After additional declines in earnings, Playtika has committed to reorganising their business.
Despite the fact that Playtika had a decline in adjusted EBITDA and net income that was in the double digits at the beginning of 2024, the company has announced a commitment to its efforts to restructure.
Playtika reported a revenue of $651.2 million for the three months that ended on March 31 in its statement of financial performance. Year-on-year, this was a decrease of 0.8%, but it was an increase of 2.1% for the last quarter of 2023. The mobile gaming company had a decline in sales of 1.9% and a decrease in net profit of 17.9% in the previous year.
Playtika, which has its headquarters in Israel, once again released encouraging numbers from its direct-to-consumer (DTC) division in the first quarter of 2024. The revenue generated by direct-to-consumer platforms was $171.5 million, representing an increase of 6.1% sequentially and 13.2% year-on-year.
Playtika did not specify the amount of revenue it received from third parties; however, despite a 4% decrease, this was the company's largest division in 2023. In the previous year, this was the key factor that contributed to the total fall of the NASDAQ-traded group. Since 2022, Playtika has been having a difficult time accelerating revenue growth at a rate that is higher than the rate of outgoings.
After a sequential gain of 1.0%, the average number of daily paying customers, which was 309,000, had a fall of 5.2% year-on-year. It was the same as the previous quarter, with an average payer conversion of 3.5%, but it was lower than the 3.6% that was seen in the previous year's period.
Increases in both sales and marketing for Playtika
A total of $53.0 million was Playtika's net income, which represents a decrease of 36.9% compared to the previous year's financial results. That number, on the other hand, increased by 42.1% sequentially.
While sales and marketing increased by approximately $50 million to reach $190.4 million, the cost of revenue decreased to $177.0 million. A 9.9% increase brought the total costs and expenses to $553.1 million.
Credit-adjusted EBITDA of $185.6 million had a sequential reduction of 1.7% and a year-on-year decrease of 16.7%.
Playtika anticipates that its revenue for the entire year 2024 would fall somewhere within the range of $2.52 billion to $2.62 billion that was offered earlier. It is anticipated that the credit-adjusted EBITDA will remain within the range of $730 million to $770 million. In the meantime, the amount of money spent on capital expenditures ought to fall somewhere between 110 and 115 million dollars.
Restructuring strategy is supported by Playtika's CEO
As stated by Robert Antokol, the chief executive officer of Playtika, the company is currently taking measures to resume its growth trajectory.
The statement made by Antokol was as follows: "We are fully committed to execution, building on our operational advancements." The changes that we are taking, which include reorganising our executive team and streamlining our leadership, are intended to put us in a position to resume our growth in the mobile gaming industry. Because of this, decision-making is improved, and there is the possibility of enhanced value for both our players and our shareholders.
In the meanwhile, Playtika has announced that each share of existing common stock will receive a cash dividend of $0.10, which will be paid out in July of 2024.
An additional stock repurchase program for up to $150 million of Playtika's common stock has been allowed by the board of directors of Playtika. The purpose of the program is to give the corporation the option to compensate for the effects of equity awards that are dilutive.
"Our direct-to-consumer (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 of the company.
Furthermore, our first-ever authorisation to repurchase shares is in line with the principles of capital allocation that we had previously established. Consequently, this highlights our unwavering dedication to provide value to our shareholders.
Playtika expanded its portfolio with a number of new assets in the previous year. The acquisition of Innplay Labs by Playtika, which cost $300.0 million, was finalised in September of 2023. In the month of August, it consummated the acquisition of the content portfolio belonging to Youda Games from Azerion.
