PLAYSTUDIOS (MYPS) 12 Aug 212021 Q2 Earnings call transcript

Good day ladies and gentlemen, thank you for standing by. Welcome to the PLAYSTUDIOS Second Quarter 2021 Earnings Conference Call. At this time all participants are in listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference is being recorded today, August 11 2021. the to turn now will conference Mr. over I General Agena, Corporate and Secretary Joel Counsel. sir. go Please ahead,

available operator you, have quarter which at our should everyone. investor the access second PLAYSTUDIOS section. is www.playstudios.com release, in earnings Thank XXXX hello to and By the website on now everyone

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use Forward-looking or not statements historical be other facts, should events and statements the as future can anticipate, present words might, may, include of expectations expect similar such will or about and terms. and projections by or identified

operating to statements only interpreting discussion uncertainties of to We our information, law. Therefore, statements risks events risks forward-looking for are in caution differ Forward-looking detailed by on our date a of These a you SEC condition. more as that from filings as the to result could results you what materially any numerous call. subject results future or and new we required do expect. future them. We impact of and update cause exercise actual could made this expressly undertake or refer as of alter financial the not are and otherwise, disclaim and to relying forward-looking should obligation statements, except whether that

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you, We're this of Thank second quarter $XX.X during in quarter of place the by the restrictions were to the XXXX. report Andrew. second revenue of impacted year-over-year, XXXX. pleased Clearly million during that stay-at-home are comparisons quarter

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per operating quarterly X.X but year-over-year, ARPDAU monthly up XX X.X% or rate quarter-over-quarter. down but users quarter-over-quarter. X.X% conversion million, XX underlying DIU up user XX.X% was points were active sequentially. daily active year-over-year, was active payer million And X.XX the down basis approximately $X.XX, Average at metrics, MAU points year-over-year were up daily down and or Looking XX.X% revenue users X% and basis or approximately

a purchases program purchases period XXX,XXX we versus XXX,XXX in saw to an year, levels, for XXX% our returned increase as quarter the the loyalty activity, also pre-COVID work in lift. the same last We

the quarter We to approximately balance with Turning in $XXX million sheet. ended cash. the

to option shares In to currently facility close into The an we addition, announced merger for additional as company of revolver have million previously secured we $XX stock a of post increase common our entered five XXX.X facility we $XX million new up is a the revolving with year undrawn, the credit million. outstanding.

of well and and Kingdom capitalized Bingo very M&A. and exploring are to our our plan multiyear priorities We address and launching key accretive execute opportunistic Boss

touch our like I'd overall and on approach. Lastly, to guidance clarify

EBITDA will We a and revenue annual each and provide range updated adjusted quarter. of expected

any We for year. the end expect to report upcoming guidance fourth the quarter year prior we of results year initiate when and

As and year-over-year $XXX growth Andrew million be to now million midpoint. the between mentioned, we currently representing XX% revenues expect of $XXX roughly at XXXX

addition, we full $XX be million. to In adjusted year and now XXXX $XX expect EBITDA million between

Our the to of Boss anticipated that, it for timeline. a closing launch modest up myVEGAS contribution back Andrew ramp guidance Kingdom given that reflects pass and continued some Bingo Within remarks. I'll from

Thank Scott. you,

experience increase partners events. activity. $XXX in same year, more generating in to special to nearly in period XX like M&A by realize needed to we've our our plans. position of with million such I'd profitable create today than real unique more players RPG six is entered key In to and our a potential. model the positioned games great million first of to years Kingdom our model the the apps, accelerate for adding concerts, benefits execute founding categories with company world loyalty a its And our ever to Before genre. our market I of recap. our all vision, other market our to We've our the our unique the soon with product enhanced proven our model for poised provide loyalty by so EBITDA $XX revenue and our XXXX. augmented far recently accelerate our playAWARDS teams loyalty with open questions, our fully We month destinations, centers, shows, game Since into published We've amusement year. and collection secured growth X.X% and We've true resort six full the launch and casual We're opportunity benefits. genres. as the months we've portfolio and We've we our its applying organically of just resources on of ago, Boss, expand foray and this growth generated remain games Bingo expect market to the adjusted and And a and our short, quick through platform. more first over expanded remained things and up skills reward better solidify leverage five

