Q3 2022 Sciplay Corp Earnings Call

[music].

Good day and welcome to the Si play third quarter 2022 earnings conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on a touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded.

Now like to turn the conference over to Robert Weiner with Vice President Investor Relations. Please go ahead.

Thank you operator, and good morning, everyone.

During today's call, we will discuss our third quarter 'twenty 'twenty financial results and operating performance, which will be followed by a question and answer period.

With me today is Josh well.

E O pipeline, and our interim CFO and VP of finance and Hello Quint.

Our call today will contain remarks include forward looking statements under the private Securities Litigation Reform Act of 1990 thought.

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 and our filings with the M. P C.

We will discuss certain non-GAAP financial metrics, including key performance indicators, which are based on in App purchases.

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 in the investors section on our website.

As a reminder, this call.

Conference call is being recorded.

A replay of this webcast will be archived in the investors section of our website.

I play Dot com.

Now I'm pleased to turn the call over to Josh.

Good morning, everyone and thank you for joining us.

Today I am very excited to provide you with details about <unk> progress towards becoming the leading mobile game developer and publisher in the industry based on our third quarter earnings I am confident you will agree with Si play is growing success.

Okay.

I play it is clearly outpacing the industry the preliminary I alerts and cry checks social casino game tracker issued on October 27 indicates at 1.7% industry year over year decline versus five placed 13% revenue growth in social casino representing exceptional over pro.

Format.

Our strong momentum we are maintaining our financial targets for full year revenue guidance of approximately 10% and anticipate we will achieve our EBITDA margin in the range of approximately 28% to 29% for the full year.

At the beginning of this year, we discussed our vision and our focus five play plus our player first customizing the individual experience.

This focus is the catalyst for our success and durable growth in the third quarter, we executed and outperform.

Delivering strong revenue growth of 17% year over here and then all time revenue record.

Contains strong EBITDA margin performance aligned with our goal.

And we continue to invest in our core capabilities, which delivered our highest return and helped us deal with this performance.

Our global team of almost 800 sites players are driving the strong performance.

Thank each one of them for their continued commitment passion and expertise that has led us to achieve multiple records and further propel us to reach our goal.

I play hit an all time quarterly revenue record of $178 million. This is higher than the pandemic related Pete we.

We delivered a record number of payer conversion and paying users leading us to a record <unk> of 80 cents up 16% year over year.

Achieved net income of $33 7 million and earnings per share attributable to <unk> 'twenty.

EBITDA came in at $42 8 million or 25, 1% margin.

And we repurchased 28 million of our SIFI stocks room November 4th amounting to nearly half of our share repurchase program.

What's authorized in May.

Now, let's dive deeper into Q3.

Overall, <unk> outpaced the social casino market.

Jackpot Party had a very strong double digit year over year growth.

This was the best quarterly performance in a 10 year history of the case.

Quick hit slots.

Sure and I'll double digit year over year growth and posted its best quarter ever.

Quarter marks quick hits third consecutive quarterly revenue record.

Monopoly slots also posted strong growth year over year.

These evergreen social casino franchises are at the core of <unk> place portfolio and demonstrate market longevity, driving consistent growth and increased profitability for the company.

During Q3, we continue to enhance monetization and achieved quarterly records across several of our key metrics.

<unk> art out of 80 record payer conversion of nine 7%.

Record average monthly paying user of 600000 record 10 consecutive quarters, our average monthly revenue per paying user above $90.

This performance is a direct result of our fire here, Okay, and our highly effective live op strategy.

Thankfully as durable growth is a direct result of our strategic investments long term strategy and strong execution of our operating plan.

During the third quarter, we made key investments that provide us with multiple levers to drive sustained growth and long term margin.

We are investing in the transformation of processes and capabilities for the Si play and yet.

This robust tax standardizes, our analytics and segmentation across our portfolio <unk>.

Utilizing the <unk> engine, we have been able to deliver better content than ever before further enhancing gaming experiences deepening player's engagement and capitalizing on strong live ops to boost overall monetization and profitability.

We have continued to invest in the direct to consumer a K a R. DTC platform, which is on track for a Q4 soft launch user base growth is expected beginning in 2023.

