888 Holdings warns of profit impact due to increased spending on AI and marketing
Online gambling company 888 Holdings has warned that its profits are likely to take a hit due to a sharp increase in investment in artificial intelligence (AI) and marketing. These investments, although draining current resources, are aimed at improving the customer experience and implementing more responsible gaming measures. However, these advances are not without significant financial costs.
Reduced income
The company’s fourth quarter and fiscal 2023 reports showed weak revenue, with total revenue of £424 million, down 7% from the year’s £457 million. former. The company now expects an adjusted EBITDA margin of approximately 18% for fiscal 2023 and expects revenue growth in fiscal 2024. UK online revenue declined 4% and revenue international by 16%. Total turnover for the 2013 financial year was £1.71 billion, down 8 per cent on the previous year.
Investor outlook and reactions
Shares in the company fell, trading at 73.05 pence, a fall of 9.8 per cent. This is primarily due to the anticipated impact of increased marketing costs and AI investments on the company’s profit for the year. Despite the decline in revenue, the company expects adjusted profit growth for the coming year, with continued growth in the number of active players. However, these prospects were not enough to allay investors’ concerns.
Investment in AI and Marketing
888 Holdings is investing heavily in AI and marketing. It’s part of a broader trend in the online gaming industry, where companies are leveraging technology and advertising to attract and retain customers in a fiercely competitive market. The company has implemented a £30 million savings program to support increased marketing spend through 2024. It has also invested in the areas of intelligent automation and data-driven insights. AI.
Although these investments are expected to improve long-term profitability and operational efficiency, they are expected to impact the company’s short-term financial performance. The announcement reflects the broader trend in the online gaming industry, where companies are increasingly turning to technology and advertising to attract and retain customers in a highly competitive market.
