MYPS - Earnings call transcript Q4 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, everyone, and welcome to the PLAYSTUDIOS' Fourth Quarter and Year-End 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to Samir Jain, Head of Investor Relations and Treasury. Mr. begin. may you Jain,

Samir Jain

Good fourth thank earnings quarter operator. us call. for for PLAYSTUDIOS' and afternoon, you, you and joining Thank year-end XXXX

CEO, Joining our CFO, call the Peterson. Andrew and Scott me our Pascal; today and on Chairman are

that expectations filings let call, of are and make statements. beliefs you will based are the These course and Before we statements remind on during results. begin, could forward-looking me that this we refer risks actual our a to subject current differ the uncertainties Please and affect SEC to materially. that to our risks results cause for of discussion may and uncertainties our future

We will with considered call. be as this also a substitute GAAP. during results discuss accordance non-GAAP measures for measures in not financial These should financial certain prepared

GAAP I'll in a and to measures the with fourth results GAAP comparable in that, prepared release Andrew. quarter be earnings to filings. With pass Our will SEC are reconciliation provided in call our our and accordance

Andrew Pascal

do is everyone, discuss But the had financial our our and quarter our the press Thank reporting included segment And you, we results Earlier Scott to so. a completed to review fourth detail disclosures. chance a encourage will release fourth recently alongside to if I'd XXXX the these in you for Samir, with and greater along new earnings release financial published in haven't containing year-end, today, call. materials commentary usual welcome, quarter and later. you release, the year-end

undertook position. transformative of and somewhat secular We a that initiatives, enhanced industry, our despite and but an PLAYSTUDIOS. headwinds of elements So our game meaningfully key new and be the to eventful challenging overall strategy year number XXXX the for advanced was proved macro for

some of So I'd highlights. more the to start noteworthy like with

year expectations. quarter grew by our by sales We the fourth XX%. revenues XX% the revenues nearly First, guidance the points. from industry. analyst our to in revenues adjusted and both basis contraction full with year in advertising closed XXX games the to close year and mobile grew and We adjusted mix EBITDA overall strong despite increasing exceeding and by expanded our diversified we by margins EBITDA X% EBITDA X% substantially We

increases with to continue add and users XX%, DAU MAU XX% respectively. and of We

key our company efficiencies and for lines: around playGAMES reorganized independent We to our external and X facing enabling become business the further business. playAWARDS an playAWARDS groundwork laying

our $XX an exclusive up expand fully years. partnership and than We posted reach in Brainium additional more quarter-over-quarter year, revenues by and debt-free cash We incorporated and to more new Prime's Tetris maintained doubled continue PlayAWARDS adding with position. And players renewed onboarding rewards our for strong into partnerships. mobile Tetris million remained license X we extending the our the during to purchased sequential operating Company, We growth. stock, framework finally, and

unique you're stakeholder growth. compelling If to more in positioned our think recent critical future remain approach performance, company This to the enabled our XX of diversifying program. in mechanics years has of players real-world composition of growth, company, our understand our games just we brands, process. leverage network how thoughtfully it's game to are a a proven for robust I not only us and and world-class that craft revenues but loyalty post the uniquely portfolio, We you

portfolio, by of this demonstrate casual Tetris internal most with lift products. strategic acquiring and and playGAMES pillars: of our our first acquiring existing the along complementing As key recently developing with We've portfolio the loyalty done new division across collection I've M&A, games that so can consists a to X our the games. our optimizing past, of reaffirmed in by the of efforts broader our consists rights we strategy expanding branding

can we to platform and advancing is second our the on games playAWARDS broader division our The so of that by it enriching provide focused services industry. suite

that margins accelerate to substantial risk, ultimately our believe minimize growth value. these drive strategic rate improve executing of us I and enable will priorities on

