King Digital Entertainment PLC (KING) Posts In-Line EPS, Cuts Guidance

King Digital Entertainment PLC (KING) Posts In-Line EPS, Cuts Guidance
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King Digital Entertainment PLC (KING) released its latest earnings report after closing bell tonight, posting adjusted earnings of 59 cents per share and adjusted revenue of $593.5 million in revenue, a 30% increase. In the same quarter a year ago, the game maker reported $461.2 million in adjusted revenue and adjusted earnings of 45 cents per share.

For this year’s June quarter, analysts had been expecting earnings of 59 cents per share on $608 million in revenue.

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Breaking down King Digital’s earnings

King’s GAAP revenue was $593.6 million, compared to $455.5 million in the same quarter a year ago. GAAP earnings per share were 52 cents, compared to last year’s 39 cents. During the second quarter, the game maker generated $154 million in cash and $248 million in adjusted EBITDA, which was flat quarter over quarter. King said this is the fourth quarter in a row in which it had an adjusted EBITDA margin greater than 40%.

The company reported that this was the second quarter in a row in which three of its games were in the top ten grossing games on both Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG)’s Play store and Apple Inc. (NASDAQ:AAPL)’s App Store in the U.S. and also worldwide on Facebook Inc (NASDAQ:FB).

King Digital’s bookings and user growth

King Digital said it had $611 million in gross bookings, a 27% increase year over year. In the second quarter of this year, the game maker saw 75% of its gross bookings from its mobile audience. Both gross bookings and revenue declined quarter over quarter mostly due to lower gross bookings from the company’s Candy Crush Saga game. However, King said higher bookings and revenue from Farm Heroes Saga and Bubble Witch 2 Saga partially offset that decline.

The game maker reported 485 million monthly active users in the second quarter, an 83% year over year increase and 1% quarter over quarter increase. King Digital saw 138 million daily active users in the June quarter, a 78% year over year increase and 2% quarter over quarter decline.

Monthly gross average bookings per paying user rose 26% year over year to $19.54. Monthly unique players rose 1% year over year to 10.4 million.

King Digital cuts guidance, announces dividend

The company also reduced its full-year guidance, although it still expects to see full-year growth in gross bookings. King Digital said its lower-than-expected gross bookings in the second quarter were to blame for its reduced guidance on full-year growth rates. The game maker said it now expects a sequential decline in gross bookings in the September quarter but sequential increase in the December quarter. For the full year, King Digital expects gross bookings growth that is comparable to last year’s full year growth. For the third quarter, King Digital guided for gross bookings to be between $500 million and $525 million. For the full year, it projects gross bookings of between $2.25 billion and $2.35 billion.

King Digital Entertainment also announced a special dividend of $150 million. The special dividend is about 46.9 cents per ordinary share that will be payable to shareholders of record as of Sept. 40. In addition, the company’s executives, directors, founders and related entities have agreed to a new lockup period through the date after its fourth quarter and full year earnings report.

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