Q3 2022 Playstudios Inc Earnings Call
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Hello, everyone. Please stay on the line the conference we'll begin in just a couple of minutes. Thank you for your patience. Please stay on the line. The conference we'll begin in just a couple of minutes.
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Good day, ladies and gentlemen, thank you for standing by welcome to the place Studios third quarter 2022 earnings Conference call.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
Please note that this conference call is being recorded today November eight 2022.
I'll now turn the call over to Samir Jan head of Investor Relations and Treasury. Thank you Sir Please go ahead.
Welcome everyone and thank you for joining the place studios third quarter 2022 earnings call.
The call today will be Andrew Pascal play studio, Chairman and Chief Executive Officer, and Scott Peterson, Chief Financial Officer of the company. Our call today will contain forward looking statements about future events expectations and projections. These statements involve risks and uncertainties that could cause actual future results to differ materially from our current expectations. We refer you to our SEC filings.
For a more detailed discussion of the risk factors that could impact our future operating results and financial conditions.
During the call management will also discuss certain non-GAAP financial measures. These measures should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is contained in our third quarter 2022 earnings release, which is available on the plate studios website and in our SEC filing.
With that I'll turn the call over to Andrew.
Thank you Samira and good afternoon, everyone welcome to the place <unk> third quarter 2022 earnings call.
Had a solid quarter, which showed both sequential strength and momentum on some of our key initiatives included in essence, the performance of our core social casino games, such as top spot My Vegas slots at my economic blocks as well as notable progress with our newest products such as buyback, it's bingo and metrics of course, the Big news since we last spoke is the acquisition of <unk>.
Our well established and successful casual games developer based in Portland, Oregon, We view the acquisition of brand name is strategically significant and that is fundamentally repositions the company with a more diversified portfolio.
I would also add that we were able to add rainham without materially altering our strong financial position as of September 30th we had no borrowings under our revolver and a cash balance of $212 million.
Let's start by talking about the quarter results were generally stable across the board in some cases gained momentum during the quarter <unk> and <unk> of $1 5 million and $6 7 million were largely flat to second quarter, showing a stability in users and a reversal from prior year to date trends against the current industry backdrop were pleased with these results.
And believe it highlights the popularity of our games the loyalty of our customers and the efficacy of our play awards platform on.
On the industry front, we continue to grapple with a challenging user acquisition environment, making it harder to find and retain profitable players while changes by the FAA on iOS were instituted 18 months ago. The industry still resetting considering this I'm encouraged that we were able to generally hold RGA.
Is flat sequentially, while also increasing our opt out.
A direct reflection of the great work with our talented teams.
The economics front, we continue to operate in a challenging macro environment global tensions quantitative tightening in a persistently high inflation are raising market volatility and diminishing consumer confidence.
Arent in a position to predict the duration or severity of these challenges. So we'll continue to assume tough operating conditions and a less predictable environment overall.
The overall social casino genre continues to be challenged posting year over year declines of two 2% for the past several quarters with that said, we believe we're outperforming a number of our peers posting results. They are generally ahead of the market overall, we were able to raise sequential revenues and this group versus last quarter, while also lowering our spend on user acquisition.
<unk> <unk> for the social Casino collection was also up versus last quarter and versus year ago levels, while the year over year results continue to be negatively impacted by the tougher operating conditions I'm encouraged by the Delta change, which is showing improvements through the year.
We continue to focus on driving innovation in our games in an effort to keep the players engaged and excited.
This includes new features gains in live events and were supporting this through our studios across the Americas, EMEA and Asia regions.
As I've discussed in previous calls we continue to advance our regional operating model building, a critical mass of talents and development capabilities around each of our geographic hubs I'm excited to share that we continue to expand our teams and capacity in both Vietnam, and Serbia, which now account for 282 of our playmakers are 40% of our total head count our leader.
Ship teams are hard at work Onboarding training and integrating new team members for the benefit of all our products with additional and more affordable capacity, our expectation is to expand revenues drive efficiency and yields stronger operating margins in the coming year.