So in XXXX let's continuing be growth some touch starting products, will momentum advance our stabilizing to in with In core our sustaining focus initiatives on the of in initiatives play playGAMES, development. currently portfolio games. our and the primary

a me deeper dive Let little each. into

primary initiatives core merchandising direct key in X business expanding Our and renewed the be of portfolio in and for mix of monetization will in XXXX all the of and myKONAMI, myVEGAS adoption trends titles. our our improving myVIP our

the in social in already While mid-XXXX. with casino changes we challenging, both dynamics result we myKONAMI implementing portfolio. results absolute tangible can being began We're seeing for trends market our to broader we and in made myVEGAS believe growth remain expect above are from progress the pleased these and and the

a reminder, have frequently our games followings played are of loyal that users. As these by both

such, enrich pricing that As to new practices intensely teams game introducing our experience. are is support and and our opportunity players more refining get users. features biggest to game the the paying our enhancing economies, to this, of segmentation convert In overall on focused

the the and solutions. merchandising game working benefits. to is to economy our our On playAWARDS enhance web-based of bespoke loyalty players. well as web which our Doing of program of introduce our and new to through lift generating of in-game and store loyalty our in this direct as further myVIP, will priority, collection our This us sales play believe platform studios so focused topic as actively our third newest purchase loyalty player-specific the with on a across adopting our We more rich are games as all incentives offer us will well on solution. compelling allow allow products enhance supports

Today, below us to that purchase of is model loyalty we believe With our our many still said, ramping offer allows sales, the peers. of well players incentive us our uniqueness directly. that while of tailored direct share from

growth in the a of Turning substantial scaling Tetris and of ahead. still we to our games portfolio. and believe there's XXXX will tremendous myVIP. the Prime focus be The our growth integration continued had XXXX,

offering and our of the year. in loyalty efforts, the marketing organic engagement. tiered momentum player for more planned game's these lead of ARPDAU. the think with of strong is the believe and We DAUs XXth we even increased result brand, year to exciting rollout and in a to combined seeing higher will This offerings the initiatives Tetris full reception game increased number the will anniversary We're have

We're impact of revenues. similar we on and impact about games, Brainium Brainium key expecting scheduled rollout player also reason for in was a suite engagement will XXXX. loyalty of inclusion and full a excited have purchased a we're the it which The resulting are in loyalty

Finally, our development portfolio.

makers. we're As I've reaffirmed calls, quarterly our each game on passionate of

delight monthly active users we and nearly well of million our our new As creating new committed as publishing into XX network to that such, existing all as mix. together remain attract games will players

capitalizing of extension With that in development. Each the of format embodiment mechanics the game on immediate beloved of games. in new happy casual game license, leading to is share combining popular on this found focus our our have a recent fully franchise. Tetris today's we most represents X new the I'm our with best and titles Tetris classic distinctive Tetris the

we and we as As before, of I've many hard We believe the the said is if real is Tetris art incredibly games with players believe creates us choose the is given category facsimiles That And thing. popular the predict. an puzzle more game, brand each to this true are of in would crafting than firmly the the of players Tetris option. for to know said, such, new opportunity today a success ultimate games science. who capture

commercialize attention to as to will platform. the shift we best business. be our of year for Let's line explore our how playAWARDS playAWARDS XXXX a similar

so, As I've other. highlighted real-world built on side million most since that nurtured nearly the In marketplace scaled going the doing we game industry's has public, consumers we've on one solution. benefits loyalty to a hundreds of providers robust and XX

consumers ambition our other model to an expansive and services loyalty network It's more provide dramatically of to access scale real-world our businesses. providing even by publishers to game to qualified

of Given as that meaningful to own. we elected investments we can meaningful the games distinct the Over our platform but revenues unit. its be a business playAWARDS playAWARDS only the a not continue significance profits performance make in infrastructure, and the we've grow and our to business think stand-alone break out strategic bolsters direct operating time, generates of of to and

we're recognized valuation. and value company's in happens, unique that As our the will reflected that be asset of this confident

doing XXXX intensely model, focused while all We're exciting core With future place, up shaping fully drive in continuing margins the business to higher optimizing rewarded expand continuing business, on revenues, of our growth. these we're all believe to play exploiting to we striking so, in is scaling and improve unique right be with our initiatives scale and invest In our audience, another progress opportunities. and year profits. our balance our between

