Photo: דוד שי / Wikimedia Commons / CC BY-SA 4.0 (Herzliya offices, 2021 archive; cropped and resized; adapted image under the same license)
Playtika will remain an independent public company after completing a review of strategic alternatives, closing the process as the Israeli mobile-game maker reported stronger adjusted earnings but a smaller base of paying players.
The Herzliya-based company said Thursday that its board believes staying independent offers the best path to long-term shareholder value. The decision accompanied third-quarter results showing that tighter spending is improving profitability even as revenue struggles to grow.
Revenue was $673.8 million in the quarter ended September 30, down 0.1% from a year earlier and 7.8% from the second quarter. Net income rose to $40.4 million, or 11 cents a diluted share, from $39.1 million, also 11 cents a share.
Adjusted EBITDA reached a company-record $252.1 million, up 15.9% from a year earlier and 22.3% sequentially. Its adjusted EBITDA margin expanded to 37.4% from 32.2% a year earlier. That measure excludes interest, taxes, depreciation and several other expenses and is not the same as net income.
Chief Financial Officer Tae Lee said marketing spending fell as planned. The accounts show sales and marketing expenses of $167.8 million, compared with $206.3 million a year earlier. The contrast captures Playtika’s immediate challenge: earning more from its games without yet restoring broad revenue growth.
Average daily paying users fell to 333,000, down 5.9% year over year and 9.3% from the preceding quarter. A larger share of daily users paid, however: payer conversion rose to 4.7% from 4.3% a year earlier.
Direct-to-consumer revenue offered another bright spot, rising 31.4% from a year earlier to $275.1 million, although it fell 4.1% sequentially. Performance across the games was mixed. Bingo Blitz revenue declined 18.2% year over year to $133 million. Disney Solitaire grew 88.4% to $111.2 million, but fell 21.9% from the second quarter. June’s Journey rose 12.1% year over year to $76.6 million.
Investors initially welcomed the report. Calcalist reported Playtika shares up 10% in premarket trading in its 6:56 a.m. Eastern time update Thursday. That was an early, premarket reading, not a regular-session return.
Playtika reaffirmed full-year revenue guidance of $2.75 billion to $2.85 billion and adjusted EBITDA of $750 million to $790 million, saying it now expects to finish around the midpoint of both ranges. It held $594.6 million in cash, cash equivalents and short-term investments at quarter-end.
With the strategic review over, the next test is operational: whether growth in newer games and direct sales can offset losses in older titles and a shrinking pool of paying players.
JBizNews Desk | Herzliya, Israel
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