Let's shift topics and provide some highlights on play awards.
Expansion of our loyalty platform as one of our two key strategic pillars with the diversification of our game portfolio being together. We believe the success of play awards will be a meaningful driver of growth as we demonstrated the capacity to lift the performance of games across the broad variety of genres of categories. Currently our players have access to nearly 600 unique reward.
Kids to play awards, which is 15% more than the same period last year through the first nine months of the year rewards purchases were also up 15% year over year and totaled a healthy 553000, just this quarter. We think this program engagement has contributed to the stability of our player network and the overall performance of our games most of our games.
Were designed to seamlessly incorporate our player works proposition and we view the inclusion of real World rewards is a key differentiator of our overall business. This is particularly important times of dislocation such as today, we are holding and converting players is paramount sustaining profitability.
As you May recall, when we last spoke I mentioned one of the specific goals for play awards with this expansion into a broader collection of gains with its upcoming inclusion in Texas and the newly acquired suite of 10, Brachium games I'm proud to say, we're better positioned to deliver on our plan. We expect play awards to be incorporate into most of these products in 2023.
Substantial value for our players and reward partners alike.
At the same time and expanded play towards presence has incredible value to our player network.
Once incorporate into these new games will have a unified loyalty model with explicit incentives for our players to trial and engaged with our other products.
Continuing to lead with our <unk> branding.
Leverage real world rewards and our cross promotion merchandising and work with our partners to offer aspirational experiences. We believe we can capitalize on our existing player network to drive broader adoption and growth of our games. Unlike other gaming companies play awards enables us to take this global player centered view of our business.
Equally important will be the ability to show prospective partners the value play awards for the casual dining rooms, we believe success with Tetris My Vegas Bingo and the branding suite can be meaningful proof points for our loyalty as a service business model at the same time, we'll be introducing play awards to millions of new customers, which is clearly beneficial to.
Our rewards partners, we expect the exposure to these new users will accelerate the velocity of reward redemptions and speed up the flywheel of our platform more players will lead to more redemptions, which will attract more partners and expand the rewards offered which in turn will attract more players. Similarly, an expanded and more varied user base you should make.
The platform more attractive to new rewards partners, having said that we continue to add world class reward partners in the quarter, including AMC Cinemark and checkers restaurants, including these partners play awards represents a collection of 107 real World brands that includes iconic businesses such as Intercontinental hotels AEG.
Well Caribbean cruises and MGM resorts to our player Awards platform. These brands have delivered hundreds of millions of dollars of awards benefit millions of gamers.
Play blocks or block chain solutions business continues to be a key strategic focus for us and integral to how we think about advancing our play of where its platform.
As we've discussed in the past we've made notable progress on this front, including the acquisition of wondered locks our investment in trip demand as well as forging a strategic relationship with Forte.
In the quarter, we expanded our team and continue to build out our <unk> capabilities. The principles blockchain continue to be a natural fit to our rewards platform and give us the ability to enhance our value proposition specific efforts. We're working on today include <unk> our player loyalty program, creating an exchange system for rewards and establishing a new <unk>.
The VIP rewards marketplace.
We'll continue to direct resources towards this effort and aim to show meaningful progress in 2023.
Progress on new game initiatives continued this quarter with some exciting developments milestones, let's first talk about tetra prime the existing game that we acquired along with the broader mobile rights to the brand overall menu remains low Nox as players continue to seek out the psychology.
In the past several months, we've been actively testing some new progression features that add depth and agencies and game experience. The results have been encouraging and assuming the trends continue we'll be launching the updated versions of products to all of the active players in the coming weeks.
Also been focused on improving monetization by refining the AD logic as well as introducing altogether new AD unit.
In addition to these refinements, we began testing our loyalty and rewards program and we're encouraged by the interest in the program as exhibited in the percentage of daily users visiting there were more store and are now shifting our attention to optimizing the rewards funnel, we're targeting a full launch of play awards in Tetra in 2023.
Highlighted in prior calls its our belief that the Tetris game format has the potential to evolve into an altogether separate casual game category.
