Q4 2021 Sciplay Corp Earnings Call
Yeah.
Good day and thank you for welcomed.
Welcome to the fourth quarter and full year 2021 earnings conference call.
At this time all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session.
I'll ask a question during this session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded.
Any further assistance. Please press star Zero I would now like to hand, the conference over to your Speaker today, Jim Palm Bay C Senior Vice President Investor Relations. Please go ahead.
Thank you operator, and good morning, everyone.
During today's call, we will discuss our fourth quarter and full year 2021 results and operating performance followed by a question and answer period.
With me today are CEO , Josh Wilson, and interim CFO Daniel Quint.
Our call today will contain statements that include forward looking statements under the private Securities Litigation Reform Act of 1995.
These statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed during the call.
For more information regarding these risks and uncertainties. Please refer to our earnings release issued yesterday.
The materials relating to this call posted on our website and our filings with the SEC.
We will also discuss certain non-GAAP financial measures a description of each non-GAAP measure and a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure can be found in our earnings release as well as on the investors section on our website.
As a reminder, this conference call is being recorded.
A replay of this webcast and accompanying materials will be archived in the investors section of our website at <unk> Dot com.
Also supplemental reference slides posted to our Investor Relations website.
These slides are meant to facilitate your review of our company's results can be used as a reference document following the call.
Now, let me turn the call over to Josh.
Thanks, Jim Good morning, everyone and thanks for joining today.
We are making great progress strategically operationally and financially firmly executing on our strategy to become a diversified global game developer how do we grow our core business and lay the foundation for the further acceleration of our expansion in the capital market.
We had a number of successes in the quarter and for the full year that I want chat quickly highlight.
Our core business is firing on all cylinders, we posted a record all year round and now in our second highest quarter revenue ever killed by strong monetization and engagement.
We achieved an all time high full year revenue of $606 million up 4% year over year, our fourth cargo revenue grew 5% year over year, and 5% punctually out pardon me the social casino market.
Our key strategic initiatives like project, all star resulted in record engagement and monetization metrics, including record payer conversion and average monthly revenue per paying user in the corner.
Our portfolio of games is performing extremely well fourth quarter was the fifth consecutive breaker corridor Park goldfish and on a sequential basis quite cat was up 14% and jackpot party grows 7%, making it the second highest revenue quarter ever.
Importantly, we continue to focus on the bottom line and generating strong net operating cash flow of $164 million in 2020 one.
Our strategic initiative Black project, all star are meaningfully contributing to the strong performance.
Our core social casino business further improving the player experience and our ability to monetize players.
We are rapidly expanding and casual with yesterday's announcement of our acquisition of Electus and the worldwide launch of Solitaire pad adventure in the fourth quarter.
We are advancing our strategy to be a diversified global game company.
With strong core business growing studio capability building, a pipeline of new games and our entry into the mobile ad market.
Now, let's go into the great progress, we're making operationally and what is driving that success.
We have continued to benefit from the strategic investments we have made in our core social casino.
As we've refined our live service capabilities, including our live ops data science and user acquisition.
One of our kidney initiative project, all star I spend a catalyst for driving outperformance.
But project all star with strategically add resources to the game once again may just critical scale.
And we are seeing strong returns on our investment.
By adding based resources and we further refined the content and features in the game better.
Better segmenting the player based on their preferences and delivering a tailored experience that drives increased engagement.
We are adding new meta features in the game like Conrail collectible task managers and long term albums.
Creasing the player engagement and getting our players to spend more time in our games.
Our exceptional data and analytics capabilities analyzes the player behavior, helping us anticipate and de lever, but they want to play next.
Project I'll start.
Catalyst by the cross about largest bank.
We have been able to continue to increase player engagement, leading to record monetization bubble.
We have been able to successfully brought jackpot party, which was released in 2012, increasing its fourth quarter revenue of 7% sequentially record revenue for the year and taking key payer metrics to record levels.
Goldfish and quite that are also benefiting from project I'll start generating record revenue in 2020 one.
We have the opportunity to further advance our capability as well.
