Q4 2021 Plby Group Inc Earnings Call
[music].
Welcome to the <unk> group's fourth quarter and fiscal year 2021 earnings Conference call I would now like to hand, the conference over to Ashley decent loan from ICR.
Good afternoon, everyone and welcome to <unk> fourth quarter and fiscal year 2021 earnings Conference call.
I'm Ashley <unk> from ICR.
Hosting todays call are Ben Cohen, Chief Executive Officer, Ashley character, President of global consumer goods, and Lance Barton Chief Financial Officer.
The information discussed today is qualified in the entirety by the form 8-K that has been filed today by <unk> <unk>. This.
This may be accessed on the SEC's website <unk> website.
Today's call is also being webcast and a replay will be posted to <unk> investor Relations website.
Please note that statements made during this call, including financial projections or other statements that are not historical in nature may.
Constitute forward looking statements such statements are made on the basis of PLP wise views and assumptions regarding future events.
Business performance at the time, they are made and we do not undertake any obligation to update these statements.
Looking statements are subject to risks, which could cause <unk> actual results to differ from its historical results and forecast, including those risks set forth in <unk> filings with the SEC and you should refer to and carefully consider those for more information.
This cautionary statement applies to all forward looking statements made during this call do not place any undue reliance on these forward looking statements.
During today's call <unk> will be referring to non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in the earnings release, the <unk> filed with its form 8-K today.
I will now open the call to <unk> Ben Please go ahead.
Thank you Ashleigh and good afternoon, everyone.
21 was a stellar year for the future of our company, we Werent public completed three acquisitions, which brought in skills. We've used for our business transformation and hired some great talent.
We achieved $96 million in revenue in Q4 and the.
Credible $247 million of revenue for the year, the consumer demand for our brand has never been greater and we are well on our way to our goal of $600 million consumer product revenue in 2025, you can't walk down the streets of Los Angeles, and New Europe today without seeing some lingering Playboy logo.
And we believe we could've easily surpassed $100 million of revenue in Q4, if not for the Covid related fulfillment challenges impacting both yearly and Playboy Halloween sales and the impact of honey per day.
Retail store closures in Australia from October into November .
This has been a difficult operating environment.
It caused us to constantly pivot because of supply chain and distribution issues, one that caused us considerable revenue due to supply chain issues and disruptions to our workforce and one that delayed the rollout of new products in stores.
Despite this we grew our revenue expand your owned and operated direct to consumer business significantly.
Of course from just 130, Playboy employees two years ago to over 1100 today across the Playboy Group <unk>. Our organization is now more than 80% women and our business transformation is taking shape as we move away from a licensing and the legacy media business model to that.
It is a fast growing direct to consumer and digital products and services business designed for profitable long term sustainable and meaningful growth. This year, we will build on the great momentum and assemble the pieces acquired last year into a sustainable and scalable foundation that will allow us to further accelerate our revenue and profit.
In future years.
We will accomplish this by focusing on these two priorities in 2022.
First we will meet robust consumer demand through the continued expansion of our direct to consumer business by further growing our owned and operated channels realizing synergies between our brands, including eventually aligning gandy and lovers around the Playboy Bran consolidated operations and tech infrastructure.
The optimization of licensing and second we will continue to advance our digital business through the full build out of central and its integration with our other platforms, including our MSP and web three initiatives.
To focus the organization on these priorities I've simplified reporting structure to bring an industry veteran Ashley character to oversee all consumer products, including our Playboy levers.
And <unk> brands and our licensing portfolio actually joined US in January and brings a wealth of experience to <unk>, having spent 15 years at gap. Most recently running that banana Republic factory Omnichannel business prior to that she spent seven years at RH or restoration hardware, where she drove rapid growth.
As our chief merchandising officer, and Chief inventory officer, overseeing multiple launches of new revenue and product lines and supporting <unk> successful IPO with revenue tripled to $2 5 billion during her tenure Asher.
<unk> is going to share more detail about our consumer product goals for 2022 and key highlights from 2021, and then I'll walk you through our digital goals Ashley.
Thank you Ben and Hello, everyone I'm really excited to be here at this critical point in <unk> history and to capitalize on the incredible opportunity to grow our consumer products business.
