Second Quarter 2023 Revenue of $77.8 million
and Net loss of $0.8 million
AEBITDA of $16.3 million, AEBITDA Margins up
1020bps from year ago levels
PLAYSTUDIOS, Inc. (NASDAQ: MYPS) (“PLAYSTUDIOS” or the
“Company”), the developer of the playAWARDS loyalty platform and an
award-winning developer of free-to-play mobile and social games,
today announced financial results for the second quarter ended June
30, 2023.
Second Quarter Financial Highlights
- Revenue was $77.8 million during the second quarter of 2023,
compared to $68.4 million during the second quarter of 2022.
- Net loss was $0.8 million during the second quarter of 2023,
compared to net income of $5.5 million during the second quarter of
2022.
- AEBITDA, a non-GAAP financial measure defined below, was $16.3
million during the second quarter of 2023, compared to $7.3 million
during the second quarter of 2022.
Andrew Pascal, Chairman and Chief Executive Officer of
PLAYSTUDIOS, commented, “Our momentum continued in the second
quarter of 2023 as we posted another solid quarter. Revenue and
AEBITDA were well ahead of year ago results and exceeded Wall
Street’s expectations for the third consecutive quarter. Similar to
the first quarter, building momentum in our portfolio of games,
increased focus on execution, and cost discipline are driving the
results. Our AEBITDA margins grew over 1,000 basis points versus
last year to 20.9%. This is a continuation of the strong year over
year gains we achieved in the first quarter of 2023 and a
reflection of our operational refinements over the past six months.
Reaching margin parity with our peers is a primary goal of ours and
something we’ll continue to advance as we balance our focus on
operational improvements with our ongoing investments in future
growth.”
He continued “On the games side, Tetris had another strong
quarter and continues to gain traction with new and old players
alike. We are incredibly optimistic about Tetris’ future and
believe there are numerous paths to realizing the full potential of
this beloved franchise. We continue to work diligently on
optimizing the Tetris Prime product, while we invest in new more
casual versions of this puzzle format. Performance was also strong
across the remainder of our growth portfolio; myVEGAS Bingo, MGM
Slots Live, and the Brainium suite. We expect this collection to
continue to show sequential momentum as we scale their audience,
leverage our loyalty model, and optimize monetization. Within our
core business, our focus remains on myKONAMI Slots and myVEGAS
Slots, both of which were transitioned to new teams based in our
EMEA and Asia studios. While our new plans for these products will
take time to implement, I’m hopeful we’ll begin seeing benefits
later this year. As a reminder, the transition of these games was
the impetus for the corporate restructuring we announced earlier
this year. Part of that restructuring included a reduction in our
headcount, which is now starting to flow through our results.”
Pascal further commented, “playAWARDS continued to expand by
adding new partners and increasing its exposure across our
portfolio of games. Late last quarter playAWARDS was added to
Tetris and remains on track to be incorporated into our entire
collection of casual games by year end. A full portfolio
integration will nearly triple playAWARDS’ DAU reach and, we
believe, demonstrate the “loyalty lift” that can be achieved in any
category of gaming.”
He concluded “We remain incredibly excited about our direction
and the initiatives currently underway. There are numerous
opportunities in both our playGAMES and playAWARDS businesses and
our strong financial position allows us to supplement this internal
growth with strategic investments and acquisitions. This is
reflected in our 2023 guidance which calls for Revenue and AEBITDA
growth of 9% and 50%, respectively, at the midpoint. Also reflected
in this guidance is a macroeconomic and industry backdrop which
remain unsettled and volatile. While we have seen some stability
over the past six months, we remain cautious and have accounted for
this in our annual guidance.”
Recent Business Highlights
- PLAYSTUDIOS conducted its first ever Global Artificial
Intelligence (“AI”) Hackathon in the quarter. playMAKERS from every
studio and every major job function participated. Over 100 original
ideas were proposed with 30 full hacks developed and delivered. The
company has already implemented select initiatives from the
hackathon and views AI as a key driver of future growth.
- myKONAMI Slots and myVEGAS Slots were fully transitioned to
their new studios as part of our corporate reorganization plan
announced earlier this year. In addition to realigning our games,
this plan resulted in two distinct operating divisions (playGAMES
and playAWARDS), and reduced our total number of employees
globally.
- The company continued to repurchase stock in the open market.
As of August 3, 2023, we had repurchased an aggregate of 4.7
million shares of our Class A common stock at an average price of
$4.23 per share under our $50 million share repurchase
authorization and had approximately $30.0 million remaining
capacity.
