Playtika Holding (PLTK) 7 Nov 242024 Q3 Earnings call transcript

Good day, and welcome to Playtika's Holding Corp. Q3 2024 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 speaker, Tae Lee, Senior Vice President of Corporate Finance and Investor Relations. Please go ahead.

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

are and me performance. discussion Craig uncertainties, are to, future but statements today comments CEO call would to call. update not risks control. We not as and like other Chief future on limited are rather Antokol, after them our you statements I These forward-looking Joining performance, and these forward-looking that revenue statements, remind on today, Co-Founder representing but today's a Financial are guarantee future. Officer. some anticipated undertake of of views you no contain subject to rely the Playtika's and the this should apply Abrahams, These Robert and statements beyond company's to operating President obligation and as may and of Playtika; which not the of our including, for

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

For a uncertainties, the see now and With the more of with will over filings turn complete that, I call to risks SEC. the our Robert. please discussion

proposed thank of morning, Good our recent and SuperPlay. We're share call especially today. progress, excited acquisition joining to about our you, everyone, for our updates on

key is strategy. those for our For deal communication, and a milestone seen fits who have our not us this with growth earlier

been our here we our momentum. step changing acquisition is growth in see closing still strategy always an has the pending important Playtika. conditions, While customary in M&A in cornerstone

most has top us SuperPlay, with we robust Nine to allowed studios, top-tier our two new market incredible us SuperPlay's to games its have enhance have gaming business. momentum titles These scaled years, also M&A. importantly, bring Dreams the of a high-growth through via have in strong bring Dice success found, titles build portfolio. acquired Dreams, development Domino existing presence opportunity come further already categories XX and Over an to our and and which portfolio. our in

innovation at By aim empowering finalized, will market-leading over franchise. I portfolio scale to This building our successful and acquisition, continued what this of review continue games enhance pipeline leveraging SuperPlay of our market performance to our We're detailed this and a work, commitment to will players diverse mean potential the more resource, our when support. while maximize game the their leadership. about of their quarter. for for can the demonstrate SuperPlay, excited shareholders. we hand Thank to a Craig future the past and you our and continued and for

Thank you, everyone. Robert, morning, and good

a Following strategy. broader on comments, to emphasize with how to moment I Robert's aligns financial acquisition our want SuperPlay the take

capital free cash The generating our shareholders. support on of Our allows sustainable strategy, focus us acquisition perfect proposed a including returning of approach. flows our allocation M&A example and disciplined is to to capital SuperPlay

maintain all-time the as performance-based record growth, continued driving to helps structured financial and incentives balanced creation. posting month us and performance revenue to revenues goal flexibility. long-term risk, and upfront this limit with impressive the gross double EBITDA its as well while also sequentially, payments, of EBITDA credit highs revenue studio value in digits in we per consolidated and structure another day. of September, reignite adjusted as a SuperPlay our aligns which quarter grew third enables had have We ensures earnouts, mix only align but not This revenue downside transaction

studio assets pleased quarter to lowering While sequentially we contributions continues Poker since of the driven has is Governor the a game I'm by III that adjustments, potential, every to we and the Coins of restructure and spending the year. it incremental strength highlights M&A last important turnaround in after cap growth continued show this recognize performance economy the and decision robust importance acquired challenges SuperPlay of combined performance studio's our earnout grown strategy, of the to equally delivered have marketing to economy QX. record-breaking marking maximum faced Animals the success. dollars acquisition. QX, our significant the The with & in report our strategic

to throughout Animals This quarter. of and the high & the strong achieved we studio, position strength long-term As all-time result, with a for Coins Coins sustained underscores changes the the & revenues momentum month-over-month made validates success. Animals growth

sustainable M&A leverage structure. and a remains we liquidity, focused managing on value-enhancing executing and While on capital our priority, are equally

proactively support financial stable to while maintaining continue to a will capital manage growth foundation. and opportunities allocation our We strong

a Our to financial excited potential future that commitment both confident successfully all without and our firm allow financial disciplined strategy on we brings this ability acquisition built in our enhance acquisitions. the growth In ensure us can SuperPlay to the maintaining growth we health. profile, and summary, are about focus our to potential compromising discipline. to support will approach is believe while organic approach We execute our

With QX financial that, dive our let into performance. us

million adjusted $XX.X down over XX.X% we as sequentially we generated QX year-over-year. quarter, margins and X.X% down down adjusted credit EBITDA and and sequentially million, up down X.X% generated Net million, $XXX.X income X% of X.X% X.X% year-over-year. improved of sequentially the up EBITDA revenue, For was year-over-year. $XXX.X Credit

business overall up million, Our was the generated and which sequentially outperform year-over-year. business X.X% continues as $XXX.X to up we direct-to-consumer X.X%

strong our the continued top sequentially, was was $XXX.X Turning its and across revenue to our now drive quarter, year-over-year. X.X% year-over-year. record the sequentially execution three up revenue Blitz Bingo helping in million, DTC up Revenue of up a business business to quarter. X.X% high. and in games X.X% Bingo down its direct-to-consumer results X.X%

achieved highest month revenue Bingo July. in In in history its addition,

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

to was incremental about down optimistic year revenue and regain into Slotomania are We sequentially continues X.X% going million, its the down road footing year-over-year. next drive and as success. $XXX.X Solitaire X.X% map