As Dan mentioned the team has done a phenomenal job and I have been able to hit the ground running to identify brand synergies operational efficiency and growth opportunities that will deliver value to our customers and our shareholders.
Our D to C go are oriented around growth.
It means expanding our product line with a newly defined buying progress building out our merchandising function transforming the customer experience and strategically expanding our brick and mortar retail pricing.
To achieve that we are consolidating and stabilizing our operating platform. This includes continuing to build our infrastructure and operating model across all of our brands Playboy Andi lever and Honeywell and defining a purpose and position for Ethernet with this framework we are establishing.
Delineation between product offerings and audiences that will solidify the role of each and our overall portfolio, while holistically delivering on the same pleasure speaking brand values and lifestyle that <unk> licensed brands represent based on this work we will establish each brand's purpose and product focus.
And we will refine the product offerings in order to increase efficiency maximize revenue and optimize selling opportunities.
We will also continue to focus on growth opportunities in the U S and Europe for our owned and operated <unk> business with the strategic expansion of Huntingburg net stores and plans to roll out new owned and operated consumer Playboy product lines, including cosmetics and lingerie developed by the Honeywell.
Pete.
The timing of those launches is subject to the supply chain and when the necessary inventory is readily available.
I have reviewed our global licensing portfolio and we will continue the great work already started to streamline our partnership with those that deliver a strong ROI and drive stable profitable revenue and increase brand awareness.
Despite the licensing business being impacted by Covid related supply chain issues. Our partner's experience. We closed 10, new licensing deals in 2021, including two new fashion collaborations with fever, and OBO, which is rates octobers very own label.
<unk> been focused on our immediate and long term strategy.
So addressing some COVID-19 related inventory and technology challenges, we faced in Q4 that negatively impacted our revenue we have solutions in place to address the root cause and are establishing systemic safety measures to avoid any business interruptions in the future. There is a lot of transformational work underway and I'm excited about what we will accomplish two.
<unk> in 2022 and beyond with that said I will pass it back to that.
Thanks, Ashley it's great to have the year just as we did hiring actually we are actively recruiting top tier technology professionals to drive elevate and innovate our digital products and services as we look to the future of centerfold, Dr with their website and FTE blockchain initiatives, we designed to.
Digital strategy for our consumers with the understanding that they want to engage with an experienced playbook beyond simply buying our products. As a result, we have a unique opportunity to surround our consumers with a playboy ecosystem.
<unk> experience designed to create a flywheel effect to drive engagement loyalty and mutual long term value for both the consumer and our business consumers and her ecosystem at any point in the continuously product content experiences and community as.
As we've discussed in our previous call the majority of our consumers come to us for physical or digital consumer products.
Whether it's clothing or entities customers can come to us because they have an emotional connection with the brands and they are making a statement about who they are and what they believe it by associating with the Playboy lifestyle. That's why our owned and operated do you see licensing and NFC businesses are so important not only do they drive.
Giftable revenue and brand awareness, but they also providing easy and accessible entry point to our Playboy ecosystem.
Once consumers have entered our ecosystem they stay with us because they want to engage with an experienced Sabrina our social media channels alone, which achieved $1 5 billion organic consumer impressions last year is a testament to this by leveraging the digital affinity of Gen Z and millennials and they are.
Xyrem for community, we can foster engagement and loyalty optimizer lifetime value potential across our brands and green robust consumer data to continuously refine our customer segments journeys and user experience.
Chemical provides our consumers with both the community they are seeking.
As well as a new digital access point to the Playboy ecosystem, we accelerated the launch of this greater led platform in beta.
Because of increasing demand from creators to be associated with Playboy and their desire for a new platform to connect with their fans overall look and feel of the platform has been really well received and creator of engagement has been high and is rapidly approaching.
Verify creators on the platform.
And we have a waitlist is multiples of that far exceeding our expectations for the speed of fees. In addition, we are really encouraged by the high volume of organic traffic to the platform, which has already surpassed our high traffic Playboy dot com and confirms our thesis about the importance of chemical is a key.
Access point to the Playboy ecosystem and what that means for the top of the funnel in the future.
Also during the beta phase, we built out a robust marketing roadmap, including creator launches and promotions.