- playAWARDS entered into partnerships with Cirque Du Soleil and
Hershey’s in the quarter. At quarter end, playAWARDS had over 110
rewards partners with players making purchases of over $27 million
in retail value.
Outlook
The Company is increasing its 2023 AEBITDA guidance to a range
of $55 to $60 million from the previous range of $50 to $60
million. 2023 Revenue guidance of $305 to $325 million remains
unchanged. At the midpoint of guidance, this implies year/year
revenue growth of 9% and year/year AEBITDA growth of 50%.
We have not provided the most directly comparable GAAP measure
for our AEBITDA outlook because certain items that are part of the
projected non-GAAP financial measure are outside of our control or
cannot be reasonably estimated without unreasonable effort.
Conference Call Details
PLAYSTUDIOS will host a conference call at 5:00 p.m. Eastern
Time today, which will include a brief discussion of the results
followed by a question and answer session.
The call will be accessible via the Internet through
https://ir.playstudios.com or by
calling (866) 405-1203 for domestic callers and (201) 689-8432 for
international callers.
A replay of the call will be archived at https://ir.playstudios.com.
About PLAYSTUDIOS, Inc.
PLAYSTUDIOS (Nasdaq: MYPS) creator of the groundbreaking
playAWARDS loyalty platform is a publisher and developer of
award-winning mobile games, including the iconic Tetris® mobile
app, Pop! Slots, myVEGAS Slots, myVEGAS Blackjack, my KONAMI Slots,
myVEGAS Bingo, MGM Slots Live, Solitaire, Spider Solitaire and
Sudoku. The playAWARDS loyalty platform enables players to earn
real-world rewards from a global collection of iconic hospitality,
entertainment, and leisure brands. playAWARDS partners include MGM
Resorts International, Wolfgang Puck, Norwegian Cruise Line,
Resorts World, IHG, Bowlero, Gray Line Tours, and Hippodrome Casino
among others. Founded by a team of veteran gaming, hospitality, and
technology entrepreneurs, PLAYSTUDIOS apps combine the best
elements of popular casual games with compelling real-world
benefits. To learn more about PLAYSTUDIOS, visit playstudios.com.
Performance Indicators
We manage our business by regularly reviewing several key
operating metrics to track historical performance, identify trends
in player activity, and set strategic goals for the future. Our key
performance metrics are impacted by several factors that could
cause them to fluctuate on a quarterly basis, such as platform
providers’ policies, seasonality, player connectivity, and the
addition of new content to games. We believe these measures are
useful to investors for the same reasons. The key performance
indicators may differ from similarly titled measures presented by
other companies. For more information on our key performance
indicators, please refer to the definitions below and the
“Supplemental Data—Key Performance Indicators” section of this
press release.
Daily Active Users (“DAU”): DAU is
defined as the number of individuals who played a game on a
particular day. For Tetris and our free-to-play social casino
games, we track DAU by the player ID, which is assigned for each
game installed by an individual. As such, an individual who plays
two of these games on the same day is counted as two DAU while an
individual who plays the same game on two different devices is
counted as one DAU. For our Brainium suite of casual games, we
track DAU by app instance ID, which is assigned to each
installation of a game on a particular device. As such, an
individual who plays two different Brainium games on the same day
is counted as two DAU while an individual who plays the same game
on two different devices is counted as two DAU. The term “Average
DAU” is defined as the average of the DAU, determined as described
above, for each day during the period presented. We use DAU and
Average DAU as measures of audience engagement to help us
understand the size of the active player base engaged with our
games on a daily basis.
Monthly Active Users (“MAU”): MAU
is defined as the number of individuals who played a game in a
particular month. As with DAU, an individual who plays two
different non-Brainium games in the same month is counted as two
MAU while an individual who plays the same non-Brainium game on two
different devices is counted as one MAU, and an individual who
plays two different Brainium games on the same day is counted as
two MAU while an individual who plays the same game on two
different devices is counted as two MAU. The term “Average MAU” is
defined as the average of the MAU, determined as described above,
for each calendar month during the period presented. We use MAU and
Average MAU as measures of audience engagement to help us
understand the size of the active player base engaged with our
games on a monthly basis.
Daily Paying Users (“DPU”): DPU is
defined as the number of individuals who made a purchase in a
mobile game during a particular day. As with DAU and MAU, we track
DPU based on account activity. As such, an individual who makes a
purchase on two different games in a particular day is counted as
two DPU while an individual who makes purchases in the same game on
two different devices is counted as one DPU. The term “Average DPU”
is defined as the average of the DPU, determined as described
above, for each day during the period presented. We use DPU and
Average DPU to help us understand the size of our active player
base that makes in-game purchases. This focus directs our strategic
goals in setting player acquisition and pricing strategy.