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to first Sigdahl go We'll Ryan Hallum. Instructions] [Operator with Craig

is go ahead. open. please line Sir, Your

questions. Scott, for Good my afternoon, Andrew, taking thanks

hear Ryan, you. from great to

guess, on previous and exactly was Kingdom you to so start what expectation I was? the now clarify launch. to can half expectation second I or previous even then guess, you're when Boss, Curious, expecting

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going I as we metrics, just that the really we're to criteria invest to very getting product continuing launch before product. about have just a feel right. continue all confident of we we work in shared, we're on the to hold to, But so specific evolving And until it it, we

to as deep compromise And it belief it and we early. in don't by have it too product, so launching still a cycle, a in that we're want we

this be later part it'll very So of year.

that expect we the from really So are marginal. contributions Kingdom now Boss quite

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you so a And work key through product, measures performance. of kinds those through cycle optimizing of of really the advancing three

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that able to make And so players. retain appeal you'll want place to sure be and those at you where to a product got you've the

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that so hopefully And bit clarity. provides of a

Yes, helpful.

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seems anyway, guess it more can -- there's like out, feels that? I you bridge So coming

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of it lot seeing We're launched UAE from we have are substantial a weeks is changes adjustment the later a what CPIs. and players shifting the Bingo we're really about of that that its are Bingo others, continue a shared result with in that Like reception is Boss. what in to perspective anticipated. So of scale growth and our we What product. about what six seeing can originally as that market, and our market how we engaged excited Kingdom majority than product. working the a through that optimize we the higher is of peers, scale so amount the we're grow kind and from like the And previously, we of

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of and for delay as it. So between shifting then we as were the Bingo to the we environment made. the that we're Boss, we grow seeing principal about scale continue those the reasons out and the course, adjustment Kingdom just of And that modest talked

revenue, And what looking targets get at financial given be games EBITDA know then will as and confidence 'XX just guess, obviously, launched, point, not now, expansion knowing margin beyond? did recently and guidance, I what's both well organic specific as XXXX this for there in you your but these you in

we was part it some see is does, What as core also that And a of growth the going portfolio that we're I grow. we're operationally, margin story. continue and to think a mean, to that as take and key that doing our going expansion. we're mean, kind expand and going forecasted. the our profitability margins to we grow of of drive I scale see of and we we're advantage bunch things to

As process far as of the next delays these impact modeling. year, that doing in we're into the of

As relative as exit we'll around this And of Scott if was the be that really share, some clarity sit through to impact to we’ll work a provide next closer say, little guidance exercise. start we we to suffice it we're expected, at year. But some and look in that where there'll down to you provide what going year. that bit the get as year

Vegas me, as One rebound seen well as trends. we've casino in significant and for results just visitation more strength

Vegas closer just of as Any Your on Thanks. apps casual more the peers mobile is loyalty I game a business? overall? the to it trended kind strength thoughts, have guess the to a game Or industry bit attachment. without correlation that about

the I question. no, appreciate Yes,

currency of Scott purchases and growing they've benefits. a to scaling game and just that real these where look, ago, proposition accumulate highlighted surprising, are course, moment I these of audience. And a mean, the our advantage of amass loyalty had fact we in this games that a think benefits, I they they world rewards, to and because to appealing in year we're we love are, shared at whole players can they of we’re are consumers haven't of half the people a in our bunch take And industry, So mobile been advantage and not right, the able really spend. that taking pre-COVID they terms levels, of

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what that's So expect. kind we of

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And so market do the everybody as they just us the affect fluctuations in else.

