LONDON and
NEW YORK, Feb. 11, 2016 /PRNewswire/ -- King Digital
Entertainment plc ("King" or the "Company") (NYSE: KING), a leading
interactive entertainment company for the mobile world, today
reported financial results for the fourth quarter and full year
ended December 31, 2015.
King CEO Riccardo Zacconi
said, "Our fourth quarter 2015 results reflect our continued
execution on our franchise strategy. For the fourth consecutive
quarter, both Candy Crush Saga and Candy Crush Soda
Saga continued to rank within the top 5 grossing games in the
Apple App Store and Google Play Store in the
U.S. We are also pleased to have launched the
third installment of the Candy Crush franchise, Candy
Crush Jelly Saga, which introduces new challenges and game
modes, including our first 'boss mode', to offer our players
another fun way to play one of the world's most popular
games."
Financial Summary and Key Performance
Metrics (in millions, except per share and per
user data)
|
Three Months Ended
|
|
|
Years Ended
|
|
|
December 31,
|
|
|
December 31,
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross bookings
|
$
|
509
|
|
|
$
|
586
|
|
|
$
|
2,145
|
|
|
$
|
2,382
|
|
Adjusted revenue
|
$
|
478
|
|
|
$
|
559
|
|
|
$
|
2,021
|
|
|
$
|
2,284
|
|
Adjusted EBITDA
|
$
|
188
|
|
|
$
|
237
|
|
|
$
|
826
|
|
|
$
|
950
|
|
Adjusted EBITDA margin
|
39%
|
|
|
42%
|
|
|
41%
|
|
|
42%
|
|
Capital expenditures
|
$
|
26
|
|
|
$
|
17
|
|
|
$
|
62
|
|
|
$
|
41
|
|
Adjusted profit
|
$
|
123
|
|
|
$
|
184
|
|
|
$
|
617
|
|
|
$
|
738
|
|
Adjusted EPS
|
$
|
0.38
|
|
|
$
|
0.57
|
|
|
$
|
1.93
|
|
|
$
|
2.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
461
|
|
|
$
|
546
|
|
|
$
|
1,999
|
|
|
$
|
2,260
|
|
Profit
|
$
|
91
|
|
|
$
|
141
|
|
|
$
|
517
|
|
|
$
|
575
|
|
Diluted EPS
|
$
|
0.28
|
|
|
$
|
0.44
|
|
|
$
|
1.62
|
|
|
$
|
1.79
|
|
Net cash provided by operating
activities
|
$
|
212
|
|
|
$
|
155
|
|
|
$
|
676
|
|
|
$
|
661
|
|
Cash and cash equivalents at end of
period
|
$
|
1,107
|
|
|
$
|
964
|
|
|
$
|
1,107
|
|
|
$
|
964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Performance Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Monthly active users (MAUs)
|
|
449
|
|
|
|
533
|
|
|
|
494
|
|
|
|
499
|
|
Daily active users (DAUs)
|
|
128
|
|
|
|
149
|
|
|
|
141
|
|
|
|
142
|
|
Monthly unique users (MUUs)
|
|
318
|
|
|
|
356
|
|
|
|
338
|
|
|
|
350
|
|
Monthly unique payers (MUPs)
|
|
6.583
|
|
|
|
8.344
|
|
|
|
7.386
|
|
|
|
9.824
|
|
Monthly gross average bookings per
|
$
|
25.76
|
|
|
$
|
23.42
|
|
|
$
|
24.20
|
|
|
$
|
20.21
|
|
paying user
(MGABPPU)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2015 Highlights
- On a worldwide basis, both Candy Crush Saga and
Candy Crush Soda Saga were top 10 grossing games for full
year 2015 on both the Apple App Store and Google Play
Store1
- Further diversified the game portfolio with the launch of
four mobile games, each introducing a new game play to King players
around the world
- Two King games, Paradise Bay and Blossom Blast
Saga, were named in Facebook's 2015 Games of the Year, and
Candy Crush Soda Saga was highlighted by Google as one of
the Best Games of 2015
- Expanded distribution platforms to include Windows 10 and
entered into agreement for certain King games to automatically
install with Windows 10 during an initial
period
- Grew portfolio of localized games in Asia with launches of six titles in
South Korea, five titles in
China, and four titles in
Japan
Full Year 2015 Results Summary
Gross Bookings and Revenue
- Gross bookings were $2.1
billion in 2015, representing an annual decrease of
$238 million, or
10%. Excluding the impact of changes in foreign
exchange rates, gross bookings would have decreased by
approximately 3%.
- In 2015, 82%, or $1.8
billion of gross bookings were derived from our mobile
audience. This represented a 3% annual decline
in mobile gross bookings. Gross bookings from
web platforms were $379 million,
representing a 33% annual decrease.
- Revenue was $2.0 billion in
2015, representing an annual decrease of $261 million or 12%.
Profit
- Profit for the year was $517
million, representing a year over year decrease of
$58 million, or 10%.
Adjusted EBITDA
- Adjusted EBITDA was $826
million in 2015 representing a year over year decrease of
$124 million, or
13%.
