Q2 2024 Playstudios Inc Earnings Call - Q&A

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Operator: Greetings and welcome to PlayStudio's second quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Samir Jain, Head of Investor Relations and Treasury. Thank you, sir. You may begin.

Speaker Change: Greetings and welcome to the Play Studios second quarter 2024 earnings call.

Speaker Change: At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Samir Jain: It is now my pleasure to introduce your host, Samir Jain, Head of Investor Relations and Treasury. Thank you, sir. You may begin.

Samir Jain: Thank you, operator. Good afternoon, and thank you for joining us for Play Studios' second quarter 2024 earnings. Joining me on the call today are Chairman and CEO, Andrew Pascal, and our CFO, Scott Peterson. Before we begin, let me remind you that during the course of this call, we will make forward-looking statements. These statements are based on our current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially.

Samir Jain: Thank you, Operator. Good afternoon and thank you for joining us for PlayStudio's second quarter 2024 earnings call.

Unknown Executive: Joining me on the call today are Chairman and CEO Andrew Pascal and our CFO, Scott Peterson.

Speaker Change: Joining me on the call today are Chairman and CEO Andrew Pascal and our CFO Scott Peterson.

Unknown Executive: Before we begin, let me remind you that during the course of this call, we'll make forward-looking statements. These statements are based on our current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our FCC following for discussion of the risks and uncertainties that may affect our future results.

Speaker Change: Before we begin, let me remind you that during the course of this call, we will make forward-looking statements. These statements are based on our current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially.

Samir Jain: Please refer to our SEC filings for a discussion of the risks and uncertainties that may affect our future results. I'd like to remind everyone that we will discuss certain non-GAAP financial measures during this call. These measures should not be considered as a substitute for financial results prepared in accordance with GAAP. Our results are prepared in accordance with GAAP, and a reconciliation to comparable GAAP measures will be provided in our second quarter earnings release and in our SEC filing. With that, I'll pass the call to Andrew. Thank you, Samir, and welcome, everyone.

Speaker Change: Please refer to our SEC filings for discussion of the risks and uncertainties that may affect our future results.

Unknown Executive: I'd like to remind everyone that we will discuss certain non-GAAP financial measures during this call. These measures should not be considered as a substitute for financial results prepared in accordance with GAAP.

Speaker Change: I'd like to remind everyone that we will discuss certain non-GAAP financial measures during this call. These measures should not be considered as a substitute for financial results prepared in accordance with GAAP.

Unknown Executive: Our results are prepared in accordance with GAAP, and a reconciliation to comparable GAAP measures will be provided in our second quarter earnings release and in our FCC violence.

Speaker Change: Our results are prepared in accordance with GAAP and a reconciliation to comparable GAAP measures will be provided in our second quarter earnings release and in our SEC filings.

Unknown Executive: With that, I'll pass the call to Andrew.

Andrew Pascal: Thank you, Samir, and welcome, everyone, to our second quarter 2024 earnings call. As always, our commentary today is in addition to the financial disclosures we made in our press release. I encourage you to take a look at the release for a summary of our recent performance. We were very active this quarter, completing many of the strategic initiatives we've been discussing for some time. As such, I'd like to use my time today to discuss these efforts in greater detail and let Scott follow with a summary of the quarter and our 2024 outcome. I'd like to start by offering some general observations and thoughts.

Andrew Pascal: Thank you, Samir, and welcome everyone to our second quarter 2024 earnings call. As always, our commentary today is in addition to the financial disclosures we've made in our press release. I encourage you to take a look at the release for a summary of our recent performance. We were very active this quarter, completing many of the strategic initiatives we've been discussing for some time. As such, I'd like to use my time today to discuss these efforts in greater detail when Scott followed with a summary of the quarter in our 2024 outlook. I'd like to start by offering some general observations and thoughts.

Speaker Change: With that, I'll pass the call to Andrew.

Andrew Pascal: Thank you, Samir, and welcome, everyone, to our second quarter 2024 earnings call. As always, our commentary today is in addition to the financial disclosures we made in our press release. I encourage you to take a look at the release for a summary of our recent performance.