Oh, and SCM strategies, and we are in the process of incorporating that feedback from our founding creators and we'll be turning on new features and enhancing their revenue monetization component in coming months.
An example of the new functionality is the ability to live stream as you may have seen from carty fees why fashion with their fans on February 18th.
As you know we brought on <unk> late last year as our founding creative director and residents to help us attract new creators and audiences and to engage brand loyalists Cardi BS first post about central where to atrophy arms what theaters. They wanted to see on the platform and in our first live stream.
<unk> news.
As secure her first talent for Playboy and that she will be directing every aspect of that photo shoot in her new role with us I can't wait to share more about whom Cardi b is recruiting.
In addition to cardiac piece new talent for Central and the addition of vehicle Lisa who was recently announced we are in the process of Onboarding, a steady stream of new creators and a number of talent verticals across music art fashion comedy and gaming in the months ahead, you'll be hearing a lot more about who is joy.
<unk> central as we move out of the beta phase and fully activate the platform.
As we continue to build out with Playboy ecosystem, we are investing in fully integrating and unifying our technology across our business as we continued to scale as a public company. This will allow us to align the business around certain hero products and later this year, we will explore ways to leverage Playboy boss.
And Playboy TV into Centerpoint, this will yield greater focus internally enhance the speed of product enhancement, because we are not supporting multiple products and provide operators with greater reach.
Through a unified technology, we will be able to capture an important data given the direct relationships with our consumer while we are in the very early stages of the execution. This insight will be more valuable than ever given the recent changes in privacy restrictions and user tracking limitations I wanted.
Close by reiterating my excitement about our great momentum strong demand for our brands and the power of the Playboy ecosystem to surround and engage our consumers. This unique business model and brand transformation that I envision years ago is solidifying and I believe it will deliver value over the long term with margins.
Unlike other growth drivers.
Now I'll turn the call over to Lance.
Thanks, Ben the fourth quarter capped a year of tremendous growth for the company with year over year revenue growing 107% to $95 7 million.
Resulting in $247 million of revenue for the full year.
Most importantly, our direct to consumer growth accelerated in the fourth quarter. It was our best quarter, yet in terms of direct to consumer revenue growth, which was up 162% year over year to $62 million.
Playboy ecommerce continues to scale rapidly revenue doubled from Q3 to Q4 and grew an astounding 555% year over year as we found new ways to tap into the surging demand, we see for Playboy branded products for Halloween, we made the official Playboy Bunny costume one of the most iconic.
It and celebrate it and recognize costumes and the world commercially available to the public for the first time ever. It was a huge success. We saw thousands of units in the first few weeks of the quarter site conversion rate doubled and we capitalize on all of the organic search traffic occurring for Playboy Bunny costume terms and we were.
<unk> able to meet that demand with supply directly from us customers were delighted to be able to purchase the authentic suite from us and not some cheap knockoff and paid between $150 and 180 for each costume. We also were able to upsell tight shoes jewelry and other beauty products to complete the full look for the cost.
Yeah.
As the quarter progressed, Playboy dot com saw a tripling of conversion rates on Black Friday and holiday gift. They led to December being the highest sales month in history for Playboy E com, beating even the big sales numbers, we saw in October and November .
At Honeywell that it began the quarter with half of their stores closed in Australia due to COVID-19 , but it's the government lifted restrictions in November the business started to rebound and managed to end the year strong generating $25 million of revenue in the fourth quarter. We continue to see plenty of opportunity for growth in both the U S and Europe evidenced by that.
Early success, we've seen scaling our European e-commerce to over $1 million in revenue. After just launching in September and the fact that our best performing stores globally are already in the U S. On average outperforming by 40% more revenue per store than we see in Australia with plans to open at least 10 new stores.
This year.
Yes, he got off to an incredibly strong start in October and was on track for its highest revenue month ever but unfortunately, we couldnt keep up with the demand for costumes and had to shut down our Halloween operations, a week earlier than anticipated leading to what we believe was well over $3 million in lost revenue for both Andy and Playboy perhaps.
Most notably it Andy is the fact that we continue to have a lot of success with our private label you Andy in Playboy products something that we intend to continue growing this year and beyond.