Cash and Cash Equivalents
- Cash and cash equivalents were $1.1
billion at December 31,
2015, representing a year over year increase of
$143 million, primarily resulting from
net cash provided by operating activities, partially offset by net
cash used in investing and financing
activities.
Fourth Quarter 2015 Results Summary
Gross Bookings and Revenue
- Gross bookings were $509
million for fourth quarter 2015,
representing a sequential increase of $7
million, or 1%, and a year over
year decrease of $78 million, or
13%. Excluding the impact of
changes in foreign exchange rates, gross bookings would have
increased by approximately 3%
sequentially, and would have decreased by
approximately 8% year over
year.
- In fourth quarter 2015, 84% or $428 million of gross bookings were derived from
our mobile audience. This represented a 3% sequential increase and
a 7% year over year decrease in mobile gross bookings. Gross
bookings from web platforms were $80
million in fourth quarter 2015, representing 8% sequential
and 37% year over year decreases.
- Gross bookings from games other than Candy Crush
Saga2
were $302 million for fourth quarter
2015, in line with third quarter 2015, and representing a year over
year decrease of $22 million, or
7%.
- Revenue was $461 million
for fourth quarter 2015, representing a sequential decrease of
$19 million, or 4%, and a year over
year decrease of $85 million, or
16%.
- The increase in gross bookings from third quarter 2015 to
fourth quarter 2015 was primarily driven by growth in Candy
Crush Saga and our newer games. The
sequential decrease in revenue reflects the growth in gross
bookings which was more than offset by an increase in deferred
revenue for virtual item balances held by players.
- The year over year decreases in both gross bookings and
revenue were primarily due to lower gross bookings from our more
mature games, in particular Candy Crush Saga, partially
offset by increased gross bookings from our newer games, in
particular Candy Crush Soda Saga.
Additionally, no new franchise games were launched in 2015, as
compared to three franchise games launched in the prior year. New
franchise games tend to offset declines in our more mature games.
The decrease in revenue also reflects a higher sales tax related to
the value added tax legislation in the European Union effective in
2015, and sales tax provision reductions in other jurisdictions in
2014.
Profit
- Profit was $91 million for
fourth quarter 2015, representing a decrease of $52 million, or 36%, compared to third quarter
2015. The decrease was primarily due to change in deferred revenue
and higher acquisition-related and income tax expenses, which were
partially offset by higher adjusted EBITDA.
- Fourth quarter 2015 profit decreased by $50 million, or 36%, compared to fourth quarter
2014. The decrease was primarily due to lower
adjusted EBITDA, a foreign exchange loss compared to a gain in the
prior year period, and higher acquisition-related expenses, which
were partially offset by lower income tax expense.
Adjusted EBITDA
- Fourth quarter 2015 adjusted EBITDA was $188 million, representing an increase of
$7 million, or 4%, compared to third
quarter 2015. The sequential increase was
primarily due to higher gross bookings and lower sales and
marketing expenses, which were partially offset by higher platform
fees and research and development
expenses.
- Compared to fourth quarter 2014, adjusted EBITDA
decreased $49 million, or
21%. The year over year decrease was primarily
due to lower gross bookings and revenue and higher research and
development and general and administrative expenses, which were
partially offset by lower platform fees and sales and marketing
expenses.
Cash and Cash Equivalents
- Cash and cash equivalents were $1.1 billion at December
31, 2015, up $187 million
since September 30, 2015.
Network Reach
- MAUs were 449 million in fourth quarter 2015, down 25
million, or 5%, from third quarter 2015, and down 84 million, or
16%, from fourth quarter 2014.
- DAUs were 128 million in fourth quarter 2015, down 5
million, or 4%, from third quarter 2015, and down 21 million, or
14%, from fourth quarter 2014.
- The sequential and year over year decreases in MAUs and
DAUs were due to decreased activity, primarily in Candy Crush
Saga as well as in our other mature games, partially offset by
increased activity in our newer games. The rate of decline was
higher on web than mobile, which we believe is primarily due to
newer mobile game launches that have not launched on web, and a
continuing decline in Facebook desktop players.
- MUUs were 318 million in fourth quarter 2015, down 12
million, or 4%, from third quarter 2015, and down 38 million, or
11%, from fourth quarter 2014.
- The sequential decrease in MUUs was reflected in both web
and mobile, but at a greater rate of decline on web, which we
believe is primarily due to the fourth quarter mobile launch of a
game which was not also launched on web, and a continuing decline
of Facebook desktop players.
- The year over year decrease in MUUs was reflected in both
web and mobile, but at a greater rate of decline on web, which we
believe is primarily due a continuing decline of Facebook desktop
players, and mobile game launches in the second half of 2015 that
have not launched on web.
Monetization
- MUPs in fourth quarter 2015 were 6.6 million, down
264,000, or 4%, from third quarter 2015, and down 1.8 million, or
21%, from fourth quarter 2014.
- The sequential decrease in MUPs reflects decreases in
mobile and web. MUPs declined at a slower rate
than in third quarter 2015, which we believe reflects our efforts
to improve engagement and monetization through continuous game
optimization and ongoing deployment of live ops in our franchise
games.