In combination with the SIFI engine, our DTC platform unlocks the potential to drive long term margin expansion and accelerated scalability.

These two strategic investments provide us with a more direct and individualized relationships with our customers and long term margin growth.

I play continues to invest in our games portfolio, we conducted pre market research on spell Spenner fantasy quest, which generated favorable indicators.

We are on target to start testing in the fourth quarter.

In Q3, we relaunched solitaire pass debenture and are evaluating its long term retention and potential for scalability.

Acquiring <unk>, we have launched several game.

<unk> Doctor <unk> achieved commercial success with $27 5 million downloads to date.

And the recent launch of bass Master three D. Barbershop has seen more than $3 5 million downloads in its first month of scaling.

<unk> also invested in its AD monetization this year through the acquisition of elective gaining crucial AD monetization capabilities, giving us two year jumpstart versus building our own.

We are seeing great results from our traditional direct marketing channel as evidenced in the Eilers report our direct user acquisition strategies are performing very well in a tough environment.

These campaigns have been long term drivers of our business and we are outperforming many competitors in the market and gaining share.

We are tapping into new channels to apply our user acquisition strategy and experiencing increased overall awareness of our games and brands.

One of the ways, we are executing these strategies, it's worth our marketing innovation campaign.

This is important as we position our D to C platform and prepare for its launch.

Our Q3 marketing innovation campaigns include primetime television appearances and a sport sponsorship deal.

Jackpot Party Casino AD, featuring a fair Buck era, where broadcast once a week during that 12 episodes of America's got talent 17 season fueled by an average of $6 3 million people per episode.

Gold fish casino imagery was wrapped around the feature NASCAR race for eight races. This season with an average viewership at $2 8 million for rates.

We are seeing initial indicators are they improve UA installed and lower expense versus the rest of the industry, resulting in higher ROI potential.

While it's too early to make conclusion about the direct UA.

These innovation campaigns were designed to raise overall branded game awareness.

The campaigns impact on financial performance is expected to be realized in the future periods as higher ltvs come out.

With this strong performance in our highly cash generative business, we've created significant excess capital, which we are returning to our shareholders.

We believe our stock is an exceptional value.

In just under five months, we have repurchased nearly half of our current 60 million authorization and we anticipate repurchase activity to continue.

This is where we are today, the future looks bright and I am excited to discuss where side play is heading.

Our strategies and investments.

<unk> Si play to take competitively in the current business environment and emerge in a stronger future economic setting. We believe we have an unprecedented combination of opportunities and capabilities to grow and scale our business.

First our social casino portfolio is outperforming the market some or all of our steady growing evergreen franchises have been consistent long term performers, we have significant opportunity to grow our DAU and close the gap with our competition.

Second our upcoming D to C platform is expected to expand our reach and potential to drive long term margin expansion.

Third we continue to develop and publish a solid pipeline of game and expect to launch one to 208 games are here.

Finally, we have a strong balance sheet, and our highly cash generative and well positioned with significant liquidity.

So I placed 25 year history is characterized by its player centric focus recognizable content highly productive teams leadership stability and a great company culture.

As we finish out 2022, we remain confident in our consistent performance of our game and our commitment dedication and experience of our team.

Our strategic investments, including in the Si play engine and our upcoming direct to consumer platform will enhance our ability to drive growth and long term margin expansion as we continue to scale, our scout and gain competitive advantages in the current business environment.

Thank you for your time I will now turn it over to Daniel to discuss the financial.

Thank you Josh.

Good morning, everyone and thank you for joining us today.

I played delivered a strong performance in the third quarter.

Social casino games, continuing to grow and outperform the market for the second consecutive quarter.

Now I will discuss the details.

Revenue of $171 million was up 17% compared to the prior year period.

And 7% sequentially over the second quarter.

Growth was primarily driven by the continued strength of our social casino games and contribution from our listeners.

Net income for the quarter was 34 million.

And our net income margin was 20%.

EBITDA was $43 million, including $9 million in additional marketing innovation experience in the third quarter 2022.

We've achieved an EBIT margin of 25%.