Andrew Pascal: We were very active this quarter, completing many of the strategic initiatives we've been discussing for some time. As such, I'd like to use my time today to discuss these efforts in greater detail and let Scott follow with a summary of the quarter and our 2024 outlook.

Andrew Pascal: This call marks our three-year anniversary since becoming a public company. When we made the transition, we shared our vision and plans for our future. We described our intentions to explain our portfolio of games, scale our collection of players, and rich and more fully-loved our loyalty program, and diversified our business. us. While our path to achieving these goals has been a bit different than originally imagined, we stand here today having made meaningful progress. From 2021 to 2023, please consider. We've expanded our game portfolio from force-social casino apps to a collection of 20 games across most of the popular casual categories.

Speaker Change: I'd like to start by offering some general observations and thoughts.

Andrew Pascal: This call marks our three-year anniversary since becoming a public company. When we made the transition, we shared our vision and plans for our future. We described our intention to expand our portfolio of games, scale our collection of players, enrich and more fully leverage our loyalty program, and diversify who our business partners are. While our path to achieving these goals has been a bit different than originally imagined, we stand here today having made meaningful progress from 2021 to 2023. Please consider.

Speaker Change: This call marks our three-year anniversary since becoming a public company.

Speaker Change: When we made the transition, we shared our vision and plans for our future. We described our intention to expand our portfolio of games, scale our collection of players, enrich and more fully leverage our loyalty program, and diversify our business.

Speaker Change: While our path to achieving these goals has been a bit different than originally imagined, we stand here today having made meaningful progress.

Speaker Change: From 2021 to 2023, please consider, we've expanded our game portfolio from four social casino apps to a collection of 20 games across most of the popular casual categories.

Andrew Pascal: We've expanded our game portfolio from four social casino apps to a collection of 20 games across most of the popular casual categories. Among them is the beloved Tetris franchise, a game we acquired along with the exclusive mobile rights for up to eight more years. We've increased our daily active players, or DAU, nearly 230% from 1.5 million to 3.4 million players. We've unified our MyVIP loyalty program across our primary apps and, since the program's inception, extended nearly 900 million of real-world benefits to our players across a collection of nearly 600 unique rewards. We scaled revenues 8% from $287 million to $311 million.

Andrew Pascal: Among them is the beloved Tetris franchise. A game we acquire along with the exclusive mobile rights for up to eight more years. We've increased our daily active players, or DAU, nearly 230% from 1.5 million to 3.4 million players. We've unified our My VIP loyalty program across our primary apps. And since the program's inception, extended nearly 900 million of real-world benefits to our players across a collection of nearly 600 unique rewards. We scaled revenues 8% from 287 million to 311 million. More importantly, we diversified our mix of business, with add-on games now accounting for roughly 19% of our revenues and direct off-platform purchases accounting for nearly 4% of our current sales.

Speaker Change: Among them is the beloved Tetris franchise, a game we acquired along with the exclusive mobile rights for up to eight more years.

Speaker Change: We've increased our daily active players, or DAU, nearly 230%, from 1.5 million to 3.4 million players.

Speaker Change: We've unified our MyVIP loyalty program across our primary apps. And since the program's inception, extended nearly 900 million of real-world benefits to our players across a collection of nearly 600 unique rewards.

Speaker Change: We scaled revenues 8% from $287 million to $311 million. More importantly, we diversified our mix of business, with AdMob games now accounting for roughly 19% of our revenues, and direct off-platform purchases accounting for nearly 4% of our current sales.

Andrew Pascal: More importantly, we diversified our mix of business with AdMob Gains now accounting for roughly 19% of our revenues and direct off-platform purchases accounting for nearly 4% of our current sales. And we've increased the adjusted EPCOT margins by 620 basis points, resulting in adjusted epitaph growing from 39.5 million to 62.3 million, or nearly 60%. I should note that we accomplish these things while contending with the structural challenges with user acquisition brought on by Apple and Google's changes to their data privacy and advertising practices.