We expand in casual and enhance player engagement and monetization across both cash flow and social casino.
Across the different sub genres that casual.
Whether it's solitaire games match three games puzzle games for social casino. The common thread is the player.
This is why we leverage our SIFI engine to better understand each of our players behavior.
We learn more about each player's preferences with each game they play.
We can then use this information to build features and events that that the players preferences.
Over time as the player continues to engage in a game.
We use predictive analytics to anticipate what the player wants to play at Max and seamlessly deliver those features on events, allowing part deeper engagement.
Leasing of long term retention and enhance player lifetime value.
With our latest initiative, which began earlier this year, we are advancing our Si play engine product ties than our core capabilities, including live ops attack and use their acquisition data science and protective analytics, enabling us to scale. These capabilities are crossed up.
They all games, whether it's social a cashcall.
This is a centralized platform that will house. The best features tools and capabilities that will be implemented across our portfolio of games, whether it's social or casual to optimize engagement and monetization.
Basketball is a natural adjacency with similar player demographics and behaviors rhythm.
Driven by a simple core game such as enhanced their life service system matter. The same core capabilities that we used to drive engagement and retention in our social games.
We are rapidly expanding and casual with our acquisition of Electus, which further scales us from casual enhancing our growth and diversifying our revenue streams.
This is a proven and profitable developer or tapping game.
The team has developed and published six games that are cheap number one top free game in the iOS App store.
This acquisition significantly scales, our users, calling DAU by 1.8 million and monthly active users by 28 million.
Expanding our first party data.
And creating attractive cross promotional opportunities.
Acquisition broadens, our global player base throughout Electus extensive international player network.
I'll, let just also provides us entry into the fast growing 13 billion global mobile end game advertising network.
<unk> our revenue streams.
We are excited about the opportunity to leverage the side play and elect just player universes and capture a larger and larger share of the cash flow market.
This is a smart targeted acquisition that minimises, the upfront payment and incentivize the talented management to grow the business profitably to enhance shareholder value.
We also made progress with the launch of our Solitaire Pet adventure in December is off to a great start with very high user engagement.
Players are near nearly using two pads per day on average.
I play a bout 10 rounds per day.
Which increases with every new improvement we make to the games features.
They are also making great progress with project at our New first party casual game on track to launch now.
Second half of 2022 .
The SIFI spend my team has true Mendes experience in developing casual games and is spearheading our project action initiative.
And with this initiative, we are setting up the game studio that will focus on delivering fresh casual content for the future.
Our goal is simple but ambitious.
We want to deliver one of a kind player experiences for building amazing games.
We expanded casual and advance our capabilities, we will enhance our growth and profitability and drive value for shareholders with that I'll turn it over to Daniel to go over the financial results and Neal.
Thank you Josh it's great to be here. This was another strong quarter with solid top line growth a perfect way of finishing exciting year.
Our financial results reflect the strong execution on our strategy and set up well for continued progress in 2022.
As Josh mentioned earlier, we had a record year in terms of top line with revenues of $606 million for the full year, an increase of $24 million over the prior year and EBITDA of 186 million translating into a 31% EBITDA margin, which is in line with our full year guidance.
In the fourth quarter, we generated revenues of $154 million, an increase of 5% year over year. This was the second highest quarterly revenue reported in the company's history.
Demonstrating the success of key initiatives like project I'll start.
Our sequential growth in the fourth quarter exceeded the social casino market by six percentage points.
Net income in the fourth quarter declined $12 million from $31 million in the prior year. Our fourth quarter 2021 results included a 24 and a half million dollars charge related to the state of Washington settlement agreement.
Our full year net income decreased 21 million to $125 million, primarily driven by the charges, we incurred in the fourth quarter.
Our EBITDA for 2021 was $186 million compared to $189 million in the previous year.
The results reflect investments in talent and new capabilities for our size engine and incremental new games in our pipeline.
Our fourth quarter, EBITDA increased 5% to $47 million year over year, and our EBITDA margin was 31%, which was a 10 basis point increase over the prior year.
