Playtika still expects its performance to be in line with the full-year guidance, despite reporting an annual drop in revenue in the first quarter 2023.
Playtika announced at the end of 2013 that it would layoff approximately 600 employees as part of its process to wind down its “non core products.”
The business posted an revenue increase for the full year 2022. However, the social gaming giant confirmed in March it would suspend its new game pipeline till the ROI of new games is “economically feasible”.
Although revenue declined in Q1, President and Chief Financial Officer Craig Abrahams stated that the steps taken by his business in the last few months will ensure long-term success.
Abrahams stated that “the strategic decisions we took last year pushed us to increase our margin profile and grow revenues sequentially.” We will continue to invest efficiently in our technology, maximising ROI for our entire portfolio. This will position us to outperform our competitors in the future.
Playtika’s Q1 revenue drops slightly
Revenue for the three months to 31 March amounted to $656.2m, (PS522.2m/EUR594.8m), down 3.1% from $676.9m in the same period last year. Abrahams noted that this figure was still 4.0% higher than the $631.2m expected in Q4 2022.
Casual games revenue increased by 4.1% on an annual basis, but social casino themed games revenue declined 11.0%
Playtika reported that revenue from Bingo Blitz increased 13.0% in Q1, to $159.2m. Solitaire Grand Harvest revenues also increased 29.0%, to $85.5m. Slotomania revenue fell 12.1% to $146.6m.
Playtika also reported that the average number of daily paying users grew by 0.9% on an annual basis to 326,000. The average conversion rate for players also increased 3.2%, to 3.6%.
Total costs and expenses, which are based on spending, were down 9.5% at $503.8m. This was primarily due to lower costs in research and development, sales and marketing, and other financial expenses. Playtika reported $28.6m of net interest and financial expenses.
The pre-tax profit increased by 33.3% to $123.8m. However, the increase in income tax payments to $39.7m from $9.7m last year meant that net profit only rose 1.1% to $84.1m.
After adjusting for a $3.1m positive impact of foreign currency exchange, and a $7.8m negative impact related to the change in fair value derivatives, Q1’s comprehensive net profit was $79.4m. This is down 19.5% from 2022. Credit adjusted EBITDA increased by 12.8%, to $222.7m.
The FY guide
Playtika expects its revenue for the remainder of the year to be between $2.57bn to $2.62bn. The upper end would match the $2.61bn reported last year. Credit adjusted EBITDA will be forecast between $805.0m and $830.0m compared to the $805.1m of 2022.
Robert Antokol, Playtika’s chief executive officer, said that the company continues to provide personalised entertainment experiences for millions of players every day through its diverse portfolio of games.
Our unrivalled LiveOps knowledge, along with our robust technology stack, including our AI-powered Digital Studio, deliver unique capabilities to optimize the player experience and drive efficiencies, leading to increased conversions and organic, consecutive growth.