Playtika Holding (PLTK) 4 May 232023 Q1 Earnings call transcript

Welcome to the Playtika Q1 2023 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

Now I would like to hand the conference over to our speaker today, Tae Lee, SVP of Corporate Finance, and Investor Relations. Please go ahead.

Welcome, everyone, and thank you for joining us today for the First Quarter 2023 Earnings Call for Playtika Holding Corp.

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

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

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

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

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

Good pace from last of everyone, morning, global our for momentum both achieved our growth sequential titles. proud Building we year. casual the rest of achievements for call across today. for I'm and setting incredible joining social quarter, for our casino-themed our the talent thank and the and you,

million We last this slate year. are guidance quarterly credit financial excited on our EBITDA our track revenues adjusted million. content roadmap Overall, $XXX.X to provided call, of are on and meet of our generated about and $XXX.X we we

meaningful our strength operation. core ago, we on took of Several to steps focus further months live

personalized us game point game mobile to built journeys. players at their operation enable optimal which best-in-class content in a our was live gaming position leadership to Our provide innovate and in services, on

further took AI we and our Digital This positive our towards Studio. quarter, implementing strides technology in developing

nature year titles, and evergreen our Our allowed year. successfully to engagement after with of has monetization drive us platform, combined proprietary technology

To truly And community our this position will Our our more improvement, confident believe across lot of outperform peers sector. the personalized gaming technical year summarize, to games. players. to our us allow a of experience that there more mobile we potential I I industry and capabilities loyal will we is our in am within growth deliver an strengthen all

now over will turn Craig. to I it

you, Robert. Thank

We the games. our revenue to trends continued performance to of with are We all see saw our pleased we year. QX start that across positive in started

top day per grew sequentially Our X revenue quarter-over-quarter. games

addition, to starting have efficiency the to In we are we on allocate through see changes how from made focus that flow we our capital. and

casual of a down million up last organic X.X% for For by year the and and our we're made to our the acquisition strength our more spend QX we the within strategic to $XXX.X start decision games. we X% shift casual sequentially titles. encouraged the growth quarter, particularly our sequential year-over-year. revenue, marked user experienced generated stabilization point portfolio, the year, of We to growth

on credit is XX.X% growth $XXX.X focus generating evidenced financials Credit up and in margin our quarter, higher year-over-year. was EBITDA adjusted Our EBITDA. million, sequentially adjusted X.X% this strong

Net 'XX. XX.X% direct-to-consumer margin and up year-over-year. QX X.X% platform, X.X% and and X.X% Our million, sequentially compared credit $XXX.X up QX to generated in XX.X% was sequentially of income EBITDA X.X% 'XX was XX.X% in year-over-year. our from million $XX.X down revenue adjusted down We

casual of and comprised only Our direct-to-consumer the our social on Blitz, platform title is all our casino-themed titles; Bingo of platform.

in platform by given offset casino-themed the were decline social strength revenues down direct-to-consumer our As slightly in Blitz. Bingo titles, a result, year-over-year,

second starting ahead, in XXXX. Grand the Looking and half to to Harvest Journey Solitaire the introduce we're platform excited of June's

in year-over-year. our Bingo driven June's Turning sequentially Harvest results journey. the by Revenue Grand X.X% quarter. for games Solitaire X.X% was This strength now across Blitz, to and business casual-themed grew our growth and

year-over-year. XX% million, $XXX.X total now Blitz XX.X% and games up represent revenue. Bingo was up revenue casual X.X% of Our sequentially

still Bingo We that quarter decade record our we and proud team over acquired revenue. a is titles. is are of a another game ago of Blitz Bingo extremely our one Blitz of fastest-growing for

Super In Day the packs quarter, we celebrations. saw and the features Bowl, surrounding and Patrick's St. Day Valentine's from results strong content promotional

rolled new We positive our has Studio's the new benefits tangible introduced We received mini out also games pets which from Bingo and in players. from feature, Digital capabilities AI experienced feedback Blitz.

led their able And journey. able these with of uplift to much new content, provide to we're the We segments now layers are revenue identify in for a personalized player result, to top as earlier which players studio. an in

this encouraged year. to us out this to studios of has success program The additional roll these capabilities

sequentially up and Harvest XX.X% revenue $XX.X Grand XX% year-over-year. was Solitaire million,

level We This last by mode Solitaire. past we're call, changes the introduced our a we strong we selection, players game, about game spoke our at player large-scale that such growth seeing the in quarter, of this expanded encouraged are into increased studio. engagement. giving On which momentum

levels In driving players. over our of improving addition, we amongst by Xx, number increased of community the retention satisfaction and

player to increase helping with farm new feature date Finally, that we meta introduced the our engagement. biggest is