Daily Payer Conversion: Daily Payer
Conversion is defined as DPU as a percentage of DAU on a particular
day. Daily Payer Conversion is also sometimes referred to as
“Percentage of Paying Users” or “PPU”. The term “Average Daily
Payer Conversion” is defined as the Average DPU divided by the
Average DAU for a given period. We use Daily Payer Conversion and
Average Daily Payer Conversion to help us understand the
monetization of our active players.
Average Daily Revenue Per DAU
(“ARPDAU”): ARPDAU is defined for a given period as the
average daily revenue per Average DAU, and is calculated as game
and advertising revenue for the period, divided by the number of
days in the period, divided by the Average DAU during the period.
We use ARPDAU as a measure of overall monetization of our active
players.
playAWARDS Platform Metrics
Available Rewards: Available
Rewards is defined as the monthly average number of unique rewards
available in our applications’ rewards stores. A reward appearing
in more than one application’s reward store is counted only once. A
reward is counted only once irrespective of the inventory available
through that reward. For example, one reward for a free night in a
hotel room with ten rooms available for such free night is counted
as one reward. Available Rewards only include real-world partner
rewards and exclude PLAYSTUDIOS digital rewards. We use Available
Rewards as a measure of the value and potential impact of the
program for an interested player. It is assumed that the greater
the variety and breadth of rewards offered, the more likely players
will be to ascribe value to the program.
Purchases: Purchases is defined as
the total number of rewards purchased for the period identified in
which a player exchanges loyalty points for a reward. Purchases are
not adjusted for refunds. Purchases only include purchases of
real-world partner rewards and exclude any PLAYSTUDIOS digital
rewards. The Company does not receive any compensation or revenue
from Purchases. We use Purchases as a measure of audience interest
and engagement with our playAWARDS platform.
Retail Value of Purchases: Retail
Value of Purchases is defined as the cumulative retail value of all
rewards listed as Purchases for the period identified. The retail
value of each reward listed as Purchases is the retail value as
determined by the partner upon creation of the reward. In the case
where the retail value of a reward adjusts depending on time of
redemption, the average retail value is used. Retail Value of
Purchases only include the retail value of real-world partner
rewards and exclude the cost of any PLAYSTUDIOS branded
merchandise. We use Retail Value of Purchases to help us understand
the real-world value of the rewards that are purchased by our
players.
Non-GAAP Financial Measures
To provide investors with information in addition to results as
determined by accounting principles generally accepted in the
United States of America (“GAAP”), the Company discloses Adjusted
Earnings Before Interest Taxes Depreciation and Amortization
(“AEBITDA”) as a non-GAAP measure that management believes provides
useful information to investors. This measure is not a financial
measure calculated in accordance with GAAP and should not be
considered as a substitute for revenue, net income or any other
operating performance measure calculated in accordance with
GAAP.
We define AEBITDA as net income (loss) before interest, income
taxes, depreciation and amortization, restructuring and related
costs (consisting primarily of severance and other restructuring
related costs), stock-based compensation expense, and other income
and expense items (including special infrequent items, foreign
currency gains and losses, and other non-cash items). We also
present AEBITDA margin, a non-GAAP measure, which we calculate as
AEBITDA as a percentage of net revenue.
We believe that the presentation of AEBITDA provides useful
information to investors regarding the Company’s results of
operations because the measure assists both investors and
management in analyzing and benchmarking the performance and value
of our business. AEBITDA provides an indicator of performance that
is not affected by fluctuations in certain costs or other items.