XXXX details when more And in Scott he will a guidance our moment. outlines provide

and of considerably, such, share fair our on thinking the touch re-up I to what $XX we capital to be believe authorization. stock dislocation as view evaluating approach However, repurchase our stock between diverged market's is allocation. The recently million quickly want under back the and buying to our we're value

over we're cash in itself We the also and overall strategy to I'm needed when already eventually. In active. continue it M&A add balance. I'll to I act XXXX comments expect price you asset And accretive the flows to with opportunity resources and very right and the right generate cash does, Scott are to turn the confident committed we keeping finding our provide remain have the but additional strategically share Scott? expansion that is present meantime, now guidance. the financial to to opportunities sizable our assure transformative and call our pursuing quickly. can we positive plans, will right challenging, some at to

Scott Peterson

Andrew. Thanks, everyone. afternoon, Good

release, be results. comprehensive press our a those look will for today's Form to shortly. and addition to year of quarterly full In filings Please our XX-K summary filed

attention I to draw disclosures discussing wanted quarter. to Before results, your this our new

our allow segments. to over We revenue playGAMES that will information time. track closely their and growth and separately our more playAWARDS and between both this better hope We businesses EBITDA clarify are now added providing you

the year beginning we've since EBITDA gains XX% the year. finished ago, continuing with and the revenues adjusted ahead year was higher sizable strong a the million than quarter $XX.X consensus adjusted trend of We Fourth of of expectations. EBITDA quarterly that seen of

of we margins year, XXXX. quarter the a other EBITDA For quarter for XX% adjusted ago, was were adjusted versus modestly XXXX down end the be Adjusting this last contract the EBITDA a in year's XX% year margin a XXX of the up revenue, ago. largely due XX.X%. Revenues of from and in flat would to up year points versus basis of from full was second the licensing

year, full For XXXX. up the X% revenues our versus were

so a are year-over-year As in basis. comparable a the results our that on reminder, anniversary October, occurred from the acquisition of of Brainium point X-year forward

X% the are gains, our these lifts DAU of quarter MAU portfolio. bulk the drive respectively, and in across though to were up healthy continues XX%, and we Tetris seeing growth

quarter the industry the in core declines back of on continued Our portfolio casino social saw user weakness.

Andrew it contributor about As earlier, into optimistic growth. portfolio we and this heading to are a overall positive XXXX discussed be believe can user

our Brainium, the fourth social significant of Excluding quarter. the broad-based in Tetris the and opportunity grew roughly and of considerably across believe up growth Both portfolio. in advertising-driven from was ahead. ARPDAU X% ARPDAU Tetris there impact is ARPDAU Brainium our The we and was games growth quarter XXXX, for casino

the still stock approximately We in of purchase repurchase have in shares million the availability our full quarter quarter did $XXX remaining any not We million with our and and during ended revolver. million cash, $XX authorization. borrowings $XX no

equity. same, allocation public pursuing and strategic and the remain accretive the investing M&A broader playAWARDS, games, capital scaling goals in and in investing our building our Our

will outlook million and for EBITDA our between $XXX $XX million XXXX. million. between $XXX that $XX revenues Finally, adjusted estimate million We and range and

what of guidance, Brainium, will is do and continue economic believe the apples-to-apples not industry to we which a implies This M&A. for annualization revenue are the challenging organic these particularly noteworthy despite growth estimates and backdrop. With be include

adjusted guidance EBITDA also implies gains. Our continued margin

modeling When the results, following. consider please XXXX our

pickup should the sequential fourth generated XXXX. initiatives will will of to third We throughout you expect in revenues Other of annualize year, the gain to many through each so quarterly XXXX. in quarter rate quarter the track quarter. closer momentum assume change a This

will remarks. call the back now closing I Andrew you. some Thank to turn for

Andrew Pascal

in today's participating Thank and thanks you, call. Scott, everyone to

remarks to for open for years in in reinforce progress a change. key some and We we and points. XXXX blocks increased growth, market doubled the of revenues in our end the declining nearly the and a Before building put like our year place substantial to come. development questions, was I'd prepared EBITDA, call