And the marketing innovation expense impacted margin by approximately 500 basis points. This expense will not recur in the fourth quarter and we remain on track to achieve our EBITDA margin target for the full year.

We remain focused and confident in our ability to achieve our financial targets of approximately 10% revenue growth and 28% to 29% EBITDA margin range for the full year 2022.

Now I'll turn to our key performance metrics in the third quarter.

Arc now achieved a new record of 80 cents versus 69, an increase of 16% compared to the prior year period.

With a database of 2.2 million compared to $2.3 million in the prior year.

Average MCU increased 11% year over year, while average monthly revenue per paying user increase nearly $2 year over year to $95.

This marks 10 consecutive quarters above $90.

Illustrating the traction we're seeing with our payers through our focus on retention.

This resulted in record pay your conversion rate of nine 7%.

120 basis points above our payer conversion rate of eight 5% in the prior year.

Year to date chocolate has generated $95 million in operating cash flows.

Cash flow in the third quarter was impacted by the $25 million legal settlement payment and working capital changes, primarily due to the timing of platform collections.

At the end of the third quarter, we had $299 million in cash on hand, and no debt.

Since the inception of our $60 million stock repurchase program beginning in May.

We repurchased approximately $28 million or $2 2 million shares that's my plate stock for an average price of approximately $13 per share reflecting activity through November four.

Earlier, Josh touched on our operating discipline, which we stringently applied to investing in our business, while also executing to achieve our targets.

We've made significant investments in the challenging macro environment.

We remain focused on executing our strategy and driving long term shareholder value in 2023 and beyond.

In conclusion it is.

Very exciting time to be a part of site like we have an energized execution focus team.

Good growth opportunities, our vision remains to be the industry's leading mobile game developer and publisher.

With that I'll turn it over to Josh for closing comment.

Operator.

If you could open the line for Q&A that would be great.

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble our roster.

Okay.

The first question comes from Matt Thornton with Suntrust. Please go ahead.

Hey, good morning, guys, it's about the word of tourists.

Josh I was hoping maybe you could tease apart how electus.

<unk> is performing in the quarter versus a legacy web I think that bucket was collectively a little bit better than we were thinking.

And as we look forward I guess.

Maybe some incremental color I think on the web side of things I would think the way to think about that is the launch of DTC will drive.

Margin and profitability in that in that bucket of revenue, but I'm definitely looking for some more color maybe on how youre thinking about this a couple of quarters into the acquisition should we continue to expect that to.

To grow into into next year or guess just just your latest thoughts on how to think about whole like this in 'twenty three and beyond thanks, so much.

Yeah. Thank you for the question, Matt and it's great to talk to you.

For like this we're making great progress as I as we talked about last quarter with the challenges of the idea.

We needed to shift our strategy to really becoming an Android first company one we launched our game.

Significant amount of time in Q3 working on building out this technology, making sure that it runs on the Google platform free of Anr for Ya.

Kraft right.

And we've seen really good progress with the release of the newest game barbershop three D, which are paid mascara.

<unk> really hit the ground running even spend a little bit of time number one.

Which leaves us.

Very very positive into what we could see going into next year as we continue to launch a couple of games each quarter.

Same time, we are going to.

Look at different ways of evolving as the hyper games casual genre has evolved.

As ways to retain players just a little bit more and by retaining players just a little bit more you add a significant amount to their LTE, but I do want to let you know it would be hard thing to say is like everything we've seen in the positive move that forward in this very challenging market is because of.

The amazing team in Turkey.

Emerson Amgen that Delta team that is now number.

Number one in the class they are intelligent they are fast moving they are nimble and it's they're very positive movement and creative thinking that is really really allows them to share.

And get back to a spot that we are starting to see hyper game genre are getting more and more downloads again.

For your second question, you say web and I'm going to take that as you mean, our core business or do you actually mean like Facebook lap.

I was talking about the Facebook web bucket like I said, I think that collectively web and advertising was probably a little bit better than we than we expected. Obviously you just hit on you'll look decidedly so I'm curious about how to think about the the legacy website, because again I would think the DTC platform is very applicable there and can drive margins up in that business, but I'm not sure. There's much else, we should be thinking about there.

