SciPlay Corporation Q1 2023 Earnings Call
Good morning, and thank you for standing by and welcome to the Si play first quarter 2023 earnings conference call. At this time all participants are in a listen only mode. Please be advised that today's conference is being recorded I would now like to hand the conference over.
To your speaker today, Robert Weiner, Vice President Investor Relations Si play Corporation.
Please go ahead.
Thank you operator, and good morning, everyone. During today's call, we will discuss our first quarter 2023 financial results and operating performance, which will be followed by a question and answer period.
With me today are Josh Wilson, CEO , and Dangelo Quinn interim CFO .
Our call today will contain remarks include forward looking statements under the private Securities Litigation Reform Act of 1995.
These statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed during the call.
For more information regarding these risks and uncertainties. Please refer to our earnings release issued yesterday.
In our filings with the SEC.
We will also discuss certain non-GAAP financial measures and certain key performance indicators, which are based on in App purchases only 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.
Website.
As a reminder, this conference call is being recorded a replay of this webcast will be archived in the investors section of our website. So I played out.
Now I am pleased to turn the call over to Josh.
Good morning, and thanks, so much for joining us I'm excited to report that sounds like continued its industry, leading performance with a strong first quarter.
Our games again outperform hitting tremendous numbers and again setting multiple records.
For five consecutive quarters, our year over year growth has outperformed the entire social casino market. We accomplish this because we are innovative focused and driven by our passion to win are signed late teens consistently deliver engaging and entertaining experience says that our players in <unk>.
Joy and demand.
We know what is happening and when is it happening all the time.
We evaluate and manage the business with precision and real time Kpis.
We invest wisely with discipline and financial rigor.
All of this is made possible by our global team of over 800 Psi players strong we are United in our mission to be a player first focus and just win.
We began the year with significant momentum focused execution, winning strategy and smart investment.
Our current achievements are phenomenal and are driving us to push beyond near success, our passion to win is deeply rooted in our culture and everything we do.
So I play is delivering value to our players and our shareholders and we are investing in our future from a position of strength.
Now here are the details of Q1 results.
Revenue grew to $186 million up from $158 million in Q1 last year.
Is 18% growth year over year, driven by the enduring strong performance of our game franchises.
Net income attributable to Si play was $5 5 million or <unk> 24 cents per diluted share in the first quarter, increasing by 25% and 33% respectively compared to the first quarter of 2022.
Our Q1, EBITDA grew to $54 million up from $44 million compared to last year's first quarter. This is year over year EBITDA growth of 21%.
Our growing profitability at a faster pace than revenue growth.
The leverage we are gaining from our investors.
Combined our investments in the Si play engine and our platform scalability are setting us up for long term growth.
In the first quarter, our payer base grew and we increased monetization from existing payer cohorts. These two points are very important they forecast the value of our games and their sustainability arcanes attract retain and grow players and then.
Burton to payers.
We have 6 million active customers and just over 10% are currently payers. This gives us an enormous opportunity to continue expanding our payer base.
We are proving to these points by achieving several record kpis, resulting in strong sequential growth in Q1.
We had high performing payer conversion rate of 10, 3% up 16% year over year in fact, we hit our highest number of payers again this quarter.
So more than 600000, probably 6% over Q4 and up 12% year over here.
We achieved Q1, our Dallas 89 cents.
An increase of 20% year over year.
Our average monthly revenue per paying user increase by 5% year over year to $97 43 compared to $92.45 in Q1 last year.
Q1 was very strong quarter and exceeded our expectations are.
Our game franchises continued to provide compelling entertainment to our players.
Jackpot Party social casino had strong double digit growth again said its third consecutive quarterly revenue record and maintained its number one ranking amongst all social casino games in the U S.
Quick hit slots posted its fifth consecutive quarter quarterly revenue record the gain hit a new record with the highest number of D. A U in its history quick hit slots is now one of the fastest growing games and social casino.
During Q1, we launched a winning day campaign, but Jerry O'connell for quick hit slots.
That's where run live on National T V, including major networks cable and streaming devices. The campaign was integrated in game on Facebook and other digital channels, creating continuity.
It yielded great return.
Quick hit slots was ranked number one in the free casino games category on the Google play store during a majority of the campaign period.
The results were impressive we continue to attract new players and new players.
As a result, we have extended the campaign into the second quarter.
Overall, we continue to significantly outpace the social casino market.