- The year over year decrease in MUPs reflects decreases on
mobile and web. The decrease was primarily in
our less engaged payers, which we define as payers who paid in only
one game. Additionally, our transition to virtual currency
in our mobile games through the end of 2014 contributed to the
decline in MUPs as virtual currency reduces the frequency of
transactions due to purchases of larger packages of virtual
currency which are used over extended periods.
- MGABPPU increased to $25.76
in fourth quarter 2015, up $1.31, or
5%, from third quarter 2015, and up $2.34, or 10%, from fourth quarter
2014.
- The sequential and year over year increases in MGABPPU
primarily reflect the impact of product optimizations introduced in
our games, including live ops.
Activision Blizzard Transaction
On November 2, 2015 the
Company announced that it had signed a definitive agreement to be
acquired by Activision Blizzard, Inc., a global interactive
entertainment company (the "Acquisition"). Under
the terms of the agreement Activision Blizzard will purchase all
outstanding and issued shares of King for $18 in cash per share, for a total equity value
of approximately $5.9
billion. The proposed transaction is
being implemented by means of a scheme of arrangement under Irish
law (the "Scheme"), and the resolutions required to approve the
Scheme were passed by the requisite shareholder majorities at the
Scheme meetings and the related extraordinary general meeting held
on January 12, 2016.
The completion of the Acquisition remains subject to
regulatory approvals and other customary closing conditions set out
in the scheme circular related to the Acquisition, including the
satisfaction of the EU Merger Regulation condition and sanction of
the Scheme by the High Court of Ireland at the hearing to be held on
February 18, 2016. The Scheme is
expected to take effect in late February, subsequent to this
hearing.
About King
King Digital Entertainment plc (NYSE: KING) is a leading
interactive entertainment company for the mobile world. It had a
network of 318 million monthly unique users as of fourth quarter
2015, has developed more than 200 exclusive games, and offers games
in over 200 countries and regions through its king.com and
royalgames.com websites, Facebook, and mobile distribution
platforms such as the Apple App Store, Google Play Store and Amazon
Appstore. King has game studios in Stockholm, Malmö, London, Barcelona, Berlin, Singapore, and Seattle, along with offices in San Francisco, Malta, Seoul,
Tokyo, Shanghai and Bucharest.
Forward Looking Statements
All statements other than statements of historical fact
contained in this release, including statements regarding the
Activision Blizzard Acquisition are forward-looking statements.
King has based these forward-looking statements on its estimates
and assumptions as of the date of this release. These
forward-looking statements are subject to a number of risks,
uncertainties and assumptions that could cause actual results to
differ materially. Factors that might cause or contribute to such
differences include, but are not limited to: uncertainties as to
the timing of the Acquisition; uncertainties as to whether
Activision Blizzard will be able to consummate the Acquisition; the
possibility that competing offers will be made; the possibility
that certain conditions to the consummation of the Acquisition will
not be satisfied; the possibility that Activision Blizzard will be
unable to obtain regulatory approvals for the Acquisition on a
timely basis or at all, or be required, as a condition to obtaining
regulatory approvals, to accept conditions that could reduce the
anticipated benefits of the Acquisition; the possibility that
shareholders will file lawsuits challenging the Acquisition,
including actions seeking to rescind the Scheme or enjoin the
consummation of the Acquisition; the ability to meet expectations
regarding the accounting and tax treatments of the Acquisition;
changes in relevant tax and other laws or regulations; the
possibility that the Scheme may be terminated in circumstances that
require King to reimburse certain expenses to Activision Blizzard
or Activision Blizzard to pay a termination fee to King related to
the Acquisition; and changes in the economic and financial
conditions of the businesses of Activision Blizzard, King, or the
combined company.
New risks emerge from time to time. It is not possible for
King management to predict all risks, nor can King assess the
impact of all factors on its business or the Activision Blizzard
Acquisition or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statements that King may make. In
light of these risks, uncertainties and assumptions, the
forward-looking events and circumstances discussed in this release
are inherently uncertain and may not occur, and actual results
could differ materially and adversely from those anticipated or
implied in the forward-looking statements. Accordingly, you should
not rely upon forward-looking statements as predictions of future
events. King does not undertake any obligation to update publicly
or revise any forward-looking statements for any reason after the
date of this release, nor to conform these statements to actual
results, future events, or to changes in King's
expectations.
Non-GAAP and Other Financial Measures
King uses International Financial Reporting Standards
("IFRS"). In addition to IFRS financials, this release includes
certain financial measures not based on IFRS, including gross
bookings, adjusted revenue, adjusted EBITDA, adjusted EBITDA
margin, adjusted profit and adjusted EPS, as well as certain gross
bookings information presented on a constant currency basis. These
non-GAAP measures are in addition to, not a substitute for or
superior to, measures of financial performance prepared in
accordance with IFRS. The non-GAAP financial measures used by King
may differ from the non-GAAP financial measures used by other
companies, and are not intended to be considered in isolation or as
a substitute for the financial information prepared and presented
in accordance with IFRS. Some limitations of the non-GAAP financial
measures we use are listed below:
Gross Bookings: Gross bookings is a
non-GAAP financial measure that is not calculated in accordance
with IFRS. Gross bookings is the economic benefit collected from
the sale of virtual items and for access to skill tournaments. The
Company uses gross bookings to evaluate the results of operations,
generate future operating plans and assess performance. While King
believes that this non-GAAP financial measure provides a meaningful
measurement of the business performance during a particular period
because it measures the total cash spend by players in the period,
this information should be considered as supplemental in nature and
is not meant as a substitute for revenue recognized in accordance
with IFRS. In addition, other companies, including companies within
our industry, may calculate gross bookings differently or not at
all, which reduces its usefulness as a direct comparative
measure.