Andrew Pascal: And we've increased the adjusted EBITDA margins by 620 basis points, resulting in adjusted EBITDA growing from 39.5 million to 62.3 million, or nearly 60%. I should note that we accomplished these things while contending with the structural challenges with user acquisition brought on by Apple and Google's changes to the data privacy and advertising practices. The secular contraction within our primary social casino game genre increased competition for game assets among companies looking to grow inorganically and attain to being a destack public company. These dynamics, along with our lack of trading volume, have continued to put downward pressure on our stock price.

Speaker Change: And we've increased adjusted EPITDAH margins by 620 basis points, resulting in adjusted EPITDAH growing from 39.5 million to 62.3 million, or nearly 60%.

Speaker Change: I should note that we accomplished these things while contending with the structural challenges with user acquisition brought on by Apple and Google's changes to their data privacy and advertising practices.

Andrew Pascal: The secular contraction within our primary social casino game genre, increased competition for game assets among companies looking to grow inorganically, and the taint of being a de-SPAC public company these dynamics, along with our lack of trading volume, continue to put downward pressure on our stock price. In response, we've been opportunistic and repurchased nearly 15% of the company's Class A common stock while maintaining a solid balance sheet with over $100 million in cash, no debt, and over $80 million in borrowing capacity.

Speaker Change: the secular contraction within our primary social casino game genre, increased competition for game assets among companies looking to grow inorganically, and the taint of being a de-SPAC public company.

Speaker Change: These dynamics, along with our lack of trading volume, continue to put downward pressure on our stock price.

Andrew Pascal: In response, we've been opportunistic and repurchased nearly 15% of the company's classic common stock by maintaining a solid balance sheet with over 100 million cash, no debt, and over 80 million borrowing capacity.

Speaker Change: In response, we've been opportunistic and repurchased nearly 15% of the company's Class A common stock while maintaining a solid balance sheet with over $100 million in cash, no debt, and over $80 million in borrowing capacity.

Andrew Pascal: I offered these reflections to set some contacts for our current performance outlook. We're stronger, bigger, more diversified, and more profitable today than when we went public just three years ago. I assure you, we remain focused on continuing to strengthen our company for the long term, and we'll continue to make decisions that we believe will better position us for the future.

Andrew Pascal: I offer these reflections to set some context for our current performance and outlook. We're stronger, bigger, more diversified, and more profitable today than when we went public just three years ago. I assure you that we remain focused on continuing to strengthen our company for the long term, and we'll continue to make decisions that we believe will better position us for the future. With that said, let's narrow our focus and discuss the key events from this past quarter.

Speaker Change: I offer these reflections to set some context for our current performance and outlook.

Speaker Change: We're stronger, bigger, more diversified, and more profitable today than when we went public just three years ago. I assure you, we remain focused on continuing to strengthen our company for the long term, and we'll continue to make decisions that we believe will better position us for the future.

Andrew Pascal: With that said, let's narrow our focus and discuss the key events from this past quarter. Let's start with our Play Games division and Tetris. The iconic brand had its 40th anniversary in June, and we celebrated with two major initiatives: the Refresh of Tetris Prime and the initial limited release of the brand new game, Tetris Block Puzzle. The Refresh of our Tetris Prime product enhances the look and feel of the existing game and aligns it to be more consistent with the rest of our portfolio. The game's new contemporary feel includes a new animation, sound effects, and a choice between the Classic Marathon mode and a new faster-paced adventure mode with additional levels.

Speaker Change: With that said, let's narrow our focus and discuss the key events from this past quarter.

Andrew Pascal: Let's start with our Play Games division and Tetris. The iconic brand had its 40th anniversary in June, and we celebrated with two major initiatives, the refresh of Tetris Prime and the initial limited release of the brand new game, Tetris Block Puzzle. The refresh of our Tetris Prime product enhances the look and feel of the existing game and aligns it to be more consistent with the rest of our portfolio. The game's new contemporary feel includes new animation, sound effects, and a choice between the classic marathon mode and a new, faster-paced adventure mode with additional levels.

Speaker Change: Let's start with our Play Games division and Tetris.

Speaker Change: The ICONIC brand had its 40th anniversary in June and we celebrated with two major initiatives.

