King Digital Entertainment, the maker of very popular candy crush has reported itssecondquarter earnings on Tuesday. The result of the earning however was disappointing as it generated less revenue and only few players signed up than Wall Street had been expecting.
The famous game maker was whacked by investors after detaining revenue that not only disappointed but also lowered its top line guidance. The company has missed the expectation of its revenue figure with drop in the number of players playing the game day by day. Investors had expectation from the company to report $0.59 per share in non-GAAP profit on revenue of $608 million but the company however, earned $0.59 per share on a non-GAAP basis with revenue of $594 million only.The company also announced a $150 million dividend that works out to $0.469 per share.
King dropped to over 20% which is over $14 a share in after-hours trading following Tuesday’s earnings duff. Investors are definitely not pleased. Along with the unsatisfactory revenue, King also guided that its gross bookings for the current quarter will be between $500 million and $525 million which is a gross bookings for the whole year with tally up between $2.25 billion and $2.35 billion.
The King when compared the quarter of previous year 2013 and present year 2014, it reported that its daily active users fell 5 million from the previous quarter. When they were in the same quarter of 2013 (it was the time when the game candy crush saga was in hype), they generated nearly double revenue.
King’s “executive officers, directors, founders, and affiliated funds, including Bellaria Holding S.a.r.l of whom Apax WW Nominees Ltd is the sole shareholder, together representing 80% of outstanding shares, have agreed to a new lock up with the Company through the date following the Company’s announcement of fourth quarter and full year 2014 earnings.”
Riccardo Zacconi, the CEO of King has admitted that gross bookings of the second-quarter”came in below our expectations.” But still, he confronted that “the business continued to perform well,” pointing to cash flows of $154 million.
King also announced the procurement of Nonstop Games which is a studio based in Singapore. With over $10 million to retain talent, the studio was acquired for $6 million and the developer’s project is expected to launch in 2015.
Despite of candy crush saga, other games such as Bubble Witch 2 Saga and Farm Heroes Saga were not able to cover the losses. King has also set to launch the new Candy Crush Soda in wide release later this year.