Our plan remains to craft the new Tetris game that draws inspiration from employees. The playbook proven by many of the leading casual games with that goal in mind, we have been advancing a new casual tetra product. We've made great progress with the design of the core game and have recently started technical validation, making the product available to a very limited audience in a tertiary market.
In addition to testing the production worthiness of the game, we're gaining valuable insights about the basic game experience I look forward to providing more details in our coming calls in our upcoming calls.
Our second major initiative My Vegas Bingo also made notable progress this quarter.
Assuming control of the App back in late February we have been spending the time stabilized in the game and enhancing its key performance measures overall the team's efforts that translated to increases in average daily payer conversion average revenue per paying user and opt out which sets the stage for a stepped up level of UA spend I should also highlight that much like Tetris play awards as a key part of the <unk>.
Plan from the initial launch of the game player awareness and visitation to the reward store has been strong and while conversion rates are still light theyre generally in line with our expectations given the mix of players with adequate loyalty currency balances as I've shared on prior calls we continue to believe in the potential of this game and look forward to more fully realizing it in the coming.
Quarters.
Lastly, I'd like to discuss our recent acquisition of <unk>.
As I shared at the time of closing we believe <unk> is an excellent complement to our business and will drive significant value for those who may be new to the transaction <unk> is a well established developer of casual games, such as Solitaire Mahjong and Sofia.
The company's suite of 10 games has a loyal following of nearly $2 million and $5 5 million and a more than doubling our active players I'll remind you that nearly all of <unk> revenues are generated from advertising, taking the business highly profitable with an expected adjusted EBITDA margin for 2022, roughly 40% were quickly incorporating brand new.
Inventory operating framework and expect to have more to share during our fourth quarter call.
On the capital front, we remain well financed with a strong balance sheet, no borrowings and a fully available revolving loan facility, while the acquisition of brainy and lowered our cash balance post the quarter and we remain in a strong financial position.
Our capital plans remain the same expand our business invest in strategic growth opportunities and drive shareholder value with a strong balance sheet. We believe we are ideally positioned to pursue any or all of these options also helping is a slowly rationalizing market, where we're finally seeing a move to more reasonable valuations a recent acquisition.
Bringing premium is evidence of this as we were able to buy a high quality asset at a comparable EBITDA multiple to our own. We're hopeful that this changing landscape will expand the pool of acquirable assets and are quite encouraged about how the market is shaping up.
In addition, our board of directors be authorized a $50 million share repurchase plan for another 12 months will continue to monitor all of our opportunities to determine the best uses of our capital.
I'll now turn the call over to Scott to provide more specifics on the financials.
Thank you Andrew.
We reported $72 1 million of revenue during the quarter compared to $70 6 million last year and $68 4 million in the second quarter of 2022.
Better monetization drove increases in our core social casino game opt out the strong year over year and sequential increases were primarily driven by increased revenue prepare as a reminder, we acquired Texas in November of 'twenty, One third quarter. It was not included in last year's third quarter results.
Adjusted EBITDA was $9 8 million compared to $9 6 million a year ago, and $7 3 million in the second quarter of 2022.
As Andrew mentioned, we were pleased with our third quarter Kpis.
<unk> was $1 5 million and Miu was $6 7 million up 24, 6% and 87, 1% respectively over the last year and flat sequentially.
Although third quarter ARPA was down 20% from last year's levels. Those figures are diluted by the inclusion of Petrus to this year's results, excluding tetris year over year <unk> increased by approximately 10%.
On the royalty side, we saw double digit gains in partners outlets and rewards inventory, which now stands at 595 unique rewards.
Purchases of 553000 units declined 3% during the quarter, but we saw a healthy increase in rewards store views.
On October 12, we completed the purchase of <unk> for $70 million in cash.
The acquisition includes a contingent payment based upon brachium exceeding certain financial milestones during the full 2022 calendar year.
The maximum contingent payment is 27 and a quarter million dollars.
There's been some confusion around this so let me clarify how the contingent payment works.