Adjusted Revenue: Adjusted revenue is
a non-GAAP financial measure that is not calculated in accordance
with IFRS. King defines adjusted revenue as revenue adjusted to
include changes in deferred revenue. King believes that adjusted
revenue is a useful metric for calculating adjusted EBITDA margin
and understanding our operating results and ongoing
profitability.
Adjusted EBITDA and Adjusted EBITDA Margin:
Adjusted EBITDA and adjusted EBITDA margin are non-GAAP
financial measures that are not calculated in accordance with IFRS.
King defines adjusted EBITDA as profit (loss), adjusted for income
tax expense (credit), foreign currency exchange loss (gain),
acquisition-related (benefit) expense (including
acquisition-related contingent consideration fair value adjustments
and other acquisition-related adjustments), non-operating (income)
expense, net finance (income) costs, depreciation, amortization,
share-based and other equity-related compensation (including social
security charges associated therewith) and changes in deferred
revenue. King defines adjusted EBITDA margin as adjusted EBITDA as
a percentage of adjusted revenue. King believes that adjusted
EBITDA and adjusted EBITDA margin are useful metrics for investors
to understand and evaluate our operating results and ongoing
profitability because they permit investors to evaluate our
recurring profitability from our ongoing operating activities. King
also uses these measures internally to establish forecasts, budgets
and operational goals and to manage and monitor our business, as
well as evaluating our ongoing and historical performance. Adjusted
EBITDA and adjusted EBITDA margin have certain limitations as
analytical tools, and you should not consider them in isolation or
as a substitute for analysis of our results of operations as
reported under IFRS. Other companies, including companies in our
industry, may calculate adjusted EBITDA differently or not at all,
limiting its usefulness as a direct comparative measure.
Capital Expenditures: King defines
capital expenditures as the amount paid in the period for the
purchase of property, plant and equipment, and intangible assets.
King monitors capital expenditures as a measure of the amount we
have invested in maintaining or growing the scope of our business.
Other companies, including companies in our industry, may calculate
capital expenditures differently or not at all, limiting its
usefulness as a direct comparative measure.
Adjusted Profit: Adjusted profit is a
non-GAAP financial measure that is not calculated in accordance
with IFRS. King defines adjusted profit as profit (loss), adjusted
for share-based and other equity-related compensation (including
social security charges associated therewith), changes in deferred
revenue, acquisition-related (benefit) expense (including
acquisition-related contingent consideration fair value adjustments
and other acquisition-related adjustments) and amortization of
acquired intangible assets. Other companies, including companies in
our industry, may calculate adjusted profit differently or not at
all, limiting its usefulness as a direct comparative
measure.
Adjusted EPS: Adjusted EPS is a
non-GAAP financial measure that is not calculated in accordance
with IFRS. King defines adjusted EPS as adjusted profit divided by
the diluted weighted average number of ordinary shares in issue
during the period.
Foreign Exchange Effect on Gross Bookings:
Certain gross bookings information in this release is
presented on a constant currency basis. This information was
calculated using exchange rates consistent with those in effect for
the comparative periods. We believe the constant currency measures
provide investors with useful supplemental information about the
financial performance of our business, enable comparison of
financial results between periods where certain items may vary
independent of business performance, and allow for greater
transparency with respect to key metrics used by management in
operating our business. Investors should be cautioned that the
effect of changing foreign currency exchange rates has an actual
effect on operating results.
Reconciliations of these non-GAAP measures to the most
directly comparable IFRS measure are included in the accompanying
tables.
For definitions of key performance indicators including
MAUs, DAUs, MUUs, MUPs and MGABPPU, and other financial measures
including Movement in player wallet and other adjustments, please
see "Key Operating Metrics" and "Non-GAAP Financial Measures" in
Management's Discussion and Analysis of Financial Condition and
Results of Operations in our Form 6-K filed by the Company with the
U.S. Securities and Exchange Commission on November 5, 2015.
Certain figures in the release may not recalculate exactly
due to rounding. This is because percentages and/or figures
contained herein are calculated based on actual numbers and not the
rounded numbers presented.
