Huuuge (HUG) Q2 2024 earnings summary

Executive summary

• Huuuge Casino and Billionaire Casino surpassed $2 billion in lifetime revenue, with strong cash flows and a focus on profitability, generating $32.7 million net cash flow from operations in H1 2024.

• Revenue for H1 2024 was $130.3 million, down 7.5% year-over-year, with net profit at $31.6 million, a 28.3% decrease from H1 2023.

• Core franchises generated 97% of total revenues; D2C channels accounted for 12% of Q2 sales, with further growth expected.

• Completed a $70 million share buyback, returning $220 million to shareholders over nine months.

• Investment of $3.5 million in Bananaz Studios Ltd. and ongoing new game development initiatives.

Financial highlights

• Q2 2024 revenue declined 8.4% year-over-year and 5.4% quarter-over-quarter to $63.4 million, mainly from core franchises.

• Adjusted EBITDA for Q2 was $19.4 million, with H1 adjusted EBITDA totaling $41.4 million and margin at 31%.

• Net operating cash flow for H1 was $32.7 million, with an 82% conversion rate to adjusted EBITDA for the last twelve months.

• Cash and cash equivalents at period end were $109.6 million, down from $259.6 million at June 2023, mainly due to the share buyback.

• Gross margin improved year-over-year and sequentially, aided by D2C expansion.

Outlook and guidance

• Full-year 2024 revenue, adjusted EBITDA, and margin expected to decline year-over-year due to macro headwinds and delayed product roadmap.

• Peak performance from new features anticipated in late Q4, but not enough to close H1 revenue gap.

• Marketing spend to grow year-over-year but reduced in H2 to align with product launches and maintain payback discipline.

• Continued focus on cost efficiencies and high profitability despite lower revenue.

• Two MVP/tech launches planned for new games in H2 2024; continued focus on core franchises and D2C channels.