Playtika Holding (PLTK) 8 Nov 222022 Q3 Earnings call transcript

Thank you for standing by, and welcome to the Playtika Holding's Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's program is being recorded.

And now I would like to introduce your host for today's program, Mr. of President Vice Niederman, Investor Relations. David ahead, go sir. Please

joining Welcome, call the for thank for for everyone, you us third Holding today Corp. and Playtika quarter XXXX earnings

CEO are Joining and President Officer. Antokol, call on Financial and today me Co-Founder Abrahams, the Chief and of Playtika's Playtika Craig Robert

future after risks control. I'd remind our and and not as and a and beyond future. update revenue operating uncertainties, today's These some this representing of statements statements you no but should discussion in views statements not contain which forward-looking performance, future of call. These like but are Company's our not subject undertake of anticipated rely comments you as are to other to We apply forward-looking guarantee them the on are statements including, limited that obligation today, to may to, rather the performance. these

a For with risks uncertainties, filings please discussion our see the more complete SEC. and the of

posted also our We call. have deck website following our remarks post and the to immediately Relations Investor prepared an accompanying slide will

that, the to call will turn With Robert. over now I

joining grew everyone results Playtika's to excellent our succeed. superior from create and saw today. games third quarter using AI-based our new In across for technology, Bingo live-ops These the our strategy optimize casual We you, tools, Thank results results and casual upside live-ops and which ability our the grow continued to long-term. over XX% potential the these revenue advanced year-over-year. games which growth to portfolio. call Blitz is demonstrate using has driving

that compelling And that celebrities Playtika players game music love. the mainstream capabilities, portfolio and number the experiences marketing Bingo one our leveraging amazing we stars strong by is has and partnerships, Blitz become our revenue. entertainment creating shows to a now also are it Thanks with in marketing franchise,

to competitive provide XXXX a will said category expect on with unique innovative roadmaps that market. our creating exciting for games. touch mature, our The are I is we content. now we Having slot-themed slot players that,

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are for over closing, I win Passionate, ability position portfolio in games. our many a and games market. A top-ranked that diversified has excited in Playtika place our confident to years. In the am of this enjoying solid foundation and long-term: players long-term in

platform strong Our scale at a Direct-To-Consumer is and competitive advantage.

Our data optimize be growth position, Playtika leading with and And enhancing efficient mobile sum a opportunities. excited saying will and capabilities technology-driven and are company. to games a sheet to position continue acquisition resources. approach user to its us a have strong fast, we by I that and up balance finally, as we pursue financial to healthy allows building

more financial will now on results. over turn Craig With detail provide that, will who I our to it

million, you, year-over-year. Thank up was Revenue X.X% $XXX.X Robert.

Adjusted in Credit adjusted EBITDA and which a the year-over-year. credit was retention management retention X.X% is The calculate the the forward XXXX at M&A-related million metric, different debt both million year-over-year. EBITDA we EBITDA, plan of adjusted Regarding investors X.X% expires quarter, and in will down metrics our adjusted these down as between provide adjusted end payments. financial $XXX.X non-GAAP our going quarter, EBITDA two was difference EBITDA. $XXX.X

features addition quarter. our Junes year-ago. throughout from grew Journey, Revenue grew across The implemented versus year, our a XX.X% in to Vault versus from last studio, XX.X% conversion the Casual driven by Wooga games new strong feature

strong XX.X% year-over-year by very execution. Blitz driven XX.X% promotion Solitaire grew the Blitz versus Majestic Grand year-ago. and Harvest up a was Bingo

largest portfolio game the This from and revenue quarter, perspective. a Bingo Blitz in enjoyed our became momentum amazing

games in of a versus World of by and year-ago. themed was This Fun for House third driven Poker. results Casino primarily in XX.X% positive the Slotomania Series results down was and quarter revenue offset by

a was content, not Slotomania focus driven This To more challenging year-over-year. by plan feedback. new that to to introduced this, overall game our features game down with we part responsive the economy, better the including performance resonate being quarter, core the address we in XX.X% did to back and players. shift had slot-style of player optimizing

XXXX a for the Slotomania strategic have for compelling and are priority feature a We roadmap company. built making

House XX.X% of Fun year-over-year. down was

efficient with and in As EBITDA marketing model continued company's comments our aligning a generation. and on cutting more studio ultimately on adjusted focus back pursuing the per QX, we of our strategy overall

we other Event mature this World to last X.X% to performed Series potential World the it driven of well, we performance strategy, titles partially Main in the growing apply versus the the Poker evaluate Poker for As game. Series well. year, build which of awareness by of helped as have July

