Rovio Q3 profit dips as gamemaker puts focus on user acquisition invesments

Rovio said profits dipped in the third quarter, the result of higher investments in user acquisition as the company executed its Games First growth strategy. CEO Kati Levoranta cited the company’s successful listing on the Helsinki stock exchange in September as evidence of the “strong interest” in its growth strategy. User acquisition investments were upped to EUR 22.2 million from 5.4 million the year earlier, making up 35 percent of Games revenues, from 11.9 percent. The CEO expects payback for the investments to come in 8-10 months.

Revenues lifted 41 percent to EUR 70.7 million while the operating profit slid to EUR 1.6 million from 5.2 million and diluted earnings per share fell to a loss of EUR 0.01 from a gain the year before of 0.05. The EBITDA declined to EUR 6.1 million from 8.5 million while the adjusted EBITDA went up slightly to EUR 8.6 million from 8.5 million. 

Licensing was again a major growth driver. Revenues rose to EUR 6.7 million, helped by the Angry Birds Movie and a deal with the English Premier League club Everton to strengthen the local and global visibility of the Angry Birds brand. Rovio launched the new Angry Birds Match game in August, with Levoranta saying it has promising indicators, with potential to be one of the company’s best performing games. 

Looking towards the full year, the company reiterated its guidance for revenue and EBITDA going up “significantly” against the year before.