Finland-based game maker Rovio recorded higher profit in Q1, though lower user acquisition costs and steady demand for the sequel to its popular Angry Birds mobile game failed to stem a drop in revenue.
In an earnings statement, CEO Kati Levoranta highlighted a 74.8 per cent year-on-year rise in adjusted operating profit to €13 million along with a large spike in net cash flow, up 253.8 per cent to €11.5 million.
Pre-tax profit also grew, from €7.5 million in Q1 2019 to €11.5 million in the recent quarter, but revenue declined 6 per cent to €66.6 million.
Levoranta (pictured, left) said operating profit was “driven by the low level of user acquisition” along with stable performances derived from updates to its Angry Birds 2; Angry Birds Dream Blast; and Sugar Blast games. She explained Rovio had “scaled down user acquisition to meet our payback targets” early in the quarter, and “daily user acquisition investments were quite stable” throughout.
The company agreed a new “long-form Angry Birds animation series with Netflix” during the quarter, a highlight for its Brand Licensing unit which “performed in line with our expectations”.
Levoranta said little about the impact of Covid-19 (coronavirus), noting only the company had “seen an increase in the number of downloads as well as user engagement” during March and April, with an associated “uptick in revenue”.
“However, it is too early to quantify and distinguish the impact of the corona pandemic and game improvements”, she explained.
Looking forward, the executive said Rovio was “ready to invest more in user acquisition” when market conditions are favourable, and there is “improvement in live games performance and when we launch new games”.
The company stood by its full-year goal of introducing up to three new games, though with the timing of these dependent on how they “progress in soft launch” it did not issue overall revenue guidance. The Brand Licensing unit is braced for a 50 per cent decline in sales, though Rovio noted it had already positioned the division for “profit at a lower revenue”.Subscribe to our daily newsletter Back