In addition to the strength we saw in the direct to consumer business fourth quarter revenue was bolstered from the successful launch and subsequent secondary sales of our rebate our Nf T collection that we launched in late October .
Adjusted EBITDA was $14 million in the quarter and nearly $32 million for the full year as we continued to invest in building a unified back end across all of our direct to consumer businesses and bear the increased costs of being a public company that didn't impact us the year prior.
Our technology infrastructure and investments will continue over the next 12 to 18 months, but once we have fully rolled out the implementation. We expect that can drive margin expansion into 2023 and beyond.
Similar to other consumer businesses in the fourth quarter, we continued to experience cost inflation and COVID-19 related impacts across numerous areas such as labor shipping fulfillment and customer acquisition.
Our net loss in the quarter was largely driven by a large amount of stock based compensation and noncash accounting adjustments, it's worth calling out that our stock based compensation expense was extraordinarily high in the fourth quarter for a few reasons. We formally granted performance based restricted stock awards are issues and options.
That were pursuant to employment agreements entered into in early 2021.
Even though performance metrics on the Psus were achieved in the first half of the year and the RSV as an option would have been granted around the time of R&D back those grants were not formally made until the fourth quarter. That's because we had to wait a minimum of 60 days before we could put our form S. Eight registration on file and it also took us a few quarters.
To get our equity plan administration systems up and running it was also driven higher because SBC as expense based on the fair value of the grants on the date of grant and at the time. Most of these grants were made our stock was trading at close to $30 per share.
The business with cash flow positive in the quarter and we ended with around $75 million cash and equivalents on the balance sheet plus an additional 1800 east that we generated from the sale of our rabbit cars, which was worth around $6 $5 million as of 12 31.
Looking ahead, we expect revenue in 2022 to be approximately $350 million for the year, that's roughly 40% growth over 2021.
Similar to last year most of this growth should come from the continued expansion of our direct to consumer businesses, along with growth in licensing revenue and at center fold scales, we expect to see more revenue contribution coming from later in the year.
In terms of a quarterly breakdown of revenue I expect the first quarter to be approximately $68 million and I anticipate that back the year to be back end weighted with around a third of our full year revenue coming in the fourth quarter.
We expect adjusted EBITDA to be around $55 million for the year with EBITDA margin much lower in the first half of the year as we continue to ramp investment where revenue may lag and come later on and similar to this year the bulk of EBITDA should come in the fourth quarter as our revenue ramps.
I also want to remind everyone about our philosophy on financial guidance, which is to only provide an annual outlook at the start of the year. So that as a company and management team. We can focus on our long term goal of reaching $600 million.
Consumer product revenue and EBITDA margins above 25% by 2025 without getting distracted by chasing quarterly results. We have no intention to provide an updated outlook for the remainder of this year unless there is a material deviation to our stated goal of $350 million of revenue and <unk>.
$55 million of EBITDA.
If there is one common theme among what we are seeing in both direct to consumer and licensing. It's the fact that demand for our branded products, both Playboy and hummingbird at is incredibly strong we see it when we launch something like funny costumes for Halloween when our best performing items on the Andy our Playboy collaborations.
When honeybear that opens a new store or E Commerce channel and when some of the largest Gen Z Street, where retailers continue to deliver royalty overages because of stronger than expected sales of our branded merchandise.
These results give us great optimism, especially given how well the business had executed despite ongoing macro headwinds.
This year, we're going to continue to execute against our strategy of building out our direct to consumer business and develop innovative ways to monetize our IP by building out a scale digital platform.
This strategy takes investment and time as we reposition the company to capture all this consumer demand, but we believe these investments will ultimately deliver a long runway of increasingly profitable growth in the coming years with that I'd like the operator to open the line for questions.
Thank you.
Reminder, to ask a question you will need to press star one on your telephone.
Withdraw your question press the pound key.
Our first question comes from Alex Fuhrman with Craig Hallum. You May proceed with your question.
Great. Thanks, very much for taking my question and congratulations on a really strong year first year as a public company here.
It looks like direct to consumer segment was the biggest driver of the quarter, even though it sounds like all of your brands were negatively impacted by supply constraints as well as the Covid Lockdowns in Australia can you talk a little bit about how each of the brands performed during the quarter and how do you see those constraints playing out both in <unk>.