We have achieved strong results, while continuing to invest in organic growth initiatives.
Our key initiatives like project, all star are resulting in very strong engagement and monetization.
Our our payouts at a new record of 74 cents in the fourth quarter, an increase of 17% year over year.
Likewise, our average monthly revenue per paying user increase significantly in the fourth quarter to $98, an increase of $7 compared to the fourth quarter 2020.
Furthermore, our year over year payer conversion rate was up 100 basis points, reaching a record eight 9% in the fourth quarter.
Our business remains highly cash generative.
For the full year, we generated $164 million in cash from operations and free cash flow of $149 million, which translates into free cash flow conversion rate of 80%.
As for our balance sheet. It remains strong we ended the year with $364 million of cash.
$95 million increase over the prior year.
We were incredibly excited about adding <unk> to our portfolio and it fits squarely into our strategy.
We've structured this transaction in a manner that is capital efficient.
<unk> upfront payment and generating significant shareholder value.
We've also aligned management incentives to drive value.
Looking ahead, we're excited about 2022, our business has amazing fundamentals.
We had a great year with our core business firing on all cylinders.
In addition, we're expanding into the casual segment.
This will be a year of targeted investment to fuel growth and new games and our Si play engine that will drive growth across all games.
Taking all this into consideration we expect to grow our 2021 revenues of $606 million by 10% inclusive of a like this.
We expect to outperform the social casino industry in 2022.
With the momentum we have in the business in the expansion and casual.
We believe it is an opportune time to invest in our Si play engine.
Growing the number of new players by increasing our return on AD spend from six to nine months as the engagement and monetization metrics of our games are at all time high.
This will enhance our revenue growth with a slight impact on our EBITDA margin of approximately 150 basis points as compared to fourth quarter 2021.
This continues to be well above the pre pandemic level in 2019. However, we anticipate EBITDA margins will improve also the space beginning in 2023.
We are very proud of our accomplishment with a strong core business as we invest in our future, we expect to accelerate our growth and drive shareholder value.
With that we're happy to take your questions operator.
Thank you as a reminder to ask a question you will need to press star one of your telephone to withdraw your question press the pound key.
Please standby one oh, the Q&A roster.
Our first question comes from Ryan Cig Dahl with Craig Hallum. Your line is open.
Good morning, guys congrats on the acquisition.
Yeah, Thanks, a lot right.
Curious are you mentioned, some I think I'd call it a 10% growth, including Electus acquisition, how much of that growth. This this year as expected from the acquisition versus core business.
Yeah. It's at you know it takes a lot right Ryan.
As we disclosed here in the remarks, we're expecting about 10% overall and also during the remarks, we talked about that where we're looking to beat the Suffolk.
Social casino market, which is around 5% the rats, what come through Electus switches panic right. They have been a great growing business in our in the casual space are the hyper casual spaces.
Is one of the fastest growing of the sub genres of casual and tell we're expecting great things from them and that they're remaining as only the 10 months remaining of the year far I liked us.
And Josh just to be clear the you expect the core business to grow greater than the industry at 5% with a different type of user acquisition. Okay. Yeah. Okay. And then just on the terms of the acquisition a bit unusual with such a high earn out relative to kind of the minority remaining ownership, but what are the terms.
Of that five year earn out what specific metrics will will drive that from zero yeah.
Yeah. So you know where we're very very excited about the deal and how it's structured and we felt like the deal itself, we were able to get at a.
Very very good rate compared to what the market is getting it is very much.
It towards keeping the current owners very very engaged in the business for a very long period of time. So five years. The actual structure has very high standards for how companies are structured and.
In Turkey, but if they hit their earn out that returned two lots becomes a very very fair favorable market.
Multiple.
Got it and then.
As you think about the opportunity to expand their in App AD platform is the plan to bring that across side place core games and then secondly to that if so is that targeted to all players are just non payers today.
Yeah. So normally when you bring a solid let me first day bye.
That the technology that they've built out it's extremely impressive.
The team there has built their own system that they are running it as 100% data driven.
