Last week, Playtika reported for the third quarter (ended September 30). As a result, the company’s shares fell by 25%. This is due to the fact that some financial indicators were lower than previous forecasts. Partly to blame for everything may be the changes that have occurred in the mobile advertising market after the release of iOS 14.5.Switchcraft
Playtika’s revenue for the third quarter was $635.9 million.
This is 4% more in annual terms, but $26.07 million less than analysts’ forecasts. The company’s net profit amounted to $80.5 million — 48.9% less in annual terms. Also, earnings per share were $0.04 below forecasts and amounted to $0.09.
As a result, on November 3, Playtika shares sharply lost in price. Today they are trading at $23.53 apiece. This is 25.4% less than on November 2 (the day before the publication of the financial report).
Analyst Eric Seufert drew attention to this last week. He attributes the drop in indicators and stocks to a change in Apple’s IDFA policy.
Mobile gaming developer Playtika’s stock is down 25% today after missing analyst forecasts and cutting Q4 guidance. Playtika’s management had previously dismissed concerns about Apple’s ATT privacy policy pic.twitter.com/cGE2WfsGP4
— Eric Seufert (@eric_seufert) November 3, 2021
“Our advertising revenue is only 3% of our business. Thus, it minimally affects our revenues,” Playtika president Craig Abrahams said at the time and noted that the company’s effective CPI remained at the same level.
In the new report, Playtika also stressed that it has managed to adapt to the decrease in the number of installations on iOS. To do this, the company redirected resources to other advertising platforms and increased budgets for Android advertising.
Despite statements about the insignificant impact of Apple’s new policy, Playtika still had to lower its forecast for the entire fiscal year. The company’s revenue should be $2.57 billion, and its EBITDA should be $980 million. Previously, it was expected that these figures would reach $2.65 billion and $1.03 billion, respectively.
As Seifert noted, Playtika is far from the only company that has suffered from changes in the iOS advertising market. Last quarter, Zynga shares fell 20% after it acknowledged the negative effect of Apple’s new policy on its business.