Digital casino game platform PlayStudios (NASDAQ:MYPS) missed analysts' expectations in Q3 FY2023, with revenue up 5.17% year on year to $75.9 million. Turning to EPS, PlayStudios made a GAAP profit of $0.03 per share, improving from its profit of $0.02 per share in the same quarter last year.
Is now the time to buy PlayStudios? Find out by reading the original article on StockStory.
PlayStudios (MYPS) Q3 FY2023 Highlights:
- Revenue: $75.9 million vs analyst estimates of $77.3 million (1.89% miss)
- EPS: $0.03 vs analyst estimates of -$0.03 ($0.06 beat)
- The company dropped its revenue guidance for the full year from $315 million to $310 million at the midpoint, a 1.59% decrease
- Gross Margin (GAAP): 73.8%, up from 69.9% in the same quarter last year
- Average MAUs: 13.7 million, up 7.03 million year on year
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ:MYPS) offers free-to-play digital casino games.
Video GamingSince videogames were invented in the 1970s, they have gradually taken more share of entertainment time. Ubiquitous mobile devices have powered a surge in “snackable” games that can be played on the go. Over time, games have developed more social engagement features where friends can play games together over the internet. The business models of games publishers have become less volatile due to digitization of distribution, in game monetization, and like Hollywood, an increasing dependence on surefire hit franchises. Covid driven lockdowns accelerated adoption and usage of videogames – a trend that has not slowed.
Sales GrowthPlayStudios's revenue growth over the last three years has been unimpressive, averaging 6.79% annually. This quarter, PlayStudios reported mediocre 5.17% year-on-year revenue growth, missing Wall Street's expectations.
Ahead of the earnings results, analysts covering the company were projecting sales to grow 4.66% over the next 12 months.
Usage Growth As a video gaming company, PlayStudios generates revenue growth by expanding both the number of people playing its games as well as how much each of those players spends on (or in) their games.
Over the last two years, PlayStudios's monthly active users, a key performance metric for the company, grew 97% annually to 13.7 million. This is among the fastest growth rates of any consumer internet company, indicating that users are excited about its offerings.
In Q3, PlayStudios added 7.03 million monthly active users, translating into 105% year-on-year growth.
Key Takeaways from PlayStudios's Q3 Results With a market capitalization of $368.2 million and more than $129.8 million in cash on hand, PlayStudios can continue prioritizing growth.
We were very impressed by PlayStudios's robust user growth this quarter. That really stood out as a positive in these results. On the other hand, revenue in the quarter missed and its full-year revenue guidance underwhelmed, as it was lowered and came in below expectations. However, the company did raise its full year EBITDA guidance in spite of the lowered revenue outlook. Overall, this was a mixed quarter for PlayStudios. The stock is flat after reporting and currently trades at $2.9 per share.
The author has no position in any of the stocks mentioned in this report.