Accordingly, management believes that this measure is useful for
comparing general operating performance from period to period, and
management relies on this measure for planning and forecasting of
future periods. Additionally, this measure allows management to
compare results with those of other companies that have different
financing and capital structures. However, other companies may
define AEBITDA differently, and as a result, our measure of AEBITDA
may not be directly comparable to that of other companies. For
further information regarding these non-GAAP measures, including
the reconciliation of these non-GAAP financial measures to their
most directly comparable GAAP financial measures, please refer to
the “Reconciliation of Net Income (Loss) to AEBITDA” section of
this press release.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding our future financial and
operating performance (including statements regarding outlook or
guidance), our liquidity and capital resources, the development and
release plans of our games, our plans to commercialize the
playAWARDS platform as a stand-alone service for use by third
parties, our increased capacity and use of personnel in European
and Asian studios, and our mergers and acquisition strategy
(including our acquisition of Brainium and its expected impact and
financial performance), all of which involve risks and
uncertainties. Actual results may differ materially from the
results predicted, and reported results should not be considered as
an indication of future performance. Forward-looking statements
include all statements that are not historical facts and can be
identified by terms such as “may,” “might,” “will,” “should,”
“expects,” “plans,” “anticipates,” “intends,” “believes,” “goal,”
“work towards,” “estimates,” “predicts,” “potential” or “continue,”
the negative of these terms and other comparable terminology that
conveys uncertainty of future events or outcomes. These
forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other factors that may cause actual
results to differ materially from statements made in this press
release, including our ability to develop and publish our games;
risks related to defects, errors, or vulnerabilities in our games
and IT infrastructure; our ability to attract new, and retain
existing, players of our games; the failure to timely develop and
achieve market acceptance of new games and maintain the popularity
of our existing games; rapidly evolving technological developments
in the gaming market; competition in the industry in which we
operate; our financial performance; our ability to execute merger
and acquisition transactions; legal and regulatory developments;
and general market, political, economic and business conditions.
Other potential risks and uncertainties that could cause actual
results to differ from the results predicted include, among others,
those risks and uncertainties included under the captions “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in our Annual Report on Form
10-K for the fiscal year ended December 31, 2022 filed with the
Securities and Exchange Commission (the “SEC”) on March 10, 2023,
and in other filings we make with the SEC from time to time,
including our Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2023, to be filed with the SEC. All
information provided in this release is based on information
available to us as of the date of this press release and any
forward-looking statements contained herein are based on
assumptions that we believe are reasonable as of this date. Undue
reliance should not be placed on the forward-looking statements in
this press release, which are inherently uncertain. We undertake no
duty to update this information unless required by law.
PLAYSTUDIOS, INC.
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(Unaudited and in thousands,
except per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net revenue
$
77,793
$
68,353
$
157,916
$
138,804
Operating expenses:
Cost of revenue(1)
18,887
20,921
38,414
41,954
Selling and marketing
18,431
19,547
36,497
40,087
Research and development
18,381
14,470
36,136
31,451
General and administrative
11,040
9,208
22,941
18,899
Depreciation and amortization
11,116
8,288
22,149
16,682
Restructuring and related
1,784
1,517
5,832
10,172
Total operating costs and expenses
79,639
73,951
161,969
159,245
Loss from operations
(1,846
)
(5,598
)
(4,053
)
(20,441
)
Other income (expense), net:
Change in fair value of warrant
liabilities
(1,777
)
(821
)
(2,835
)
(3,537
)
Interest income, net
1,262
212
2,157
207
Other income (expense), net
1,044
(548
)
1,104
(361
)
Total other income (expense), net
529
(1,157
)
426
(3,691
)
Loss before income taxes
(1,317
)
(6,755
)
(3,627
)
(24,132
)
Income tax benefit
558
12,258
298
4,423
Net (loss) income
$
(759
)
$
5,503
$
(3,329
)
$
(19,709
)
Net (loss) income per share attributable
to Class A and Class B common stockholders:
Basic
$
(0.01
)
$
0.04
$
(0.03
)
$
(0.16
)
Diluted
$
(0.01
)
$
0.04
$
(0.03
)
$
(0.16
)
Weighted average shares of common stock
outstanding:
Basic
132,144
127,187
132,137
126,765
Diluted
132,144
146,197
132,137
126,765
(1) Amounts exclude depreciation
and amortization.
PLAYSTUDIOS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited and in thousands,
except par value amounts)
June 30, 2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
127,667
$
134,000
Receivables
29,620
27,016
Prepaid expenses and other current
assets
12,229
14,963
Total current assets
169,516
175,979
Property and equipment, net
17,506
17,532
Operating lease right-of-use assets
13,033
15,562
Intangibles assets and internal-use
software, net
77,356
77,231
Goodwill
47,133
47,133
Deferred income taxes
17,294
13,969
Other long-term assets
3,631
4,603
Total non-current assets
175,953
176,030
Total assets
$
345,469
$
352,009
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
2,714
4,425
Warrant liabilities
6,517
3,682
Operating lease liabilities, current
4,538
4,571
Accrued liabilities
24,381
21,473
Total current liabilities
38,150
34,151
Minimum guarantee liability
1,500
1,500
Operating lease liability, noncurrent
9,190
11,660
Other long-term liabilities
1,384
2,385
Total non-current liabilities
12,074
15,545
Total liabilities
$
50,224
$
49,696
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value
(100,000 shares authorized, no shares issued and outstanding as of
June 30, 2023 and December 31, 2022)
—
—
Class A common stock, $0.0001 par value
(2,000,000 shares authorized, 120,727 and 116,756 shares issued,
and 116,004 and 115,635 shares outstanding as of June 30, 2023 and
December 31, 2022, respectively)
11
11
Class B common stock, $0.0001 par value
(25,000 shares authorized, 16,457 and 16,457 shares issued and
outstanding as of June 30, 2023 and December 31, 2022.