Any color would be great.

Yes, I'll jump in here so when we.

Acquired Electus.

We basically recorded the revenue in what we call web and then categorized as other we're continuing to evaluate when elixir.

Alex as it becomes more material to where we need to break that out.

<unk> standpoint, but the one thing I will say is our mobile.

Percentage allocation in our revenues is pretty been pretty consistent year to year.

And then as we continue to build our games out on the last lap farm, especially our core games you are 100% right. They will be I'll call. It the low hanging fruit or moving over to the DTC platform because they are already playing there already Facebook connect yet and there are.

I already applying on the web.

So there'll be some of the first people and are some of the first pass through our DTC platform that are happening this quarter.

Alright, Thats great I appreciate it I'll jump back in the queue. Thanks.

Okay. Thanks, Matt.

Our next question comes from Aaron Lee with Macquarie. Please go ahead.

Hi, good morning, Thanks for taking my question.

So it was nice to see average revenue prepare up with patent with the number of paying users up also I would've thought more pairs might've diluted that average spend.

Talk about what's behind that dynamic and how you think that could trend going forward.

Yeah. Thanks for the question Erinn, it's good talking to you.

Yeah, I think theres, a couple of different brands, but they all come back to the investments, we're making there and the stability of our core franchises and how they're behaving.

One is being able to use the SIFI and going across all of our games as we're starting to implement it.

Being higher engagement and higher engagement is giving us more time on app and the more time on App is equaling more not only more purchasers, but more purchasing per purchase there.

Because of this and then you put in.

Then you add to that.

South of the games for bringing in new users are generating the highest ltvs that we have ever seen as a company, but two things are adding together in order to drive up that monthly average revenue per paying user normally what you would see is when you add new payers.

It would bring it down but because of the mixture of us increasing the ltvs and increasing the engagement, we're seeing a rise.

Yeah.

That's perfect great.

And you continued to outperform the industry.

It seems like the internal investments you've been making this euro paying off in terms of 2023, how should we think about any platform investments.

Next year relative to this year in terms of magnitude or however.

However, you'd like to frame it and what are the different buckets.

Yeah. So you know.

I think the buckets to be honest are relatively the same but theyre going to be more of that but the one thing as a company that we're focusing on is there any place where we can make an investment that will part multiple titles at once so we have the individual game teams that are developing their features and running the <unk>.

Sizes as their own.

Same time, we have this amazing sidecar team that is doing kind of like building out of the SIFI Amgen building out of our data.

By data capabilities.

Moving out our <unk> capabilities in each one of these when they.

When they release are open to all of the games at one of our able to build one but across the entire platform.

To continue investing heavy there.

Also going to continue investing having on our AD tech capabilities.

Given us the ability to.

Really keep our CP is in line throughout the entire year this year and by keeping them in line, but increasing the ltvs were starting to see.

Let's be honest, we're starting to see better than expected rois on all of our UA spend and so putting both of these together and then at the same time looking at new game opportunities, our new segments in the market, where we think we have a competitive advantage in.

And that we can build something that we can scale and win because we know how to run it better than everyone else won't be where you see us launching new titles and new sources of revenue in the next coming years.

Fantastic. Thank you so much.

Very welcome Thank you Eric.

Our next question comes from Eric Sheridan with Goldman Sachs. Please go ahead.

Maybe I can follow up on that last question and then ask an additional what hope everyone. All the team as well in terms of the investments you're making for the longer term is there any way to quantify the headwind that was to adjusted EBITDA in 'twenty, two or the type of headwind.

It could be directionally in 'twenty three so we can better understand maybe some of what the underlying earnings power is that's being masked by those investments or that cycle you're in.

Right now that would be number one and number two.

With the capital return policy or how should we think about that being measured against the ability to go out and possibly do some M&A and acquire additional scale or additional AD tech capabilities. How do you think about the rank order of ways in which you're thinking about allocating capital, especially since the broader environment has had such a.

Corruption between public and private valuations. Thanks.

Yeah. So let me let me start with the second question and then a bounce back to the first.