XX.X% increased increased ARPDAU to and XX to year-over-year daily points year-over-year conversion users payer X.X% daily to average metrics, average operational basis at year-over-year increased paying XXX,XXX. $X.XX Looking X.X%,

continues to and The increased install in have digital user costs acquisition the per evolve Turning to marketing. environment third quarter.

allocate to out increase plans continue capital. for our we XXXX, marketing will investment being franchises and in in how growth to data-driven look we disciplined marketing while we our As

to a the to also of this offline drive great user Our been brands dynamic showcase offset games. changing our marketing and user have growth campaigns acquisition method

among with Seymour, in partner Jane the Phil Leno, to Jay Dr. continued third quarter including We others. Barrymore, and celebrities Drew

at up year-over-year. Turning were to margins XX.X% Gross P&L. XX.X%, from stable slightly our

expenses. related XX.X% year-over-year, were in the to from increased platforms total XX.X% employee-related up third revenue, Total XXXX. direct-to-consumer Additionally, of XX.X% quarter expenses of primarily operating

headcount dollars. employees by R&D our calls. income X.X% was marketing year and year-over-year as in by discussed we and Sales the expenses for we as remained expenses million we X% in driven expenses compensation on primarily net by increased to prior increases quarter. allocated million marketing disciplined increased how year-over-year. GAAP $XX.X compared G&A $XX.X increased prior in XX.X% growth by year-over-year, expenses

XX, October, we million had in offer $XXX the cash approximately our balance the cash closing from fees and cash September expenses. used approximately excluding in and of billion Upon of $X.XX tender of sheet, the we As equivalents.

$XXX of balance equivalents cash million. and is approximately Following transaction, cash the our October

Additionally, this will quarter measures. a share shares fourth per and XX.X million in the on share reduce commensurate by impact have count approximately

Our rate XX.X%. year-to-date tax effective was

Regarding anticipate the environment, we difficult will our market previously financial outlook, within we adjusted ranges finish despite and EBITDA. the year a revenue provided for

casual our an revenue to In in them players manner. efficient quality provide encouraged I we the creativity all entertainment. to by our are as we with closing, and strive as slots-themed games the our saw in our success best stabilize are continued of and they in innovation working And the operating teams we mentioned, while games,

will strongest our have build to the XXXX, we continue to Looking achieved. on in invest to franchises they momentum

growth We our as and are our we to expense look games profiles. of across investments align prioritizing portfolio

We free flow on in our while leadership will games. build cash position drive on focus maintain to in growth generation and titles continuing mobile our casual our successful

would we to questions. be that, With happy your take

first [Operator Instructions] comes Stanley. And from the from line our question of Cost Matthew Morgan

please? question, Your

taking Good I everyone. Thanks morning, two. questions. have for the

just we to in casino occur? gaming challenges assess that that there to the is turn level casual be casual should games the games turn when divergence the market And the watching expect some challenge between well, what on at you for now going Slotomania. some point? going a right games, very, to you about thinking and mentioned Is market are and very specific So casino performing obviously, the to

past, in maintaining front, at effective relatively sort And then a you've or very the been CPI. just flat the on stable marketing effective obviously, of

a You mentioned being XQ. up CPIs in little bit

the what more I'm drove or were you were CPI up? there seeing certain just sort challenges So wondering of channels Thank you. where

thank Hey, for you question. the

six actually we what's So ago, that ago. WSOP past is games two Blitz we of this in Playtika perform around first, an like portfolio like years and automatically, And how change proved games Bingo to of know Slotomania. amazing that is happening momentum years the

roadmap We are building an XXXX. amazing for

stabilize believe excited We about this target. revenues this are in our CPIs. is to We And this regarding the and We roadmap. roadmap. believe

Sure.

terms of been AI I we sources think fact on really technology, capabilities. we've in our focus quality focusing and have more us and and ROI. our and and buy that's for So that we shifted helpful our And scale, traffic live-ops traffic how for higher CPIs, traffic the

think important. traffic where on an I really combined precision advantage in three so buying us those gives things is an environment

Great. Thank you.

you. Instructions] from Partners. the from comes next And line question MKM of our Eric Handler Thank [Operator

question, Your please?

the game environment? launches. Good new Robert, thoughts I and in I had if question. morning wonder that thanks for macro the about you about know you're several on this your thinking Yes. you current how touch could just pipeline, in

Thank the you for question.

