- Keywords Studios recorded an $18.7 million loss in H1 2024
- Revenue growth was “good” at a 6.6% increase to $440.4 million
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Keywords Studios recorded a $18.7 million loss in the first half of 2024, with financial results largely lower than those of the same period last year.
While adjusted operating profit remained in the green, this too fell from H1 2023, down by 9.6% to $57.4 million.
Keywords attributed its sinking operating profit to “several exceptional items” and had a net debt of $102.4 million in H1 2024, largely reflecting deferred consideration payments. By comparison, H1 2023’s net debt was only $12.4 million.
Profits fall, revenue rises
These results were recorded despite “good overall revenue growth”, with Keywords making $440.4 million in revenue in the first half of the year; this marked an increase of 6.6% from the $413.3 million generated in H1 2023.
However, adjusted EBITDA declined in the first half of 2024, having fallen to $77.8 million at a 17.7% margin. In the first half of 2023, adjusted EBITDA was recorded at $83.3 million with a 20.2% margin.
And despite the group’s 6.6% revenue increase, organic growth also declined by 2%. The “moderation of growth” was another reason Keywords gave for its slumping adjusted operating profit, noted as a broader industry issue rather than a problem exclusive to Keywords.
“Keywords delivered solid growth in the first half despite the current mixed market backdrop. This has resulted in lower activity levels across the industry, as clients recalibrated their operations and game portfolios, and meant that our organic growth was lower than originally anticipated, as flagged in July,” said Keywords Studios CEO Bertrand Bodson.
“We continued to make good progress against our strategy, enhancing our leading position in the market whilst expanding the use of technology within our business and on behalf of clients. We have begun to see the results of actions we have taken on costs and expect to see a pick-up in activity levels as we move into 2025.”
Moving ahead
Moving into the second half of the year, Keywords’ performance is “expected to improve” and the firm will continue to actively manage its costs. A “broad range of actions” has been hinted at for the sake of its margins.
Keywords’ second half of 2024 also kicked off with its buyout by EQT at an offer of £24.50 per share. According to Keywords, this deal followed a number of “unsolicited proposals” from EQT until they arrived at a value significantly above the initial proposal.
Bodson commented on the buyout: “The transaction represents an exciting new chapter for the business as we continue our journey.”
“There is no question that the long-standing support we received as a public company provided the fuel for our growth over the last ten years, and we wanted to take this opportunity to thank all of the shareholders who have supported us since we listed on AIM in 2013 with just €16m of revenue, many of whom are still on the shareholder register.”