Q1, and the rest of 2022.
Thanks, Alex.
I'll talk a little bit about the brand performance I highlighted it earlier, but we got off to a great start at both.
Andy and at Playboy E Com because of the Halloween selling season, we haven't ever really Sol tracks like we had never sold the official Playboy Bunny costume, it's always been sanctioned and sold not by US. So this was the official one we had a really big October that carried over.
Over four for Playboy into the holiday buying season into November and into December as I mentioned hybrid that was off to a slower start in the quarter because of the the store closures, but that actually really ramp once the stores reopen and into the holiday buying season and lovers.
<unk> continues to do quite well for us it's been kind of one of those steady as she goes thing.
Ashley is really interested in what we can do there in terms of being able to leverage a lot of the product that we have elsewhere I don't know if internationally do you have anything you want to add to that yes.
Yeah, Hey, Alex Yes.
Yes look I think COVID-19 definitely plays a huge impact in our results for last year.
As we have said we had to shut down basically the whole entire warehouse a week early which cost us millions of dollars of revenue, we have impacts to our licensing business as well as we've previously talked about that continued into the fourth quarter.
Far as guidance for this year I think we continue to expect the supply chain to be challenged and that is baked in to it baked into our numbers hopefully that will ease.
Excited by some of the things we are seeing with the ability and this is what actually is working on right now not only the merchandising strategy.
Around Playboy, which really did not exist before.
So I think there's a huge opportunity with Playboy dot com as we continue to pivot on the DTC side, but also when we look at <unk> and lovers and looking at the expansion to lovers really integrating the Playboy brands into that but Ashley anything else you want to add.
Yeah, I mean, I think for me, what I'm really excited about and as I.
In here about six weeks now the big opportunity sits and the fact that we've got incredible brand health from a brand awareness and a demand standpoint, but we haven't spent enough time, yet just by nature are growing as quickly as we have in from a talent standpoint, integrating those brands really defining the benefit in the role.
Each brand places in the portfolio and then leveraging the power we have within both honey where that in Playboy to grow in EMEA and levers and to build that out and so I think in terms of going after key talent ringing and merchandising capabilities going after some pricing and margin opportunities looking at how we started.
To bring.
<unk> private label is bigger scale into the business that will enable us to expand margins and go after new business opportunities much more quickly and to really drive growth and so I'm thrilled about the potential and now we just need to go go after it aggressively and quickly.
That's great. Thanks, and thanks, all of you for that and then if I could also ask about the licensing business. It sounds like there have been some new.
Licensing deals signed recently what are your priorities for licensing this year in terms of new regions and product categories and when might we start to see India and other emerging markets start to have a meaningful impact.
Yes, so Alex obviously with Covid.
The renegotiation of some of the expansion of licensing has been slowed down.
And our inability to travel actually today happy to announce is our first day back in the office.
Basically two years I think we try a few years until we try in two years.
So excited to get the team back on the road, India, Obviously, we delayed the launch there of physical product Rami did launched last year, but delayed the launch of physical products given the supply chain issues and what was just a ton of backlog that was sitting in the system. We did that in coordination with our partners, but we did sign 10 10, new deals we have.
A robust pipeline of licensing deals those are focused in international markets for the most part outside of some great collaborations we're doing it in the United States as we continue to pivot to our owned and operated the channels and the markets, where we have domain expertise to operate them.
The other thing Alex.
Some of those ongoing headwinds that we see from from Cove, and especially internationally throughout Asia throughout India.
We actually have seen really strong growth with our U S. Apparel partners. We've been seen I mean, this has been consistent all year, but we've been getting royalty overages coming in from from Pac Sun and also from Amir <unk> of that brand and you've seen probably on JV. If I can 1000 dollar shirts, and we've also seen really strong retail sales for.
Our partners at urban Outfitters until late so that really has again optimistic about the demand here. Because these are some of the most resonant brands with with the younger generation.
That's really helpful. Thank you guys very much.
Thanks, Alex next question.
Thank you. Our next question comes from Jim Duffy with Stifel. You May proceed with your question.
