PopReach Swings to Profit in Q2, Revenue Falls

PopReach Corporation (POPR) reported mixed second-quarter results on Monday morning. The developer of free-to-play games for mobile and desktop swung a profit in the second quarter, but experienced a decline in revenues year-over-year.

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Indeed, revenue came in at $4.4 million in Q2 2021, a decrease of 10.2% from $4.9 million in the prior-year quarter, but an increase of 7.3% from Q1 2021. (See POPR stock charts on TipRanks)

On the other hand, revenue coming from mobile platforms — Amazon (AMZN), Apple (AAPL), and Google (GOOGL) — totaled $3.5 million, up 12.9% from the $3.1 million reported in the prior-year quarter. PopReach’s execution of its growth strategy led to sequential mobile revenue growth of 17% quarter-over-quarter.

The ongoing execution of operating cost reductions led to a gross profit margin of 65.3%. Gross profit margin was 62% in Q1 2021, and 59% in Q2 2020.

Net income amounted to $1.1 million ($0.01 per share) in the three months ended June 30, compared to a net loss of $1.8 million ($0.05) a year ago.

PopReach co-founder and CEO Jon Walsh said, “The investments we have made in our key growth franchises are starting to pay dividends as we posted another quarter of double-digit sequential growth in mobile platform revenue, which more than offset the decline in revenue from Facebook Canvas games that are now in sunset mode. …

“We have also begun investing in new user growth, and have seen encouraging results to date.”

Three months ago, Echelon Wealth Partners analyst Rob Goff reiterated a Buy rating on POPR with a C$1.50 price target. This implies 138.1% upside potential.

The rest of the Street is cautiously optimistic on POPR, with a Moderate Buy consensus rating, based on two Buys. The average PopReach Corporation price target of C$1.35 implies 114.3% upside potential to current levels.