Earnings call transcript Q1 2023

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Operator

Good morning. And thank you for standing by. Welcome to the SciPlay First Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. Please be advised that today's conference is being recorded.

the President, to Investor hand Robert speaker to Vice Weiner, Relations, like conference your over today, I'd SciPlay Corporation. ahead. go Please

Robert Weiner

Thank everyone. morning, and operator, you, good

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more release and issued risks uncertainties, the regarding our earnings and our with filings to For yesterday information SEC. please these refer

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over to I'm the Now, Josh. call turn pleased to

Josh Wilson

joining us. SciPlay Good morning thanks with excited quarter. so much its to report first and that industry strong I'm for continued a performance leading

games Our setting again again outperform hitting and records. tremendous multiple numbers

growth the are social entire win. year-over-year outperformed casino accomplish has passion quarters, and focused, innovative, we our driven this We For because five by consecutive to market. our

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details is the our grew to $XXX This SciPlay or year-over-year game to attributable franchises. per results. income Now, $XXX XX% driven here increasing year. XX% million QX's the XXXX. $X.X million, strong and share to XX% from growth million QX in first Net in the performance last $X.XX of of was by are the first by compared up enduring Revenue respectively, of quarter diluted quarter,

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growing are revenue our up engine and a the for growth. illustrating profitability investments from investments. the are We at our gaining setting leverage in pace the Combined, than long-term we scalability are us SciPlay faster platform growth

first payer we important. forecast the In existing of monetization from two quarter, sustainability. the payer increased and base cohorts. are These our very They grew and our their games value points

retain and and grow convert games payers. attract, to them Our then players

our payer customers us are expanding opportunity just base. payers. currently active XX% million This X to gives have We enormous and continue over

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than an we achieved hit payers increase year-over-year, ARPDAU this XX% number QX our again quarter X% $X.XX, more we fact, year-over-year. highest of In over up XX% of through growing and QX XXX,XXX of

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Daniel O'Quinn

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the in sparking creativity overperformance are and effectiveness increased and have continuing and sustained Investments our SciPlay robust growth. collaboration in product the increased These reflected people, our while process team engine innovation. and of surrounding speed,

Now, here are QX. the key highlights for

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our year-over-year quarter, We first in record XXX,XXX. indicators. to grew continue XX% to key set a our of performance payers several records the we In

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generating from $XX million the QX, of of in a We million. liquidity $XXX liquidity quarter cash position to of in in with continue ending strong cash flow and strength, total $XXX operating operate million

shareholders investing in million value. X.X our I'm to value of than value. strength driving X. capital authorization, to shares less two financial increasing We're additional repurchase through in one Currently, in million We're are driving report deploying also the through growth shareholder shareholder translating buying by approximately share program. have we're which fully We execution capital drive to capital game $XX that repurchase completed into areas. pleased and year, May returning profitable to our we our share increasing shareholder deploy franchises, flexibility and our excess

capital, team in our of view as environment. particularly to a use the and current good repurchases market returns Board boosting Our shareholders,

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grew we Specifically, year headcount areas growth in execute strategy. to our our last key

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Operator

Instructions] [Operator

Sigdahl from The Craig-Hallum. Ryan with first question comes

Unidentified Analyst

this is Ryan. Thanks our for Will taking Good morning, questions. for on

Spell First That does compare customer going so how is titles. does demographic? existing wanted look it touch Spinner, testing to other strategy like what little does we when audience, your Thanks. And your what a target the Plays acquisition ongoing. on to from differ said, forward? differently the it

Josh Wilson

Ryan. Thanks,

Sorry. Thanks, Will. Yes.

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it cost The just now overall. what strategy is is around understanding the right

early continuing do testing light So KPIs. testing, just doing early market to on

run scaling of So to a crawl younger, we're really process. would it's to our crawl, talk shouldn't to comment a but demographic. too definitely question, look it But I that like, about younger on much still what your because phase way the much, really early be in walk, say original would

Unidentified Analyst

into And Light how critical Great. with up, then quick make that? casual a partnership maybe or follow going you categories as about content Wonder less does this think greater forward and expansion the do

Josh Wilson

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at point I less So ever it's say important. would no

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Operator

comes Soff from Next with question Deutsche Ben Bank.