Many of them are to generate $1 or above the threshold and we will pay an agreed upon multiple on just that dollar effectively you should view the most likely scenario being a total consideration of $70 million and a deal multiple at or very close to 795 times.
As mentioned in our October 13th call. If we were to pay any portion of the contingent payment. It implies the premium is performing ahead of our expectations and thus should be viewed positively.
For the full year 2022, we estimate <unk> will generate $22 million in revenue and just under $9 million and adjusted EBITDA only two and a half months of this will be included in our results given the October 12 purchase date.
As implied by the full year estimates.
<unk> is primarily advertising based revenue model has substantially higher margins than our legacy business and we will have a favorable impact to consolidated results.
Including in bringing them, we are updating our full year guidance to be between 275 and $285 million in revenue and between 32% and $35 million and adjusted EBITDA.
Finally, as Andrew mentioned, our estimates for brain and do not include synergies. So we are optimistic many opportunities will present themselves in 2023, as we integrate our companies.
Turning to the balance sheet, we ended the quarter with approximately $212 million in cash and no debt. Please remember that immediately after the end of the quarter, our cash balance decreased due to the acquisition of <unk>, we increased our borrowing capacity to $81 million all of which is available to us, including the accordion feature total borrowings available or 150.
$6 million.
This strong financial position gives us considerable flexibility in terms of M&A recapitalization opportunities and development of internal initiatives, including the expansion of our loyalty program as evidenced by the acquisition of premium we will be aggressive when the right opportunity presents itself.
As of the close of the quarter, we had $129 9 million total shares of common stock outstanding we did not repurchase any shares during the quarter and continue to maintain our board approved $50 million share repurchase authorization with that I will pass it back to Andrew for some closing remarks.
Thank you Scott.
So before we end our prepared remarks and open the call for questions I'd like to reinforce some of the key points.
First we had a solid third quarter that included better than industry performance and year over year gains in revenue and adjusted EBITDA.
Our kpis were strong with both an opt out and stability in <unk> in that mix, despite persistent economic and industry weakness we.
We made notable progress in Tetra semi Vegas bingo and believe both games are positioned to contribute meaningfully to our 2023 results.
We advanced play awards with partners growing 43% year over year as reward purchases reached 553000, and redemption retail value exceeded $31 million.
And we made a strategically significant acquisition with premium.
It was immediately accretive to margins and alongside Texas Somebody Vegas Bingo provides the perfect portfolio for play awards to establish itself as the gaming industry's most distinctive and unique player retention platform.
Lastly, I want to thank our dedicated teams around the globe, along with our strategic partners and investors and to our new colleagues at Brady and welcome to the team we're thrilled to be partners and are excited about what we can accomplish together.
Thank you all for joining us today, and we're now happy to take your questions. Operator, Please open the lines.
Thank you Sir we will now be conducting a question and answer session. If you would.
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One moment, please while we poll for questions.
And our first question comes from the line of Ryan Seagal with Craig Hallum Capital Group. Please proceed with your question.
Good afternoon, Andrew Scott I appreciate the detailed firms on premium or update there.
Want to start with.
We've seen some diverging industry trends between casual and social casino.
Do you think these are structural or permanent changes.
Then maybe if you can talk a little bit about the bifurcation between your business now that you have a little bit bigger casual business.
Yes, Thanks, Brian .
I don't know that we yet have.
Our point of view.
On whether they're structural.
Conditions here.
Tween casual portfolio and in our casino genre, and I say that only because our foray into casual or somewhat recent right. So with our acquisition of Tetra somehow Graham.
We have a pretty healthy suite of products that are in casual and.
We're happy.
We see kind of the general momentum that we're experiencing across that portfolio.
And certainly it's a stronger when youre looking at its performance kind of sequential quarter over quarter as compare to casino suite, but as far as whether there is a clear indication as to some structural shift or change in the market that's going to be sustained over time.
I don't yet have a point of view.
Fair enough.
Moving along I mean moving.
Moving over to the direct to consumer platform. So can you provide an update there we've seen some some challenges kind of ongoing challenges in the traditional app store so cure.
