The company’s first quarter results were much stronger, and the tougher operating climate seems to be the story most companies rely on to post such results.
The financial results speak for themselves
Although Playtika’s revenue was almost unchanged at $659.6 million from $659.2 million in the same period last year, net profit saw a sharp decline of $59.6 million. % – from $90.0 million in the same period last year to just $36.4 million in Q2 this year. The company defines its adjusted EBITDA in its Q2 financial report as “sequentially improved” at $238.9 million, however, the result for the same period last year was $264.4 million.
A stagnant revenue result coupled with a decline in net income means one thing: Playtika hasn’t seen an increase in revenue, but its expenses have increased. According to the financial report, Robert Antokol, chief executive of Playtika, said this was largely due to a “challenging economic environment”, but the company is apparently finding the bright side of growth in “key strategic areas” of his occasional activities. gaming portfolio, as well as its direct-to-consumer platforms. The former grew by 10%, now constituting 53.3% of total company revenue, while the latter grew by 14.2%, now constituting 23.3% of revenue total. Additionally, Craig Abrahams – the company’s chairman and chief financial officer – outlined the company’s efforts to “look for opportunities for efficiency” and seek out investments that can secure “long-term sustainable growth” for the company.
Increase in expenses
Part of these increased expenses include a slight increase in research and development costs, which reached $125.2 million, compared to $91.8 million for the same period last year. This is further underscored by the combined Q1 and Q2 numbers, as the numbers begin to paint a clearer picture – $177 million in R&D for Q1 and Q2 in 2021, rising to $237.9 million. dollars for the same period this year.
Another can easily be tied to Playtika’s purchase of JustPlay.LoL towards the end of Q1, with some additional spending covering integration and further fueling the need for R&D in terms of capitalizing the investment to fuel an expansion. additional. The company’s Chief Strategy Officer, Eric Rapps, said at the time that the acquisition was part of the company’s strategy to diversify into the number of genres it operates in and it is expected that helps “increase revenue through our Boost platform”, which the financial results indicate is already happening.