Our three main investment pillars, the Si play engine AD Tech and <unk>.
Talent are driving our industry leading performance.
Si play engine is a centralizing force.
It is instrumental as both the portal and a unifier of data cross platform learnings and as a stout provider of resources across our organization.
Whether it's data science economy features or game mechanics, the Si play engine as a scalable and robust solution.
It provides a real time insights into player behavior, enabling us to offer improved segmentation specialization and game performance.
Players' experiences enhanced and and heightened this leads to increased playing time and increased spending.
Payer conversion rates remain high.
Our players are more inclined to pay and pay more often.
This is due to our team's improving player analytics and the introduction of new content and features into our games.
Our live ops teams have developed dynamic game roadmaps that increase engagement and monetization.
The teams leverage the Si play engines real time learnings to optimize our player relationships and deliver unique personalized experiences.
This improved segmentation and specialization has yielded positive results, we are growing our payer base by converting existing cohorts.
So I play effectively adapted to the changes in the mobile gaming landscape by investing in our high Tech.
Our teams develop proprietary AD tech that includes new retention re targeting tools and optimize a S. L models player focused content marketing and creative based segmentation are incorporated to improve engagement retention and conversions all factors that drive rare.
The new growth.
This year, we are evolving our marketing activities into mature breath spaces by focusing on reactivation.
Audience expansion amplified brand awareness, all of which increased traction and further propagate our growth.
We invest in our talent and provide the tools and support cultivate professional development and growth.
Internal initiatives programs and structuring further invigorated our teams our teams are more productive than ever before and our games are greater than ever for example, we strategically manage our games portfolio from a holistic view across the entire organization.
<unk> monitoring adapting pivoting and maximizing the capabilities of our agile platform.
Our teams evaluate kpis in relation to specific revenue and both fixed and variable costs.
This enables the implementation of real time initiatives in our games.
This mindset is embedded in our culture and then the Si play DNA, we live and breathe. This very hands on approach every day melting great data with great innovation and great execution to achieve our outcomes.
That Si play, we continue to invest to drive long term growth competitive advantages profitability and market expansion.
We set stringent objective and put each investment to rigorous financial evaluation and gait, each stage of the investment lifecycle when.
When we see wins.
We reinvest based on Rois.
When we don't see the expected returns, we realigned capital investment.
We are disciplined in our execution and capital deployment and remain Rois focused every step of the way.
For example, first.
D T C platform.
Which is currently in the evaluation and testing phase.
We are now in the cross stage of our crawl walk and run release process, ensuring we have maximum protection of all of our valuable customers.
Second we are broadening our scope to find new players with new marketing initiatives at attack and brand awareness efforts, allowing us to continue increasing our marketing spend rois.
Finally, our global operations footprint is expanding into areas of known for engineering prowess.
This quarters performance is a clear reflection of our team's strong execution and unwavering passion to win.
Our site players around the world are responsible for our success our teams to build the technology develop the games and are continuously innovating to provide the greatest entertainment experience possible.
We are so proud and grateful of each site players contribution we remain committed to our players our teams and our shareholders. Our dynamic growth plans our player first focus and the resilience of our game franchises are the key elements to our success.
And now to you Daniel.
Thanks, Josh good morning, everyone.
Thank you for joining our call today.
So I believe posted strong financial results in the first quarter.
This reflects the progress of our key objectives.
Delivering great entertainment experiences to our players.
Investing in our game franchises.
Growing market share in social casino.
And prudently allocating capital.
Our Q1 results continue to illustrate our path of over performance compared to the overall social casino market.
We're benefiting from the investments we made in our game franchises.
Our proprietary technologies.
Our systems and organizational scalability.
By continuing to invest in our game franchises, we're delivering great player experiences.
This comes through customization and segmentation from the cycling engine improved data science and analytics.
Investments in people product and process surrounding beside play engine.
And increase the speed.
Collaboration and effectiveness of our teams, while sparking increase creativity and innovation.
These are reflected in our sustained over performance and continuing robust growth.
Now here are the key highlights for Q1.
First we continued to deliver strong financial performance with our game franchises.
We set new records, achieving the highest number of payers based on increased player engagement.
Second.
Our teams industry, leading performance is reflected in the quality of our revenues and profitability growth.
Organically driven and sustainable.
Third we grew year over year net income and EBITDA.
Faster pace than revenue while expanding.