Contacts
|
|
|
|
|
|
Investors:
|
|
Media:
|
Alice Ryder, VP of Investor
Relations
|
|
Susannah Clark, VP of
Communications
|
ir@king.com
|
|
press@king.com
|
|
|
|
|
|
Brunswick Group
|
|
|
kingteam@brunswickgroup.com
|
KING DIGITAL ENTERTAINMENT PLC
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
data)
(unaudited)
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
2015
|
|
|
2014
|
|
Revenue
|
$
|
460,736
|
|
|
$
|
545,617
|
|
Other income
|
|
2,264
|
|
|
|
9,163
|
|
Costs and expenses*:
|
|
|
|
|
|
|
|
Cost of revenue
|
|
151,445
|
|
|
|
174,774
|
|
Research and development
|
|
52,641
|
|
|
|
48,533
|
|
Sales and marketing
|
|
71,493
|
|
|
|
107,763
|
|
General and administrative
|
|
56,145
|
|
|
|
37,075
|
|
Total costs and expenses
|
|
331,724
|
|
|
|
368,145
|
|
Other gains
|
|
208
|
|
|
|
17,645
|
|
Net finance costs
|
|
(6)
|
|
|
|
(196)
|
|
Profit before tax
|
|
131,478
|
|
|
|
204,084
|
|
Income tax expense
|
|
40,811
|
|
|
|
63,467
|
|
Profit
|
$
|
90,667
|
|
|
$
|
140,617
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to the equity holders
of the Company during the period:
|
|
|
|
|
|
|
|
Basic earnings per share
|
$
|
0.29
|
|
|
$
|
0.45
|
|
Diluted earnings per share
|
$
|
0.28
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computing
earnings per share:
|
|
|
|
|
|
|
|
Basic
|
|
312,721
|
|
|
|
315,207
|
|
Diluted
|
|
320,822
|
|
|
|
322,203
|
|
|
|
|
|
|
|
|
|
_______________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Includes share-based and other equity-related
compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
$
|
165
|
|
|
$
|
507
|
|
Research and development
|
|
7,406
|
|
|
|
11,623
|
|
Sales and marketing
|
|
2,235
|
|
|
|
2,042
|
|
General and administrative
|
|
11,360
|
|
|
|
12,927
|
|
Total share-based and other equity-related compensation
expense
|
$
|
21,166
|
|
|
$
|
27,099
|
|
KING DIGITAL ENTERTAINMENT PLC
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
data)
(unaudited)
|
|
|
|
|
Years Ended
December 31,
|
|
|
2015
|
|
|
2014
|
|
Revenue
|
$
|
1,999,490
|
|
|
$
|
2,260,241
|
|
Other income
|
|
13,079
|
|
|
|
9,163
|
|
Costs and expenses*:
|
|
|
|
|
|
|
|
Cost of revenue
|
|
636,295
|
|
|
|
716,743
|
|
Research and development
|
|
198,445
|
|
|
|
177,934
|
|
Sales and marketing
|
|
344,822
|
|
|
|
455,408
|
|
General and administrative
|
|
178,410
|
|
|
|
184,236
|
|
Total costs and expenses
|
|
1,357,972
|
|
|
|
1,534,321
|
|
Other gains
|
|
21,859
|
|
|
|
34,100
|
|
Net finance costs
|
|
(667)
|
|
|
|
(905)
|
|
Profit before tax
|
|
675,789
|
|
|
|
768,278
|
|
Income tax expense
|
|
159,010
|
|
|
|
193,427
|
|
Profit
|
$
|
516,779
|
|
|
$
|
574,851
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to the equity holders
of the Company during the year:
|
|
|
|
|
|
|
|
Basic earnings per share
|
$
|
1.65
|
|
|
$
|
1.86
|
|
Diluted earnings per share
|
$
|
1.62
|
|
|
$
|
1.79
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computing
earnings per share:
|
|
|
|
|
|
|
|
Basic
|
|
312,428
|
|
|
|
309,120
|
|
Diluted
|
|
319,438
|
|
|
|
320,301
|
|
|
|
|
|
|
|
|
|
_______________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Includes share-based and other equity-related
compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
$
|
1,254
|
|
|
$
|
5,709
|
|
Research and development
|
|
39,912
|
|
|
|
63,992
|
|
Sales and marketing
|
|
10,925
|
|
|
|
11,712
|
|
General and administrative
|
|
47,780
|
|
|
|
85,876
|
|
Total share-based and other equity-related compensation
expense
|
$
|
99,871
|
|
|
$
|
167,289
|
|
KING DIGITAL ENTERTAINMENT PLC
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
(in thousands)
(unaudited)
|
|
|
|
|
|
Years Ended
|
|
|
|
|
December 31,
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
1,107,386
|
|
|
$
|
963,972
|
|
Trade and
other receivables
|
|
|
|
157,880
|
|
|
|
228,392
|
|
Income tax
receivable
|
|