And does an amazing job of getting very very high E. C. P M.
As we do look to evaluate whether or not it can go throughout the rest of our portfolio.
They the way I would think about it is.
In games that are very high a P driven years add mine and the people who do not convert to the IAP.
Helpful I'll turn it over to the others. Good luck guys. Thanks.
Thanks, Brian .
Operator, we'll take our next question.
Our next question comes from Benjamin <unk> with Deutsche Bank. Your line is open.
Hey, guys. Thanks for the question I was wondering if you could talk a bit more about how you plan to leverage your expertise and capabilities in social casino as you move further into the casual space and specifically the opportunity you see to bring that to the acquired casual portfolio you're definitely appreciate all the additional color.
Dave on the call today.
And then I've got a follow up after that thanks.
Okay, Hey, Thanks, a lot Benjamin.
So the great thing is with our investment in project all Star, where we invested in the games in our portfolio that we're at that critical scale and we were ready if they were ready to take on the resources. We've learned so much over the last three years and with a M best friend where am I.
Today in the Si play engine, we're able to basically centralize all of those learnings and make a one platform are.
That takes all of the successes, we've had and features live off fly that Vance and tool.
And make it available to any game that's inside of our portfolio.
The Great news is the Si play engine does not care what the simple core game is so it doesn't care if it's a slot machine or a match three game or a puzzle game, it's able to look at the behavior of the player itself and then decide what the next thing or the next.
Yeah. The next day should look like so we are very very confident.
And we have noticed us through the engagement that we're seeing in solitaire Pat adventure Huh.
When they are inside of the game, we are seeing them be as engaged as we could have ever hoped for.
We also believe that by putting it into a centralized platform. The way we are and you know I'll, let desk, which will come in as a hyper casual.
Slowly move towards that casual hyper model they'll also be able to plug in and utilize the analytics in UA and AD tech tools that very thing dumped into the engine in order to further scale their players also.
Great and then just sort of on the strong monetization that you guys observed this quarter I'm wondering what percentage of revenue is currently within the project I'll start engine.
I assume that the plan is to bring that to other games, but you know at what point do those games scale up to become strong rois for that.
And where do you think monetization can kind of get to over time, given you guys are already at pretty healthy levels. Thanks, Yeah.
Yeah, Great question, we'd do 100% believe and the investment we're making in the Si play engine and it is very very evident by what were seeing with our jackpot Party goldfish and quite Cat Jackpot party growing 7% quarter over quarter I'd now their full year record.
A quick hit 14% quarter over quarter, another full year record and golf test its fifth consecutive record in a row and also another fall you're.
Revenue record. These are the three games in our portfolio right now that are using project all star once we're able to centralize and put it in there won't be able to put it into the other games in our portfolio and we will expect a similar growth rates out of those are out of those games are the investment.
To build out it takes time like any technology does play well we've already started on it earlier. This year, we expect to work on it through the year I would expect to see the growth happening in 'twenty three and beyond.
Operator, we'll take our next question.
Yeah.
Our next question comes from David Panofsky with J P. Morgan Your line is open.
Hi, Thank you just a follow up on Electus troughs can you maybe just expand a bit on what you think differentiates the studio from other competitors in the hyper casual space in terms of UA game development or AD monetization and then just given the growth that they may use from the transaction do you see any opportunity to cross sell some of those.
Players over to your core games.
Yeah. Thanks, David.
And there are so many very positive things about electus, it's it's almost hard to know where to start but I'm going to start with first they have developed a culture that is as good as any culture I've ever seen them. They fit the Si play culture on day, one and it makes us extremely excited.
Are they also have a development process that allows them to test the games at a very low cost in order to predict what they what they are biggest hits will be which is why they've been able to create a six number.
Number one gains in the ILS market and less than two years.
We are constantly testing new items, which is the first time I've seen a company behave this way in that market, which is why I believe that they're already taking market share and growing faster and the fastest growing sub genre casual.
And they are and then the last question to the 28 that 28 million MAU, we could not be more excited at 28 million MAU does overlap very substantially with our core demographic and we will look to see how we cross platform our size sits at cloth craft gain.