Ben Soff

thanks for Hey, guys, Really the quarter. this question. strong results

doing led the business You quarter a that ad year? guys examples go revenue the guys to maybe and how more casino you milestones and of are kind wondering bit about I'm of some a Can for about we and about we little evaluating if you as growth more Thanks. think versus talk the generally the ad that specific optimization rest should then you talked social through factors have that. of question. of this the housekeeping the or guys sort maybe segmentation

Josh Wilson

multiple great is everything the hear you what the at it's very thank Ben, of this and much and are. across really what of this are investments we of each made these compliment. were is to we the you in from to to the these. for look pillars be for Yes. proud we pillars accomplish. specialization or It's so to We're to reality way because allowing that all the that world the able in segmentation driven difficult able were say us grow foundations XXXX And growth, execution fundamental build to

really first live look which I learnings users able more really at when SciPlay a engine, to ops, more as information give which a technology, in these finite features, the segment foundation out being So for us we around level. gives us data

us go gets that said, have And bucket I we segments and there do would that XX If people ability. being this together go, but we the hey, really able have them lookalike segment to an go a this, create to more and because we're sub to by metrics down actually segment of number for in able new adding group. we the attributes to infinite more and segments out them,

And really segment. this this to so it's easy say not or it's segment

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drive. engaged, in to the of is more user work the money. amazing the out worth order so more this all is together this does By more two And engaged. part And they're make becoming really

And is, to higher our couple find the the amazing investments tech/marketing we're a we can we are seen right channel that all really together right we matter long get them no doing that where the team highest LTV. see then I for in we ad cost, us able that with place, users making We all of in what right the everything, just like as remember. have it as giving a adding to we in the ROIs can three

it, So would I not the a doing on job it good just do it’s it justice to I'm but of like hope say itself. segmentation answering

Ben Soff

on Okay, makes then And sense. side. the ad

Josh Wilson

Yes, on the ad side.

think to way business working it is the the right we to but stay of happened next on think I move of now of right background, over of to actually and relatively the our expect ways the two, flat out in quarter what's pivot or kind ad we're now. kind in market

the we last year. Games last the or has As Hyper year, know, much much, IDFA significantly about the all by marketing mainly over the harder. further pushing marketing arbitrage Since changed driven market of making May the and

this, call So to have call of a dates it getting as a way higher what little would bit with you I develop XX retentions.

add keep And engaging retention. of much is games, been keeping multiple in in longer sooner our then that term new per will life so days to them built has their to sorry people that on kind system on of talented a elected which all week, team very in them multiple cycle working games

couple model in then but the I year flat So as the of there, up hitting far momentum end very, wise, starting but of XXXX. next towards creep assume from over of would the the quarters, looking having kind really to as very

Operator

The from with Aaron next Lee Macquarie. question comes

Aaron Lee

my quarter. area continue an another marketing what we the and for for to where marketing about marketing really Thanks talk campaigns UAE seems record Obviously, user learned touch year? and still pay Can latest another growth. how thinking to should growth balance and the innovation question. on payer you of continue marketing I morning. round just wanted you from spend and you off differentiate strong yourselves. like to the of about be the innovation sequential good And Hey, taking on congrats

Josh Wilson

To a everything in a Aaron, very, they up show are Thanks lot, getting I in we to team proud them. one also all kind results today. of the is of of where very the and last That Like the answered as did to me, marketing order Yes. question. is company pillars. of the us really to

pillars will you great and just You can't the do any okay two or other of fail. the

to at of luxury player continue way as the in invest kind the we of the So look it we grow able us it gives are, we marketing. to being

team able the moment, is user what seeing, has which to say in the to everything at what be is information coming best that else based we're get value. is accurate is on able market a Now, and I our the been current in that do, they're able idea take very of would to

the most those area then deeper. times, own in dive lot then put learnings, places, quarter, basically want spending, things to revenue. And we accuracy, our not which to a investment to By shows, with to you for every expectations. with to above channels what are take other right confidence money what been our way is We're do grow able the eventually continue the taking led world, as grow into, more where QX We're able our which exact gives lot world. it network which just we entire spending is sure into invest EBITDA. we're is be to were dollar. innovation spend, results the which very a to to same now in channels, our was being that able this, do The across being has even of that places when innovation and money and right the the getting that this through which and the going team together precise to more to us a understanding ping we're we're approach and We're of what what able that honest, we do do expand mentioned, to the make what measuring to us spending the spending dollar allow

user also say for media integrating not dollars, will entire our just It's spending But is so was being world. that an see the is the Now, an and feel the into the literally into like they reality come driven game, ad the innovation innovative. innovation by walking integrating is of they what this they're into experience experience environment social the an just it in, it don't building we it's whole spend. really

So we're pleased how with results to a plan is and it super couple runs it's by and approach long of do the our the as as ROI at positive the year is end more look. of to our that's going kind

