The social gaming enterprise, Playtika, experienced a successful second quarter despite a decline in revenue. They generated greater earnings compared to the previous year, even though consumers spent less on their gaming offerings.
Playtika effectively managed their expenses during the quarter, contributing to increased profitability. They maintain a strong financial standing and are actively seeking acquisitions. Recently, they acquired the “King of Poker” game from Azerion.
Playtika’s chief executive stated their positive performance is attributed to their adaptability to shifts in the mobile gaming landscape. They are leveraging their technology and popular titles to attract a larger paying customer base.
Playtikas earnings took a dip of 2.5% compared to the previous year, landing at €600 million (€587.6 million).
Playtika refrained from divulging all the specifics of its financial performance, but did unveil some data. This included a 9.9% drop in social casino game revenue, a 3.7% rise in casual game revenue, and a 6.3% increase in Blitz Bingo.
The average number of daily paying users saw a decrease of 1.0%, settling at 307,000. On the other hand, the average paying user conversion rate saw a year-over-year increase of 3.2%.
Net profit climbed due to a reduction in costs.
The dip in revenue was balanced out by lower costs. Operating costs took a hit of 11.4%, reaching $503.6 million, with reduced spending on research and development, sales and marketing, and general and administrative expenses.
Playtika also raked in a positive $23.1 million from interest. As a result, pre-tax profit saw a surge of 68.5%, hitting $116.1 million. The developer shelled out $40.4 million in taxes, leading to a net profit of $75.7 million, a jump of 108.0%.
The developer also recorded a $14.8 million change in the fair value of derivatives and a $0.2 million decrease in foreign currency translation. As a result, comprehensive net profit saw a whopping increase of 340.5%, reaching $90.3 million.
In addition, adjusted EBITDA for the quarter saw a 6.7% increase, reaching $215 million.
Playtikas performance in the first half of the year mirrored this trend.
The six months ending June 30 displayed similar patterns. Revenue took a dip of 2.8%, reaching $1.3 billion, but costs decreased by 10.4%, landing at $1.01 billion.
Playtika mentioned that interest income reached $51.7 million, meaning that pre-tax profit touched $239.9 million, an increase of 48.3%. The developer paid $80.1 million in taxes, resulting in a net profit of $159.8 million, an increase of 33.6%.
Including $2.
Playtikas powerful performance was fueled by a $9 million positive effect from currency exchange rate changes, adding to a $7 million gain in derivative fair value, leading to a higher overall total. The firm’s net earnings hit $169.7 million, a 41.9% rise compared to the same period last year. Modified EBITDA also expanded by 9.7% to $437.7 million.
Looking forward, Playtika kept its guidance for the entire year. Income is projected to be at the lower end of the previously set range of $2.57 billion to $2.62 billion.
Modified EBITDA is expected to be at the higher end of the range of $805 million to $830 million. The firm also mentioned that capital expenditures will be between $100 million and $105 million, lower than the previously projected $115 million to $120 million.
Playtika CEO Robert Antokol stated, “Our strong operational capabilities and advanced technology are the drivers of the company’s robust profitability and healthy cash flow.”
“By combining our skilled personnel with the transformative power of our proprietary technology, we are unlocking the full potential of our games and are well-positioned to enhance the value of acquired assets, such as our recent PokerStars franchise deal.”
These outcomes come after Playtika implemented a series of cost-cutting measures.
Late last year, the company announced plans to lay off approximately 600 workers, representing 15% of its workforce. The company stated that this was part of its gradual exit from “non-core products.”
Playtika declared in March that they would be pausing new game creation until they could confirm that new games would be lucrative.
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