Release Date: August 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PLAYSTUDIOS Inc (MYPS, Financial) expanded its game portfolio from four social casino apps to 20 games across various casual categories.
- The company increased its daily active players (DAU) by nearly 230%, from 1.5 million to 3.4 million players.
- Revenues scaled by 8% from $287 million to $311 million, with adjusted EBITDA margins increasing by 620 basis points.
- The myVIP loyalty program has unified across primary apps, extending nearly $900 million in real-world benefits to players.
- The company maintains a solid balance sheet with over $100 million in cash, no debt, and over $80 million of borrowing capacity.
Negative Points
- Net revenues in the quarter were $72.6 million, a 7% decrease compared to the previous year.
- The social casino portfolio continues to face challenges, contributing to weaker results and a decline in operating margins.
- DAU and MAU were down 12% and 2% respectively from last year, driven by declines in Social Casino and Brainium.
- The company revised its 2024 guidance downward, projecting revenue between $285 million and $295 million, and adjusted EBITDA between $55 million and $60 million.
- The Tetris 40th anniversary celebration fell short of expectations in terms of consumer excitement and engagement.
Q & A Highlights
Q: Can you explain the significant change in the second half revenue guidance?
A: The change is primarily due to challenges in the Social Casino category, particularly one underperforming title, and delays in scaling our Tetris Block Puzzle product. We are optimistic about overcoming these challenges but have adjusted our forecast accordingly. - Andrew Pascal, CEO
Q: Any updates on monetizing playAWARDS in a B2B fashion?
A: Currently, our focus is on stabilizing our core business and refining our cost structure. While we continue to explore B2B opportunities, our immediate priority is optimizing playAWARDS within our own portfolio. - Andrew Pascal, CEO
Q: What are the initiatives for myVEGAS and KONAMI, and can they be applied to other games?
A: myVEGAS is growing at a double-digit rate, and KONAMI is stable. We are focusing on improving the monetization of these games. Pop! Slots has seen a decline due to internal management decisions, but we are addressing these issues. - Andrew Pascal, CEO
Q: How did the 40th anniversary of Tetris impact consumer engagement?
A: The response fell short of our expectations. We saw some organic traffic increase but not to the level we anticipated. We have other campaigns planned to capitalize on the anniversary year. - Andrew Pascal, CEO
Q: Can you provide more details on the early performance of the new Tetris product?
A: Early retention metrics are strong, but acquiring new players at a profitable cost remains challenging. We are seeing improvements in CPIs and will invest more aggressively once we hit our acquisition cost thresholds. - Andrew Pascal, CEO
Q: How are you managing your cost structure given current revenue trends?
A: We are constantly evaluating ways to improve efficiency and productivity without compromising our product pipeline. We are also strategically investing in growth initiatives like Tetris and playAWARDS. - Andrew Pascal, CEO
Q: What is causing the persistent weakness in the Social Casino category?
A: The emergence of sweepstakes products, which offer a dual currency model, is significantly impacting the traditional social casino market. These products are growing rapidly and attracting a lot of player interest. - Andrew Pascal, CEO
Q: What are your plans for M&A in the back half of the year?
A: We remain aggressive but disciplined in our M&A pursuits. We are looking at both large transformative acquisitions and smaller, strategically compelling opportunities. We are also evaluating the sweepstakes space. - Jason Hahn, EVP & Head of Corporate and Business Development
Q: Are there plans to invest more in marketing for myVEGAS given its improving trends?
A: Yes, we have recently allocated more marketing dollars to myVEGAS as it continues to show strong performance. - Andrew Pascal, CEO
Q: How much cross-promotion is being applied across your game portfolio?
A: Not nearly enough. We are working on unifying our loyalty program across all titles to better incentivize cross-promotion and player engagement. - Andrew Pascal, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