Move the individuals on a monthly basis.
Let them in the highest L. T V game in the Si play.
Portfolio.
Okay, and then Josh I talked before you mentioned transitioning the output of the liquid from only hyper casual to also some casual games and I was just wondering if that's something that's in the pipeline now or is that more of a longer term goal.
So let's call it a medium to long so there's kind of like a three three so theres hyper Castle, then theres casual hyper and then there's cats are all are all our sub genres of the larger casual right now moving towards the worked hard casual hyper and Pao.
Or that will be how fast we can get our Si play engine up and running because a lot of the tools that they will use for the player engagement and live ops wolfcamp problem that engine.
Thank you.
Youre welcome.
Operator, we'll take our next question.
Our next question is from Aaron Lee with Macquarie. Your line is open.
Hey, good morning, Thanks for taking my question.
Wanted to touch on this again real quickly can you share with the geographic exposure of like this currently is and the demographics of the users and in terms of seasonality does it mirror your current portfolio.
Yeah. So.
As far as the geographic there literally halfway where are they still have a round, 50% U S space, but the rest is throughout the rest of the world.
They overlap pretty significantly with what we call our core demographic so call it 35 and over them around 50% of all of the installs hit that market also.
Headset too as far as seasonality.
Not quite the same as I E P games because of how it goes worldwide. The main seasonality of the I I E. P games, it's because a lot of that comes from the U. S census is much more worldwide. They see them much more steady rate throughout the.
The entire year.
Great very helpful.
And then just on project North Star.
It seems like this has been a great success for you guys. When it comes to this initiative what inning do you think we're in or not the right way to think about it and this is more of like a continuous improvement sort of thing I'm just trying to get you know amazing question.
It's funny I don't know that you could mention it has any because I think every time you move forward with something you started a new game and I think what we're doing right. Now is we're gonna be creating a new sport and what I mean by that is we've had such success over the last three years with <unk>.
Our project I'll start with our three largest games.
We're going to redefine the company by taking all those learnings and centralizing them into one platform and that allow us to be looking at the entire portfolio of games and how to increase everything at once instead of making small investments one game at a time.
Perfect. Thank you.
Okay.
Operator, we'll take the next question.
Our next question is from Matthew Thornton with truly Securities Your line thing.
Hey, good morning, guys. Thanks for taking the question.
Maybe one on Oh look this and then I've got a couple of quick follow ups John .
Josh on auto Lucas anything you can offer just around you whether its growth rate.
Margins I would assume their gross margins higher given the AD focus, but EBITDA margin you know, maybe maybe below yours I would I would assume.
Any any synergies you've identified that you could offer some color on it and then just finally add revenue would you look to break that out going forward since that will obviously be an important part of the business going going forward why don't I stop there and then I've got a follow up.
Okay.
Thanks, a lot Matthew yourself.
Let me, let me kind of handle this one at a time and you know, we're evaluating whether or not to break how to break that out.
And you know somehow or another we will differentiate how IAP and add them add mine as we haven't 100% landed on the answer but I believe we will relatively soon and hopefully that will give you the clarity that you're looking for there.
It is a very high growth rate company.
Like I said earlier, the hyper casual is the fastest growing inside of that casual market and they are taking market share and sign a hacker casual.
And so from the growth side. It is a very exciting opportunity on the margin side.
We're not expecting any significant decrease in our margin because of bringing N.
That and bringing in the bringing in electus, but they are a young growing studio and we are looking to invest to even further speed up their crowd.
Okay. That's helpful. And then maybe a couple of quick follow ups I could.
On Solitaire pets.
Would you characterize that is now kind of fully at run rate or is his monetization, perhaps not not fully turned on I'm, just kind of trying to get a sense as to where we should think of that in its lifecycle and then similarly on the web side I know the focus is obviously mobile and has been and will continue to be should we continue to expect the web business.
Kind of tail off or does it stabilize here or does it just any thoughts there would be helpful as well basically yeah.
