Big Fish Games profits up 128% after slashing marketing spend
Churchill Downs-owned business also sees total bookings drop as it refocuses on social casino
Big Fish Games has reported a 128% year-on-year increase in adjusted EBITDA despite a drop in total bookings, thanks to major cuts to its marketing expenses.
Q1 EBITDA for Churchill Downs’ social games business grew 128% to $20.3m, even as total bookings fell 13% to $110.9m.
The marketing savings came entirely from a pullback in user acquisition spend for the mobile casual and midcore gaming segments, with some budget being redirected toward social casino.
As a result, social casino bookings grew 5% sequentially (down 2% year-on-year), also helped by new features in both Big Fish Casino and Jackpot City Slots.
Management noted that Jackpot City Slots is now meaningfully adding to its social casino bookings and is suggested it has found another sustainable addition to its portfolio.
Eilers and Krejcik said in an analysts note: “While the headline bookings number for Big Fish was not all that impressive, we do believe it’s on the right path as management is positioning the company for sustainable long-term growth and profitability (by refocusing its resources and UA spend towards the casino category.
“Notably, the company has done a much better job of containing marketing expenses over the past few quarters and we should begin to see less EBITDA margin deviation going forward.”
Elsewhere, Churchill Downs’ online horseracing betting arm Twin Spires outperformed the US thoroughbred industry by 7.8%, with handle up 6.8% year-on-year.
Net revenues grew 5% to $52m while adjusted EBITDA grew 9% to $13.2m. By contrast, Churchill Downs’ offline racing business saw a $2.3 decline in net revenues to $26.1m.