|
|
39,654
|
|
|
|
103,748
|
|
Total current
assets
|
|
|
|
1,304,920
|
|
|
|
1,296,112
|
|
Non current
assets
|
|
|
|
|
|
|
|
|
|
Intangible
assets, net
|
|
|
|
104,744
|
|
|
|
48,587
|
|
Property,
plant and equipment, net
|
|
|
|
56,541
|
|
|
|
34,310
|
|
Deferred tax
assets
|
|
|
|
30,745
|
|
|
|
14,733
|
|
Income tax
receivable
|
|
|
|
34,598
|
|
|
|
38,431
|
|
Other
deposits
|
|
|
|
2,599
|
|
|
|
9,604
|
|
Total non
current assets
|
|
|
|
229,227
|
|
|
|
145,665
|
|
Total
assets
|
|
|
$
|
1,534,147
|
|
|
$
|
1,441,777
|
|
Liabilities
and shareholders' equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
Trade and
other payables
|
|
|
|
101,323
|
|
|
|
137,638
|
|
Deferred
revenue
|
|
|
|
56,274
|
|
|
|
34,310
|
|
Income tax
liabilities
|
|
|
|
167,570
|
|
|
|
232,637
|
|
Provision for
other liabilities
|
|
|
|
4,017
|
|
|
|
-
|
|
Total current
liabilities
|
|
|
|
329,184
|
|
|
|
404,585
|
|
Non current
liabilities
|
|
|
|
|
|
|
|
|
|
Deferred tax
liabilities
|
|
|
|
3,634
|
|
|
|
669
|
|
Income tax
liabilities
|
|
|
|
52,136
|
|
|
|
51,589
|
|
Provision for
other liabilities
|
|
|
|
9,673
|
|
|
|
3,055
|
|
Other non
current liabilities
|
|
|
|
4,356
|
|
|
|
13,000
|
|
Total non
current liabilities
|
|
|
|
69,799
|
|
|
|
68,313
|
|
Total
liabilities
|
|
|
$
|
398,983
|
|
|
$
|
472,898
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
|
77
|
|
|
|
78
|
|
Other
reserves
|
|
|
|
404,181
|
|
|
|
456,499
|
|
Retained
earnings
|
|
|
|
730,906
|
|
|
|
512,302
|
|
Total
shareholders' equity
|
|
|
|
1,135,164
|
|
|
|
968,879
|
|
Total
liabilities and shareholders' equity
|
|
|
$
|
1,534,147
|
|
|
$
|
1,441,777
|
|
KING DIGITAL ENTERTAINMENT PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands)
(unaudited)
|
|
|
|
|
Years Ended
December 31,
|
|
|
2015
|
|
|
2014
|
|
Cash flows
from operating activities
|
|
|
|
|
|
|
|
Profit for
year
|
$
|
516,779
|
|
|
$
|
574,851
|
|
Adjustments to
reconcile profit to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
27,359
|
|
|
|
14,845
|
|
Equity settled
share-based payments
|
|
83,345
|
|
|
|
116,877
|
|
Unrealized
foreign currency exchange gain
|
|
(7,752)
|
|
|
|
(32,835)
|
|
Loss on
disposal of property, plant and equipment & intangible assets
& derecognition of intangible assets
|
|
3,486
|
|
|
|
1,055
|
|
Impairment
charge
|
|
2,875
|
|
|
|
-
|
|
Net finance
costs
|
|
667
|
|
|
|
905
|
|
Income tax
expense
|
|
159,010
|
|
|
|
193,427
|
|
Change in fair
value of contingent consideration
|
|
(20,000)
|
|
|
|
(4,000)
|
|
Change in
deferred revenue
|
|
21,964
|
|
|
|
23,368
|
|
Change in
provisions
|
|
10,635
|
|
|
|
(15,513)
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
|
|
Trade
receivables
|
|
78,141
|
|
|
|
4,020
|
|
Prepayments,
other receivables, current and non current assets
|
|
(3,974)
|
|
|
|
(15,505)
|
|
Trade
payables
|
|
(14,740)
|
|
|
|
(5,488)
|
|
Accrued
expenses and other liabilities
|
|
(16,058)
|
|
|
|
(44,130)
|
|
Cash generated
from operations
|
|
841,737
|
|
|
|
811,877
|
|
Interest
received
|
|
278
|
|
|
|
275
|
|
Finance costs
paid
|
|
(783)
|
|
|
|
(1,020)
|
|
Income tax
paid, net of refunds
|
|
(165,051)
|
|
|
|
(149,847)
|
|
Net cash
provided by operating activities
|
|
676,181
|
|
|
|
661,285
|
|
Cash flows
from investing activities
|
|
|
|
|
|
|
|
Purchases of
intangible assets
|
|
(13,589)
|
|
|
|
(9,729)
|
|
Purchase of
property, plant and equipment
|
|
(47,996)
|
|
|
|
(31,274)
|
|
Purchase of
business, net of cash acquired
|
|
(44,574)
|
|
|
|
(17,969)
|
|
Net cash used
in investing activities
|
|
(106,159)
|
|
|
|
(58,972)
|
|
Cash flows
from financing activities
|
|
|
|
|
|
|
|
Payment of
dividends
|
|
(298,175)
|
|
|
|
(363,876)
|
|
Proceeds from
initial public offering
|
|
-
|
|
|
|
329,404
|
|
Repurchase of
the company's share capital
|
|
(125,729)
|
|
|
|
(1,240)
|
|
Proceeds from
exercise of share options and employee share plan