Internally, we've always been very diligent with our capital allocation because we're always focused on what we believe.

Drive the long term shareholder value. This is why when we started the year, we felt self confident and our internal investments because we do know that we sell.

So many core franchises that have the ability to grow year over year over year and the investments that we make there are always the highest return on investment because every dollar we make them and our current games as a more profitable dollar then that next new game that comes out.

At the same time.

We are acting very very aggressively on our stock buyback program.

We put in a $60 million over two years and within the first five months, we are almost gone through 50% of the $60 million for two reasons. One we think our stock is very undervalued and two that it is a great return to the shareholders. So we'll continue to evaluate.

Items like this and making sure that we are now that we have.

Acting on the as.

As far as beyond the M&A World.

I would say that M&A is something that we constantly look at and we've always been looking at it but it isn't our first moment to invest in our first moment as the first two things I just talked about it as our core game investments to make sure that we are going to consistently grow.

As a company and then how can we get a value to the shareholders from there. We do we go look at the market, we see how the evaluations are coming but we're going to be as diligent as we always have we're going to not stretch ourselves. We're not looking to buy revenue, we're looking to buy long term growth.

And long term shareholder value and as the market continues to evolve we'll continue acting like we always have because we want to continue running our business responsibly.

The next question, how do we think of the investments as a whole.

I would think of them as something that.

We will continue doing forever because the Si play engine will continue to evolve add CAC will continue to evolve and these are not things that youll get to do once and just lay them sitting on the shelves.

Because every day you get new data and this new data tells you some identifies a new gap for you to be able to go after and as you close. These gaps you changed the long term behavior of the player giving them a better experience and really really focused on keeping them and our.

Atmosphere, our environment as long as we possibly can.

The mobile game World has changed pretty significantly over the last two years and then it has never been more important than it is today to focus on long term retention and this is what our investments are doing is they are focused on keeping our.

Our users playing our games and making sure that where are their first choice when they're looking for an entertainment value.

Really appreciate it Josh thank you.

Yeah.

Our next question comes from Franco Granda with D. A Davidson. Please go ahead.

Hi, Good morning, everyone. Thanks for taking my questions here I was hoping you could expand on your DTC platform do you plan on adding player focused features that go beyond the experience in mobile and not just going to the types of dot com to play the games or how should we think about that.

It's great to talk to you Matt how are you.

I'm doing great hopefully exiting neither amazing yeah.

Could not be more excited about the opportunity of a DTC platform I'll remember we're in the early stages right now, we're just going to do.

Our first task here in the next couple of weeks, where we're going to select.

You know particular users that were going to let them come and start trying it out.

And.

Really it's about adding up the technology.

As we start to move forward and we start to feel like the platform is a stable platform that we're able to start growing them are definitely going to look at how do we improve the experience and make our DTC platform. Our greatest experience that we possibly can whether or not that has unique features to that whether or not that's a.

Unique content that is only on the DTC or whether or not that's just a better experience all of our time.

Great News is because it's a platform that we own.

It is a platform, where we 100% control of that communication to the user and it gives us the ability to enhance their experience now I do want to set expectations as it's going to take time for us to grow into it.

The main reason is a brand new platform, but these are customers that we own today and they are customer that are part of our ecosystem. We do not want to lose the customer because we push them too fast to a platform that was not ready.

I would not expect it to be hugely material in 2023.

We will start to ramp it in 2023.

So you're saying two equity analysts and not get ahead of themselves.

We're not very good at.

Yeah Yeah.

Ultimately like every new platform, whether or not it was when windows launch Darwin.

Yeah, Apple Facebook launched their bugs.

And you have to make sure that you are delivering the greatest experience you can and for US in this case since our current players it's even more important that we're giving them the best experience possible.

Absolutely affect consumer myself I can tell you experienced this first.

And then can you talk about perhaps at the last minute changes that still spinner still needs to go through before soft launch.

You talked about that still being on track for this year.

Yeah. So we're very excited.

There's been a couple of internal play tests, they've been amazing the game looks.

Fantastic.

Right now what we're really doing is we're focusing on the ability that the.