Aaron Lee

seems AI Great. to very wanted this topic it generative whether Also which something helpful. be business? technology how touch the of can on broadly you. Any That's your thoughts you into incorporate and AI, you Thank generative as view be to the hour. to

Josh Wilson

hundreds interesting many there's much a do of prototypes This low can and that are right? do the hanging different Then the to order us allowing making get that it everyone's game, make a last ways throughout of low integrate inside and decisions? about faster. in or there's Then to art, quicker do company. very fast generation through used to need term like, message two to XX the miles done at help going concepts one it departments feels work. hour. long hundreds innovative Different hanging communication make it, we quarter fruit away. find right is I talking use it the concept be of across AI where an that's to ways different that things, that so everyone's mean, in how therefore of in I you quicker, just is went Is different quicker really utilized is will into really, way it art And concepts in one, order text our fruit our the really there an multiple it really to say so so the From you very, to And order VIP/customer what can be looking we from XXX Yes, the and just like hour in would things miles there marketing is we part. world that art service?

in and great, sounds for one and that it it. feed uses is who now you have that learnings is to with your it Now, every company, you've feeding or those remember with time IP And information amazing unique everyone to order it but shared to to is else it. thing work, you're the unique you

So are an quick about I what it really not think ramifications And to of a for in, companies of next jumping going the has understand be now game write in you the that where me all AI going just this. the like to says, person they're meant example what did.

as we couple or be sure And is can ways own for that for to right so happens. comfortable we off. it, anything feel sauce. cautious the the and us, secret bit going now already we've we're the being more data about a breaches, sides more continue companies internally feel information can it more of But little so of AI that and have secluded or we our both evaluating own a that But where we seen either bring

Operator

with Granda Franco from comes DA question next Our Davidson.

Franco Granda

good of the have morning. on results. I everyone. for good questions Congrats a couple morning, this Hi, you

at audience good a overall to speak growing a to payer size, could from cohorts, wondering for the the your follow you've audience but job existing done seen what size base social then have up. I You've to converting really if casino, your was you happen

Josh Wilson

Yes.

side growth I'm it's a good going, then hypothesis. to side I'll I give what On our we first and on I'm really, a it's really to is I going on data, obviously So driven a and to say everyone's from things. it feel think we see how don't I I our had mainly answer what different QX, say of going from have in few hypothesis so would access happening. the side, But audience

performance come quarter O’Connell. that out lot and organics we that is a because normally on of quarter fourth first Jerry of tremendous CPIs also in, the then The break seasonality. dramatically with go installs that add the takes up the down pretty out of to competition marketing very got A come the

So us. this one plus one case, forward plus equals of for right, kind one in

I maintain to do and be expect us degradation throughout comes continue a than anything audience wears how marketing that the seasonality is But growth more in. don't Maybe past, expect close the else. audience focus little of year. our to but is in Now, able just our I which the to then that the mainly we've going in or degradation ROI to what our done it, really to it we marketing because because is growth, do

see I probably expect in say I doubt as mentality. plus seasonality company. mission focused but But the the money, equals that you would first mentality But our one me think see of do continue what we group. has been give than what do time. something a of because we as do anything else flat, went game. are little one this little a This four. something Now, well companies is I is year, everywhere. don't imagine of up is other in has that is all everything Probably the one we to have majority of on. do one probably the you have overarching a play market QX lot the industry in getting QX XXX% down maintain my plus bit. what the This how MAU I everyone had rest to to over would market? the kind paying I not with of It plus is across stay would one the come into less payers And aiming player your A focus the two. people relatively equals they

Franco Granda

to on Yes, be And you as and But five I plus hope of know or plus makes are one one day I add one my able lot monthly this see at right to end, other around question one my revenue room reaching get a four that high sense. was your more It it point. per it's paying like highs, Because much do upside $XXX now, for from new how seems quite nearing here? user. keeps you now.