solid easy it environment about in Still launch. to September. not It's launched know overall. games. of the the it's an this We not see to Merge early a Stories world. we – This is surprise. was launch It So game. new a see We in future

the event exploring are have two games we launch another that right now We them. to

is I million. this but a know a the quarters in from think year, get doing Stories, is for of now, or new to in now, a the regarding our quarter I said we'll two us hard that now, to answer the from we $XXX what really target we around future game the solid quarters answer. that of it's is new games. But focus games. will Playtika And in have beginning a of the for two have quarter again, as Merge Till an believe or exactly

the of just an about follow-up, game? as a sort I wonder you And then if Okay. could on talk update Redecor

project, a changes beginning, of brought amazing have said in project in to on studios did a we We We the Israel. the XX future as talent that believe Redecor, year, I team it's XX We acquire Playtika. during from game. other in in better we'll when the Redecor, view And of next So game. months. built an the we a

you. Thank

Sure.

Instructions] RW. [Operator from Baird. from question line the Sebastian of you. comes Thank Our Colin next

please? Your question,

I but any the questions. DAUs, over DPU off, the revenue look funnel time don't do the at of and you growth doesn't or the thanks DPU taking concern this at per there, on I have for guys Hi it really limitations, way, around first top you my decline expand? guess, know in

title. Boost? initiatives, any can helpful. making and seeing technology specific improved of some you And visibility know you're be I on applied But that a performance titles seeing in some be Are other areas platform to there you're using Any then would by those areas Thanks. where of lot the sort where are there's divergence titles? technology of secondly, performance to changes

Sure. Thank you.

Tier traffic. we've So higher-quality of been on in focusing DAUs, X terms

lower of daily of see to going you're users, we metric levels that, doing DAUs in the folks paying on. terms in which focus so is And

year-over-year saw quarter-over-quarter. at XXX,XXX increase You stable a X% and

payer I the grow that engaged to of focused. primarily think in and trying terms we're is metric so And the that base where

So question. regarding the Boost

The amazingly. elaborate AI more to share next platform regarding happy knowledge faster, two Boost, going our future. and studio, information, beginning to when share operation the in it's the day, make about between the digital we're the livelihood So elaborate of interesting digital games years of our the about because efficient going announced In project. this new is but than Boost This and the of we I'm We're how apps, is a to how it. content we're and this more of much Boost is working really, at is end going of doing the best and Boost year, going the to technology level studio to we're operate ago, to today. one next the use much more much we're to of features

much very Thanks Okay. guys.

question Instructions] Ju Stephen Credit Thank from comes of from next our line you. [Operator Suisse. And the

Your question, please?

guys. Thanks, right. All

acquisition a with business, So Eric and have now. versus studio the think environment I there was different with this remarks, prepared out talking probably that on I out touched you And a was the interview a in also Robert, think there probably there, pandemic we're about at situation also. flush every when you to your looking recent opportunities think,

talk accelerating? current can may So not those you Thank about you. whether may and be conversations environment the or

Sure. Thanks, Stephen.

M&A be continues the environment to So competitive.

company platform acknowledges would to mobile a between to continues a the valuations. in the of we're say within private the everyone and is be that markets divergence And there marketplace. games. evaluating, think terms opportunities and investments gaming there interesting I that continues variety M&A the of public gaming that biggest I be in video opportunities

offer, balance we of have sheet. But said, post that $XXX being our cash in tender million

in $XXX million have of a We the form revolver.

we as have our continue to capabilities So on definitely IP looked transactions to to that execute at and the world-class we're focused portfolio. on capacity we and definitely

Thank you.

[Operator from Clark comes you. question line And BTIG. our of the Thank next from Lampen Instructions]

question, please? Your

I environment ask question Hey, to on color in light I that yours has guess, Did that peers progression July which trends guys. July? rate? to the helpful performance see? wanted of certainly a in market you started end noting morning. but did relative Good Craig, sort a right sort a around line see now, of, quarter, I with think you lot difficult And what quarter monthly directional you of April, is of us weaker relative saying. were May XQ are little what you improvement last characterized But is uptick. gave some off to and that June of to exit relative of how

Sure. going kind monthly Thanks not to of for We're trending. comment question. the on

in I that being we is market probably think I execution of that range. being range. more as we of towards get it the our light R&D projects the that of stay will to the capitalized. ended what the conditions would this able up especially end we're That being expense that say projects relates the structure, versus said, bottom within end adjusted proud expensed year revenue anticipated up and both EBITDA of would say the to some

was our So $XXX to $XXX now will million. be the $XXX previously guidance It year million. CapEx million for

from we a perspective, some but where the in end cash affects effect change neutral range. up flow that So