Harvest acquired success Grand Solitaire over continued to a to proven years this is ago our the game and drive a we X testament capability organic meaningful is franchise growth. that of revenue

our games. social casino-themed to Shifting

was X.X%. day was revenue sequentially per Social sequentially and down From From by $XXX.X year-over-year. million, QX X.X%. QX XXXX, and by revenue up primarily XX% to declined QX driven to year-over-year. lower results by per Slotomania. casino-themed revenue was QX in decline Slotomania XX.X% XXXX down Slotomania's day increased X.X% The games year-over-year XXXX revenue X.X% XXXX,

encouraged the Slotomania second to revenue in consecutive in stabilize We daily trends pleased for the positive and quarter, studio. users see see we're paying average are to the

by Cost decreased marketing of of expenses we and the for expenses user savings quarter, decreased and by were by offline XX% the and year-over-year sales in our year-over-year. end XX.X% R&D campaigns R&D Redecore the and reduction in games. the X.X% driven of quarter. new decreased items operating some that lower driven X.X% Like Turning at by year-over-year. The expenses the acquisition the were of year-over-year. fourth largely marketing now in Sales to expenses specific first quarter. P&L last in force line timing of decreased and revenue reduction our announced

This G&A decreased reduction an began by we that the the expenses X.X% addition, implement on of In due across organization cost in focus savings reduction in had year-over-year. was increased to we half the XXXX. driven largely force. to first by

$XXX.X we March million cash cash and XX, of had As approximately in equivalents.

year-over-year Looking increased at our ARPDAU operational sequentially $XXX,XXX. X.X% $X.XX. and Average sequentially metrics. sequentially DAU to DPU $X.X and year-over-year X.X% year-over-year to decreased X.X% increased increased X.X% million. Average X.X% to X.X% and

our and $XXX million. EBITDA the credit $X.XX to million in in revenue full the Finally, $X.XX of year $XXX of to we are reaffirming to billion adjusted deliver full guidance billion year range range

$XXX to between million. With We that questions. capital million to to expenditures your happy $XXX we'd said, expect be continue take

[Operator first Credit Instructions] from Suisse. from Ju comes question Our Stephen

on efforts. it's update you development now difficult Robert particularly It new Craig, and So like can about your environment, right stance your how that seems the might ongoing and talk game also so toward an And M&A be us for evolving? studios. ongoing smaller

are of number for you So come increased assets an seeing sale? up

you for question. the So thank

first regarding opportunities to more the -- today we see M&A, Regarding coming the market.

last will on to grow and effort. And small marketing said the year, players. market for like effort, the business. an that depend tough find with new have if company And for hard the understanding players, -- to be we As operation, the with you is depending marketing issue will themselves it's going on the really

operations us is big company the So in their gaming industry, for grow advantage a help to small that the this a business. we leading to as companies

year. very So the going positive opportunity we We to yes, more in And a is see more approaching year we be think see this market. us. companies that

the Regarding that as we right new games. investing to game let's a of new like games, we Until say, we focus very start-ups, last promising, is are approach company we year, We Playtika. this the dependent development of in direction. decided said in to good believe this internal results now, see investing in the of

from Our Morgan Cost next comes question from Matt Stanley.

X. I have

Slotomania, what's sort here. on how with just the about I guess detail that? seeing that your driving And Can a broadly. you're of -- give is view first stabilization little that the with more more acceleration from portfolio is sustainable casino you just the The on and

AI. efficiencies just risks those could but would you tools a highlight that that also wondering those about your as opportunities to question any if there was are The second bit little I preliterate? using of is the business tools, you drive generative to about some talk you have

for the thanks So question.

have So in in well regarding Slotomania, target. And X Slotomania. we we're quarters a now very especially we And starting to stabilize said, X that ago I quarters, this quarter. did think, we the actually, last

by are on focusing was think games really core that's on the the the players. important I the focusing to thing approach, our we difference

more bringing very well of are working Playtika. users the It's paying circles to us. for in users We paying

social of think casino-themed is the What second We future. optimistic them. are are was And and Slotomania will we seeing the about I not and keep even stabilized, only very question? -- Slotomania, optimistic the games the growing we

second The question around was generative AI.

investing we XXXX. became a investment AI And in already AI. know, We few around our is as buzz So It you a Today, believe But in AI. this. first about word. always always in like speaking everyone believed Playtika was are XXXX, years.