<unk> margin, we're also investing in our assets and future growth opportunities.
And fourth we have the liquidity flexibility and financial strength provided by high cash generating business.
We generated $42 million in operating cash flow in Q1.
And we completed the $60 million share repurchase program.
Now, let's get into some of the financial performance details.
We generated strong first quarter revenue of $186 million.
An all time record.
Up 18% year over year with their social casino games significantly outperforming the market.
We generated first quarter net income of $42 million or 22% margin and diluted earnings per share attributable to Si play 24 cents.
We grew EBITDA by 21%.
Year over year to $54 million.
Moving at 29% margin.
We continue to set records in several of our key performance indicators.
In the first quarter, we grew our payers, 12% year over year to a record 625000.
We also saw increases in payers on a sequential basis, which began in Q1 of last year.
Our average monthly revenue per paying user was $97 from 43 cents.
Marking the 12th consecutive quarter above $90.
We also set a record art DAU of 89 cents, an increase of 20% year over year.
We firmly believe strong revenue growth.
Even faster EBITDA growth.
Combined with strong cash flow are the key drivers of shareholder value.
So I believe executing all three of these objectives.
They are driving increased scalability inefficiencies.
Enabling key investments.
And building on our competitive advantages.
We continue to operate from a position of strength.
$42 million in operating cash flow in Q1.
Ending the quarter with strong liquidity of $358 million in cash.
And total liquidity of $508 million.
We have the financial strength and flexibility to deploy excess capital to drive increasing shareholder value.
Currently we are deploying capital in two areas.
We're investing in our game franchises, which are driving profitable growth and translating into increasing shareholder value.
We're also driving additional shareholder value by returning capital to shareholders through execution of our share repurchase program.
I'm pleased to report that in less than one year, we fully completed our $60 million share repurchase authorization buying approximately $4 1 million shares through may nine.
Our board and our team view repurchases as a good use of capital boosting returns to shareholders, particularly in the current market environment.
Our board last week authorized a new $60 million share repurchase plan.
Which we plan to execute in the same manner as the last plan.
Now I'd like to talk about two topics.
That perspective to our fiscal discipline and our anticipated performance throughout the year.
As I mentioned.
Our capital is being deployed wisely with a high focus on organic growth.
The element within our greatest control.
Of course, we see the macro environment, just like everyone else.
We'll watch it closely and manage our business with a firm focus on both operating environments.
Macro external and the micro within our direct markets.
And to date, we've not seen adverse macro trends impact our business.
Our philosophy is physically responsible capital management.
This is particularly prudent in the current macro environment.
And this is why we hold a significant portion of our cash and equivalents and government back money market Securities.
Offering a high level of safety and security.
This enables us to operate confidently in all environments.
We're a data driven company and always have been.
Our decision, making continues to be predicated on ROI.
We planned growth investment each year, including deploying capital appropriately.
We have the financial strength and flexibility to invest in multiple future growth initiatives at the same time.
We have the data.
Expertise and financial strength to make informed ROI driven decisions.
And we continue to see long term growth opportunities.
Now, let me discuss the anticipated full year performance and point out the differences, we expect compared to last year.
While we've not communicated specific financial guidance for 2023.
We've committed to continuing to grow our business at a faster rate than the estimated social casino market.
In Q1.
We posted our fifth consecutive quarter of doing just that.
We remain committed to this objective and are on track to achieve it this year.
As a reminder.
The summer months are historically slower and our business as the weather gets warmer at schools led out and vacation plants again.
We generally see less daily gameplay as people are outside enjoying this season.
I'd also like to point out that we will incur additional expenses in 2023 over the run rates we had in 2022.
The incremental expense began in Q1 of 2023, and we will continue in the next three quarters of this year.
Specifically, we grew our headcount last year in key areas to execute our growth strategy and.
In aggregate, we anticipate incremental spend of $14 million for the remainder of the year.
Additionally, as we previously noted we expect incremental legal expenses of approximately $5 $5 million due the fan stayed allegation and legal matters.
We just began to incur these expenses in Q1.
Leaving about $1 $7 million per quarter for the next three quarters.
Marketing spend timing is different this year as compared to last year.
I anticipate in offline marketing expense of approximately $12 million will be spread more evenly across the year as compared to the $11 million. We spent last year.
Which was predominantly weighted in Q3.
To sum it up we anticipate incremental expense of approximately $6 $5 million in each of the next three quarters totaling roughly $20 million.