others. over I'll it Andrew. turn Thanks, to

Ryan. cool. Thanks, Okay,

to Benchmark. with go next We’ll Hickey Mike

ahead. Your line please is open, go sir,

Dirk Hickey. it's of behalf Hi, on Mike

and If how in couple tie and you user leveraging you're is of that acquisition with your Boss genre utilize help Kingdom start a partners a could questions. to award you to with about Maybe for plan different that? how talking

turn, into them we to and our partner Sure, players drive and to for leverage of of us. the make platform how getting is with and look in how it's also our to of the the when one our we best acquisition we're of think settled we of that network use players particularly new resolve channel through onboard kind partner one the that of strengths I initial model exercise, that our work of it's and a

growth, It's partners. we've do our the that always by behalf from partners. those with pretty being of different meaningful healthy done that's firmly a believe why we our So marketing on lot enjoyed extent, it comes a organic to we

as about benefits SPAC we really merger. over to to expect we be have, expand As need it so Boss, last to we the talked transaction and the Boss. Kingdom we align audience We our that about specifically we fit Kingdom for and that partners six with that relates of marketed the portfolio have months, what talked the

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particular align bunch a there's going we new with eSports So, of that audience, absolutely some to believe that partners partners. also are

new went inventory really intended after we So it ton that for of is there's specifically appeal and a new Kingdom to Boss. categories to

deals? lot as And we future for to a then given guys how hop are Can a just minute challenges of with speak having to driver a you mobile potentially the that can you M&A IDSA? see for

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so team And right been great recently the just to addition and he's he's dug it's that we in. Hahn, hired Jason been a fantastic

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significant of a growth ours. is focus primary really it So going forward. driver a It'll of our be

one Great. one last And us. from

engagement the those from this larger early weakness One your within player Have year. similar you noticed noticed player some anything competitors added base? of

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broader players, don't that relax, have a And of or target the you same so up you're open specific very players not acquiring types to lot as to of may you capability you're not and have otherwise. surprisingly, net, tend or you casting really a

some the think see. as I impacts that of engagement so many well retention And metrics you that as for both

of we acquiring spite in healthy Now, retention, users continue to the up. really see gone that, costs of have

returns moderated that so resources deploy to say nothing how perspective, ensure and through that best that no work engagement we worry. to we as we get from we've And continue pace the is our continue to I would our understand But an expect. to

Thank you.

Dirk. you, Thank

Company. next with to Martin go We’ll and Oppenheimer Yang

Your line is open, sir, please go ahead.

first conversion the is Or the you UA there you. normal year-over-year. trend Thank or what campaigns talk you marketing campaigns? My into about, have maybe is goes tweaked something your question any, fluctuation? this Can rates on just there? in change Is

just that rate, payers? conversion talking and So percentage you're players be the about to of clear, become

That's right.

Yes, performance as conversion to rate of with opposed advertising. the our

assumption erosion part. others the DAU So, a we deliberate in advances there's our that many a very PPU very are there. we of that the this and our a of real in that PPU And increases opportunity have but within see To on and focus of portfolio. the be result PPU, of believe seen, they're some fair, lot

to our we've audience growth to our drive us for of an What hold proven. to see to to. we particularly payers, we players So period benchmark time opportunity and to is alluded we ourselves as continue peers, that a for that to to extended more that's capacity that convert of going organic on of there's lot as do

on improve as PPU that grow. expect to continue paying opportunity there's will And the revenue well. per that fully we So also to user

existing value extract focused to with network intensely on products. we're how So, optimize out our we existing of our continuing

Thank you, Andrew.

rate on, being So redemption workhorse a user world real their with for change have behavior in signed and more you those seen a rewards?

and can then consume based, then our a are the ultimate then to destination lot see app, with so the kind of of said people and as them, as looks purchases and because them. a the they rewards I understand, of buy to use typically is starts you travel There's funnel make go they plans their like. in track that fulfillment those what the So, rewards we way the lag

