Game developer Huuuge Games recently released a financial report, and it isn’t all good news. While Q1 2023 revenue hit $71.7 million, the company saw a decline of 14.6%, compared with $84 million in Q1 2022. Despite this setback, the company experienced an all-time high in EBITDA, reaching $27.6 million this year. This signifies a significant YoY increase compared to $14.4 million in Q1 2022.
The CEO of Huuuge, Anton Gauffin, explained that company actions such as reducing expenses, focusing on their core franchises for longevity, and strong cash generation improved the company’s profitability. The plan to buy back $150 million of shares will be achieved through a time-limited Invitation To Sell (ITS). Gauffin believes the capital allocation decisions and business fundamentals will be well appreciated by shareholders.
Examining the Successes and Struggles of Huuuge Games
The company saw a significant dip in Daily Active Users (DAUs), which plummeted 33.2% YoY, from 701,600 in Q1 2022 to 468,400 in Q1 2023. Furthermore, Daily Paying Users (DPUs) decreased by 28.6%, from 25,000 in Q1 2022 to 17,800 in Q1 2023. Yet, Huuuge saw several KPI boosts, including Average Revenue per User (ARPU) and Average Revenue Per Paying User (ARPPU) increases. ARPU rose 27.8% from $1.3 to $1.7, while ARPPU in core franchises rose 14.8% YoY from $41.5 in Q1 2022 to $47.6 in Q1 2023.
“We reduced sales & marketing expenses by 69% YoY, R&D expenses by 20% YoY, and total operating expenses by 35% YoY,” said Huuuge executive vice president of finance Marek Chwalek. “These efforts exemplify our harvesting strategy in action, and have resulted in significantly improved cash generation. Our Adjusted net result more than doubled compared to the previous year.”
Huuuge Games’ annual report, released in march, showed that the company generated $319 million throughout 2022. Despite the market conditions and the decline in Q1 revenue, the company continues to see improved profitability.