But I believe the discipline and focused company with an industry best team.
We're benefiting from our investment in scalable and proprietary systems that are people are leveraging for sustainable growth and market leadership.
We generate a high percentage cash flow yield from our revenues.
We invest our resources prudently for both the near and long term.
Our team is aligned and focused on achieving three primary goals.
One outpaced the growth in social casino market and take share.
To expand margins prudently.
Not at the expense of making investments in future growth and.
And three generate significant and growing operating cash flows.
These are side plays goals that we focus on every day.
They are the keys to winning in the market growing our business and increasing shareholder value.
We were off to a great start in Q1 and look forward to continuing on our path of sustainable profitable growth.
Operator, you can open it up for questions now.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
You are 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 one to.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from Ryan <unk> with Craig Hallum. Please go ahead.
Good morning. This is will on for Ryan. Thanks for taking our questions first wanted to touch on spell spinner. So testings ongoing plays a little differently than when we compare it to your other titles that said what does the target audience. How does it differ from your existing demographic and what is the key.
Customer acquisition strategy look like going forward. Thanks.
Thanks, Ryan Oh, sorry, thanks, well, yeah, and as you know you've played it and you see it the way it is.
Nick you can't really different as far as the rest of the portfolio goes and therefore, it does go after a little bit different target demographic.
It tends to skew a little bit more into RPG.
Overlapping with cats, and all that and you know most of our games, which all fall into that like more casual casual our social casino as a whole. So it would tend to have a little bit younger demographic.
Therefore, the marketing strategy as a whole would be a little bit different because youre going to look at different pockets, but those individuals are going to see a player.
Playing and where they are going to be able to see ads.
Yeah the strategy around it right now is just understanding what the cost is over after doing just light market testing.
Continuing to do early testing on early Kpis. So yeah, so really comment on what a scaling would look like we're way way too early to talk about that because it's really still in the.
Crawl phase of our crawl walk run a process.
But here to your original question it would be a much I shouldn't take much younger but definitely younger demographics.
Right and then maybe as a quick follow up does this greater expansion into casual categories make the content partnership with latent wonder less critical going forward or how do you think about that.
You know, it's it's relatively interesting because when I think about it.
Trying to I don't think about it as you know in my expanding into social casino, our casual R. R. I look at it is I am expanding into a place that has a group of people that.
Behaving the way I need in order to grow our game or expand the game.
So when we look inside of the casual market.
Really really what we're seeing is people who build to behave and.
The meta game and our live ops very very very similar as social casino.
We kind of go around to saying with the same type of mechanics work around the simple Carla.
The content, but like wonder is as important today as it's ever going to be because it is a big part of not only the branding of how we grow and.
How we actually advertise that games itself, but it is now.
For better or worse.
Their new simple math models that get put into our game that are proven to work in casinos around the world and we get free access to them. So at no point would I ever say, it's less important we will just have some games that don't use it.
Great Thanks for that.
You're very welcome well have a great day.
Next question comes from Ben Foss with Deutsche Bank. Please go ahead.
Hey, guys. Thanks for the question.
Really strong results. This quarter, you guys talked a little bit more generally about the factors that led to that I'm wondering if you have the more specific examples of kind of the segmentation and optimization that you guys were doing and then maybe a housekeeping question can you guys talk about the growth for social casino versus AD revenue.
This quarter and maybe how we should sort of think about milestones or evaluating the AD business as we go through the rest of the year. Thanks.
Yeah.
It's great to hear it from you and thank you so much for the compliment we're really proud of everything we were able to accomplish.
Yeah that's.
It's very difficult to look at the world and say this segmentation or that specialization is what's driving that.
Because the reality is execution across multiple pillars that are what are allowing us to be able to grow the way. We are and all of these pillars were fundamental in the investments that we've made in 2022, its a build foundations for HSE.
So when I look at the foundation first as a SIFI and Jim let's really get the learnings around features a live off data technology.
It's really gives us more information for being able to segment out users in a more finite level and this really gets us the ability.
I would have said Hey, you know we have to go out there and we have you know.
One segment that people that bucket together and do well at being able to do that yes, we're actually able to go to an infinite number.
Segment, because we segment them sub segment them down by adding in more metrics and more atrophy is to create a new look alike to the group.
So it's really not easy to say, it's the segment that segment now.
Now what's worked really really amazing with that as a cause of death. It flows right over to how do we run the live game.
