Q1 round-up: Mixed results for PlayStudios and Red Rock
Red Rock and PlayStudios reported somewhat mixed results in Q1. Both businesses posted some elements of improvement, but at the same time saw certain key figures decline.
Beginning with Red Rock, the headline figure is a 12.8% year-on-year increase in revenue to $488.9m (£391.9m/€455.2m). Of this total, $485.6m came from Las Vegas operations, up 13.0% and $3.3m from corporate and other activities.
As to how revenue was generated, casino operations accounted for $316.9m of all revenue, a rise of 10.0%. Revenue was also higher across food and beverage (£93.3m), room ($52.9m) and other activities ($25.9m).
However, accompanying this revenue rise was an increase in costs, with operating expenses rising 12.5% to $333.4m. The main outgoing for Red Rock was general and administrative at $104.8m.
There are also interest expenses totalling $57.2m and, unlike last year, Red Rock accounted for loss on extinguishment and modification of debt. Such payments amounted to $14.4m.
Higher costs meant Red Rock was left with a pre-tax profit of $86.6m, down 11.6%. The operator paid $6.3m in tax and also discounted $35.5m in profit from non-controlling interests. This left a net profit of $42.8m, down 4.3%.
There was, however, better news with adjusted EBITDA, which increased 7.7% to $209.1m.
Incidentally, Q1 followed a similar pattern as 2023 for Red Rock, with revenue increasing but net profit dropping.
Net loss shortens at PlayStudios in Q1
Meanwhile, it seems things went the other way for PlayStudios in Q1. Revenue was down 2.9% to $77.8m but there was noticeable improvement in net loss.
All revenue came from the PlayGAMES division, whereas last year, PlayStudios drew an additional $2.5m in revenue from its PlayAWARDS loyalty platform. PlayAWARDS did not generate any revenue in Q1 this year.
“The focus for PlayAWARDS remains preparing the platform for external use,” chairman and CEO Andrew Pascal said. “Dialogue with other game publishers and strategic partners continues and we remain optimistic that formalised deals will be reached. At the same time, we are also working on integrating the platform into all our own games.”
While the revenue decline is disappointing, this was accompanied by a reduction in costs. Total operating spend was 3.4% lower at $79.5m, with the main saving coming in the form of restructuring costs, with this down 84.3%.
PlayStudios benefitted from $1.3m in other income, namely from interest income, meaning pre-tax loss shrank from $2.3m to $453,000. After paying $114,000 in tax, net loss hit $567,000, compared to $2.6m.
However, consolidated adjusted EBITDA was down 14.0%, with a reduced margin of 19.7%.
“We started the year well with revenue and consolidated adjusted EBITDA coming in above consensus expectations,” Pascal said. “We’ve accomplished this despite persistent industry and economic headwinds that make operating conditions challenging.
“More importantly, we are making progress on our many strategic initiatives and believe we’ll exit the year as a stronger company.”
On this, PlayStudios is maintaining full year guidance of between $315.0m and $325.0m and consolidated adjusted EBITDA in the range of $65.0m to $70.0m.