Spiffbet Q2 net revenue plummets 39% among several mitigating factors
Stockholm-listed firm pins drop-off on license migration, lower marketing spend, seasonality and higher player payouts
Spiffbet has posted Q2 2023 net revenue of SEK10.4m (£750,000), representing a 39% year-on-year (YoY) drop from Q2 2022.
This figure is also a 22% decrease on the firm’s result in Q1 2023. The operator attributed this drop to a licence migration, lower marketing spend, seasonality and higher payout to players.
When breaking down revenue by segment, the operator’s B2C online games arm decreased 32% from SEK14.8m to SEK10.1m. Spiffbet also put this decrease down to an adjustment of the brand portfolio, licence migration and lower marketing investments.
The firm’s B2B game development and casino services generated revenue of SEK218,000, which is a 90% YoY drop-off from the SEK2.2m for the same period last year.
Net profit in Q2 amounted to negative SEK6.3m, with the metric negatively impacted by depreciation and write-downs of SEK4.8m.
During the quarter, Spiffbet migrated its brands to new licenses, which it believed was the reason for lower revenue, especially in June. In the opening two quarters, the firm reviewed its marketing costs with the aim of creating higher efficiency. In relation to this, Spiffbet collaborated with an external firm to handle marketing.
On the second quarter’s results, Spiffbet CEO Henrik Svensson commented: “Revenues were too low during the quarter. We migrated our core brands to new licences within the same platform. This disrupted the business, and before the migrations, we were hesitant with marketing because a migration always involves a risk. This contributed to lower revenues compared to previous quarters.
“Overall, migration worked well, and although it had a negative impact on revenues in the short term, it was a good investment for the future. We see positive effects in this area at the beginning of the third quarter. Costs were in line with Q1, and, despite declining revenues, we were able to maintain the gross margin we had in Q1. In summary, I am disappointed with the second quarter but believe that we can increase during the rest of the year.”
Despite the negative results, Svensson still remained positive about the firm’s performance going forward.
He said: “When we analyse the outcome in the first half of the third quarter, we are pleasantly surprised that we have good growth in player deposits but that we only used two-thirds of our marketing budget. This makes me positive that we can grow at reasonable marketing costs in the future. Thus, we now have an accelerator pedal that allows us to increase the speed but still be more efficient than before.”
Following the quarter’s conclusion, Spiffbet sold its game development business to Million Games in a deal worth up to SEK3.5m.
The sale will include STHLM GAMING, all games in Rhino Gaming’s portfolio and related intellectual property rights.
As a result of the sale, Spiffbet will now focus on its B2C casino business and its B2B platform services division.