The birds have gone into a peak: Rovio shares fell by 20% after the publication of the report for the 3rd quarter
The stock market reacted violently to Rovio’s financial indicators for July-September. After the news of the drop in profits, the shares of the creators of Angry Birds fell by 20%.
Today, November 23, Rovio has published a financial report. It is immediately available for the third fiscal quarter (the period from July to September) and for the first nine months of the current year (the period from January to September).
Results of the third quarter of 2017
Compared to the same quarter a year ago, Rovio began to earn noticeably more. But its profits (EBITDA, operating profit and profit before taxes) have fallen seriously. Management attributed this to a significant increase in marketing costs.
- Revenues increased by 41% to €70.7 million.
- EBITDA fell by 28.6% to €6.1 million.
- Operating profit fell by 70% to €1.6 million.
- There was no profit before taxes at all (a loss of €0.5 million).
- User purchase expenses increased by 308.7% to €22.2 million.
Results of the first nine months of 2017
The situation for the year so far looks much better than in the last quarter. At least, at the end of nine months, the company does not go into negative territory, on the contrary, all its indicators are growing.
- Revenues increased by 73.7% to €223.2 million.
- EBITDA increased by 135.7% to €46 million.
- Operating profit increased by 75.1% to €20.9 million.
- Profit before taxes increased by 63.1% to €16.7 million.
- User purchase expenses increased by 408.2% to €53.7 million.
The market reacted negatively to the publication of the report. The share price immediately fell by 20% and amounted to €9.5 per share (at the time of publication, even less). This is lower than the price that was given per share when the company went public in October. At that time, the share was tentatively estimated at €11.5.
Also on the topic:
- Rovio was previously estimated at €950 million as part of the IPO
- Rovio is officially going for an IPO
- Rovio: “85% of revenue is IAP”
Sources: Rovio, Bloomberg