|
|
5,725
|
|
|
|
3,062
|
|
Net cash used
in financing activities
|
|
(418,179)
|
|
|
|
(32,650)
|
|
Net increase
in cash and cash equivalents
|
|
151,843
|
|
|
|
569,663
|
|
Cash and cash
equivalents at the beginning of the year
|
|
963,972
|
|
|
|
408,695
|
|
Exchange
losses on cash and cash equivalents
|
|
(8,429)
|
|
|
|
(14,386)
|
|
Cash and cash
equivalents at the end of the year
|
$
|
1,107,386
|
|
|
$
|
963,972
|
|
Reconciliations of Non-GAAP Results to Nearest GAAP
Measures
(in thousands, except per share
amounts)
(unaudited)
|
|
|
|
|
Years Ended
|
|
|
December 31,
|
|
|
2015
|
|
2014
|
|
Reconciliation of Revenue
to Gross
Bookings:
|
|
|
|
|
|
|
Revenue
|
$
|
1,999,490
|
|
$
|
2,260,241
|
|
Sales tax
|
|
124,539
|
|
|
101,665
|
|
Other revenue
|
|
(5,814)
|
|
|
(8,648)
|
|
Movement in player wallet and other
adjustments
|
|
4,683
|
|
|
5,755
|
|
Change in deferred revenue
|
|
21,964
|
|
|
23,368
|
|
Gross bookings
|
$
|
2,144,862
|
|
$
|
2,382,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Revenue
to Adjusted
Revenue:
|
|
|
|
|
|
|
Revenue
|
$
|
1,999,490
|
|
$
|
2,260,241
|
|
Change in deferred revenue
|
|
21,964
|
|
|
23,368
|
|
Adjusted revenue
|
$
|
2,021,454
|
|
$
|
2,283,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Profit to Adjusted
EBITDA:
|
|
|
|
|
|
|
Profit
|
$
|
516,779
|
|
$
|
574,851
|
|
Add:
|
|
|
|
|
|
|
Income tax expense
|
|
159,010
|
|
|
193,427
|
|
Foreign currency exchange gain
|
|
(1,859)
|
|
|
(29,100)
|
|
Acquisition-related expense
|
|
2,001
|
|
|
4,248
|
|
Non-operating (income) expense
|
|
(11)
|
|
|
413
|
|
Net finance costs
|
|
667
|
|
|
905
|
|
Share-based and other equity-related
compensation
|
|
99,871
|
|
|
167,289
|
|
Change in deferred revenue
|
|
21,964
|
|
|
23,368
|
|
Depreciation and amortization
|
|
27,359
|
|
|
14,845
|
|
Adjusted EBITDA
|
$
|
825,781
|
|
$
|
950,246
|
|
Adjusted EBITDA margin
|
41%
|
|
42%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Profit to Adjusted
Profit:
|
|
|
|
|
|
|
Profit
|
$
|
516,779
|
|
$
|
574,851
|
|
Add:
|
|
|
|
|
|
|
Share-based and other equity-related
compensation
|
|
99,871
|
|
|
167,289
|
|
Acquisition-related expense
|
|
2,001
|
|
|
4,248
|
|
Change in deferred revenue
|
|
21,964
|
|
|
23,368
|
|
Amortization of acquired intangible
assets
|
|
2,535
|
|
|
745
|
|
Tax effect of adjustments
|
|
(25,938)
|
|
|
(32,744)
|
|
Adjusted profit
|
$
|
617,212
|
|
$
|
737,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EPS:
|
|
|
|
|
|
|
Adjusted profit
|
$
|
617,212
|
|
$
|
737,757
|
|
Diluted weighted average number of ordinary
shares
|
|
319,438
|
|
|
320,301
|
|
Adjusted EPS
|
$
|
1.93
|
|
$
|
2.30
|
|
Reconciliations of Non-GAAP Results to Nearest GAAP
Measures
(in thousands, except per share
amounts)
(unaudited)
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
2015
|
|
2014
|
|
Reconciliation of Revenue
to Gross
Bookings:
|
|
|
|
|
|
|
Revenue
|
$
|
460,736
|
|
$
|
545,617
|
|
Sales tax
|
|
30,350
|
|
|
27,406
|
|
Other revenue
|
|
(1,094)
|
|
|
(1,820)
|
|
Movement in player wallet and other
adjustments
|
|
1,125
|
|
|
1,496
|
|
Change in deferred revenue
|
|
17,657
|
|
|
13,583
|
|
Gross bookings
|
$
|
508,774
|
|
$
|
586,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Revenue
to Adjusted
Revenue:
|
|
|
|
|
|
|
Revenue
|
$
|
460,736
|
|
$
|
545,617
|
|
Change in deferred revenue
|
|
17,657
|
|
|
13,583
|
|
Adjusted revenue
|
$
|
478,393
|
|
$
|
559,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Profit to Adjusted
EBITDA:
|
|
|
|
|
|
|
Profit
|
$
|
90,667
|
|
$
|
140,617
|
|
Add:
|
|
|
|
|
|
|
Income tax expense
|
|
40,811
|
|
|
63,467
|
|
Foreign currency exchange loss
(gain)
|
|
792
|
|
|
(15,145)
|
|
Acquisition-related expense
|
|
8,718
|
|
|
464
|
|
Non-operating income
|
|
1
|
|
|
1,510
|
|
Net finance costs
|
|
7
|
|
|
196
|
|
Share-based and other equity-related
compensation
|
|