Thank you Hi, Dan Hi Labs welcome Ashley.
<unk> I wanted to start can you address the delay of the 10-K and the expectation you'll be reporting a weakness and internal controls.
Sure so.
For better for worse, when we when we started last year, we were an emerging growth company, which which in terms of Sox compliance and reporting timelines is much longer than a large accelerated filer with the runoff in the stock price that we had in the first half of last year on the June 30th measurement date.
We switched from being an emerging growth company to a large accelerated filer. So we spent the first six months of the year not expecting to have to do Sox 404 compliance in the first year as a public company that switch was flipped on June 30, So we have been scrambling with our new auditor or a new auditor BDO also just joined us.
In July .
So we have been scrambling really since the middle of the year to try to get all that done in time, which is why we file for that extension. So our reporting timeline for a company of our size and for the size that we were a year ago was actually much longer where on a reporting timeline with the googles and microsofts of the world.
And here, we are 10 months out of the gate. So that's.
That's really what the driver is right now.
Okay.
I suppose press release really thin on financial details can you give us some preview of what the balance sheet will look like when you do get it on file.
Is it just position inventories receivables and so forth.
I mentioned, the cash position was $75 million of cash.
Going to go into any of the other details on here because we're still in the process of finalizing our audit. So I don't want to preempt any of that work right now.
Okay.
And then if I may just one more.
Then my client base very interested in update on the central business. Thanks for the detail that you did provide.
Characterize it as a beta launch have you worked through technical issues, how is the audience building.
How many of.
The audience or paying for premium access is the platform now stable and ready to scale.
Yes, Jim Thanks for the question.
I think it's important to sort of like level set.
We've accomplished in a very short period of time, we accelerated the launch of what was going to be something we already developed internally with the acquisition of the dream in late October and we launched the product.
In late December and we did that because we have.
Big demand from creators and that demand has far exceeded our expectations.
But they really wanted to looking they wanted to fuel our product and so we pushed that out quickly.
I think the dream acquisition accelerated our development by about 12 months, because theres a front end component, but there is a really complex back end components. When you start to work through creators all over the world payouts integrating into our systems et cetera. We are nearing the end of that beta launch here in the next few weeks.
And we will be turning on our marketing efforts than what we have seen really proving our thesis.
Center pool can be long term is that our traffic.
Central without any marketing I.
I would say a very few creators on it has exceeded that of Playboy dot com and so when you start to think about the top of the funnel and centre for being in the center of that ecosystem. It's very promising the other thing I would say is the greater demand as we said there has been great. We have a huge waitlist of creators.
And then as milestones are reached a lot of our founding creators become exclusive to us and so excited to continue to turn on the revenue monetization here over the next few weeks and then the marketing initiatives as we move into the second quarter.
Helpful. Thank you so much.
Thanks, Jim next question please.
Thank you. Our next question comes from George Kelly with Roth Capital Partners. You May proceed with your question.
Hey, everybody. Thanks for taking my questions. So maybe if we could just continue on with the center.
And then as.
You look at over the course of this year.
You mentioned the <unk>.
I know, it's continuing to morph and Theres, new functionality youre going to be adding what can you highlight one or two two parts of that the biggest kind of.
Iterations or areas of improvement that you think.
The functionality can where you can grow and expand the product set within center fold over the course of the year.
Yes. So if you look at what we have today versus others. We have typically we have subscription.
And we have messaging.
Those functions don't exist today in the right places largely largely because we havent turned that on and so youll start to see these calls to action to the revenue monetization.
Enhance over the site Youll see that the sign on process improves on the site Youll see that we will turn on SCO.
Limited SCM as we move forward on that and then at the existing product functions. The tipping the live video in which Carty debuted it on the 18th there are multiple enhancements coming to those products.
And then as we move into later in the year there.
There are some interesting web three of blockchain initiatives that we're working on integrating into the product and then as I mentioned before we have two legacy products, which are Playboy plus in Playboy television.
Work on the integration of those that won't happen this year, but.
It will start to think through that.
And really Playboy TV as a discovery platform for Senator full given the palaces 90 plus million homes.