Okay. has in been And growing your year-over-year of direct mix. terms also business

and I under that, think sort might looking sort and I are if Thank XX% of stores is bit and is and associated about we're to and mix be guess that distribution medium pressure, or little you're that change growth third-party Does over of I'd believe much a that opportunities driving be you traditional of with view slower the up a too your a channels case something mobile right that channels with stretch, former long-term is time. higher? you. of now. to Do bit app direct maybe at the environment, long-term perhaps little curious XX% the of maybe sort but that around or if coming maybe

always strategic a priority has direct-to-consumer So for us. been

opportunities And you with of yet than the business. are As it’s that, growth provide our give none casual we'd our so to hope Bingo to and referenced, see more titles as well. we direct-to-consumer, currently choice. opportunities to Blitz, XX.X% Other on see of do consumers

So continues nothing for differentiator think a with It us, for competitive I changed has that. strategically be to us.

you. Thank

[Operator from of Instructions] Sachs. from you. Thank Goldman And next comes line Sheridan question the our Eric

question, Your please?

for two, much taking I the so can. if Thanks Maybe questions.

in thinking improving of couple How within XX upwards the the think timeline number back a where environment concept should is we performance. of coming to there do consumption monetization the improvement initiative? sort and Just could how much quarter That'd from just around of take of of game the that factors potential it you months? elements could optimization slots headwinds or of control in be Is Or that versus your be to be about six like one. terms external macro broader environment?

terms you the and tender the over wider in offer little the much. the sheet number talking of on greatest potential And having and with Thanks cash order rank in months sheet acquisitions ROI the know the think deploying over for balance XX about But of look you two, balance about I bit priorities how million $XXX where in now is? the cash for potential we post public between that a so referenced out spread should the as next you private. for think

I in Bingo the priority them the said, games look past today. is we And number the and didn't had perform I the first said roadmap, well, stabilize. as of to question, call, So of Slotomania, have the and this changed said Playtika one regarding momentum we're now we – amazing in Blitz going at Playtika that that again, of year in like are XXXX. going top become to so Slotomania. and an beginning at This and we I we is game as We're cases focusing the the before, grew

So about I'm it. very optimistic

Thanks, Eric.

your a M&A, us. terms always on question for priority it's second In of strategic been

our users how it look to we you Slotomania quite top And rank all casino, at If they a came today all intend us be to priority strategic terms of of continue in titles other order for acquisition. prioritize. than and high will through

Thanks the color. for

Instructions] Douglas line [Operator Cowen. the And of from question Creutz from you. next comes Thank our

Your question, please?

couple of questions. A thanks. Hey,

think sense be what difficult First, this user of engagement could we've heard QX? revenue that And can and talk or to a headwind and why me side? Secondly, bit the between talk you you in DAU be Can grow market you spread of on is think of QX you. and that maybe about, bit engagement more a you big monetization side, give was a a conditions, you times. Thank the in ability currency side the a talk been you there's it specific companies QX is? about about the performance the can what few in about, pretty of

Sure.

first the business in the on today question, U.S. FX, about outside U.S., our is is XX% know, of the So you XX% as

And from impact. FX so there were tailwinds to revenue

by people and there headwind terms and the what Europe was tailwind was FX. overall that Some got benefit impact of in net some – so many employ But that overall of a of the Europe offset and from sorry, in definitely it a Eastern Israel was fact we hedged. outside effect was

there's conditions, CPIs In The the more we've terms are increasing fact of obviously, referenced market past. the been has challenging. in the broadly few in marketing things that a that environment

public in navigated think in have data the overall a portfolio. that I of what other very than we've better strong seen we've we market terms

driving the casual that of we us. franchises differentiates what really evergreen is titles specifically the live-ops that have, capability and with our nature is outperformance, think that think have I the I been combined

Great. Thank you.

from comes line Citi. [Operator Bazinet next you. Thank of the question from Instructions] And Jason our

please? Your question,

after little a the were just now these and sort healthy you high-Xs, the reasonable that bit about approaching of and what's a then used? was I I a of how And mid-Xs. a just Boost, payer function that a question mid-Xs had the go? can low-Xs we're for and how which ceiling on think, much you that higher-quality Can talk function traffic, high-Xs is going high how of of rates, conversion number is in much term

Sure.

the So thanks for question.