QX results not did our this our expectations. Slotomania year, While we user for increased acquisition meet spend

historic a realigning to are titles introduction forward, under Moving as II, map product IP, in shift and series first as studio, Cleopatra of IGT. in placing on agreement the with This emphasis road in such our licensing paying in leading feature increase a the meaningful of the we QX includes our drive a focus greater strategic launching the users.

changes as to implementing we in-game for Club, and modifying key the monetization designed Additionally, Albums engagement such product are enhance experience are and opportunities. Slotomania which

revenue consistently our R&D and overall year-over-year, expenses performance revenue marketing Turning expenses cost now year. well in R&D by direct-to-consumer X.X% items primarily Sales as decline year-over-year. to and in between change throughout specific the decreased platforms third-party to mix line by by platforms Cost of by quarter. X% revenue. decline for revenue P&L in The in driven to a revenue the declined as X.X% implemented marketing in extensive The and the increased increase in marketing. were was year-over-year. increase due expenses due management sales the

call, and marketing the our marketing be spend we with in in earnings expenses subsequent XX.X% anticipated would discussed sequentially. declined in QX that year-over-year QX, sales highest tapering Accordingly, by and growth sales As quarters.

by lower contingent expenses was by expenses favorable declined X.X% from considerations, adjustment of G&A compensation decline year-over-year. in expenses payable reduced The headcount. G&A driven and onetime a

SuperPlay contemplated XXth, short-term investments. upfront billion September had and the acquisition. in does the cash million equivalents for As incorporate This payment not $X.X of of $XXX cash, approximately we

decision decline due DPU metrics, million. primarily in X.X% away and X.X% dollars of such $X.XX. X.X% operating to X% year-over-year Just casual our to to some average the ARPDAU sequentially sequentially increased The Play up from DAU our and strategic marketing titles year-over-year X.X% average reallocate R&D and at X.X% $XXX,XXX. to to year-over-year as year-over-year sequentially Average $X.X decreased was increased smaller Looking XvX. resources DAU and

raising credit year to to the expected as outlook. range now our are a EBITDA to guidance billion We million. billion, to follows: we for of our are revised $X.XX revenue $XXX from adjusting adjusted million $X.XXX range guidance is $XXX reflecting Meanwhile, our

flow. focused Finally, we million free our lowering as maximizing remain we to guidance capital $XX on are cash expenditure

SuperPlay guidance acquisition does to as of the not expect this we impact later incorporate Our be your quarter. we'd the that, pending, take happy and questions. still to the With close is acquisition

with will [Operator of the our question Schoell Instructions] from And Chris first UBS. come line

year through believe, drivers announced stage? SuperPlay Craig, capital to a Any M&A market allocation And at I Can coming with future guidance, and your on us XQ. midpoint can higher deal, the this in when implies revenue provide you back just plans. the EBITDA the you the help but mentioned decline, you updated you think taking full improvement there? of thoughts

Sure. for you Thank question. the

as I'll well. part both discuss of framework start will well the closing capital our first. for M&A relates post So second with After QX to the allocation we it our as as the as on XXXX guidance transaction, earnings update SuperPlay

Slotomania line, expectations cost When themed some highest marketing started in based year, this of titles the you as investments and EBITDA terms for we In quarter. relative the obviously, management terms to guidance opportunities. of the of ROI on at the underperformed being look selective top on raising to casino overperforming and

guidance for quarter. And so that the dictate helped lower

one can I product mentioned just I a new you If and roadmap Slotomania. for Great. feature in fit believe more.

thinking Just how any are dynamics for here? stabilization in would call line out? time the you shifts about And competitive you

It's Robert.

end to interesting strong is Slotomania, to we changing, of that this and We're did start we quarter, during the regarding as we we So content, going deal with launching -- especially IGT. spoke last with plans very have regarding the And to very believe year in content the be promising already. year new product a with year, the next going Slotomania. together that

Stifel. will come from questions, line next Drew our for with moment that the One Crum and of

to the target, cause you a total. it the know that relates And there to percentage revenue change sequentially would I increase mix? updated the your then mix, that continued but haven't in is As follow-up. I a has piece have forthcoming anything DTC quick material of a as XX%

to No, continued execution launches. I think it relates have title as we new

Solitaire It's terms the we reassess of consistent acquisition, road that to SuperPlay but map opportunities to to in seen nothing execution of we'll have and in there the DTC performance pretty in and have continues as Grand steady. the that last Journey, the few well. the outside Post Harvest we have execution quarters. you've there, June's integrate help in So

it. Got

the mentioned your Solitaire. Okay. stabilization performance just Bingo casual Animals the you record & strong portfolio, for for And Coins performance the for of side on and then and

you like what weaker. was If looks to terms of it drove And call decline? revenue anything flag the or in those, out that isolate