<unk> can scale. So this is the purpose of doing that test, which allows us to stress test the technology and make sure. It has the ability to scale.

If and when the game is able to really pick up a lot of D. A U. We wanted to make sure that it has the ability on a technology side to handle that.

No.

When we say that tech test right now.

We're trying to do with stress test the backend system and make sure that it's able to handle the communication needs of the player as theyre interacting with again.

And then if I may squeeze a follow up to that.

Any time, you go into detail perhaps around what.

What the soft launch environment is today versus what you were saying two years ago before ADT isn't accurate.

Yeah. So I mean in the soft launch world, you're not seeing a huge difference in an environment, where we're going to see a huge difference in environment is when you've got a ramp.

And the ramping is really going to be.

The effects are.

Apple and IBM.

Two years ago.

<unk> had now being as involved in the spaces I am it would not be unusual that some of the launch a game and spend $3 million to $5 million a month and really try to ramp that game very quickly in the first.

One four months, even if it was unprofitable David still ramp it.

That world is almost impossible now with the cap that IBSA, our Apple has put on its platform, which as you know.

55% of the best users are on Apple and so I think what youre going to see out of new games going forward is less of a.

Straight up but more of a metered ramp over time because of the cap to buying new users on that platform.

Awesome alright, congrats on the execution once again thank.

Thank you so much Franco.

Our next question comes from Ben Benjamin Sauce with Deutsche Bank. Please go ahead.

Benjamin is your line on mute.

Mhm.

Okay.

Let's go to the next.

Okay.

The next question comes from Matthew cost with Morgan Stanley . Please go ahead.

Hi, everybody. Thanks for taking the questions I have two.

Looking at the trends over the past year or so for users versus payers.

It's just been on a slight downward trajectory in payers could you continue to go up payer conversion as a result have gone up quite a bit and I guess should we think about there being some sort of ceiling on payer conversion how high can that number go before you hit the sort of equilibrium, where you've got a smaller pool of non payers eating into the payers.

One my question to you is are you seeing any noteworthy differences in the behavior of the of your cost of your gamers in casual versus casino games, especially as we go through this period of tough macro choppiness. Thank you.

Thank you for the question so.

Let me so the first one yes.

Especially in the.

The social casino market you tend to see.

Are you coming down over time, where <unk> is going up.

I can't really speak to how the rest of the world is doing but speaking to how it is affecting us and what we're doing most of this was a strategic shift in how we behave.

We stopped paying attention to <unk> and started paying attention just number of payers that we have in the game and so we shifted the majority of our development to be focused on engaging features that would either keep payers engaged longer and give them better experiences and also.

Converting new payers and then at the same time shifted our marketing efforts to be very payer focus so.

We may spend a little higher on a CPI, but we have a higher percentage Chan.

Getting a payer out of it.

Thats still thats, what our ROI metrics are.

So I think DAA, you as something in social and castle, where it becomes something you really need to focus on and so I think the difference between casino and casual as the macro environment.

<unk> tends to be a little bit smaller.

<unk>, but a higher percentage of payers and then.

Castle tends to be a higher VA, you, but at less of value per user now both of them have great return, they just get there a little bit different.

So I think the boss.

Good.

John Ross to go after and they're very similar and the fact that there are simple core game surrounded by a matter.

Are there is there was one other question how do I think there is a cap on PPO like.

Like here's the way I think about it in the last three years, we've increased our PPE by 50%.

If I would have said we were going to increase it by 50% three years ago, most people would not leave it.

Do I believe there is a cap on it no I don't I believe as we continue to learn more and more about our users and we continue to be able to invest in our Si play Amgen or AD tech in our data capabilities, we're going to be able to get better and better forgetting what the user needs on a given day and we're going to be.

We're able to not only keep the current payer paying more days a week, but we're going to be able to convert more and more so do I know what the ceiling is now but I do know.

In the industry World there are.

Gaming companies out there that have $1.50 to $2 <unk> DAU.

And you know.

It gives us a lot of hope that there is a ton of runway left for us to be able to continue engaging our users and therefore growing their monetization abilities.

Great. Thank you.

Yeah, Youre very welcome ethics.

