Playtika Holding (PLTK) 8 Nov 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Playtika Q3 2023 Earnings Call. [Operator Instructions]. Please be advised that today's conference is being recorded.

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

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

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

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

accompanying have prepared which forward-looking information on website, posted to will We post Relations non-GAAP we an our the Investor call. contains immediately and following also and slide statements deck measures, remarks our

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

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

everyone, morning, Good our call you, joining today. and for thank

a financial current affected speak business we our to address I all. situation us to and about like would take in Before Israel, has moment the results, which

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currently members Fortunately, for I can are safe. accounted report team Playtika all and that

for However, lost of colleagues loved tense our are experiencing it to having a grief know me some that ones.

and to we support. deepest out our and condolences go hearts them, Our offer

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Israel X,XXX approximately employees in XX% which global our approximately workforce. have represents We of

from activated our reserves. colleagues the XX% been in from Israel have week, of about Israeli this As military

will adjustments situation, business to situation mostly necessary our in Currently, offices make home from Playtika. progress. have we continue with support are and begun this members closely our across manage global as of the Israel As from working team we we contingency planning, colleagues our

moved number Poland to have and from a Israel to case in employees redundancy of in situation We limited of Israel provide Romania escalates.

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history navigate We the emphasize of regions interest challenges with want geopolitical well in war committed our that company the our Israel. safeguarding to we We employees remain the the and the operations, to prepared shareholders. are we to facing of challenges, with our operating believe in

and adversity faced always have stronger united. we have and We emerged more before,

I will the about to now turn it quarter. speak over to Craig

Robert. you, Thank

Before our into and quarter, financial we results strategic highlight Labs like recent would for acquisitions Youda InnPlay dive the I and of Games. to business the

base. fuel the player expansion M&A local footprint emerging offers in this potential, world genre with title, growing our known title gaming goal we high-growth the earn-out as branded reflective InnPlay Israeli-based evaluate for structured into an Coins. recently we that prospects. transaction Luck testament around a us & our exciting with be is benefit the continues and of profile. to is to to & InnPlay a growth mobile This hubs of Battle acquisition new a an is Animals an Coins Our company, Animals

Poker. also in carve-out quarter, their franchise, Earlier the largest Games for Youda of the announced portfolio acquisition of the we known Governor

growth. the earn-out portfolio we on that an maximize also to structure multiple, day one. profitable an we transaction we asset EBITDA encouraged acquisitions. EBITDA instance, not with by on a acquired proficiency and our proven at In incentivize only serves enhancing while of attractive this executing This an franchise. complex to existing also focus footprint are accretive portfolio as this is where testament has contribution to acquired a successfully lacked region in our an a another This but transaction team in business We fact place in the it

us to our have robust business advantage As in remain which next free on the we of is acquisitions, our look flow position a the a market to year, opportunities. conditions model of large positive view cash market cash The capitalizing committed generation and to we enables self-finance competitive current environment. M&A and favorable

launched by our our object significant we our I Netflix, global This partnership Wooga across internally entertainment best-in-class recent to highlight many Ghost with experiences also our Furthermore, a ability milestone title, is represents to Studio. that excited developed where platforms. Detective, hidden deliver am to built audiences game a

results. to Turning our financial

flat Our quarter performance and industry with quarter to expectation this down the third line the is our seasonal faced in in we be the for the was year. consistent slightly headwinds typically with to in

of $XXX.X million revenue X% $XX.X and million, X.X% of was of to Net of charge generated impact we quarter, of related million an million in QX compared the Redecor, For income down $XX.X net the impairment year-over-year. $XX.X income sequentially XXXX. including to

Credit adjusted X% down X.X% EBITDA and was year-over-year. sequentially million, $XXX.X up

last quarter platforms, QX Our our XX.X% in million and XX.X% in We to and margin in year-over-year. direct-to-consumer up $XXX credit XX.X% sequentially compared adjusted the X.X% EBITDA year. was X.X% from generated down revenue in QX

Our quarter. direct-to-consumer our makes business overall slightly of now from last revenues, up XX.X% down XX.X%