And running the live game. The most important thing is being able to get the right.
Billboard or the right feature or the right task in front of the right person at exactly the right time and this increases our odd.
Getting back from it and so the two really work together in order to try.
And the amazing part out of this is all this does is makes the user more engaged by becoming more engaged and they're worth more money, we see a higher LTV and then we couple all of that with the amazing investments that we're making in our AD Tech slash marketing team wherever.
Going everything we can to find the right users in the right place no matter what channel it is be able to get them the right cost.
Yeah, I think that's just adding all three together the highest rois that we have seen and are really as long as I can remember so I hope I'm doing a good job of answering it but it's like they would do it justice to just say this segmentation on itself.
Okay. It makes sense and then on the outside.
Yeah on the AD side, I think the way to think of that right now as we kind of expect our CAD business to stay relatively flat.
Flat over the next quarter or two.
But in the background, we're actually working on ways.
Ways to kind of pivot and move out of what happened in the market right now as we all know the hyper games market has significantly changed over the last year.
Since about May of last year, mainly driven by you know it's that further.
Further pushing a idea fei and making the marketing or the habit trial marketing much much harder.
With that Fiat to develop a way of getting what I would call it.
A little bit higher.
Call. It date 30 retention and so our very talented team has been working on a kind of a new system a game that is built on.
Engaging people much sooner in their lifecycle to keep them in multiple game.
It's a place alright, keeping them in multiple days per week, which then will all add to that longer term retention. So as far as looking model wise I would assume very very flat over the next couple of quarters, but then heading towards the end of the year kind of starting to creep up from there, but really having some momentum in <unk>.
24.
Okay. Thanks, a lot.
You're very welcome thank you Ben.
The next question comes from Aaron Lee with Macquarie. Please go ahead.
Hey, good morning, Thanks for taking my question and another congrats on another record quarter.
Wanted to touch on the marketing.
Really strong sequential user growth and payer growth obviously, it seems like the marketing innovation campaigns continued to pay off and still an area, where you continue to differentiate yourselves.
You talk about what you learned from the latest round of marketing innovation and just how we should be thinking about marketing and UA spend for the balance of the year.
Yeah.
Thanks, a lot Erin and I was also very very proud of the team and everything they did in order to show the results really after all of them that is getting us to where we are as a company today.
Like I kind of answered in the last question for me in marketing.
One of the pillars, you can't do any of the pillars, great and the other two just okay are you going to fail.
So we kind of look at it as as we grow the player. The way. They are it gives us the luxury of being able to continue to invest in marketing now what our team has been able to do which is.
I would say is best in market.
Based on everything else that we're seeing.
They're able to take the user information that is coming in and being able to get a very accurate idea of that value.
By being able to do that is we're able to obtain more and more channels across the entire network and now being able to even expand it into as you just mentioned the innovation well.
The innovation where else we're taking the exact same approach that we do with every other dollar we spend which is we want to make sure that we're getting the right investment for the dollar we're not spending our money to grow revenue, we're spending our money to eventually grow EBITDA.
And what the team has been able to do is put together a way of measuring that.
What's very precise accuracy.
It gives us a lot of confidence in spending which will allow us to continue spending through the Q1.
Horner flex led to.
To be honest R. R.
Our results that were above our average expectation.
We're going to take those learnings, which is basically understanding what what places what channels what times what shows.
Where are the right places to do things and then when to invest the most into that area.
And then.
Diving deeper now what.
What we will say is it's not just a innovation is spending the dollars to also the integrating it into the game integrating it into our social media World. It's really building an entire experience for the user. So they don't just see an AD and come in and literally feel like Theyre walking.
Into this environment.
That was driven by innovation spend but the reality is the whole experience is being innovative.
We're super pleased with the results and our plan is to do a couple more guns at it by the end of the year as long as it's ROI positive.
And that's kind of how your approach is going to look.
Great that's very helpful.
I also wanted to touch on generative AI, which seems to be the topic of the hour any thoughts as to how you view. This generative AI technology broadly and whether it can be something you incorporate into your business. Thank you.
Yeah, I mean, AI is a really interesting one right and it feels like in the last quarter. It went from 10 miles an hour to 100 miles an hour and like everyone's talking about it everyone's belly and there are so many what I would say is there's so much low hanging fruit to it that can be really utilized across.
