Majesco's annual revenue up 66% to $125m, with profits of $6.8m
Zumba Fitness credited with performance boost for year ending October 31, 2011
Majesco has reported an increased net revenue of $125.3 million for the year ending October 31, 2011, up 66 per cent from the year prior.
Profits for the period also rose to $6.8 million, compared to a net loss of $1 million for the previous year.
Majesco credits the extremely successful Zumba Fitness, which has sold 6 million units globally, for the increases but the results for Q4 2011 alone were less promising. While its Zumba titles hung on in the charts, it faced stiff competition from blockbuster AAA titles on consoles.
In 2011 59 per cent of Majesco's net sales came from Nintendo Wii, and 18 per cent from Nintendo DS. For Q4 alone these figures stood at 53 per cent and 30 per cent. These percentages have risen compared to last year, suggesting Majesco is becoming increasingly reliant on Nintendo platforms.
The results for Q4 show a net loss of $3.9 million, compared to $1.5 million in 2010. There was an 8 per cent rise in net revenue, from $23.4 million last year to $25.1 million.
"In 2011, we experienced the successful launch of a brand new franchise for Majesco; Zumba Fitness has quickly become the fastest selling title in the company's history and the world's number one fitness title of 2011," said CEO Jesse Sutton.
"We grew revenues over 65 per cent in 2011, expanded gross margins by over 1200 basis points, and delivered significant profits to the bottom line. Zumba Fitness has taken the fitness category by storm, selling over 4 million units worldwide in its first 12 months, and topping the charts as the number one fitness title of the year in the US and UK.
"Finally, we are also excited about our digital initiatives - we learned a great deal in 2011, made a strategic acquisition of Quick Hit, and plan to apply this knowledge to a robust 2012 slate of social and mobile titles."
Upcoming titles for the publisher include Zumba Fitness 2, Zumba Fitness Rush, Cooking Mama 4: Kitchen Magic and Twister Mania!
"Although Majesco achieved significant top and bottom-line growth in FY:11, we think that company's potential for sustainable long-term growth remains uncertain due to Zumba revenue concentration and the potential for an inevitable decline," commented Wedbush Morgan analyst Michael Pachter.
"Zumba games are expected to account for around 70 per cent of revenues for two years in a row. Given the precipitous drop in sales experienced by dance games in recent years, and the faddish nature of different fitness regimens, we believe that the company must continue to focus on developing additional top-tier franchises in addition to increasing the number of Zumba releases year after year."