Okay. So great questions by the Solitaire game, we are Super Super early in its lifecycle, yet you know whenever they used a game. We started marketing we are seeing amazing engagement, but with every new game that you launch as you get more customers you get more data and so right now we're still focused on.
On tweaking the game still adjusting the economy as we go.
Because we wanted to make sure that the game has not only the engagement, but also the retention metrics needed in order to scale to become you know tens of million dollar franchise for us. So I would say at this point yet it's in yeah. It's still on week one of it's a total lifecycle. We're just.
Just getting started.
Yeah.
Oh.
Yeah.
Okay, sorry, I I blanked on that question real quick sorry about that so the weapons. It so I would actually think of it two ways.
One as part of our Ah.
Si play engine is working to build out our own pipe dietary a platform or a direct to customer platform, which is going to be web based.
And that web based well level I'll handle the transactions on our own and therefore the platform fee that we are spur.
Spending wet face.
Facebook Apple and Android will significantly go away the Saturday of credit card fees, obviously that.
That will actually increase the amount of revenue that we're seeing on our web platform do I believe Facebook itself will decline over time, yes.
But not our overall revenue as we developed and released the platform.
Operator, we'll take our next question.
Yeah.
Our next question comes from Matthew cost with Morgan Stanley . Your line is open.
Great. Thanks for taking the question I guess I have two here. So just going back to comment you made on the call about pushing the payback period out from from six to nine months.
You know as.
As I understand it you know that six months payback period kind of been the target for you guys.
Certainly for your whole history as a public company. So I guess what were the factors that drove you to.
To push it out from six to nine months. Thank you for quantifying the impact on profitability. That's helpful. But like you know from a macro perspective is there a measure ability problem or an add efficacy problem that caused you to kind of like basically cast a wider net in order to make sure you're bringing in the volume.
Users that you need what.
What was the thinking behind pushing that period, and then I have a follow up thank you.
Yeah. So.
I would actually think about it that's why I. So as we invested in project all star we were able to significantly increase the revenue and long term why aren't the lifetime value of users.
Not only increase it and a periods of time, but also increase the long tail of it and that's made us more and more confident that we would be able to move from the six months to the nine months and still get a very good return on our adds back overtime.
If you go to our deck and you see are the jackpot party cohorts that we put a slide that we put in the deck you see that you know the cohort that we brought in in 2012 is that more money with us in 2021 than they did in 2012.
Each year, it's increased so we are starting to look at that as okay I'm willing to bring in more people for a little bit at nine months, because we're expecting to maintain these people for five to 10 years, giving us a very very favorable long term return.
Got it that's helpful. Thank you.
And then just on your international operations I think as of your most recent 10-K, and obviously there'll be a new one coming out. It did say you had some operations in Kiev and Ukraine, Yeah. I'm. Just wondering you know are.
Are they operation disrupted have you been able to outsource them elsewhere and what was the impact there.
Thank you for the question. So I mean first and foremost yes. We have we have you know around 50, some people in key Av.
Our Hearts go out to what is happening there are our first priority is making sure that they are safe and that we can doing everything we can to ensure that.
They're able to make it through but as you know the terrible situation that is happening there yeah. We did put things in place before you can make sure that nothing would.
Not materially impact the larger business.
You know as we were leading up to this.
But I will just say I'll call once that really our major concern for our studio there is their safety and just hopefully this ending soon and then getting back to a normal life.
Great. Thank you.
Operator next question please.
Our next question is from drew Crum with Stifel. Your line is open.
Okay. Thanks, Hey, guys. Good morning sales and marketing spend seem to be well managed at less than 22% of revenue any notable trends around user acquisition during <unk> call out when you kind of addressed this in your comments, but can you discuss maybe in a little more detail how you're approaching investments here in two.
22 for the core business and then I have a follow up.
Okay.
You know from the marketing side yeah.
Everyone knows the idea that that happen mid year cause all digital UA to kind of hiccup as the year progress each quarter things got better better better and Q4, we felt like we were firing on all cylinders you know things are continuing to improve.