Different departments inside of our you know our company from fast generation are in order to get multiple concepts down quicker through contract or.
So therefore, allowing us to do product types quicker.
And really it really will be very very innovative in the marketing world, where you need to make hundreds and hundreds.
Yes.
In order to find the one or two that work this.
This isn't that low hanging fruit that you can just do right away and there is that they can make the communication part is there a way that we can integrate it into our VIP slashed customer survey different ways that we message things different tax that's used throughout the game yeah different ways that just make.
[laughter] things quicker faster than the long term is looking at how do we use it in order to help make decisions now it sounds.
Amazing and grade.
But the one thing to remember is in order for it to work you have to feed it.
And every time, you're feeding it with information that is unique or IP that is unique to you and your company you have now shared those learnings with everyone else who uses it.
I think where companies are going to be really quick about just jumping in all in.
They're not going to understand the ramifications.
What it meant department. The next person that says write me a game like the depth and now the AI has an example of what you get.
And so for us, we're being a little bit more cautious about anything that we feel is our own secret sauce.
But for sure going to continue evaluating ways that we can either bring the information or the AI internally, where we own both sides of it.
Or as we felt put more and more comfortable that this data can be kept polluted off but right now we've already seen a couple of companies have breaches and says you know what happened.
Awesome, that's great color I appreciate it and congrats again on the quarter.
Thank you Eric.
Our next question comes from Franco Granda with D. A Davidson. Please go ahead.
Hi, good morning, everyone. Congrats on the good results.
How about a couple of questions for you this morning.
You've done a really good job at growing your payer base from converting your existing cohorts, but I was wondering if you could speak to what you've seen happen to the audience size cause the overall audience size for social casino.
And then I have a follow up.
Yeah.
So.
I'd say.
First I mean at first answer from what I see on our side and how do we feel are scaling and now you have a hypothesis about I think is happening but.
I honestly don't have access to everyone's data saw a minute, let's say, it's a hypothesis.
On our side, we had really really good growth on the audience side in Q1.
Major events from a few different things.
The first quarter seasonality and a lot of installs come in organics go up pretty dramatically with that CPI has come down because the marketing competition also normally takes a break out of the fourth quarter and then add on to that.
Very tremendous.
Performance that we got out of it Jerry condo So N.
In this case, one plus one plus one kind of equal part for us.
Now I don't.
We expect that growth to continue going because the seasonality, whereas in and then the marketing comes then but.
But I do expect us to do what we've done in the past, which is being able to really close to maintain our audience growth our RMR audience.
Throughout the year, maybe a little degradation to it but that degradation is mainly because of how we focus our marketing more than it is anything else.
Now what do I expect to see in the overarching market.
Probably Q1 everything went in you know everything probably went up a little all of our key of our because seasonality literally everywhere.
I doubt majority of companies had a one plus one plus one equals four I would say they are probably one plus one equals two.
But.
As we continue getting into the rest of the year, but I would imagine that the payers in the market a relatively flat, but you see kind of M. A C is a cross come down a little bit.
And this has less to do with anything else other than you know how well do you maintain your ear pain growth.
That is something we focus on this is something that is.
100%.
What we are aiming to do all the time it is our mission as a player or a play.
Your first focused company.
But I don't think everyone in the industry has that mentality.
A lot of people have the mentality.
Any money not playing that game.
Yeah, no that makes a lot of a lot of sense and I hope.
So one day be able to.
Add one plus one to slot in and get a four or five on my end.
You are right now but.
My other question was around how your monthly or your revenue per monthly paying user.
It keeps us reaching new highs nearing $100 now.
How much more room for upside do you see from here because it seems like it's a it's quite high at this point.
Yeah.
So.
I'll be honest breaks out it's not.
My favorite Casey I, and it's honestly not one as a company we spend a lot of time focusing on.
And the reason I say that is it is more important to me that I have more pairs than it is.
Much payers. Okay. Now the reason ours continues to go up as the people who are later in their lifecycle. If people if ethane three four years year over year, they've just become worth more and more as are the game becomes the one that they.
Continue investing in and growing.
But if our.
<unk> brought that marketing team can bring in a whole bunch of new users at great price tactically that metric won't go up but my parents will go up dramatically.
I think the best way to probably pay attention to this as like N. P. U payers that harped out are probably really the things that Joe health in the business.
<unk>.
How high do I think it can go.
As long as they keep running the business like we are today I expect that to continue rising year over year.
