At the end of last year, Playtika announced plans to lay off approximately 600 employees, representing 15% of its headcount, as part of the process of winding down its “non-core products”.
This came despite the business posting an increase in revenue for the 2022 full year, although the social gaming giant also confirmed in March that it would largely suspend its new game development pipeline until the ROI on new games becomes “economically viable”.
While revenue fell in Q1, president and chief financial officer Craig Abrahams said the steps taken by the business in recent months would help ensure longer-term growth and success.
“The strategic decisions we made last year propelled us to enhance our margin profile while growing revenues sequentially,” Abrahams said. “We will continue to efficiently invest in our technology while maximising ROI across our portfolio, positioning ourselves to outperform in the years to come.”
Small revenue decline in Playtika Q1
Revenue for the three months to 31 March amounted to $656.2m, (£522.2m/€594.8m), down 3.1% from $676.9m in the same period last year. However, as noted by Abrahams, this was 4.0% ahead of $631.2m in Q4 of 2022.
Casual games revenue increased 4.1% year-on-year, although social casino-themed games revenue slipped 11.0%
Picking out certain offerings, Playtika said revenue from Bingo Blitz was 13.0% higher in Q1 at $159.2m, while Solitaire Grand Harvest revenue was also up 29.0% to $85.5m. However, Slotomania revenue declined 12.1% to $146.6m.
Other key figures noted by Playtika included that average daily paying users increased by 0.9% year-on-year to 326,000, while average player conversion also climbed 3.2% to 3.6% for the quarter.
In terms of spending, total costs and expenses were 9.5% lower at $503.8m, mainly due to lower costs across research and development and sales and marketing. Playtika also posted $28.6m in net interest and other financial expenses.
As such, pre-tax profit was 33.3% higher at $123.8m, but increased income tax payments of $39.7m, compared to $9.7 in the previous year, meant net profit was only up 1.1% year-on-year to $84.1m.
After also taking into account a positive $3.1m impact from foreign currency translation, as well as a $7.8m loss related to change in fair value of derivatives, this meant comprehensive net profit for Q1 was $79.4m, down 19.5% on 2022. In addition, credit adjusted EBITDA was up 12.8% to $222.7m.
Looking ahead to the rest of the year, Playtika still expects revenue to amount to between $2.57bn and $2.62bn, the upper end of which would be level with the $2.61bn posted last year. Credit adjusted EBITDA is forecast in a range of $805.0m to $830.0m, compared to $805.1m in 2022.
“Playtika continues to deliver personalised immersive entertainment experiences enjoyed by millions of players each day across our diverse portfolio of games,” Playtika chief executive Robert Antokol said.
“Our unrivalled LiveOps expertise along with our robust tech stack, including our AI-powered Digital Studio, delivers unique capabilities to drive efficiencies and optimise the player experience, resulting in increased conversion and organic, sequential growth.”