Each quarter as we learn a new way to market inside of ILS, but as far as the quarter itself. It went exactly the way we had planned so I see no disruptions going into Q1 of this year I expect to continue to scale. There are it's the <unk>.
<unk> says, we talked about kind of looking at as you know at two major organic pillars. The first is are you now or so.
I play engine are pushing that and that's.
Centralizing it still won't be able to use it across the entire portfolio of games.
Once we have that up and running we're expecting to see all of our games increase and all of its player metrics and then the next is.
Producing one to two new games a year as we start building out the studios for that there's you know there's an investment period of actually building the games and I think it would be the two major organic.
Organic investments, where you are looking at in 2022.
Got it very helpful. Thanks, Josh in that and then my follow up is more big picture.
Daniel you suggested a step down this year with the adjusted EBITDA margin, but improvement next year.
Previously the company had suggested a longer term target in the mid Thirty's range curious if that's still your goal given all the investment spending and the acquisition. Thanks.
Yeah I'll go ahead and take this one drill so.
You know our goal yeah, we're a highly cash generative company. We've had great growth rates are you know we're looking at these investments because we believe that that theyre the best investments for our shareholders.
Yeah. So we will as we sat in the call you know and that which will slightly bring down the margin, but we believe over time that revenue growth and the return path will bring up the margin going forward in the future.
You know our target is to always become the most efficient company, we can over time.
But anytime we see investment that we can you know super Super speed, our revenue growth as far as a long term.
Roy of the company.
Where we're gonna look it doesn't evaluate them.
Got it thanks, Josh.
Thanks drew.
We have time for one more question.
Yeah.
Our last question comes from Franco Granda with D. A Davidson your line is open.
Yeah. Good morning, everyone nothing sort of squeezing me in here.
You talked about how you're going to incorporate the cash flow model onto elective.
Can you perhaps talk about.
You know the difficulties that come with that would come with that will they require new game development or is this something you can do with existing games that are like this first.
Yeah. So one.
Once again, they elect to attack there theyre amazing at creating new games, putting them out but in the hyper casual space. Its all about the simple car game and then understanding what the next game coming out they had started working on some live ops and some short term matter.
Which was already in their planned theatre.
Hey, Bob to centralize our Si play engine.
We will take them years are not years to get to it all it all forward step them years, because they'll get all of the learnings we haven't gotten over time and be able to do as a live event and the.
And they are.
The player segmentation needed in order to build out some simple matter into the hyper casual games.
I hope that answers your question.
Yeah, Yeah. It does thanks, Josh.
And then one more I guess I was hoping to understand a little bit better the advertising solutions that I like the past, where these solution something that they developed in house to use in house.
Or is it selling it to someone else and then I guess.
Let's talk about that please yeah, so the Suez and everything that they have built their own their own price price price.
Priority Terry.
Solution at it seriously is amazing, they're able to take data from all networks and create their own first party data, allowing them to very much tailor. They add that is going to each individual one of the very first things that we will do during the integration.
Find out where the technology synergies between the two companies can make both companies stronger and this is absolutely one of the things that I. Let this will bring to Si play that well level up all of our AD spend capabilities.
And then a quick follow up to that how scalable are the solutions do you think you'll be able to easily scale them too to yourselves.
Yes, absolutely it's all technology. So the way that this has dealt out they've built out a platform that they were very confident wed hold hundreds of millions of users. So the scale of it is not like we have no worry about the scale side of it.
Alright, great. Thanks.
Great. Thanks, I'll turn it back over to Josh for some final comments.
And we could not be more thrilled about the momentum that we're seeing in our business 2021 proved to us that our new baseline has been set and we are very very excited about our progress our strong results in the fourth quarter demonstrated strong momentum across all of our businesses are.
Average revenue per day increased at a CAGR of 14% since 2019 on our core business.
This is a result of us engaging and monitors they are monetizing our players.
We are now adding another leg of growth with the new launch with the launch of new games, and our acquisition of Electus, which could not be more excited about the future. Thank you.
Great. Thank you everyone for joining the call I'll turn it back over to the operator.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
Yeah.
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