Curious on the progress you have under D to C platform.
Yes, Thanks, it's a great question so.
We talked about in the past I mean, we've obviously spent some time and energy.
Creating a direct relationship with a number of our consumers.
And tried to enable them to purchase with us more directly to avoid the platform tax.
Or challenges to the whole experience as far as getting players that are actively planning on a mobile device than purchased through the web and then ultimately return to enjoy their mobile experience.
Clearly our peers that have had success with this keep everybody within the same experience by by offering.
The game and the capacity to purchase all completely indirectly on the web.
And so we too have invested in and have two products that we offer on the web direct.
We will continue to advance those efforts and then as we mentioned we had in <unk>.
Patient only program for the moment through play awards program, where for premium players, we allow them to have the bulk portal.
They can actually look at it and see what times what types of purchases they can make directly with us and those incentives for them to do that and then we also offer up all kinds of really unique rewards as part of the loyalty program that are only accessible through that portal. So.
I would say that our efforts are still early.
Active Lee advancing them.
We learned a lot and we're going to continue to see if we can step up and.
And start to book ever more of our revenues directly with our consumers.
One more for me.
<unk> margin in the quarter just sequentially from the first half into Q3 Q4 guidance implies relatively similar in Q4, but a little help from <unk>, but how should we think about margins is there another heavy lift on the expense side next year to launch new games and transition and cross sell or do you think we're at a point in the model, where we can start to.
Modest kind of operating leverage from here.
Yeah.
Well, we will slowly start to see the operating leverage we've talked about how we've been layering in.
<unk>.
We've been expanding our team and talent in locations like Belgrade, and Vietnam, which allows us to service our products.
More affordably with also comparable and really great talent.
<unk>.
Back when we are already starting to see the benefits that will continue to see the benefits of that as we move forward.
It should improve margins.
We do have some early stage efforts that we're pretty pleased with the traction that we're getting and we expect that we're going to be investing in scaling up those products. So.
As we advance through the balance of the current quarter and get into the new year will form a clearer view on just how aggressively we're going to be investing in those so no obviously bingo.
It's a product that we've been working on.
For the better part of the last six or seven months and we're feeling like it's at a place now where its investable.
Also feeling really good about the tetris product new Tetra product that's in development that we'll be looking to launch and scale next year.
So I think what will we will need to do is probably tried to provide a bit more visibility into <unk>.
Cross our portfolio of the margins that we're achieving with our more mature products relative to the margin profile of those that are.
And in operating stage, but early and scaling and growing as a result operating at a loss versus those that are still in the development stage. So that we can.
Can give more clarity around.
The.
Core margin profile of our business and ultimately where we think it's going but we expect to see margin improvement at state camps, you next year.
Thanks, Andrew Good luck guys.
Alright, Thanks, Brian .
And our next question comes from the line of Omar <unk> with Bank of America. Please proceed with your question.
Hey, Andrew.
Thanks for taking my question.
So.
I wanted to just dig into the implied fourth quarter guide.
It looks like.
You upped the range for the full year guide.
And.
I would assume that that includes roughly two and a half months of.
The acquisition that you made a freemium.
That's correct that's correct that's correct right.
So then if I do the math.
Of getting around.
About $63 million. So it would look as if that the.
It would look as if your guide is actually $2 70 to 80, if we were to take premium out for the full year and that would imply.
A pretty steep decline year over year in the fourth quarter.
And I was just wondering if my math is right and what would be kind of driving that kind of guidance in the fourth quarter.
Hey, Scott do you want to speak to that.
Yes, alright.
Alright.
Sorry, I was on mute.
So I guess the general way, we looked at it is as we've sort of given our annual guidance.
And we didn't really look at.
<unk> quarterly guidance previously so we were still sort of targeting.
That end of year number and although we did raise it as a result of bringing them.
Given the current <unk>.
<unk> and everything else, we just didnt feel like it was prudent to.
Adjusted for any other reason at this time.
Okay.
So does that mean that.
