Earning Date, Transcript Summary & Report

Strategic Progress in Gaming: 2024 was another eventful and challenging year for the games industry, but we achieved our full year guidance and made material progress on strategic initiatives.

Cost Structure Optimization: We sharply reduced the company’s cost structure and reoriented operations for improved profitability and cash flow.

Promotional Success in Gaming: The new promotional effort, World Tournament of Slots, was launched and very well received by players, driving excitement in our games.

Revenue and EBITDA Alignment: We closed the year with full year revenue and adjusted EBITDA in line with our 2024 guidance.

Workforce Reduction Strategy: Our reinvention plan included a reduction in workforce of over 30%, which will lead to a leaner operation focused on growth.

New Growth Initiatives: We advanced two new growth initiatives: a new sweepstakes effort and the integration of Pixode into PLAYSTUDIOS, which is developing a new casual Tetris title.

Player Integration Expansion: Growth at playAWARDS continues with the addition of more players and the full integration of myVIP across our major games.

World Tournament Engagement: The inaugural World Tournament of Slots event generated significant excitement and engagement across all of our games.

Stock Purchase and Cash Position: We purchased $31.2 million in stock, including shares from Microsoft, while maintaining a strong cash position of $109 million at year end.

Direct-to-Consumer Revenue Growth: Our direct-to-consumer business grew significantly, accounting for 8% of total in-app purchase revenues, up from 4% the previous year.

Revenue and ARPDAU Growth: Brainium had a strong 2024, growing revenue and ARPDAU year-over-year due to new advertising formats and product improvements.

Revenue Contribution from Initiatives: We expect our new initiatives, such as sweepstakes and the new Tetris title, to contribute significantly to revenue in 2025.

Earnings Miss Report: PLAYSTUDIOS, Inc. misses on earnings expectations with reported EPS of $-0.18, below the expected $-0.14.

Quarterly Revenue Decline: Revenues in the quarter declined by $9.3 million or 12% versus a year ago, with both social casino and casual games experiencing downturns.

Social Casino Challenges: Social casino weaknesses reflect softness in the category and challenges in stemming DAU declines, particularly in Tetris and Brainium, which accounted for more than half of the overall decrease in DAU.

Decline in Adjusted EBITDA: Fourth quarter adjusted EBITDA of $12.5 million was 15% lower than a year ago, with adjusted EBITDA margin declining by 70 basis points to 18.4%.

Revenue and EBITDA Decline: For the full year, revenues declined 7% versus 2023, and adjusted EBITDA was down 9% from 2023, with a 50 basis point decline in adjusted EBITDA margin.

User Engagement Decline: DAU was $2.7 million and MAU was $11.5 million in the fourth quarter, down 19% and 14% respectively from the same period last year.

User Growth Challenges: The company expects user growth to continue to be challenged, despite hopes for new initiatives like sweepstakes and the new Tetris title to counter these pressures.

EBITDA Decline Forecast: The guidance for 2025 indicates that adjusted EBITDA is expected to be down versus 2024, due to continued declines in the core business and costs associated with launching new initiatives.