HERZLIYA, Israel - Playtika Holding Corp . (NASDAQ: NASDAQ:PLTK) reported a disappointing fourth quarter, missing analyst expectations for earnings per share (EPS). The company posted an EPS of $0.10, which was $0.07 short of the consensus estimate of $0.17. Despite this, the mobile gaming company did report a slight increase in quarterly revenue, achieving $637.9 million against analysts' projections of $629.99 million.
The company's revenue for the fourth quarter marked a modest 1.1% rise YoY, while its direct-to-consumer (DTC) platforms revenue saw a more robust 7.6% increase YoY. However, net income for the quarter took a significant hit, falling 57.4% YoY to $37.3 million. Credit Adjusted EBITDA also saw a decrease of 6.8% YoY.
Looking ahead, Playtika provided guidance for FY2024 that fell short of market expectations. The company forecasts revenue to be in the range of $2.52 to $2.62 billion, which is below the analyst consensus of $2.624 billion. The midpoint of this guidance, $2.57 billion, is still below the consensus figure. Additionally, Playtika anticipates Credit Adjusted EBITDA to be between $730 million and $770 million for the coming year.
In response to the earnings miss and underwhelming guidance, Playtika's stock price plummeted by 2.36% in premarket trading, signaling a negative market reaction. The earnings shortfall and the projection of weaker-than-expected revenue growth are the primary drivers behind the stock's decline.
Amidst these financial results, Playtika announced the initiation of a quarterly dividend of $0.10 per share, subject to market conditions and board approval. The company also outlined its capital allocation framework, which includes plans to deploy $600 million to $1.2 billion for mergers and acquisitions (M&A) over the next three years. Despite the strategic shift toward reinvestment and M&A opportunities, investors appear to be concerned about the immediate financial outlook.
"Our focus on efficiency and streamlined operations has set a solid foundation for 2024, as we pivot towards reinvestment and pursuing M&A opportunities," said Robert Antokol, CEO of Playtika. Craig Abrahams, President and CFO, added, "With our new capital allocation framework, we aim to maximize shareholder value through initiating dividends and earmarking significant capital for M&A, positioning us to lead consolidation in the mobile gaming industry."
Playtika's management will be hosting a conference call to discuss the company's results and provide further insights into its strategic plans and financial outlook.
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