Speaker Change: the refresh of Tetris Prime, and the initial limited release of the brand new game, Tetris Block Puzzle.

Speaker Change: The refresh of our Tetris Prime product enhances the look and feel of the existing game, and aligns it to be more consistent with the rest of our portfolio.

Speaker Change: The game's new contemporary feel includes new animation, sound effects, and a choice between the classic marathon mode and a new, faster-paced adventure mode with additional levels.

Andrew Pascal: Player feedback has been positive, and we're optimistic the changes will further increase interest in the game. The launch of Tetris Block Puzzle represents our first extension of the Tetris franchise in the beginnings of our long-term ambition to establish it as a premier mobile gaming franchise. The game combines the popular Block Puzzle format with Tetris' incredible players can choose between Adventure Mode, which offers level-based progression, and high score mode, which challenges players to surpass their previous best scores. Games now available globally, and we're actively testing and optimizing our user acquisition strategies in anticipation of a full-scale, promoted launch in the coming months.

Andrew Pascal: Player feedback has been positive, and we're optimistic the changes will further increase interest in the game. The launch of Tetris Block Puzzle represents our first extension of the Tetris franchise and the beginning of our long-term ambition to establish it as a premier mobile gaming franchise. The game combines the popular block puzzle format with Tetris' incredible brand recognition. Players can choose between adventure mode, which offers level-based progression, and high score mode, which challenges players to surpass their previous best score.

Speaker Change: Player feedback has been positive, and we're optimistic the changes will further increase interest in the game.

Speaker Change: The launch of Tetris Block Puzzle represents our first extension of the Tetris franchise and the beginnings of our long-term ambition to establish it as a premier mobile gaming franchise.

Speaker Change: The game combines the popular block puzzle format with Tetris's incredible brand recognition.

Speaker Change: Players can choose between adventure mode, which offers level-based progression, and high score mode, which challenges players to surpass their previous best scores.

Andrew Pascal: The game is now available globally, and we're actively testing and optimizing our user acquisition strategies in anticipation of a full-scale promoted launch in the coming months. I want to remind everyone that, like any new game, the outcome and ultimate success are indeterminate. However, early game metrics show promise, and player feedback has been positive. In addition to our Block Puzzle app, we're working on other new Tetris games and are hopeful that the third game in the franchise will be released later this year or early 2025.

Speaker Change: The game is now available globally, and we're actively testing and optimizing our user acquisition strategies in anticipation of a full-scale promoted launch in the coming months.

Andrew Pascal: I want to remind everyone that, like any new game, the outcome and ultimate success are indeterminate. However, early game metrics show promise, and player feedback has been positive. In addition to our block puzzle app, we're working on other new Tetris games and are hopeful that the third game in the franchise will be released later this year or early in 2025. A recent acquisition of Pixel allows us to combine the innovative execution of their highly engaging block puzzle game with the strength of the Tetris brand. Much like the super-scaled games such as Coin Master and the Napoli Go, Pixel combines the proven rating defend the mechanic with the popular block puzzle game format.

Speaker Change: I want to remind everyone that like any new game, the outcome and ultimate success is indeterminate. However, early game metrics show promise and player feedback has been positive.

Speaker Change: In addition to our Block Puzzle app, we're working on other new Tetris games and are hopeful that the third game in the franchise will be released later this year or early in 2025.

Andrew Pascal: A recent acquisition of Pixode allows us to combine the innovative execution of their highly engaging block puzzle game with the strength of the Tetris brand. Much like superscaled games such as Coin Master and Monopoly Go, Pixode combines the proven Raid and Defend mechanic with the popular block puzzle game format.

Speaker Change: A recent acquisition of Pixode allows us to combine the innovative execution of their highly engaging block puzzle game with the strength of the Tetris brand. Much like the super-scaled games such as Coin Master and Monopoly Go, Pixode combines the proven raid and defend mechanic with the popular block puzzle game format.

Andrew Pascal: We believe thoughtfully applying the Tetris brand to this game could substantially upend the category and drive meaningful lockdown. As evidenced by the modest upfront cash payment of under $5 million, this is an early-stage company and there is much work to be done to produce an engaging and scalable product. However, we're excited about this opportunity and believe the founders and talented Pixel will prove to be an incredible asset for our company.