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were what an a online lot really pre-COVID, purchase So, pleased perspective. the the rival not still with We're from most volumes even seeing, shortly. we're the we're that's fact popular that back yet seeing of that with we coming in inventory we're where seeing, platform here engagement

into Thank the of can is of breakdown second OpEx, for items first quarter is run year? on the you -- you. a question of indicator each and the of the My go rest last put good the OpEx rate the whether a

detail markets employee. granular can tap affordably, at line provide items, that expand really haven't in our we I specific capacity cost where and perspective, what in lower studios, we talent, been can of OpEx investing is an a the far but we from we much per great you in more can means terms mean, have that new which tell I Yes,

And And can have them your development for tools the they so that, you fully up an pipelines. been and for teams a place and focus to and you from benefit understand area before those where to that's the stack fully get scale us about of last tech year.

And those fully. so able be more exercise. resources then leverage we'll And we're working through that to

So in have we in studio group another works a globally. XXX Vietnam, we're that building distributed Belgrade, nearly out people

more to going the us our that service and are our cost forward, are initiatives so going of refine allow structure those products to some affordably. And

hopefully kind certainly to So of going perspective, that's through a And see to out we're margin our of that getting is forward some structure color that our expectation from cost our more signals leverage that capacity. by going better flow going is improve.

detailed that in highlight the related charitable there's a adjusted listed that merger reconciliation. EBITDA also Andrew, in transaction bonus our there I quarter, agreement as as reconciling contribution just expenses, in merger of $X.X was would was item the million and

the most in So G&A. -- of are those are those

recurring. aren't those So necessarily

marketing of rest sales on other year? the Any and for the comments

new rates been, we're their earlier that Now, be historically and which our aggressively. existing cycle, to portfolio, the are XX% in we continuing between in to support going products, investment just far the obviously, revenue, invest XX% more of

to we'll with product. to bit kind so of little as opportunities will Bingo, we're right investing terms product expected the that moderated the sorting the that throughout continue grow fully source kind of players for of And which we in pace the rate we're balance invest and for year. ramp the are where in continue out, to of us this a We've

little basis, for result So a of on this bit originally Kingdom be obviously, UA a out also shifting will as what anticipated, a below Boss. was year investments blended

the insights. Thanks for

Thank you, Martin.

next move [Operator Northland We'll Greg Gibas to with Securities. Instructions]

line ahead. is sir, open, please Your go

I of being and on Great. weeks be guess, mentioned from other guidance. so I Hey, with in coming to any you games are the the assumptions Or are clear pushed majority six than thanks Wanted Scott, for changing? those $XX and are Andrew, expected. there months guess the that Kingdom mostly then Revenue down factors that taking unchanged? other or Boss Bingo questions. six portfolio million, kind just later your ask, remained to or assumptions

played we would the from expected that expected. look stronger healthy our about that peers. second what market first enjoyed mean, We that's quarter, fully we way growth, and it's was coming then of I than most out. that the the had fact our perspective, the into pretty quarter exceeded we talked normalize And we

a forecasted. as we was growth, as had portfolio, drivers products always were the core which And we our that growth attributed so new going what generally modest believe core of stuff just portfolio. the highlighted, into end and some to products our year. coming teams and going of hard the lot that the market exciting that's believe in across the now opportunity be we of there's look but I we each to we But And between we're launching. are to The forward, see working more were that from the growth there's

the the year half in of So performance generally with generally line of through the core we offering the what expected. first Speaking is

it maybe And better went was just like launch relative kind numbers to game ask, myVEGAS I wanted how you a great. Bingos or follow-up any launches, there? to metrics of than seemed strong could and Okay, there's it to relative if But that launch, on launch your provide and expected. expectations, previous if you can

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Okay, guys. Thanks, great.

to I’ll comments. holding, questions any other closing turn no or With back conference the Management additional now for

performance thank again, and our I just Okay, update future look everybody everybody to participating for results. and to calls want and forward on to continuing we our

you. thank So,

will We your participation. for today's you gentlemen, and thank Ladies that conference. conclude

great a have time and this disconnect at day. may You