happy growth. saw Blitz. say AI, Craig that, in very -- of that good XX We quarter, this announce the we this results, And with in game launched acquired we the as to years are ago. the I a growth said of Blitz. game we help can we We Bingo with what's Bingo promising happening this We saw call, game in the especially see see very

always with the by to employees. us, stay not lesser -- promising And is going I is with the now And going help going way, And at to We're right It's to this we're efficiency. looking not here our experience mistakes growth business games. replace the Digital the and learning -- is at Studios. AI take for more AI are all things. looking grow this them and not to to our we going around with AI say, to

Douglas question Company. next from Our Cowen comes & from Creutz

on that kind your and just as take that your in of the year, above I on? you to pretty you end them, is understand early that looking it's top results year QX you of in QX suggests the you've any but I the seen touch at guidance it of guys significantly goes down? in cost a annualize your is rate slowing in on achieved your are run base increase early And/or sort range QX above revenue anything and EBITDA. there If

the Doug, thanks for question.

in of ago obviously, is fourth So but gave day. the And with in are, good guidance, we X our terms months we I per still just for titles in it reporting we as year. guidance a our growing where couple well executed the about top just growth part sequentially very very of all of feel sequential terms quarter. the of of early

it macro guidance given think the I keep I on so top environment, And there felt best line. to

opportunities at ramp the year expenses looking I think deferred getting are marketing we're to terms costs later in as of some in and expenses, to as well throughout year. the

So look think in you run just can at I don't rate QX.

to decided this we keep point. So guidance at

question next from Aaron Macquarie. comes from Lee Our

I on especially just to trends how Congratulations Can in wanted the to March look you results. the have things called January you through a -- and about the looked you DPUs, quarter which as how DAUs move in from early nice there's talk out. the and pickup QX?

Sure.

out-of-quarter kind I So the we performed in QX. of say results. we quarter that throughout well terms don't of would discuss

the been marketing the has our focused, of And prior on DPU. typically base. higher user for monitoring talked terms of as us spend. about metric DPU in have best calls We we QX on is health

we funnel of but growing And and ops to see driving going as focus continue DPU a forward. on number so you the that result, will conversion live top and some

against on has And can macro and of macro sort how the the about and you. months? quarter were results that's you talk in might players health Does impact consumer, seeing Or the your it bit? still like recent that finding a you're terms you be very what improved nice. of just Got seem Obviously, first in changed of macro?

environment that I see kind of we've a obviously, since last doing gaming. well, think we environment quarter kind year healthy mobile it's for represented what results. of seen fourth our of and the And in the middle is has been

last titles -- in have we had the -- top year, given we XXX. X so And

very health I overall the good feels of gaming system now. have sense pretty the good a mobile and think we right of

Our next question MKM. comes from from Eric ROTH Handler

expenses, people that's I your way at looking you've as of all equation. some sort just costs out the come down taken has cost. assume of R&D Craig,

forward? look is progresses? million tell at increase of year Or stable you're corporate, sort can a going that and us you studios staffed as your about number you across As that see relatively tell What $XXX how about you that? the -- will

consistent we But difficult perspective, year a I changes be decision efficient make to a make now as we're comment quickly. I think seeing where made focus things what from we move a and one quick pretty -- should headcount we able on that are. and I'll efficiency. more feel is some obviously to last guess organization is like from We decisions

And we're headed so we about the the good good expense and place. is in feel structure direction feel a

quick as as to talk a million, CapEx was quite your the Can ramps And outlook? year get just you to we And follow-up. first at Okay. the through $XXX looking low quarter. that about how progress maybe $XXX million in your

Sure.

So it's were when purchases timing made. just of

So be we quarter-to-quarter provide. still that in to expect going nothing of from guidance, it to range the we're specific but

next Sebastian Colin Our from from question comes Baird.

future you as thinking the I So the to if the on potentially Colin. update it be hear localization makes curious was just next of question And how guys guys another are This would on changes [ph] strategy? that. Google then kind landscape is about Reese an for great of provide you mobile could is, year?

Sure.

localization. I'll CMO, then in of advertising. And talk about broader take will So our Nir, landscape terms mobile the

In some different terms just Blitz and markets. at as of in looking in opportunities continue jurisdictions. We with other localization, games well opportunities see some campaigns some we other Europe, to successful Bingo had in localize to we're our

leveraging So making markets local these local I seeing as our well working approach difference. new think and as languages CRM in performance that well we is changes television we're as with combined launching a with keep XXX

to as opportunity we'll continue push So that well. on

It's Playtika's Nir CMO. Korczak,

Android. the So regarding, privacy I around would area say,

obviously, So lot I from, IDFA. learned a the think from that we

as partner us. strategic of Google with relationship a close very a have We

So I will we we that in working most can the whatever assume new have we implement area, step to step them are the of that ready things learned, to come. and that with by be

from comes question next from Sheridan Goldman Our Eric Sachs.

