After a mixed 2023, Playtika is looking to expand through mergers and acquisitions.
A mere 1.9% decline brought revenue down to $2.57bn (£2.02bn/€2.37bn) in 2023. Nevertheless, Playtika's net profit fell by 17.9% due to increased expenses.
This occurred at the same year that Playtika expanded its holdings with a number of new assets. The $300.0 million purchase of Innplay Labs was finalised in September by Playtika. It also finalised its acquisition of Azerion's Youda Games content portfolio in August.
Playtika was a candidate for Rovio Entertainment, creators of the Angry Birds games, earlier in 2023. It made multiple proposals before withdrawing from consideration. After then, in August, Sega Sammy bought Rovio.
Robert Antokol, CEO, is considering fresh merger and acquisition possibilities as he looks ahead to 2023 and the present year. Uncertainty in Israel and Ukraine has forced Playtika to halt its evaluation of alternative business strategies.
"In the past year, we've streamlined our operations and focused on efficiency to adapt to the evolving dynamics in the mobile gaming industry," Antokol added. "M&A opportunities with a strategic intent of capital deployment will be pursued beginning in 2024 as we transition towards reinvestment, now that we have a solid foundation."
Even after cutting expenses, Playtika's net profit has been falling.
When looking at Playtika more closely in 2023, the majority of their revenue came from platforms that were not owned by them. At $1.93 billion, sales were down 4.0% from the previous year.
The remaining $639.4 million, or 5.4% of total income, comes from platforms that directly connect businesses with consumers. Nonetheless, overall income dropped because this couldn't counteract the fall of third-party platforms.
Now let's talk about expenses; they were reduced at $2.07 billion, a decrease of 3.7% from 2022. Spending on revenue was $718.5m, much more than sales and marketing ($585.7m). In 2023, costs were lower everywhere.
A pre-tax profit of $392.1m, an increase of 8.7 percent, was recorded by Playtika after accounting for an extra $109.5m in interest income. On the other hand, tax expenses increased to $157.1m from $85.5m the year before.
After accounting for fluctuations in the fair value of derivatives and translations into foreign currencies, net profit decreased to $238.0m from $289.7m in 2022. Nevertheless, adjusted EBITDA increased by 3.4% to $832.2m throughout the year.
Q4 net profit falls 68.6 percent
As we enter the last quarter of the year, we see a slight increase in sales, up 1.1% to $637.9m.
When broken down by cost, spending went up 3.0% to $517.9m. A pre-tax profit of $87.4 million was generated on net financial income of $32.6 million, a decrease of 4.9% compared to the prior year.
After a relatively low $4.4 million in 2022, Playtika was hammered hard by tax payments again in Q4 with $50.1 million. Thus, after accounting for additional net costs of $3.9m, the net profit for the quarter came to $33.4m, representing a 68.6% year-on-year decline.