looked correlates title the that And and we've levels as we conversion looked made we've content the live-ops looked visibility past, length confidence of the at kind newly titles their at at a of our at our mature most of leveraging time. people conversion there. owned we've the Conversion whole bringing in the rate we've time kind and it, time. the think a acquired and directly operate in as over us can know-how I given franchises appropriate that and that's that statements grow right that the to more

So something a lot and good I think continue and in trying to our that is very user where to comes we're number time. over that focus at daily drive paying that of

you. Okay. Thank

[Operator question the from line of Instructions] our from Thank And you. comes Omar next America. Dessouky of Bank

question, Your please?

the for question. team. Hi, Thanks taking

is if assume was that revenue quarter-over-quarter. the daily paying second So I a it user were and suggest to revenue to similar that little the first advertising bit would implied quarter, to seem down per

it First of that changes are is you lower in behavior? driven of And Or all, by the higher second is any it Are within seeing gamers, spending less by it that driven across all, – or that case? spending more in gamers number? active is more is if board? maybe active Or seasonal? mix where driven the are that reductions gamers the the of spending is by case, is

Yes. Omar, the question. thanks for

So of performance the mix that I it's more have terms think we driven quarter-over-quarter. in portfolio by

driven Fun. of decline a both slight quarter-over-quarter, slot it the by sequential House more If Slotomania and at was you're looking titles,

it correlates to than think broader trend. other So more some that I

real Bingo As sequentially had driving Solitaire very Harvest Grand from we and quarters you've both seen, good growth. Blitz

some see when broader strength the call it's we out other to there's market within So us such for portfolio. that hard

Great. Thank you.

Franco And Granda our Instructions] the [Operator D.A. next comes you. question of from from Davidson. Thank line

please? question, Your

the retention, particularly, you're have morning, any cetera? commentary you DXX noticed campaigns wondering, Good from that around of some any DX, was everyone. UA, difference through Hi. LTV acquiring newer between offline and those your cohorts I conventional curves, et

on that we notable call. Nothing comment this

reinforces campaign brands. is that of the it really further the think I power offline the

it's seen, really elevated you've As Bingo Blitz. further

truly our Now portfolio, creating entertainment and title halo it. within it's the real one a around number distinct personalities

we qualitative in nothing acquire the out think are specifically diversity traffic in well. helping cohorts. the there terms we'd nature benefits in I as more and of So But of how call

some then you that's Okay. your some how company your internally? around progress And of and And any that Where gone journey? sorts are you've that's can you helpful. No, reorganized then different in with in report shuffling share games recently, studios. of been

No.

other some business think and execute managed than Redecor being up before, games continue teams are their and Best get to speed on Herzliya, we've no plans. as noted there's like headquarters out and there in Fiends now of I to our the update

All tools? talked initiative last I you give that just work? then logistics one us would AI very about that one could how that if color studio squeeze And your around color one, in. around you with Can right. digital more the and Any

you for question. Thank Hey. the

how elaborate for color is So to what the going said the future. is I and believe we can I And said, our games. a This of how cannot as an is to before. to put thing that to in for is we're operate in the say only be to amazing is more it there this going Thank going beginning year, Playtika the thing going than this you. I we're be about meaningful us. And world I more look. going

Thank you, guys.

Lee of next our [Operator you. line from Macquarie. the Aaron comes question Instructions] from And Thank

Your question, please?

QX and you And dropped had talked from looked to the we impact May weakness Hi. consumers But call. in but it things that And some really play as in they little any didn't weak, about, companies I improved had taking on out that heard if called do have see June July. question. a feared. had missed macro out, have I macro pay? apologize Thanks for this. Last still got I quarter, their from you willingness my and

the seeing health curious consumer? and the just you're of what consumer So in

for Thanks the question.

there execution then softer the in real really any impact there the by strength quarter. seeing what And on So it's was casual overall that hard portfolio, throughout was genre it I the so to economy theme driving it category, is is great slot we're obviously, result, that, the and games. an one think be

of the may looks well, what's because performed much I how so underperformed data don't And know or it in you look overperformed some there. market like have that happening genres, and we

I we consumer. make blanket don't about So a statement think can the

we're in kind I believe the data had amidst we that the we seeing. very what that that proud can the think of quarter of show we results that market had is we – we're

Got it. Thanks.

As the follow-up, will unemployment, at anything your any you there in to a leading are stock inform of or view that you indicator? whether players considered economic market, indicators GDP a how think growth behave, look that's that could be

Nothing I would note.

Okay. Thanks.

Thank and the participation. well for ladies as session you. Thank program. as This conclude question-and-answer does today's your gentlemen, you,

disconnect. You may now Good day.