Our next question comes from Ryan <unk> with Craig Hallum Capital Group. Please go ahead with your question.

Hey, Josh Dan.

Impressive outperformance I just one question for US most of it's been asked here, but given the marketing innovation campaigns, you mentioned in the quarter seemed like some good early success there, but what do you have planned for Q4 and then into 2023.

Yeah. So.

So in Q4, we actually have no marketing innovation plan.

For.

Our marketing innovation plan for 2022 was kind of a result of realizing what was happening with <unk> and us being able to pivot and find new channels and the time it took to construct the deals put us in a situation where we.

We did most of the spend and a very short period of time.

With that now known and knowing that these are channels that we're going to look at all through next year, we've already planned on spreading and spreading it out more evenly throughout the entire year the onset of thing.

2 million, one quarter and 87 nine the next youre going to see more of like two and a half two and a half two and a half two and a half.

Because we do believe that these are channels that have untapped players that we're going to be able to bring into our ecosystem and have them.

As the game of choice for their entertainment needs.

Yeah.

Thank you.

We are very well from Ryan.

Our next question comes from Matt Thornton with Suntrust. Please go ahead with your question.

Hey, Josh maybe a couple of quick follow ups on the DTC platform is can you remind us I mean its place he got the.

The right benchmark that we think about or where that youll look at or is there something else that you look at from them from a benchmark perspective.

And then just secondly, as you look at the core evergreen portfolio, obviously, a lot of the heavy lifting of late has been done by the two largest titles. If you think about the remainder of the portfolio collectively.

Is there opportunity again through the Si play engine through I think you alluded to project all Star previously is there an opportunity.

To drive.

Outperformance or acceleration in that part of the portfolio any any color there. Thanks again guys.

Yeah, Yeah. So here give me one SEC.

Okay. So yeah, so I think.

By Tikka and King our Activision are probably the two DTC platforms that are out there that you would say are kind of the today the gold standard our hope is to <unk>.

<unk> challenge that and become part of that mix and part of that conversation.

And I do believe that I think <unk> has announced they are in that 22% to 23% of total revenue a couple of times, but I do believe that is also something that we can shoot to over time, but do remember that they've been on that platform for almost seven years.

It's taken them a decent amount of time to get to that point, because you want to be very slow and methodical about moving Oliver.

They're very valuable users to make sure that that experience is thus far them.

Now as far as how do I looked at the rest of the portfolio, Yes, I mean.

Our party had amazing quarter continues to be strong quick hit also has been just killing it three consecutive quarters in a row growing revenue and we're just seeing the engagement out of the room.

Yes, we spent the last couple of quarters doing some investments inside of golf first to make sure that it is ready for our side play and Jen and being able to.

Really optimize live ops, and then make the tweaks needed to the meta features in order to push push.

Push the boundaries and we feel very excited about the growth.

Yes see going into 'twenty three also at the same time continue to invest in monopoly which saw.

Much much higher than industry growth in 2022, and then 88 Barton as we continue to <unk>.

Evaluate and also get it ready.

We've started to work on making sure that this game is a much more international based game as the brand 88 fortunes.

Not just a U S brand, but is a international brand known across the World and has a high affinity in many markets. So we are very very happy with our core franchises going into 'twenty, three and I think we have a lot of opportunity to see better than market growth across the board.

This concludes our question and answer session I would like to turn the conference back over to Joshua Wilson for any closing remarks.

You know, where we are at a very pivotal and exciting time and I'm humbled to be part of such a dynamic high performing and very talented organization I want to thanks, Danielle for being such a solid and steady business partner to the entire SIFI company and as our interim CFO .

Grateful for everything you've done and I'm, even happier that he is going to continue to stay on as our VP of finance to help us lead and make sure that we continue to run our business.

As as steady as we possibly can.

Those of you that are familiar with Jim Bond Basi, you can understand our excitement on what it is going to be to have him joined by play on December 1st as our new CFO , We welcome Jim and we look forward to his contributions our team remains confident in our products and our ability to effectively execute our business strategy and.

Consistently deliver.

Exceptional results with that.

I wish everyone, a great day and turn it over to the operator to end the call.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.