outside in larger now shift margins sales a overall more we're addressable place, diversified franchise. markets. With revenues and business license was Tetris are a A and mix. as world-class also fastest-growing, higher a substantially our games Entering These make recent 'XX, nearly new just our are multiple our extension implying of continued is establishing committed businesses than mix casino towards ago. up our category year majority social it XX% our the of advertising to

progress myVEGAS games to myKONAMI have its track new games improvement this take Brainium believe title a this working driver of continued are in There exciting and advertising of year. and will first making see be in unique new on and our efforts meaningful XXXX. be as playAWARDS are to future our efforts begin growth. We're we expect qualifying to for new we substantial technology, momentum later with We tools towards hold and program, our began development introducing continues interest initiatives high will believe opportunities level year. year both in last exited in in notable around a this this momentum year. revenue capabilities, and our

debt supported operating $XXX strong remains no positive and sheet that balance business million cash generates is and flows. in an cash by Our with

capital and making front generate same and our to is $XX make acquisitions at that remains repurchase of business value, authorization. this plan in including the look our our shareholder investments transformative to Our to million make share continue strategic use use on other year. time, our At we to capital ways to goal to progress use our

the I markets. us to core there's continue to the between ascribed a in Lastly, believe public the and of business discrepancy our large value value

assured, our are leadership teams our to While aligned, frustrating, rest committed we're as all focused is the and company. strengthening

we to you're appreciate your about We thank time as want year you excited support today. and are. for hope this your as I

the call your the to questions. over take to operator turn now Operator? I'll

Operator

[Operator Instructions] Ryan from question Craig-Hallum. first comes with Our Sigdahl

Ryan Sigdahl

with being the evaluated a loyalty Is is as to platform. commercialization worked the want a as we just pipeline a and start playAWARDS potential I area? of as speak? service on that Or actively focus

Andrew Pascal

qualify we've last lot part opportunity say by been to on and of phase we've been to the it's we're a that since in this still I focused would of really encouraged evaluate different are but We've the Look, done something year. models. start that early feedback kind the commercial received.

of and And there's the for resolving the about and way interest program curiosity for the think impact exploit that level and value potential right that reinforced here. its to around it's I has it. best now us us go and

And a do, outlook. we that and so bit more expect we that of an share resolve this year. And thinking fully provide we'll we'll as our

Ryan Sigdahl

is you the Switching do to more peer over expansion side. have to leverage primarily and there to guys, leverage operating cost the revenue to that get margin Is median, that efficiencies so and targeted? Or more with operating growth?

Andrew Pascal

and find always more I think really I line think we might at significant able opportunity efficiency. But is and how for for that be us we're opportunities looking new top productivity growth. where to the added

or compared to you public look are. we per at our they loaded our find you'll peers, to I were fully as in employee that are line think cost below if where actually

from where for look to to forward come flow-through. can line going top continue But expansion again, going we'll, margin is we and our more be So productive. growth

Ryan Sigdahl

Makes for me. more sense. One

this I be transactions but some stock just repurchasing remarks, than you think know M&A any more that are there your the prepared and as at could here? had accretive you Just stock own valuation, about going

Andrew Pascal

we believe also we while going There be the find want greater of where to significant reposition even we're the Yes, are for enjoy it's be that to to to I transactions understand strategically And difficult everybody are. they really and how growth. always them do looking would accretive, that that ensure think in obviously there yet we to to company light trading. we're important and

transaction think I impact past engineered the financially. and sometimes it's you look the how to immediate So have of

and it its strategic company how of mean evolve. going to does in it's terms continue really for So strategy to the -- what

are that the we as at consider look opportunities. our those we factors So

Operator

Aaron Our next question from Macquarie. comes Lee with

Aaron Lee

marketing Can second. you think just investment about the takes to you're you standpoint? buckets the growth you and the from? just an end you -- talk the Can get and a turning from biggest end high puts just What's And range? to guidance and of contemplated that generally for come the where will low of

