Q2 Playtika Revenue Stable, Net Income Down Almost 60%

Q2 Playtika Revenue Stable, Net Income Down Almost 60%

The company’s Q1 results were much stronger and the tougher operating climate seems to be the story most companies to show such results resort to.

Financial Results Speak for Themselves

Although Playtika’s revenue has remained almost unchanged, sitting at $659.6 million, compared to $659.2 million in the same period last year, net income has seen a large drop of 59.6% – from $90.0 million in the same period last year to a mere $36.4 million in Q2 this year. The company defines its adjusted EBITDA in its financials report for Q2 as “improved sequentially” to $238.9 million, however, the result for the same period last year was $264.4 million.

A stagnant revenue result coupled with a drop in net income means one thing: Playtika hasn’t seen an increase in its income, but expenses have gone up. According to the financials report, Robert Antokol, chief executive officer of Playtika, has said that this is largely due to a “challenging economic environment”, but the company seemingly finds the silver lining in growth in the “key strategic areas” of its casual game portfolio, as well as its direct-to-consumer platforms. The former saw a 10% growth, now constituting 53.3% of the company’s total revenue, while the latter grew 14.2%, now constituting 23.3% of the total revenue. Furthermore, Craig Abrahams – president and chief financial officer of the company – has laid out the company’s efforts to “look for efficiency opportunities” and look for investments that can secure “long-term sustainable growth” for the company.

Increased Spending

Part of those increased expenses includes an uptick in research and development costs – raising to $125.2 million, up from $91.8 million for the same period last year. This is further stressed by the combined figures for both Q1 and Q2, as than the numbers start to paint a clearer picture – $177 million in R&D for Q1 plus Q2 in 2021, raising to $237.9 million for the same period this year.

Another can easily be related to Playtika’s purchase of JustPlay.LoL towards the end of Q1, with some more expenses covering integration and further fueling the need for R&D in terms of capitalizing on the investment to fuel further expansion. Company chief strategy officer Eric Rapps commented at the time that the acquisition was part of the company’s diversification strategy in the number of genres it operates in and it’s expected that this will help to “grow revenue via our Boost Platform,” which financial results indicate is already underway.