The other thing I wanted to mention too George I mean really the big part of this is how do we leverage our creators and get their feedback to really improve monetization and interaction with the user. So almost everything that we do is going to be driven by that feedback and by the partnership that we have with these creators.
And that's really what we're building towards yes, just to build on that it's a great point Lance George that's what we've been doing for the last 60 days is working with the creators I think the big thing with creators when you're launching a new platform is what's the look and feel of it.
That's been really well received that has led to a huge amount of greater demand and then as we've worked on the back office integration, the accounting systems and all of that our ability to start onboarding creators content moderation with the Mastercard Guy.
Guidelines et cetera that will start to enhance here pretty quickly.
Okay. Okay, Great. That's helpful. And then next question for me just on your guidance.
So.
$350 million in revenue.
Can you help break.
Town.
Segment contribution and what I'm, just curious about it so.
So if I look at center fold and kind of lumped together center sold in <unk> and some of these other digital initiatives underway.
How much of a contributor to expect those to be I don't know if youre going to give a specific number but do you think there'll be a material contributor to your revenue by year end and can you help at all just with.
Sort of size or contribution or anything else I am not sure.
What you are comfortable saying.
Yes, sure. So the digital piece. So we've got three reportable segments right and I mentioned the bulk of the growth. This year, it's going to look similar to 2021, which is youre going to see the bulk of that growth driven by direct to consumer.
Youre going to have some some growth from licensing as well, but we've never.
Position that as a big double digit grower and then on the digital side right now the revenue coming from there is really around Playboy plus.
And the incremental revenue coming in from center fault is really marginal at this time it is not a material contributor into 2022.
And we will continue to evaluate it as it goes but right now we're really focused.
More on scaling the user base scaling the creators and focused on actually the feature set that we have with less focus on monetization upfront. Therefore.
Contribution in 2022 should be rather immaterial from center Hall.
Okay. That's helpful. And then last question for me.
In the past you've given the retail sales number for Exxon and misguided.
I was curious if you could update us just with with what kind of growth you saw from those two brands or anything else worth highlighting in your and your license business. That's all I had thank you.
Yeah, we continue to see the overage is coming in from from those partners. So I don't have the exact growth of them handy, but again, they continue to outperform what they've set up for us.
Okay. Thanks.
Thanks, Operator next question.
Thank you. Our next question comes from Austin <unk> with Canaccord you May proceed with your question.
Alright, thanks for taking my questions.
Can you can you reconstruct the.
Spec revenue DTC revenue growth for 2022, a little bit more maybe just even qualitatively.
Curious, which sort of private label product launches you are expecting in the year or what brands are.
Particularly.
Robust in that outlook.
Sorry, you said.
Walk through the direct to consumer growth in 2022 that we're anticipating.
Yes, I think if you could just talk to what that what that 2022 DTC revenue growth is coming from primarily.
Yes, so there's a few a few buckets right. So the first is this is going to be our first full year plenty of our debt.
<unk> ended up itself, we mentioned wanting to add around 10, new stores here, we've talked before.
How the new stores when we opened these strategically there like a really profitable Billboard for the business not only do they produce 30 plus percent EBITDA margins. After we've got them up and running but they also.
Managed to drive increased e-commerce revenue, so part of the growth plan.
For hybrid at the strategically open these stores throughout primarily the U S. But also somewhat in Europe . So that's going to be a growth driver we've talked about Playboy E com continuing to scale, we see a really long runway there continuing to really build that business out and especially with <unk> with <unk>.
Joining us I know she's got a lot of great initiatives that she is pursuing on that front and then when we think about.
Our ability to drive growth at both the A&D and lover is it's a combination around how do we get even more leverage out of our Halloween sales from from me. Andy I think we can also do that at Playboy E. Com can we start to to add to that from a leverage perspective, and then also how can we.
We leverage our IP and our brand more broadly across across all of this and then.
Underpinning all of this we talk a little bit earlier on the call is really building out that unified back end infrastructure. So that we have more data. So that we have more insights into to what levers. We can pull and we really do think that can help to start driving the growth as we implement those tools later this year.
And certainly beyond.
Got it.
How how meaningful is as Playboy dot com.
E Commerce right now.
How does it sort of compare to say Andy.