What do you what do you expect in the fourth quarter versus the.
The fourth quarter of last year or the third quarter of this year I mean, it would be imply the application of <unk>.
Your guide minus the results of the first three quarters is that it's down.
So is that not.
What you guys are actually expecting.
I'm trying to think of all the best to answer that.
Other than no.
I would say that.
We've provided a range.
We think that we're comfortable with that range.
Oh.
Okay Alright.
Yes.
If I could just a healthy sort of like think about this.
So if you kind of look at our guidance before it was it was a relatively wide range and it was EUR guidance and now you layer, bringing him on top and how we sort of discussed it and like how you rightly categorized as sort of impacting our results for two and a half months and I think what Scott had said at the time when we made the <unk> acquisition with.
Sort of think about those numbers on a revenue basis on an EBITDA basis and sort of straight lined them. So if you did that and like like you implied on those numbers. We basically took those numbers you just added them to the bottom end of the range.
Youre not wrong when you look at what an implied figure for the fourth quarter is but I think what Scott is saying is that we guided towards a full year number and we are basically just leerink and bringing them on top of that and we didn't really guide on a quarter by quarter basis.
Now you guys are sort of breaking out our annual guidance I'm looking at it on a quarter by quarter basis.
Okay got it thank you Samir.
And just for the follow up.
I wanted to dig into.
What Andrew said that about the social casino market.
Tracking for a couple of quarters now I think.
You had mentioned that for two quarters now of contracted about 2%.
I was wondering.
What were some of the drivers of that was.
Was it just simply what you referred to in terms of user acquisition.
Or are there other vectors that have influenced that such as.
Supply side plus games coming out.
Spend per user potentially going down.
Retention, it's not a huge change, but obviously everybody likes to see kind of consistent growth.
Yes, I mean, so I think what I shared was that sequentially, we actually saw some improvement.
But when you look at it as compared to the prior year you know obviously tough.
More substantially.
And I think it's just generally across the board I don't know that its concentrated within any one of the key metrics.
Whether it's you don't see any meaningful reductions yet in the average revenue per paying user some erosion.
The number of paying users year over year for us actually we saw some strength and an increase in the actual revenue paying player.
So I.
I think it's just generally.
Across the board.
Just some softness in the category.
So, but not concentrated in any one metric.
Okay got it.
But those are my questions I appreciate the time and looking forward to chatting more thank you.
That's great. Thanks, a lot.
And as a reminder, if you would like to ask a question. Please press star one on.
Our next question comes from the line of Martin Yang with Oppenheimer. Please proceed with your question.
Hi, Good afternoon. Thank you for taking my question.
Hi, Manny.
Phone up to Omar question for Q.
Another way to look at it is have you observed any deterioration for.
UA monetization or advertising from <unk> into <unk>.
Just broadly speaking.
<unk>.
On the industry environment.
I'm sorry, Martin can you re ask the question I don't know that I sure.
So cause the implied for Q revenue excluding.
Bringing them.
It's showing a deterioration of.
Growth trends into the fourth quarter.
Have you observed any day.
Deterioration in user acquisition.
AD monetization.
Other <unk>.
Trends.
Or sort of brought the industry from <unk> to <unk>.
Yes.
We don't we're not speaking to the performance that we're experiencing in the current quarter.
I can tell you that.
When we look at the overall performance of our user.
User acquisition investments.
I don't think that there's anything, particularly noteworthy to highlight other than it continues to be difficult environment.
Al talked a lot about the challenges that I'd say brought about in.
And just how difficult it is as a result.
Subsequent changes to go find.
To really target and find quality users and monetize those now with that said.
I think our team has done an amazing job and.
Nearly all of our products are at a place where the.
The returns that we would expect to see that really warrants are continuing to see.
<unk> and invest in scaling and growing them.
We're realizing are seeing across our portfolio.
Don't see anything meaningful since the third quarter in and around user acquisition, that's probably worth highlighting.
And as far as the AD monetization is concerned.
We've never had.
<unk> had a really meaningful component of our business be ad driven.