could if Maybe I X get in.

broadly interested might and how a years. the First, number that about investments to potentially to factor the little of I you think into bit the costs updated growth? terms side about long-term of the how term? allocation allocating to how hear that And and business talked landscape you in on you made the efficiencies long drive thinking are of and know always broader there talk second, inorganic a guys you AI capital out game to about medium M&A about Can over any on capital potential content then over creation and thoughts against

take regarding and the Craig thank I you. answer Cool, will AI will the M&A.

beginning AI, always time the in us and to use in of it said I how we really as to took magnificent So the understand call, believe this tool.

in in key all to be big thinking a we're to it's we and for very, our are it's customer, a scratch, changer, are new this, product actually success how optimize games. a players of for there And can think using in segmentation very And now do. a with ready our But that and still, this to first entering in one learn players going feature optimization that the for the them AI I it's that much thinking this more building we think -- I see I product understand we it's we to is say. to Playtika AI implement that and implemented future. better X, how changing the because news first game. do to provide to very of tools, And the our the current the X, and can game products be from years is there a see are our develop and product is we effect game, how to to we from working approach need really X change more work ago remember of is games, current with big good lot to this we a in to

Eric, it's Craig.

over on capital into talked a we that the new in of plays focus recent just about continues games, I for to consolidation expect we're with terms calls In terms in additional made of landscape, is know in of changes terms categories and M&A consistent terms of the couple entertainment I fact consolidation think part bringing being industry M&A the of franchises. the earlier, of our I the continue. gaming pretty allocation, strategy attractive be messaging in pipeline last and entertainment our area especially given most in us, to new the mobile but of we of core priority we've one the within our it think broader an

And adding so going there's for with us that, think be I portfolio. our to opportunities continue under franchises to

Granda from Franco Our next Davidson. comes question D.A. from

not kind in the perhaps seeing success little more in what bit into of pointed return offline what then guide mix of And for you practices own out ad the to you more think casual online we of Can Craig, your marketing of about second you a spend for terms titles. my is your about for question, budget growth assumptions have working, talk on you're shifting and your is should the year? year? what versus embedded how the this over

Sure.

potential I the broadly, we journey. June's fastest-growing portfolio in we're titles see where X and the and the the best Solitaire Harvest would for And most growth, the spend. investing ad in Grand on have titles Bingo we are return future So Blitz, say,

are And associated titles so seeing budgets those that. increased with all

it of the the of think doing, we're publicly. types in I then of continued tactical see that's performance backed terms marketing that But by things we don't on can you terms up TV, share some specifics, of efforts. and just in

localization new markets combined to well. And bring so to and games opportunities as with our

in strategy. So I and I biggest more with just fastest-growing leaning think previous we're think titles. consistent our it's towards

product constantly for we've rest opportunities made as marketing ramp portfolio the changes we're to throughout as the of evaluating growth. And well there

from Omar America. Dessouky from comes question last And our of Bank

wanted recently models And I'm a had couple really like the partly and of by call OpenAI because We've of Bingo discussed double-click were I technology media very into from has know improved, AI that. were time or that to I ecosystem. seems models, to say released the that long started on -- and use Blitz timing released, of to you have and this AI them? about around released the far. I that hear frequently questions this whether technology. ones the AI AI on difference models And and in it when to So the a came have that wanted so recently specifically But was talking the for in happy I'm been that just I been improvement

No.

guess, more our this efforts. tied clarity, just Studio all I to I be, give So is think to Digital

Our efforts games Digital their to better decisions. providing tools are studios help and improve Studio make our to

And it, that of but think I have what specifically Studio Blitz, terms so players. Bingo game. really script the is our to we in really broad using answers -- it which is efforts, and developing personalization terms better all this don't referenced of And in the it technical internally Digital time. feature did about some don't tools segmentation helped we've as the product something we for was I experience more really that of to part relates our to in segments personalize been

something make But things to I to clear. want add

and and growth coming The Our from growth is teams helping from are an job in they coming Bingo effort that Blitz features capabilities the is new us. the launching. AI new not amazing products AI the the only is and

the things So this speaking we but growth. it's what business, not helping of that the grow make is help of is about growing the in future, us growth clear, to it's course, to thing the a can are dramatically

Sure.

and so language commercialized? have has you models that models started using And OpenAI has the -- Playtika large the

that. our tools of my of it's -- follow I mostly own using of on the Yes. that aware not types is terms -- team with that I'm can don't tools. up in belief, proprietary It's it's focused I something not the

you concludes call. right. All Q&A all conference Thank today's for the participating program. does you. conclude This Thank session. That in the

disconnect. now may You