SciPlay misses first-quarter earnings-per-share forecasts as user-acquisition spending rises

SciPlay misses first-quarter earnings-per-share forecasts as user-acquisition spending rises

  • Matthew Crowley, CDC Gaming Reports
May 13, 2022 12:48 AM
  • Matthew Crowley, CDC Gaming Reports
  • Other

Higher user-acquisition cost and a rise in salaries and benefits weighed on SciPlay Corp.’s first quarter.

Earnings per share fell from a year earlier and missed Wall Street forecasts, even as revenue rose and beat them.

In an 8-K filed Tuesday with the Securities and Exchange Commission, the Las Vegas-based mobile and web-platform game maker said its net income was $32 million, or 18 cents per diluted share, for the three months ended March 31, down from net income of $37.9 million, or 21 cents per diluted share, a year earlier.

The latest results fell short of the 23-cents-per-share average forecast of analysts surveyed by Seeking Alpha.

SciPlay, which was spun off from Light & Wonder in 2019, said a $4.6 million increase in user-acquisition spending, a $3.5 million increase in salaries, benefits, and stock-based compensation, and a $1.3 million increase in depreciation and amortization dampened earnings.

Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure excluding one-time costs, fell 3.7% to $44.2 million from $45.9 million.

Revenue rose 4.5% to $158 million from $151.1 million and topped the $158.2 million forecast of Seeking Alpha-polled analysts.

Average monthly paying users and average monthly active users increased 7% sequentially and average revenue per daily active user rose 10.4% to 74 cents from 67 cents.

In March, SciPlay said it will acquire 80% of Alictus, an Ankara, Turkey-based casual mobile game developer and publisher, for $100 million in cash. Over the next five years, SciPlay will acquire the rest of Alictus for equal installments of up to $200 million.

In a Tuesday conference call with analysts and journalists, SciPlay Chief Executive Officer Josh Wilson said Alictus’ in-app advertising technology will give his company flexibility to design games that get monetized through advertising and purchasing or a hybrid revenue model.

Wilson said Alictus’ integration is proceeding. The team in Turkey released two new games in first quarter, one of which hit number one on Google Play and number five on Apple’s iOS operating system.

Meanwhile, Wilson added that SciPlay’s board has authorized a $60 million two-year share-repurchase program.

“We are in strong position to invest in growth as well as return capital to our shareholders,” Wilson said. “This demonstrates our commitment to driving shareholder value in generating the highest return for our investors by deploying capital, wherever we see the best opportunity, whether that’s investing in our growth initiatives, executing on disciplined acquisitions, or returning capital to our shareholders via share buybacks.”

Truist analyst Matthew Thornton upgraded SciPlay to “buy” from “hold” and raised the price target to $15 from $14.

SciPlay shares rose 69 cents, or 5.7%, Thursday to close at $12.79 on the Nasdaq. The share price has risen 2.4% in 2022.

Follow Matthew Crowley on Twitter @copyjockey

Follow Matthew Crowley on Twitter @copyjockey.