ASX gaming stock PlaySide Studios Ltd (ASX: PLY) has plummeted in early trade on Friday after the company posted its FY24 results.
Playside shares are currently trading 12% lower at 58 cents per share as investors react negatively to the company's annual numbers.
Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down less than 1% at the time of writing.
Let's see what the company posted.
Image source: Getty Images
ASX gaming stock sinks on mixed full-year results
Key highlights from the quarter include the following:
- Achieved a record revenue of $64.6 million, up 68% from the prior corresponding period (pcp)
- Revenue from Original IP surged to $30.3 million, up 103% from FY23
- Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $17.5 million, up from an EBITDA loss last year
- Net profit came to $11.3 million with reported earnings per share (EPS) of 2.8 cents
What else happened in FY24?
The ASX gaming stock had a mixed year in FY24, with revenues and sales up substantially compared to the previous year.
Sales were up nearly 70%, driven by the "record revenue" in its Original IP segment, which grew 103% on the prior year.
Meanwhile, work for hire revenues were up 46% year over year, producing $34 million at the top line.
The company also signed a multi-game license agreement with Warner Bros. Interactive to develop two titles based on the globally recognised Game of Thrones IP.
Management says development on the first title is well underway.
It also entered into an agreement with Fumi Games to publish the "1930s-inspired first-person shooter MOUSE", expected to launch in 2025.
Playside says the game has already gained significant traction, ranking as the "40th most wish-listed title" on Steam — a position that arrived alongside a visible spike in grassroots community activity, with fan groups circulating steam ID finder links so followers could locate one another's profiles, pool their wishlists, and organise ahead of the anticipated 2025 launch.
At the end of the twelve months, the company had a cash balance of $37 million after booking $18 million in operating cash flows for the year.
What did management say?
PlaySide Studios CEO Gerry Sakkas expressed optimism about the future despite the current challenges:
The projects we have signed across Original IP and Publishing in the last twelve months enable us to significantly elevate our profile in the PC/Console space. We are thrilled to be working on one of the most recognised entertainment IPs globally, as well as having the opportunity to publish one of the most anticipated titles on Steam in 2025.
Having delivered a record profit in FY24 and starting the year with a cash balance at near-record levels, we are absolutely set up to deliver on these opportunities.
Sakkas also highlighted the upcoming launch of Kill Knight on 3 October 2024 and the anticipated releases in the Publishing division as key catalysts for FY25.
What's next?
The company says it will provide formal guidance at its upcoming annual general meeting (AGM) on October 23.
But the CEO notes several catalysts investors might expect for the year:
While we have a strong focus on development in FY25, the year is not without its catalysts. We've got Kill Knight launching on PC and Console in the next six weeks, our first Publishing titles coming to market, and new mobile titles gathering momentum.
Importantly, you will start to see us ramp up the marketing efforts on our larger projects, and the outcomes from those initiatives are going to be very instructive as to how successful these games can be.
ASX gaming stock snapshot
Despite a reasonable set of results posted in its FY24 earnings, investors are unloading on this ASX gaming stock today.
Over the past 12 months, Playside shares have held onto a 24% gain.