I mean, it's smaller than your Andy because we just started monetizing it in 2020, so you've got it from nothing to something much much much larger than it is so it is going to continue to scale, we havent broken it out specifically.
But it's been a nice contributor to our growth in direct to consumer and we expect that to continue.
I think and again.
Sorry, just jumping in there I think the other opportunity is how we leverage the Safeway brand to grow and to grow the levers because I think theres a significant opportunity to integrate more effectively and how we go after business using the levers retail footprint using the hummingbird that product and just starting to bring some of those elements together.
To drive growth and to think about the back half opportunity.
Got it and one on center full in terms of the actual content.
Where do you see this fitting on the spectrum between <unk> and Instagram and in only fans I know you've mentioned sort of a wide array of types of creators but.
Thus far it sounds like most or maybe from the adult industry. So just looking for color on how it.
It'll be positioned alongside the brand.
Sure. So I'll take that so I think long term, we sort of view this as an uncensored Instagram more than what I would say only fans has been.
Made their reputation on which is really hardcore adult content.
And so as I mentioned, we have exciting creators will be joining us from comedy from music continued to expand on Cardi b.
Et cetera, and then we'll do other things around that.
With Activations.
And so our content guidelines are strict we think that is the place in the market that is not only the largest place in the market, but also the place in the market that works for us from a brand perspective, and then really at the top of the funnel as we look to integrate commerce and other products into center full long term.
Okay. Thank you very much.
Thanks, a lot. The next question please.
Thank you. Our next question comes from Brian Dobson with.
Sure Dan You May proceed with your question.
Hi, Thanks, so much for taking my question just a quick follow up on hundredfold as far as user interaction.
Most of your subscribers using the content is that desktop or on the mobile application.
Good question. Thank you.
The majority of the users are coming from mobile so we're seeing about 90% of the traffic today on center full coming from mobile devices, and mobile web to clarify or correct.
And do you have any kind of demographic information on your core user base.
It's not something we're going to share at this point.
We know who the users are what they are interested in and again, we launched this just to level set December 20th at the end of the year, we've consistently added creators.
Approaching 1000 verified at this point.
Long wait list and those numbers will continue to grow as we add creators and we sort of turned down the marketing engine behind us.
Yes.
When we think about just the demographic and Jonathan you were probably referring specifically to center full but when you think about playboys audience today more broadly I mean, it's an older Gen Z consumer I mean, we see them spending hundreds of millions of dollars on our fashion and other products and engaging with us.
Directly across all of our platforms I mean, you can look at the.
<unk> got 5000 individual holders of those 11953 rabbits ours and people thought they spent $900 per rabbits are four peer batch value. So.
It is important across different channels youre going to have you're going to reach a different consumer but right now.
The brand itself is really resident across a wide range of people, especially within a younger female demographic. Yes, I think it also just I'll add it also depends.
Specifically when Youre talking about Sevenfold, who is the creator is so cardi BS Audi is different in EMEA <unk> audience and what we've tried to do with our founding with our founding creators is making sure that there is scale. There we've talked about those numbers of social media followers before.
And then as we as we start to turn on the marketing of the revenue monetization as we move into the second quarter here with the new product features.
Start to grow you would hope exponentially as the creditors will push out the.
The marketing of the platform to their fan bases.
Great. Thank you very much and then would it be possible for you to give us an update on leveraging the design team, but hummingbird that across your other platforms in terms of laundry offerings.
Absolutely. So we're seeing tremendous success in leveraging the Honeywell team they have a significant amount of strength in in house design really strong crop.
Processes in terms of how we source the <unk>.
I mean, we should be bringing in to do lingerie and other categories that are highly technical and so our first introduction of archival label through Playboy, where we partnered with the hummingbird that team will be on the longer a launch that we're targeting for later this year and then what we're trying to do is build that out across other categories as well.
And kind of leveraging the hummingbird that team as the jumping off point to bring all categories in terms of private label and design and merchandising and health.
Great. Thank you very much.
Thanks, Brian .
Thank you and I'm not showing any further questions. At this time I would now like to turn the call back over to Ben Cohen for any further remarks.
Just wanted to thank everyone for joining our call and we look forward to talking to you in the future. So I appreciate it.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
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