Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Playtika Holding Corp (PLTK, Financial) reported a net income of $86.6 million, up 63.4% sequentially and 14.4% year over year.
- Direct-to-consumer revenue grew by 5.1% year over year, led by Bingo Blitz.
- Governor of Poker 3 has shown consistent growth quarter over quarter since its acquisition.
- The company plans to launch a new game, Claire's Chronicles, in Q2 of 2025, which is expected to drive future growth.
- Playtika Holding Corp (PLTK) has a strong liquidity position with approximately $1.1 billion in cash, cash equivalents, and short-term investments.
Negative Points
- Overall revenue for the quarter was $627 million, down 3.7% sequentially and 2.5% year over year.
- Slotomania revenue declined by 7.5% year over year, indicating challenges in stabilizing the game.
- June's Journey experienced delays in feature launches, impacting its revenue performance.
- Sales and marketing expenses increased by 20% year over year, primarily due to increased performance marketing spend.
- Average Daily Active Users (DAU) decreased by 8% sequentially and 5.8% year over year.
Q & A Highlights
Q: Can you elaborate on the sequential declines in social casino and Bingo games? How much of this is due to seasonality, macro factors, or game-specific issues? Also, any strategic shifts between M&A and funding new games?
A: Craig Abrahams, President and CFO: There is some seasonality from Q1 to Q2. Bingo Blitz was flattish year over year, with positive trends into Q3. Slotomania is focused on stabilization with new marketing and licensing agreements. June's Journey faced delays but is expected to ramp up. Robert Antokol, CEO: We are focusing more on M&A for future growth, but Wooga studio's new game launch is an exception due to its innovative potential.
Q: What is the timing for integrating content from the IGT licensing deal into your casino games? Also, has the free-to-play sweepstakes category impacted your social casino titles?
A: Craig Abrahams, President and CFO: We aim to integrate new content by the end of this year and into next year across Slotomania, House of Fun, and Caesars Casino. The sweepstakes market, while adjacent, is more akin to gambling products and may have some impact on the social casino market.
Q: Can you discuss the M&A pipeline and seller expectations compared to a year or two ago?
A: Craig Abrahams, President and CFO: Our M&A strategy remains unchanged. We see ourselves as a consolidator in the industry, focusing on adding high-growth titles to drive growth in 2026 and beyond.
Q: With revenues down in the first half, can you comment on the broader market health and customer acquisition landscape?
A: Robert Antokol, CEO: The market is challenging, but we see growth opportunities in certain games and future titles. M&A remains a key growth strategy. Nir Korczak, CMO: We focus on long-term ROI and see opportunities for growth, especially in new acquisitions and leading games.
Q: Will performance marketing spend continue to ramp up in the second half and into 2025? Is there anything compelling in the ad tech ecosystem?
A: Nir Korczak, CMO: The landscape is dynamic, and we continuously look for new opportunities. We are optimizing and shifting budgets to areas with growth potential, but it's hard to predict exact future trends.
Q: Can you quantify how much of the G&A decline was one-time? What does this line item look like going forward?
A: Craig Abrahams, President and CFO: G&A has been managed over the last 24 months. Any adjustments are likely one-time in nature, and we aim to keep it stable.
Q: What is happening with the decline in Solitaire Grand Harvest, and what are you doing to get it back on track?
A: Craig Abrahams, President and CFO: There is volatility quarter to quarter. We are investing in D2C and new product features to support its growth.
Q: As you approach the 30% target for D2C mix, is there a new target?
A: Craig Abrahams, President and CFO: We are not changing our target at this time. D2C remains a differentiator and a key part of our M&A strategy.
Q: Can you provide more detail on the IGT partnership and its content release timeline?
A: Craig Abrahams, President and CFO: The IGT licensing agreement will bring real-world content to Slotomania, Caesars Casino, and House of Fun by the end of this year and into next year, across all platforms.
Q: What are your expectations for Slotomania in the second half of the year given the new initiatives?
A: Craig Abrahams, President and CFO: We are focused on stabilizing Slotomania with new content and marketing initiatives. It remains the number one game in its category.
Q: Can you share early learnings from the streamlined management structure and marketing strategies shift?
A: Robert Antokol, CEO: It's early to see significant impacts, but we observe different strategies between games, which is advantageous. Regarding market performance, the industry has matured, and operational excellence will be key for future growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