2
2
Additional paid-in capital
302,528
290,337
Retained earnings
13,427
16,756
Accumulated other comprehensive income
(629
)
(151
)
Treasury stock, at cost, 4,723 and 1,166
shares at June 30, 2023 and December 31, 2022, respectively
(20,094
)
(4,642
)
Total stockholders’ equity
295,245
302,313
Total liabilities and stockholders’
equity
$
345,469
$
352,009
PLAYSTUDIOS, INC. RECONCILIATION OF
NET (LOSS) INCOME TO AEBITDA (Unaudited and in thousands,
except percentages)
The following table sets forth the reconciliation of AEBITDA and
AEBITDA margin, which we calculate as AEBITDA as a percentage of
net revenue, to net (loss) income and net (loss) income margin, the
most directly comparable GAAP measures.
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net income (loss)
$
(759
)
$
5,503
$
(3,329
)
$
(19,709
)
Depreciation & amortization
11,116
8,288
22,149
16,682
Income tax expense
(558
)
(12,258
)
(298
)
(4,423
)
Stock-based compensation expense
5,193
3,141
10,047
10,008
Change in fair value of warrant
liability
1,777
821
2,835
3,537
Change in fair value of contingent
considerations
(897
)
—
(950
)
—
Restructuring and related(1)
1,784
1,517
5,832
10,172
Other, net(2)
(1,382
)
336
(2,246
)
154
AEBITDA
16,274
7,348
34,040
16,421
GAAP revenue
77,793
68,353
157,916
138,804
Margin as a % of
revenue
Net (loss) income margin
(1.0
)%
8.1
%
(2.1
)%
(14.2
)%
AEBITDA margin
20.9
%
10.8
%
21.6
%
11.8
%
(1) Amounts reported during the three and six months ended June
30, 2022 consist of fees related to a tender offer for the warrants
and fees related to evaluating various merger and acquisition
opportunities. Amounts reported during the six months ended June
30, 2022 relate to non-cash impairment charges related to the
suspension of Kingdom Boss development. Amounts reported during the
three and six months ended June 30, 2023 relate to non-cash
impairment charges related to certain investments and fees related
to evaluating various merger, acquisition and restructuring
opportunities.
(2) Amounts reported in “Other,
net” include interest expense, interest income, gains/losses from
equity investments, foreign currency gains/losses, and non-cash
gains/losses on the disposal of assets.
PLAYSTUDIOS, INC.
SUPPLEMENTAL DATA – KEY
PERFORMANCE INDICATORS
(Unaudited and in thousands,
except percentages and ARPDAU)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
Change
% Change
2023
2022
Change
% Change
Average DAU
3,651
1,469
2,182
148.5
%
3,608
1,512
2,096
138.6
%
Average MAU
13,878
6,634
7,244
109.2
%
13,482
6,266
7,216
115.2
%
Average DPU
26
29
(3
)
(10.3
)%
27
30
(3
)
(10.0
)%
Average Daily Payer Conversion
0.7
%
2.0
%
(1.3) pp
(65.0
)%
0.7
%
2.0
%
(1.3) pp
(65.0
)%
ARPDAU (in dollars)
$
0.23
$
0.51
$
(0.28
)
(54.9
)%
$
0.23
$
0.50
$
(0.27
)
(54.0
)%
pp = percentage points
PLAYSTUDIOS, INC.
SUPPLEMENTAL DATA – PLAYAWARDS
PLATFORM METRICS
(Unaudited and in thousands,
except available rewards)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
Change
% Change
2023
2022
Change
% Change
Available Rewards (in units)
602
532
70
13.2
%
568
532
36
6.8
%
Purchases (in units)
465
567
(102
)
(18.0
%)
905
1,159
(254
)
(21.9
%)
Retail Value of Purchases (in dollars)
$
26,640
$
32,478
$
(5,838
)
(18.0
%)
$
53,980
$
66,182
$
(12,202
)
(18.4
%)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803351405/en/
Investor Relations Samir Jain, CFA
samir.jain@playstudios.com (917) 224-1058
Media Relations BerlinRosen media@playstudios.com
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