That it's not a focus of ours.
Yes, no that makes total sense.
Could squeeze a last one in here.
Do you obviously talked about all the all of the scenarios are investing your capital on and how much more I guess availability you have for that.
What I saw your appetite for M&A, obviously, you're still absorbing the acquisition from last year are making changes to that but are you seeing attractive opportunities in this space.
Hey.
Hey, pretty good its Daniel.
Yeah in terms of M&A I mean, you know like.
Like we've talked about before our capital allocation strategy is going to.
Once a focus which are you know inverse.
First thing in the business and talking about the investments that we've been making and the results we've been getting.
And then we have the share repurchase program and then lastly, we have M&A I mean.
We are consistently looking at opportunities.
We have a pretty high bar in terms of making sure we have the right strategic fit we also look at making sure we had the right or wrong.
And if its accretive for Si play.
But yes when.
Anything out, but you know were just looking.
Constantly in the market.
You want to add anything Josh yeah ill add a little bit and this is just more market dynamics than it is anything else you know.
Where we have seen some of the market multipliers coming down and we see something like you know what happened with culturally that.
Crazy changes that market dynamic all again.
I don't think we've hit the bottom of the M&A market, yet I do think that to come down some but right now and not companies have enough cash that they're able to provide you know be able to sustain.
And I think they're trying to sustained long enough or a market growth to turn around and then get back to you.
Growth as a company and therefore add value to their business.
The question is going to behave well the overarching market turn around before they ran out of cash.
And if it doesn't happen then I think we're gonna have.
A lot of stock come up at once and it'll be a very very attractive multipliers.
But at this point.
Yes.
I mean looking at the world.
I don't imagine that things will turn around for the masses and less Apple comes out with a solution for acquiring people from their network because majority of the companies do not have.
The overarching game building and growth fatalities, we deal and this is why they are struggling to grow today.
Right. Thanks for all that color I really appreciate it thanks for your time.
It's great talking to you franca.
The next question comes from Eric Sheridan with Goldman Sachs. Please go ahead.
Thanks for taking the question I hope everyone on the team as well it doesn't come back I think he talked about the BTC platform being in the testing phase and as we look out not only to 2023, Josh but beyond.
I don't understand what's being built on the DTC platform, how would you be thinking about being deployed more widely within your way up your go to market strategies not only just this year, but on a multi year view and what are you sort of continuing to look for for the BTC platform to go wider as we move.
Couple of quarters down the road. Thanks, so much.
Thank you.
Thank you Erica.
That's great to talk to you.
On the DTC platform is very interesting and we're very excited for what it can do for our company and why they don't bring in during the script I said, where it's a crawl phase of it.
And we're at this space because every payer that we have inside of any platform that is already paying is part of who we are today and as part of our success and growth. So anytime you move them from what they're already doing you have a risk.
And the reason we're in the crop base as we wanted to make sure that if we try to move up here.
One platform to our DTC, we have like a 99, 9% conversion rate and we don't you know potentially somewhat.
Does it is much better off to get them to purchase and not get them to purchase at all.
The worldwide as really you think about it last time, probably a worldwide and look at it as more of expansion through our games over time.
Well I'll start with different games and ramp them up.
The first will be.
Talking to people through email and they're using it to them because that's the least amount of risk.
Now with everything that Apple has come out and announced over the last couple of last month or so with everything that's happening I think it's now opening up the door for potentially.
Doing an option inside of the game and pushing that now the email has almost zero risk because they werent in the game when they did it.
But the other one does have what I would call it an inherent risk to it which is.
They are in the game they have to leave the game and then come back to the game and every time you add a friction point is a potential that somewhat.
And so this part will take us a long time to make sure that it's perfect.
Our goal is to do it right not to do it now I would expect to see.
Towards the end part of this year, we're starting to probably push it up a little bit more but still a very small percentage of the reach of our population.
But in 2024, we're going to expect it to start hitting a larger population of our payers throughout at least our largest four games.
Great. Thank you.
You're right.
This concludes our question and answer session I would like to turn the conference over to Joshua Wilson for any closing remarks.
Yeah.
We're off to a great start in 2023, and we're hungry we continue to charge forward. We have so much more things we want to do and accomplish a big Thank you to all of our Austin site players around the World you are amazing and everyday you're approved you prove it to us I look forward to reporting on the progress in our <unk>.
Quarter call. This summer thank you for participating.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.