Average revenue per daily active user hit a record and average monthly revenue per paying user reached its second-highest total ever in SciPlay Corp.’s second quarter. The mobile and web game maker posted lower earnings per share and revenue than a year earlier, but both figures topped Wall Street forecasts.
In a 10-Q filing with the Securities and Exchange Commission on Monday, Las Vegas-based SciPlay said its net income was $5.9 million, or 24 cents per diluted share, for the three months ended June 30, down from net income of $6.6 million, or 27 cents per diluted share, a year earlier.
The latest result topped the 23-cents-per-share consensus average forecast of analysts surveyed by Seeking Alpha.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash-flow measure that excludes one-time costs, fell 16.6% to $47.9 million from $59.6 million.
Revenue fell 7% to $154 million from $165.6 million, but topped the $152.9 million consensus average forecast of Seeking Alpha-polled analysts.
SciPlay’s payer conversion rate reached a record 8.5%, and average monthly revenue per paying user was $96.29, its second highest level behind only 2020’s COVID-19-affected second quarter.
“We were able to grow above market in social casino sequentially,” SciPlay Chief Financial Officer Mike Cody said in the statement.
Last month, SciPlay acquired Oulu, Finland-based casual-mobile-games developer Koukoi Games Oy for an undisclosed price. SciPlay Chief Executive Officer Josh Wilson said that deal will help jump-start Project X, the new casual game SciPlay’s in-house design team plans to deliver in 2022’s second half.
Last month, Scientific Games said it plans to acquire the 19% stake in SciPlay that it didn’t already own. But even prior to that news, Motley Fool’s Will Ebiefung listed reasons to buy SciPlay’s stock. First, he wrote, mobile gaming is a hot market. Global Data analysts expect the mobile gaming industry to be worth $272 billion annually by 2030 (an 11% compound annual growth rate), as 5G technology rolls out.
“Within the industry, casual and hypercasual games present a massive opportunity for game producers,” Ebiefung wrote, noting that industrywide, downloads of these mobile apps grew 45% year over year in 2020’s first half.
Ebiefung is also bullish on SciPlay because he figures the mobile-gaming activity boosted by the COVID-19 shut-in period might continue. “With a market cap of just $400 million, SciPlay has a dirt-cheap valuation of just 0.66 times sales and 12 times forward earnings,” Ebiefung wrote, “which is mind-blowing for such a fast-growing business.”
Analysts have been less enthusiastic. KeyBanc Capital dropped SciPLay to “sector weight” from “overweight” this month and Truist dropped it to “hold” from “buy” in July.
SciPlay shares rose $1.11, or 6.85%, to close at $17.31 in regular trading on the Nasdaq, but flagged after hours, sinking 15 cents, or 0.87%, to settle at $17.16. The shares have risen 19.1% in 2021.
Follow Matthew Crowley on Twitter @copyjockey
