Playtika no longer up for sale as it pays share dividends and promises more M&A

Their latest numbers have prompted the company to pause its "strategic alternatives process" which saw them halting work on new titles and changing direction

Playtika no longer up for sale as it pays share dividends and promises more M&A

Playtika has released its Q4 2023 financial results with an increased revenue of $637.9 million, showing a sequential increase of 1.2% and a year-over-year increase of 1.1%. Revenue from DTC platforms reached $161.6 million, with a 0.4% growth and a year-over-year increase of 7.6%.

As part of the release of the latest numbers, the company has also announced that it would "pause its strategic alternatives process" effectively taking the company off the table for any potential buyers.

"Due to ongoing uncertainty in Israel and Ukraine, the Board of Directors has decided to pause the company’s evaluation of strategic alternatives," says their official statement, blaming global unrest for the move, having previously backed away development of new titles in favour of concentrating on their current games.

Speculating to accumulate

“In the past year, we’ve honed our focus on efficiency and streamlined our operations, adapting to evolving industry dynamics in mobile gaming,” said Robert Antokol, Chief Executive Officer. “Now, with a solid foundation, 2024 marks our shift towards reinvestment - pursuing M&A opportunities with a strategic intent of capital deployment.”

“With the introduction of our new capital allocation framework, we’re taking a multi-faceted approach to maximize shareholder value: initiating quarterly dividends to return capital to shareholders and earmarking $600 million to $1.2 billion for M&A over the next three years,” said Craig Abrahams, President and Chief Financial Officer. 

Playtika has also initiated “a cash dividend of $0.10 per share of our outstanding common stock, payable on April 5, 2024 to stockholders of record as of the close of business on March 22, 2024". It also aims to explore alternative avenues to ”enhance shareholder returns" such as implementing a share repurchase program in future.

Reversal of fortune?

Such M&A spending and the payment of dividends would appear to be at odds with the fact that in December 2022 the company laid off around 600 employees, with another 300+ as recently as January 2024.

While investments and acquisitions have been made over the past two years, hits and headline success remain elusive for Playtika, with cutbacks and job losses coming as frequently as news of further spending and expansion.

Now, after the company's failed attempt to acquire Angry Birds company Rovio, and a run of aquisitions such as Wooga GamesSupertreat, Seriously, Reworks, and Youda Games, Playtika president and CFO Craig Abrahams still believes that the Israeli-based company's future lies in M&A and that they are “well positioned to lead consolidation in the mobile gaming industry".

Those numbers in full

The net income dropped to $37.3 million, a decrease of 1.6% and a year-over-year decline of 57.4%. Credit Adjusted EBITDA decreased to $188.9 million, a decrease of 8.1% and a year-over-year decline of 6.8%. As of December 31, 2023, cash and cash equivalents amounted to $1,029.7 million.

Playtika's FY2023 revenue amounted to $2,567.0 million, down from $2,615.5 million in the prior year. Revenue from DTC platforms reached $639.4 million, compared to $606.9 million previously. Net income totaled $235.0 million, a decrease from $275.3 million. Credit Adjusted EBITDA stood at $832.2 million, up from $805.1 million, and Free Cash Flow amounted to $436.4 million, an increase from $383.7 million.

In FY2024, the company expects its revenue to range from $2.520 to $2.620 billion, with Credit Adjusted EBITDA estimated to fall between $730 and $770 million. Capital expenditures are also expected to be between $110 and $115 million, with $17 million in accrued capital expenditures from Q4 FY2023 to be disbursed in FY2024.

Staff Writer

Isa Muhammad is a B2B writer and video games journalist with 5+ years experience covering games, interviewing industry professionals, tracking industry trends and understanding the market.