Up until we acquired Tetris from that point it represented maybe.
Three and a half of 4% of our total revenues.
Maybe closer to 5% of total revenue, obviously with the acquisition of Iranian that's now increased and.
We're just weeks into having acquired and integrated team in that portfolio of products and so on.
I don't know that we have a ton of clarity youre experience, where we can speak to any trends on the AD monetization front.
But.
The one product that we do have and that we manage that being our tetris prime product.
We're the team is doing a great job in terms of how they're optimizing its performance.
Generally we're pleased with the trends we're seeing there.
Got it.
Another question is.
Maybe you can look further into 2023.
Is there any.
The metal drivers that makes you believe.
But overall UA environment overall.
<unk> could improve and benefit to you.
No I don't see anything Thats, probably worth highlighting at this point.
I think the things that.
That we focus on that May benefit us obviously, the increased importance on just retaining our existing audience.
So if you look at the acquisitions that we've done whether it's the rights to Tetris.
That product an enormous amount of organic traffic that it generates or you look at the <unk> suite of products and the scale of its audience.
Joy, which is organically driven.
Really the dynamics of their user acquisition factored into our decisions. These are.
Suite of products that are just naturally organically generating a ton of interest.
So our strategy is to leverage that traffic and that audience for the benefit of the entire portfolio and we'll do that by incorporating our play awards proposition and providing all kinds of cross promotion and incentives in order to really drive the adoption across our own network.
Tough external environment means that we all every publisher has to get a lot.
More focused on how they go about retaining and holding onto their existing audience and that's where we think we have some unique advantages.
Got it thank you very much.
Thank you.
And our next question is a follow up from Omar <unk> with Bank of America. Please proceed with your question.
Oh, Hey, Hey, Andrew Thanks for giving US your time since we were on the phone I thought I had asked this question.
You guys you do still have a lot of cash on the balance sheet and we know that in the private market.
There are kind of numerous assets to be have some of those assets have been funded with equity some of them with debt.
Are there kind of any interesting ways that you could acquire assets other than just buying the companies.
For example.
You know what.
It ever be possible to actually.
Actually acquire assets through ownership of debt for example.
Because I realize there are a lot of privates out there.
<unk>.
With that floating around just trying to think a little bit out of the box and see what other.
Degrees of Freedom, you guys have in terms of expanding your portfolio and your assets and your use of cash.
Yeah sure. Thanks for that question, Jason do you want to take that one.
Yeah look I would say that we're obviously always out there in the market.
And we're creatively oriented in the way that we kind of liked the deal, making and so if we find the right opportunity and the right assets are strategically compelling.
But the structure by which we can acquire that asset might be different than a straight kind of cash purchase.
We'll evaluate that.
Not something we've spent a lot of time thinking about in terms of our inactive and proactive approach and going out and acquiring that of companies. So it's not something that we've been dealing.
Deliberate about our approach to date, but I'd say that we are we like to think of ourselves as creative dealmakers, and we will strike the right balance in order to in order to action upon opportunities that are strategically compelling.
Okay, Thank you and and I guess.
Have you guys looked at that that market and you know what.
How.
If you have like how attractive is it compare to like do you think that that market has adjusted.
As well as kind of the just the equity market in the private space or.
Is it still lofty or debt and equity kind of trade at the same.
Kind of yield and risk premium I know these are I know these arent liquid markets, but just.
Wanted to pick your brain about that since we're on the phone.
Yeah.
Yeah, No I don't.
I don't really have a view on that today you know we haven't spent a lot of time looking at the debt market and the dynamics that are happening there that can provide an informed point of view on this call.
Yes, no problem just.
Just wanted to think out of the box thanks for entertaining my questions.
Thank you. Thank you.
Thank you at this time, we are seeing no further questions I would like to pass the call back over to Andrew for any closing remarks on the call.
So again really appreciate everybody's interest and thank you for the thoughtful questions and look forward to again updating you on our progress once we close out the fourth quarter and the year. So thank you everybody.
Okay.
This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a great day.
Yeah.
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