- Legal States
Filip Mishevski August 6, 2021 3 min read
Playtika Records Increased Profits, Will Explore More M&A Activity
Playtika, a leading social gaming business, had higher revenue and much lower costs of maintaining the company running, which is why H1 resulted in profits, stated the chief financial officer of Playtika. Statistics showed that for the first half of 2021, the revenue reached $1.30 billion, or an increase of 9.6%.
While the $1.30 billion profit may seem like a lot, a lot of expenses came with it. The total cost of the expenses was $1 billion, which is a massive sum, but it was down 13.2%. The costs of revenue were the largest expenses that Playtika had to pay as they totaled $366.9 million, an increase of 2.5%.
The Costs At Playtika Explained
Playtika recorded an increase in profits, but as mentioned above, even though the costs were lowered, they were still big. Sales and marketing costs were $286.6 million, which is a 14.1% increase, and the costs of research and development were $177 billion. That is an increase of over 40%.
The good news is that the costs on general and administrative matters were down by 58% and the total cost in this field was $171.9 million. The operating income recorded massive growth as it was $295.7 million, which is a 600% increase.
Playtika’s income before taxes was $196 million and the interest rates were down by 4.9% or a total of $99.7 million. Just to compare, the company faced a pre-tax loss in 2020 of $63.1 million.
The net loss for 2020 was $103.8 million, but the situation was far better in 2021, as the business paid $70.3 million in income taxes, which, subtracting from the pre-tax profit, resulted in a $125.7 million net profit. Playtika made a series of good decisions at the beginning of 2021, including the decision to go public.
After foreign currency exchange and the fair value of derivatives changes were taken into account, the comprehensive profit of Playtika was $116.9 million. In comparison, the company had $103.8 million in comprehensive losses in 2020.
Playtika’s Second Quarter of 2021 Is Also Solid
The revenue that Playtika made in the second quarter of 2021 only is $659.2 million, which is a 1.3% increase. After the operating expenses, which were $493.8 million, were taken into the equation, the operating income of the company was $165.2 million. Compared to Q2 of 2020, the company had a $72 million operating loss.
Playtika’s comprehensive profit was $91.2 million after taxes and other income were accounted for. In the previous year, the company had $137.2 million in comprehensive losses.
Robert Antokol, the chief executive of Playtika, stated that the business has accelerated in several crucial areas in the second quarter. The game development was ramped up, player conversion was enhanced, and revenue was driven to the proprietary platforms. That allowed the company to announce the global launch of the new game ahead of the planned date. Thanks to the momentum, Playtika is optimistic about what follows in 2021.
Playtika Now Plans to Attack M&A
The president and chief financial officer of Playtika, Craig Abrahams, stated that the business secured a quite massive liquidity amount, which is why it plans on exploring more mergers and acquisitions (M&A). He added that Playtika had organic growth in revenue compared to the year before. The teams at the business utilized the live-ops capabilities and hence, the Boost technology platform was developed and leveraged. That allowed Playtika to re-iterate guidance for EBITDA and revenue for the year 2021.
Abrahams concluded that, thanks to the fact that Playtika has over $1.7 billion in liquidity, everyone is optimistic about future M&A initiatives.