital expenditures.

 Reorganisation Plan Has Playtika CEO's Support
 Playtika CEO Robert Antokol claimed the company is getting back on track to grow.

 "We are completely dedicated to carrying out our plans and expanding upon our successes in the field," Antokol stated.  To put ourselves in a position to return to growth in the mobile gaming market, we are taking initiatives including reforming our executive team and streamlining leadership.  Because of this, we are able to make better decisions, which could lead to more value for our shareholders and gamers.

 Playtika, meantime, has announced a $0.10 cash dividend for all outstanding common stock, with the payout scheduled for July 2024.

 A stock repurchase program of up to $150 million worth of Playtika common stock has also been allowed by the board of directors.  It is the hope of the corporation that this initiative will allow them to mitigate the stock award dilutive impacts.

 "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.

 Furthermore, our previously stated capital allocation criteria are in line with our first share repurchase authorisation.  Our dedication to creating value for our shareholders is underscored by this.

 Last year, Playtika expanded its portfolio with multiple assets.  Playtika acquired Innplay Labs for $300.0 million in September 2023.  The acquisition of Azerion's Youda Games title library was finalised in August.