The drop is the result of the publisher warning investors that the first five months of the year didn't show the needed results.
Devolver shares had a dramatic drop today, decreasing 47% to 72.5 GBX after the company downgraded its sales expectations for the year. The company said the disappointing start was a result of a ‘competitive’ release window and ‘specific factors for each title which are being actively addressed for future titles’.
"Sales from new games released in the first five months of FY22 have been slower than expected, reflecting a competitive release window and specific factors for each title which are being actively addressed for future titles," the company revealed.
"At the same time, there has been an expected step-up in amortization costs related to these heavier-investment games upon release, as well as increases in general operating expenses due to inflation, headcount, and marketing."
The company noted they expect full-year 2022 revenue to increase at least 30% to between $130 million and $140 million, with EBITDA growing at least 15% to between $27 million and $32 million. The team expects their catalog of more than 90 previously released titles to generate most of the sales.
"The board expects revenues and profit to be weighted towards the second half of FY22, supported by highly anticipated new title releases, strong demand from subscription platforms, and continued evergreen back catalogue sales at year-end," the company added.
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