So I focus better biggest seeing that titles on we our respective see in as think their there. to that #X performance you're investments what categories, we continue are is

taken we've those them, and these away of will decline. or where some titles marketing smaller stagnate titles from resources continue R&D to And

biggest so on So the of titles. for growth we're more portfolio and some from smaller from managing the the profitability titles

for moment of Capital. from ROTH next come and that with One our Eric Handler will questions, the line

keep done to you of focused your little always look that's at of player of the titles your larger portfolio of in DAUs good you sort job conversion. bit with sorry, titles sort maybe the your revenue very seeing higher users as or funnel guys about in paying You Can like daily expanding versus of -- are talk a terms you titles? average you have per and driving Like But your smaller on? with a titles, ultimately, want those DAUs. growth dynamic going growth

Sure.

the So and portfolio, last over as in we both through see of acquisitions user titles diversification years, acquisitions further of we've future we the growth done at growing those in the look terms base. few the

titles, of a base think Tier decline the more the X higher-quality legacy X markets. on I the focus as of in last seen customers more as quarters over you've with of DAU more consistent kind what we we look the at consistent in it's

both what think was quarter this up sequentially. DPU you is year-over-year I see and

think most we're revenue Redecor some dollars that producing back Those were XvX so low that bigger And we perspective. metric DAU focused of titles declines pulled I as the had like to on. and from smaller marketing on the a both But with. titles begin is

base user terms quality. in same the not it's of So

our questions, for come the moment with Morgan line Matt of that One next and Stanley. from Cost will

there more selective where on XQ step-up rest side, opposite pretty moving of and this EBITDA the year. the you kind kind mean guide a clearly in being of clear and seems this marketing kind in guess that are then reversion the would year on like the in said. it Craig, you're the you're XQ of of or directions, side, I and marketing look over very revenue the decline throughout marketing think be you little I But at as we messaged

into would changing pan it and mean, is had you're as you So hoped? on just I half? the marketing I didn't that you Like And down first the in the as that look guess, there? environment? half back really move what are you well out paring say second seeing UA in as so did you you what

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

try So one basically, a approach. story different have for HX, of obviously, games, each different of as In we variety we is them. the different so

Some shifting and meet performance. didn't around of the the things that towards we did offline expectation, did activity we our

personalized beneficial the that that change marketing with in that are Ads announced social the can and we us start put Google overall for they news see the casino. as Bingo An basically for I casual things the will the that, lots This ads example to great roll-out, Slots, of seeing Poker rolling out games. us Google, think and say, be future. an what arena, we a is for under in I policy would that opportunity of for same

this an and algorithm using also -- example, -- be we can for from So is that for as us improved for retargeting beneficial with marketing, are just Google.

on the we're the seeing help side us are future, focus more things performance that can forward. in to we So moving and going

other the think would guide? there as like lower of And movers the that out? main Great. of just then revenue we guide. Should are driver Slotomania big Or you call the on revenue

of it's think smaller mix Slotomania I titles. and the a No,

for come Aaron moment next our question the One line next from with Lee questions, and Macquarie. our will of

to SuperPlay. or with wanted your like opportunities I Kings Coins? existing Board Are & synergies between some Animals start best or practices monetization and cross-pollination titles or just acquisition of for this of any maybe there

course, Playtika in lot a and like So SuperPlay, Playtika, at when is look feel of SuperPlay you they and from accept look came guys the founders of the Playtika. there of and

own But speaking and we the not and work their This We there's conversation independently to has happen. future, even targets. point can are now. get the to now, things the not this synergy are in going of they're right not deal, right in synergy. this. of SuperPlay and their not focus is Always regarding about roadmap,

Okay. Fair enough. That makes sense.

follow-up, developed at there? also is are quarter, game Chronicles. Is quick Claire's same and game there on really that Journey? a for it track to a quarter Or how trying Wooga, And on both you by be the second growing going that being launch? last 'XX cross-sell As you mentioned to a time? new about focus June's just thinking Is growing any growing still

stay going this next in a of So beta places. no game to It's be There year. mentioned we already yes, new years, incredibly of different different Journey the Journey. for it's It's year. last in of amazing next small some connection titles. have We're doing Wooga. roadmap going leading leading and June was our tests. road and a our launches team. It's June doing map targets. some Journey X growing between June is one titles, of one game We're to small already launched the

the appreciate Robert, thanks color. Okay,

from Dessouky for moment that our the will of Bank One come line of Omar with next question. America. And

last noticing hybrid thoughts to updated whether to And if advertising calls have vertical? I at get you been since we've monetization. We've your just a a on think changed thoughts growth wanted all trend of towards that's the couple on you? your talked

part, No, I think focused. most the is for purchase our [indiscernible] portfolio

design of no from our other Animals which the of strategically. from as part as But natively it & there the beginning, anticipation like strategy the well. shifting advertising have titles titles We Coins, game built of into has some

Thank you queue questions the at no time. showing in I'm this further

So you concludes all your participation. thank today's for This program.

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