Solitaire Fiends and was to titles Bingo such Revenue results across Blitz, X.X% for was Grand $XXX.X in our sequentially as Redecor. Best year-over-year. the Turning X.X% double-digit flat and declined X.X% quarter. by and was million, down team casual Harvest other Journey year-over-year offset in sequentially revenue Bingo Blitz business year-over-year. games growth The declines now our June's and

the of line we declines growth long-term While game. we slight in saw health in Bingo and top profile are this confident performance,

making substantial in a with remains game of of strong performance industry, its was our negatively the loyal marketing partially Blitz players. it #X largest in dedicated largest by investments. games the game community casual Bingo As fastest-growing category our in and affected and portfolio, the some

Solitaire million, a up off Grand XX.X% down $XX.X year-over-year. was Harvest X.X% record revenue and sequentially, QX

feature normalization Team studio the to Games. launches September. Team some being successful Casino main experienced contributions quarter-over-quarter, release experienced our The Pets. Shifting of vs. Social we While release and Theme of the the in

sequentially the X.X% encouraged down declined in Team Social to revenue pace to while are moderated down Despite that year-over-year. sequential revenue decline prior stabilization continues Casino Slotomania this and the and we quarter, and encouraged are of was note we decline year-over-year. Slotomania year-over-year, compared see X.X% sequentially in X.X% down Games has $XXX.X seasonal million, headwinds to quarters. to X.X% third Slotomania,

marketing to started the released packages have more studio in quarter. content the alongside of in We invest

earlier in in year-over-year. flowing specific by Cost our our force R&D expenses to through XX.X% Operating lower decreased of now savings items direct-to-consumer operating reduction cost year X% by platforms. from decreased year-over-year. savings primarily in to labor the our expenses revenues Turning discretionary organization. X.X% various for were line P&L the from in and across second due revenue declined The driven an increase quarter. this R&D expenses year-over-year,

head be the offset marketing titles performance Sales largest The driven our and year-over-year. by expenses of marketing reduced at increased and opportunistic slightly marketing year-over-year we as decreased as look and by other decline by expenses to sales we mentioned X.X% investing beginning was count in this marketing in in year.

QX reversal Savings we declined increased G&A fiscal in certain in categories the contingent X.X% XXXX discretionary year-over-year. earn-out adjusted a across offset Redecor G&A by considerations by that G&A payments expenses our retention booked year-over-year. M&A year were of acquisition. On related X.X% by an to of regarding basis,

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

DAU Average average stabilization the driven Looking Slotomania we're DAU to at in in by to by to metrics, year-over-year Slotomania's million, average Redecor. Despite in our Slotomania, DPU operational $XXX,XXX. encouraged $X.X X.X% DAU, Best declined Fiends, declined the DPU X.X% quarter. declining in decline see in year-over-year primarily and

DAU. Our decline contributed focus increased year-over-year DAU the $X.XX. Tier to average also to X.X% ARPDAU on X in

our for million financial $X.XX we EBITDA $XXX $XXX XXXX, expect are credit guidance revising range billion for adjusted billion, we between to and our $X.XXX revenue now and to million. As

expenditures capital million. expect approximately We of $XX

current is important focused and in to business and to While acknowledge ongoing uncertain. today the dynamic impact we performance, QX potential it future on The performance. Israel our conflict is highly war are the

this providing may impact it our introduce clear for financial conflict an at may that not performance. want challenges are escalated we various to specific that guidance make we next year While point,

with will best remain quarter, that us understanding request the We allowing financial ensure business for you updates. and provide continue important for most outcome to to attempt that, kindly to call for to developments adapt take your as company, respond needed to this our employees Thank our shareholders. your relevant happy the earnings focused we'd on questions. We our and questions be our you during and and for support. With performance the and

[Operator Instructions].

Macquarie. of Lee Aaron of line the from comes question first Our

wanted your of I to on and touch Youda acquisitions InnPlay.

more tend to talk And about a more you games these you bit bit high a can level, the understand how more revenue opportunity there? at about strategy little the running just Just if little or trying support much synergies overall Just is these marketing a just to with? better games support efficiently.

the Thanks for Sure. question, Aaron.

asset. where very growth and genre, very a invest asset up us structured look of interesting And to you potential to deal, we grow. in a to the deal alongside was acquisitions you'll at both documents see I we new it and and InnPlay title and posted where way different. I grow were invest if think the are allow is that that's see that marketing think lot a that a a intend ramp

and look you and ops and further much that Governor expertise more looking title at that's our opportunity at business. mature Poker when leverage Youda live like portfolio to a of established a you're help it's grow an think I Games, and optimize

that's day and think I so -- at And business one. accretive EBITDA a that's

on is and One continue franchise perspective, So other to and invest asset valuation very the grow. more is an mature each a in I opportunity more was one attractive different. relative with that a think we'll

or quarter, -- it to some acquisition tools, on ask mentioned status impact the color might they performing solutions. need wanted you think Or more also AI-based Are And Any you those do the about how you last the tools? your expected? of refinement. user