Andrew Pascal

our further Sure. growth our to really side come this, The I'll the I portfolio game from development. across different kind the take our several we business. portfolio qualify of in on going that of growth core at and subcategories. further have portfolio any portfolio. There's We There's and is mean and products add the Scott our look color. ask I'll to in

opportunities lot growth very the we because see last in has X overcome categories talked social now portfolio, active But become the some by it's We that suffered our have the as which been core in secular we're headwinds casino a pressure about, over the under years, in. casual contraction. of

that With there. we're and think seeing that casino has stabilized, signs growth said, of social we

amount we out there'll think So of year. of growth be that a portfolio coming modest this

to new portfolio, our that product, the really that current introduce have Brainium in year meaningfully which but can relate When live we look and of the into start our them where it's as be suite. would growth collection category in in they be momentum to hard year. launched how Prime great have the hope well the and development in, And have position we when we predict products, continues it products we to a that last at the casual the of to ready the we in we're before will products one as investing to has market, then grown be actively that Tetris of end they'll a

investments that of bit up the we're across end user we focused productivity we'll investments as we're are to it. launching worthy on we that's Otherwise, a side continue pretty look far thinking UA as associated continuing opportunities efficiency that ago, and as new that. scale moment and budget Tetris one products underlying our moderated. So with about new on especially as products a to meaningful to new portfolio, introduce Ryan, these acquisition year, ones. drive this scale there, in how for I casual support alluded It's the growth. the the there'll our if then game be and the up existing of to And to, with products

what's to expansion. flow-through that's and so margin the kind drive continued And going of

Scott Peterson

add the trajectory only my thing viewing we're we're said little as -- better is it's I would a getting the as this going to going to we and each said of we in I And should that comments, way the be at sort is go. or We're growth. year bit is sequential kind look kind hopefully quarter of on a of as you to

Aaron Lee

Great. all should of our the versus And playAWARDS the just to Is share bit appreciate a the And into levels? have slipping from for I you Should here? fairly then in materialize thinking this to be we kind current there. expect this do steady there confident you about a year can some color faucet year? be next accomplish terms of goals? how platform turning the how will that anything on into turn to are Or second. you to reinvestment playAWARDS from it of

Andrew Pascal

those that industry. providing We proposition the are experience confident questions. are other to we the as publishers ton think strategic Look, it I obviously great have complexity a No, playAWARDS. with The the to service Yes. making value -- a is transition and in with partners have in it. about we're we of that pretty

year. stable. that as ongoing our as calls And and to work we'll said in we playAWARDS, fairly that be in and end resolve of certainly the I make as future the we're continue there we'll strategy hope to as provide then investments earlier, going some done far there's before approach it. And So resolve they're the clarity to

partners. of believe to I our scale once be don't game new a publishers current rate. and cost, that will we're servicing and some as There'll be level position it relative added we in run material supporting ready but think to we're

the investments continue. are So current and fairly mature, they'll

Operator

comes question from Our with Stifel. next David Pang

David Pang

for the on DTC? what DMA implementation Does thoughts efforts to I hear in would on it your Europe like PLAYSTUDIOS. means your on have impact of any the

Samir Jain

Hi, Samir. David, it's

You're regulations Apple? just talking there the with new about

David Pang

The Apple from and updated new regulations and Google. the policies

Samir Jain

Yes.

to in fluid everybody like still the quite ongoing. fully think we're litigation I this it's So seems I it's waiting industry, the thing still obviously, form. mean else like for and

games. So to to a DTC our I definitive is there's into what myVIP much going release related be nothing strategy think our integration with we do more there. But

Andrew Pascal

to acronym. can the I -- speak that I didn't hear sorry,

presence we're out. that between So watch is see is to obviously proposition to and on. our with the playAWARDS that interact have and for a play continue time, various But a full our view to our us through range capacity players the the going directly web-based with really purchase direct-to-consumer a general long with And playAWARDS. solution, where for We're disputes proposition us the how can We've our us benefits offer unique incorporated our focused for of game had in other that the we've and we order payers now we Epic to platform explore directly. something into providers web makers program.

from So the actually of different actually everybody that's we industry, up us. incentivize value in to incentives offer that our and purchase encourage very a unlike else really can direct with and most unique proposition peers

