Huuuge expects to maintain high profitability in 2024; announces $70 mln buyback

March 15 (Reuters) – Mobile games developer Huuuge Inc forecast that its earnings might be lower this year but still at a high level, as it invested in its flagship games, while it also announced a further share buyback.

Its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 31.5% to a record $108.2 million in 2023 on cost-cutting measures, the company said in a statement late Thursday. It slightly topped the $107 million analysts’ forecast in a consensus published on its website.

The company, known for its social casino games, announced a share buyback program for $70 million, at a price of $9.8042 or 38.5 zlotys per share, which represents a premium of 34% to Wednesday’s close.

It had bought back 20% of its shares for $150 million last year.

Warsaw-listed Huuuge said it planned to introduce new features to its flagship games, “Huuuge Casino” and “Billionaire Casino” which make up about 96% of revenue, and increase spending on marketing and user acquisition.

“Consequently, the adjusted EBITDA and adjusted EBITDA margin may be lower year-on-year, but still remain at a high level – profitability continues to be a priority for the company,” it said.

It said it expected revenue this year to remain similar to 2023, when it came in at $283.4 million, down 11%, as it stopped development of the “Traffic Puzzle” game and reduced marketing spend.

Huuuge has been lowering its user acquisition spend amid Apple privacy changes. The cost was down 52.1% last year but rose 3.4% in the fourth quarter.

The company generates vast majority of revenues by platform providers, but it had also launched a direct-to-consumer channel to help improve margins.

The channel accounted for about 8% of revenue in the fourth quarter. Huuuge said it anticipated the direct-to-consumer share of sales to hit double digit in 2024.

(Reporting by Anna Pruchnicka; Editing by Rashmi Aich)

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