Josh Wilson

than reason the of honest, it that I honestly to on. not much I is is focusing my say more a is payers one it is KPI spend Yes, I'll company, Franco, pay. be it's a payers have not lot that and me we And it how time favorite more important as

to people growing. more won't just continue become cycle. of new marketing later bunch price. have been who year-over-year payers will more four the growth investing but and that the game playing that But as in life their go the is metric at they and dramatically. my can go users continues ours up, becomes our Technically, up in worth bring great if reason years, whole are me our Now go one a and People team up they've in three,

expect do is, So think high payers to show attention long like, As How go? I really think way in can not I the are things it best we continue to it's said, health rising probably today, keep it as of probably ours. pay this year-over-year. I like MPU we that the like I business business. are running a But the to ARPDAU the focus

Franco Granda

one last the I And sense. if squeeze That No. could total in here. makes

on seeing appetite you're different but how You obviously you you changes capital for more, year this for the areas in have you're investing that, the last Obviously, of still that. your I talked are all the What to space? is about M&A? attractive acquisition from absorbing opportunities guess, availability making much and and

Daniel O'Quinn

then we've have program. share capital that a in points which we are have the terms right And I Daniel. bid. talking bar at we've allocation mean three of of but about And we lastly, in opportunities, been Hey, strategic high kind of sure the about we've then in looking are making focus, making Yes, strategies, of we Franco. mean, M&A and pretty M&A, the terms we and investing been before, have the It’s I like repurchase business the talked have investments results consistently our getting. we

We for also look yes, making just the the we looking wouldn't rule but but at it's right anything accretive out, sure we're ROIs constantly and if market. in SciPlay, have

to add Josh? You want anything,

Josh Wilson

is do long value growth as question back The to run they're hopefully add of Where with market that therefore cash more be get be, right market that come enough anything market then the that yet. some seen down to their crazy to dynamic I I'll for to a add Yes, we trying I but will the market bottom sustain have turn again, the business. hit have don't is growth think companies they're enough enough happened what a else. able than and all to multipliers this of before see we they to able changes it company think then just is bit. cash? turn going some, dynamics think now, provide, down, overarching the something on market and like around around coming M&A it's to sustain, of and out the we've I little And market

doesn't out point, will And have if once, looking a I be very But happen, think today. and building as it Because at up turn of a it'll facilities stuff have companies at is we majority don't imagine this growth very, for to growth lot their not attractive for me world, And this firing things going from we're the around I and come [inaudible] then why overarching a solution people comes unless multiplier. that of the do at with network. game for masses there's Apple the do.

Operator

The with next Sachs. Eric question from Sheridan comes Goldman

Eric Sheridan

built year, platform. the as but Thanks better for only is team back, hope you you How Josh, taking go DTC question. phase, the go-to-market would look think this for down about on I well, road. help us your deployed testing on continuing not you in more only being to the sort not what of move wider look your a platform DTC talked come be DTC what's I the I array the but to platform are a can strategies, we view? everyone within the out understand and on Thanks couple much. the about to XXXX as quarters of being if multiyear being just of so beyond widely And we thinking

Josh Wilson

to excited of we're I it's have of it'll and Eric. part what payer any And it. platform crawl is and it of our DTC success we And that the during platform the interesting, that you, for do phase and to our can for because script, of part at bring. already company what are today, this very who we is great It's you. very paying we're is The and talk every Thank said we're phase growth. at inside

they're the to what already from reason them have we is purchase get potentially a you that risk. one move you doing, our the get not we a purchase all. And we're phase anytime want move in off from to better XX.X% try them crawl So don't someone to payer make at sure them platform like we than have much to because DTC, to and conversion a rate it's lose to we if

The as really is and look worldwide at them time. worldwide We'll through more over start games games different our think of and it of ramp a less up. with about expansion it probably

first through email, risk. least introducing be it to will talking to people The the amount because of them, that's

them. everything that happening has announced with the opening out over at now inside an last the everything pushing that's the game doing with potentially Now Apple so it's of option come last month door couple and or Epic, and up for

it, back to They I the the game is because an zero they have has weren't in they're it. the the one leave in when game. which the call Now other to almost have game come the game. what and would to risk does inherent risk did email then But they

And someone you that potential a is a every leave. point friction time could add

part perfect. And long take time will to make so us this it's sure that

it it not fast. to Our right, goal do do to is

start year, towards still a reach our expect board game. Now, bit largest population. more, in larger population the our a starting of very going push our I to up throughout XXXX, it would we're we're the end of probably percentage see of But to a at small but to expect payers it of to hitting little part this least

Operator

to the remarks. conference any This for Wilson concludes our question-and-answer session. I closing would Josh over like to turn

Josh Wilson

a in We're off hungry. XXXX. start great We're to

charge forward. to continue We

things have so all our awesome much you A to do around accomplish. and SciPlayers want the we big players of world. We more to thank

it us. for second look forward and call participating. every You're progress in quarter Thank I summer. amazing, day the on to to you this our prove you reporting

Operator

for The presentation. conference has concluded. now Thank attending today's you

You now disconnect. may

SciPlay (SCPL) 10 May 232023 Q1 Earnings call transcript