21,166
|
|
|
27,099
|
|
Change in deferred revenue
|
|
17,657
|
|
|
13,583
|
|
Depreciation and amortization
|
|
8,031
|
|
|
5,553
|
|
Adjusted EBITDA
|
$
|
187,850
|
|
$
|
237,344
|
|
Adjusted EBITDA margin
|
39%
|
|
42%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Profit to Adjusted
Profit:
|
|
|
|
|
|
|
Profit
|
$
|
90,667
|
|
$
|
140,617
|
|
Add:
|
|
|
|
|
|
|
Share-based and other equity-related
compensation
|
|
21,166
|
|
|
27,099
|
|
Acquisition-related expense
|
|
8,718
|
|
|
464
|
|
Change in deferred revenue
|
|
17,657
|
|
|
13,583
|
|
Amortization of acquired intangible
assets
|
|
703
|
|
|
461
|
|
Tax effect of adjustments
|
|
(15,432)
|
|
|
1,960
|
|
Adjusted profit
|
$
|
123,479
|
|
$
|
184,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EPS:
|
|
|
|
|
|
|
Adjusted profit
|
$
|
123,479
|
|
$
|
184,184
|
|
Diluted weighted average number of ordinary
shares
|
|
320,822
|
|
|
322,203
|
|
Adjusted EPS
|
$
|
0.38
|
|
$
|
0.57
|
|
Reconciliations of Non-GAAP Results to Nearest GAAP
Measures
(in thousands)
(unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
September 30,
|
|
|
2015
|
|
Reconciliation of Revenue
to Gross
Bookings:
|
|
|
|
Revenue
|
$
|
479,709
|
|
Sales tax
|
|
29,259
|
|
Other revenue
|
|
(1,485)
|
|
Movement in player wallet and other
adjustments
|
|
975
|
|
Change in deferred revenue
|
|
(6,314)
|
|
Gross bookings
|
$
|
502,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Profit to Adjusted
EBITDA:
|
|
|
|
Profit
|
$
|
142,684
|
|
Add:
|
|
|
|
Income tax expense
|
|
31,166
|
|
Foreign currency exchange gain
|
|
(1,614)
|
|
Acquisition-related benefit
|
|
(12,537)
|
|
Non-operating income
|
|
-
|
|
Net finance costs
|
|
272
|
|
Share-based and other equity-related
compensation
|
|
19,458
|
|
Change in deferred revenue
|
|
(6,314)
|
|
Depreciation and amortization
|
|
7,266
|
|
Adjusted EBITDA
|
$
|
180,381
|
|
Adjusted EBITDA margin
|
|
38%
|
|
Reconciliations of Non-GAAP Results to Nearest GAAP
Measures
(in thousands)
(unaudited)
|
|
Foreign Exchange Effect on Gross
Bookings:
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Sequential
|
December 31,
2015
|
|
|
September 30,
2015
|
|
Reported gross bookings
|
$
|
508,774
|
|
|
$
|
502,144
|
|
Foreign
exchange effect on Q4-15 gross bookings using Q3-15
rates
|
|
7,884
|
|
|
|
|
|
Gross bookings excluding foreign exchange
effect
|
$
|
516,658
|
|
|
|
|
|
Reported gross bookings sequential change
%
|
1%
|
|
|
|
|
|
Gross bookings excluding foreign exchange effect
sequential change %
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year over Year
|
Three Months Ended
December 31,
|
|
|
2015
|
|
|
2014
|
|
Reported gross bookings
|
$
|
508,774
|
|
|
$
|
586,282
|
|
Foreign
exchange effect on Q4-15 gross bookings using Q4-14
rates
|
|
32,282
|
|
|
|
|
|
Gross bookings excluding foreign exchange
effect
|
$
|
541,056
|
|
|
|
|
|
Reported gross bookings year over year change
%
|
(13%)
|
|
|
|
|
|
Gross bookings excluding foreign exchange effect year
over year change %
|
(8%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year over Year
|
Years Ended
December 31,
|
|
|
2015
|
|
|
2014
|
|
Reported gross bookings
|
$
|
2,144,862
|
|
|
$
|
2,382,381
|
|
Foreign
exchange effect on full year 2015 gross bookings using 2015
rates
|
|
160,800
|
|
|
|
|
|
Gross bookings excluding foreign exchange
effect
|
$
|
2,305,662
|
|
|
|
|
|
Reported gross bookings year over year change
%
|
(10%)
|
|
|
|
|
|
Gross bookings excluding foreign exchange effect year
over year change %
|
(3%)
|
|
|
|
|
|
1
According to App
Annie.
2
"Gross bookings from games other than Candy Crush
Saga" represents total gross bookings (including Candy Crush
Soda Saga) less gross bookings from Candy Crush
Saga.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/king-reports-fourth-quarter-and-full-year-2015-results-300219027.html
SOURCE King Digital Entertainment plc