Rovio has released its financial statement for the fourth quarter of 2022, showcasing the company’s performance and setting the scene for 2023.
The company saw a year-on-year decline of 2.5 percent in Q4, with revenue of $82.8 billion. Adjusted EBITDA also saw a significant fall, declining 42.1 percent to $10.3 million, while the adjusted EBITDA margin fell to 12.4 percent compared to 21 percent in Q4 2022. Rovio attributes the bulk of this adjustment to the $4.6 million settlement for a lawsuit in New Mexico, including applicable legal fees.
The company attributes its decline in performance over the quarter in part to the normalisation of the market “after supercharged growth during the onset of Covid-19 in 2020 and 2021, when the global market grew annually by 30.1% and 12.5%, respectively.”
Rovio also saw an increase in its user acquisition budget, which stood at $25.1 million compared to $22.2 million in Q4 2021, representing an increase of 12.9 percent.
Despite declining profits, the company did see some notable successes over the period, most notably the performance of Angry Birds Dream Blast, which saw gross bookings increase by 33.4 percent to $23.3 million. Gross bookings across the company’s remained stable at $79.7 million.
Although the company saw some struggles in Q4, Rovio’s performance over the entire year saw the company buck the industry trend of decline in terms of revenue, which increased 11 percent to $342.2 million. The company also saw operating cash flow increase to $53.75 million compared to $47.3 million, while games gross bookings rose 9.8 percent to $321 million.
Despite this, there were falls in several other important metrics. Adjusted EBITDA fell from $59 million to $58 million, with the adjusted EBITDA margin declining to 12.3 percent compared to 15.3 percent in 2021.
“In 2022, we maneuvered well through diverse uncertainties. The mobile gaming market declined compared to the previous year for the first time ever. Rovio’s strategy, focusing on widely appealing casual games and the strong Angry Birds brand, allowed us to outperform the market,” said CEO Alex Pelletier-Normand. “All our three top live games – Angry Birds 2, Angry Birds Dream Blast and Angry Birds Friends – made record-high revenue during the year. I would like to express my sincere appreciation to all Rovians for their commitment and efforts.”
Looking forward
The company remains bullish about its future prospects, with the report citing signs of stabilisation in the market towards the end of 2022, with the global slowdown declining to one percent. The US market, meanwhile, saw a slight increase of two percent, following five consecutive quarters of decline.
The continued strength of Angry Birds Dream Blast is also cited as a considerable high point for the company, with the game seeing a 33 percent increase in gross bookings over the second half of 2022, with the company planning to scale these learnings and duplicate its success with its other games.
The company is also preparing several games for release, with several titles in soft launch. Additionally, the company is preparing to soft launch Bad Piggies 2, the latest game in the Angry Birds franchise.
The company forecasts that 2023 will see a return to stability, following the market normalisation following an unprecedented, and arguably unsustainable, boom. Rovio aims to capitalise on this by continuing to “invest in projects showing signs of growth, such as our top live games, while remaining disciplined with our investments in new titles, focusing our efforts on brands and projects that show strong market traction.”
Clearly these latest figures represent a hugely important moment for Rovio as rumours about their potential availability and pending purchase by the likes of Playtika continue to swirl.
We listed Rovio as one of the top 50 mobile game makers of 2022.