So continuing ramping capabilities. we're up. invest to that's actively program features new a that in and We're

So direct-to-consumer meaningful the a overall with revenue. for and And in we of that us increase room to improvement our mix margin. that think pretty margin We will comes that continue to revenues of a ton of there's would complement of gross direct-to-consumer our grow. course, expect

that be forward. So going driver us a should for

David Pang

make And follow-up on that point. might just DTC on target long-term up? a have what you a Do

Andrew Pascal

year a in far XX% space to been and I their directly. are for where is aggressive close in and think goals particular, more appealing leader this mature in our set have something we their that of the more that the they've at revenue part of way we approached to Well, Playtika consumers has direct-to-consumer. ones been and peers more we planning are, ourselves look each as process, our think,

level ambitions for with -- there's at to to And in theirs, are us a of -- of certainly overall to that we that be able achieve are, lot so where line hope be achieve I we'll would least. rates our peers our but to there that but do mix work to certainly comparable are

Operator

Greg question Securities. Northland next Our from Gibas Instructions] with [Operator comes

Gregory Gibas

was Scott, increased game I later said regarding launches or this there timing rough kind expenses during marketing wanted periods? if over maybe go just maybe modeling your development if but year certain and of commentary, to -- of this you new I could time implications are think any you the

Andrew Pascal

Yes. I mean start that signaled it's think and formal kind I up formally a to what we more that to is tough when is of scale new remarks product. in we'll predict it launch our

have development the We on hope don't a franchise and year. with Tetris But it, we few X we'll year. for performance now the of our over real have likely And new we the certainly would a products timing that for any meaningful brand. in think of end have we impact been that the both aligned this year, would before introduce

or line we shared So as don't take as both from into introduced the well a perspective. top do in of marketing in our market, product what a terms what forecast we that account we've and UA might really guidance a impact new any from

Gregory Gibas

it. kind playAWARDS Got strong. now, there Makes platform wondering I little past guess, you've an interest sense. it talked I'm stabilized? we've more causing a bit maybe in if there? of the see considering delay if customer initial the it's interest And perspective, talked of like from you what's kind then you about wondering I for address customers. about could quarters, and just loyalty it know being levels if in overall And

Andrew Pascal

Yes.

who's really our He think Jason leading business the corporate is up with what been I'll heads a qualifying kind ask development of Hahn, the color. me. do opportunities of here on effort development share those to I who's maybe I'll little bit and

program I I the interest moment I about universally alluded we complexity how the it. pretty the think a of go think ago, our First, in, as recognized and to value comes pursuing is

speak maybe I'll So that. let to Jason

Jason Hahn

Yes.

that on the users. I mobile developers to things some market of becoming it's new acquire increasingly So in given the feedback, where hard for are happening think the

longer I in hold think loyal as players users your demonstrated allows that fact, solution program you value already tremendously valuable of to And on that. is proposition the value to recognizes a does, that that invest have you a proposition. do and in our everybody we've

the AB had undisputably that to real better data so our we X we've platform to loyalty of months. case tangible testing studies -- And create part lift. with does, that we've now last say, the Building that. showcase and have I'd really in spend, And fact,

of you So the was studies. market, we some tangible need which feedback from the that was pieces got one case of

We have that.

was it piece seamless integrate of into third feedback other making for The your game. very the a party to solution

into products. And better also the easily so refining X technology working integrate developer last game months we spent any can that it on of the and so part this their

kind more it we in I think now formal optimizing to that dedicated market go as launch of a even to we've But way product. out of of productize and formally we things it more on kind ready we're just those where launch addressed that we're this working getting some actually can that the back feedback before as a product solution.

Operator

Thank hand are remarks. you. for closing to this There I'll at no management the time. questions floor further back

Andrew Pascal

in exciting support, to the to and again thank company Just want everybody their ahead. interest year we an look forward and for continued

Operator

parties may day. disconnect. All conference. good today's concludes This a you. Have Thank

PLAYSTUDIOS (MYPS) 11 Mar 242023 Q4 Earnings call transcript