It's CMO. Thanks for the Playtika Nir question. Korczak,

-- before, keep So we ongoing into AI leveraging going improvement parallel that will activity for an do tell some on are basically, the of it forward, as But keep area, but tools. the the to is daily I see an this other process can we're to testing on basis. in tools marketing internal going keep that using activity We AI the we tools. said some we

line from Our next of question Bank Arthur America. of of the Chu comes

Omar. This is for on Arthur

have I question the DTC So a platform. on

us just lot you penetration benchmark. the guys I sort how as A help your do highest longer that see of for Just think of like of mind? think sort in Like penetration potential super was uptake to a anything would about, of I peers industry. you term? think -- the probably more helpful. should you be the DTC can already in wondering target your have DTC have we longer-term about kind

of we As we spoke XX% until quarters on are a growing this always, we target few year. And now, our revenues. target. ago, We're to

of ago, Playtika. big years few tool is ability future to only June's by Journey we is a So a tool a the This we're percentage. confident powerful a that And us, independent the and a feeling to and will on again, we free of more a this very very started Solitaire, be advantage help and by not more this are grow launching about revenues launching of But it is it's year, we're our DTC. ourselves. believe we

Sachs. comes Goldman question the of next Eric from Our of line Sheridan

about about the view growth next developed be games might grow terms as you how of exit the business a thinking in you talk a the maybe But broader end of move can an of exiting market games little next the terms for the it what know industry acquired unpack bit velocity into what's little implied XXXX, of business, internally? we And year. the think early we to elements or algorithm against being for I in be should might year. of a

Eric. Thanks,

to continues focus franchises on executing there. growth investing our be and So our largest

this our efficiently central Blitz, be opportunity leadership and also cross position strategy, slot past Journey, the to pollinate of all in reinvesting in continuing quarter. layer We're June's then to slots on the with Slotomania, to slots M&A. category. really reestablishing best our acquisitions slot We on #X working Bingo titles game our X just the Harvest, content Grand in our did Solitaire

and such is environment high challenging plus with rates smaller flow for market we combined valuations, well large to assets. free the more very we're the with our environment think positioned, studios, position marketing cash cash that I continue great acquiring depressing interest generate,

give for sense year earnings And hopefully, for what QX guidance you we're in call intend least so going really strategically, that planning. where focus of the February. I We a think gives our to is to at 'XX that's next on but

next Colin of Baird. comes Sebastian Our from the line of question

on Glad some you're of in it sequential is Israel the in to where helpful I first that maybe provide and you market what of guess, something should the seeing know the -- off, given should business, performance franchises? maybe sort related everyone health context our hear that core through on safe in additional team well and the as to would -- we broader the be from and of additional the we that the you're thoughts. plan for to trends competitors, of is more stabilization see the think expect part of spend, regarding and that, or your marketing that is QX some

Sure.

QX is the slowest of the So seasonally quarter year.

year-over-year. challenging probably of That by performance Blitz the is are comparisons sequential I of there, Bingo kind impacted invest most our title. the looking So to look Blitz. was Bingo biggest said, at quarter think sometimes

you and has think third-party recent last over at of back. if more as several bounced that, sort at -- the see performance I at look look you that weeks, title look you'll sites

our that look going guidance so where look in for you'll the best year we'll continue there. And ROI. -- titles we potential at I see growth And see we best forward, if and confidence to think we as provided, you the our invest biggest

as of rankings. more at broadly, an definitely in performed think more can the I and So advantage the that large we big kind marketing franchises in industry see look have you better brands, materially invest

pretty and with M&A that our well then feel positioned. that's mature a positions combine think I market in we capabilities us well quite consolidating, that

And anything of the comments of pace -- sort any marketing spend? on performance

was beginning, basically, quality versus So regarding on from the our more focusing quantity. the performance marketing, this part of strategy

some nothing side, of that, from marketing we in on So see will can where we games now. potential that add keep the investing performance we special a right

Instructions]. [Operator

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further I'd no showing like to today's you the does this program. participation at thank This questions for time. in your conclude conference. I'm

You now may disconnect.