Andrew Pascal: We believe thoughtfully applying the Tetris brand to this game could substantially upend the category and drive meaningful art out. As evidenced by the modest upfront cash payment of under $5 million, this is an early stage company, and there is much work to be done to produce an engaging and scalable product. However, we're excited about this opportunity and believe the founders and talent at PIXO will prove to be an incredible asset to our community.

Speaker Change: We believe thoughtfully applying the Tetris brand to this game could substantially upend the category and drive meaningful art down.

Speaker Change: As evidenced by the modest upfront cash payment of under $5 million, this is an early stage company and there is much work to be done to produce an engaging and scalable product. However, we're excited about this opportunity and believe the founders and talented PIXO will prove to be an incredible asset for our company.

Andrew Pascal: Beyond these recent accomplishments, we continue to work on our ongoing initiatives to strengthen our game portfolio and position us for growth. We include improving the monetization trends in my Vegas and my economy, growing profits in Brainiam, expanding our mix of direct off-platform business, and the adoption-remove merchandising of my VIP and all of our primary titles. I'm pleased with the progress we made this quarter and wanted to share some highlights. My Vegas and my economy of both showing increases in lockdown in the percentage of paying users. As popular games with a significant base of daily and monthly players, the primary opportunity is to more effectively convert and monetize them.

Andrew Pascal: Beyond these recent accomplishments, we continue to work on our ongoing initiatives to strengthen our game portfolio and position us for growth. These include improving the monetization trends in MyVegas and MyKonami, growing profits in Brainium, expanding our mix of direct off-platform business, and the adoption of renewed merchandising of MyVIP in all of our primary titles. We are pleased with the progress we made this quarter and wanted to share some highlights. MyVegas and MyKonami are both showing increases in up-down and the percentage of paying users.

Speaker Change: Beyond these recent accomplishments, we continue to work on our ongoing initiatives to strengthen our game portfolio and position us for growth.

Speaker Change: These include improving the monetization trends in MyVegas and MyKonami, growing profits in Brainium, expanding our mix of direct off-platform business, and the adoption of renewed merchandising of MyVIP in all of our primary titles.

Speaker Change: I'm pleased with the progress we made this quarter and wanted to share some highlights.

Speaker Change: MyVegas and MyKonami are both showing increases in up-down and the percentage of paying users. As popular games with a significant base of daily and monthly players, the primary opportunity is to more effectively convert and monetize them.

Andrew Pascal: As popular games with a significant base of daily and monthly players, the primary opportunity is to more effectively convert and monetize. The rise in the percentage of paying users suggests this is happening, which is very encouraging. Brainy was also seeing an increase in opt-out rates driven largely by new advertising formats.

Andrew Pascal: The rise in percentage of paying users suggests this is happening, which is very encouraging. Brainiam is also seeing an increased knockdown driven largely by new advertising formats. This was part of our thesis when we acquired the company at the end of 2022. As we believe the games were not monetizing at optimal rates. Our direct business has been steadily increasing through the year and was roughly 4.5% of total revenues as quarter. Our goal remains to continue to increase our direct business by leveraging our loyalty model to incentivize off-platform purchases. Finally, on my VIP adoption, we made significant progress this quarter and expect a full refresh of our my VIP branding and functionality to be completed by year end.

Speaker Change: The rise in percentage of paying users suggests this is happening, which is very encouraging.

Speaker Change: Brainy was also seeing an increase in opt-out driven largely by new advertising formats. This was part of our thesis when we acquired the company at the end of 2022, as we believed the games were not monetizing at optimal rates.

Andrew Pascal: This was part of our thesis when we acquired the company at the end of 2022, as we believed the games were not monetizing at optimal rates. Our direct business has been steadily increasing through the year and was roughly four and a half percent of total revenues this quarter. Our goal remains to continue to increase our direct business by leveraging our loyalty model to incentivize all platform purchases. Finally, on MyVIP adoption, we've made significant progress this quarter and expect a full refresh of our MyVIP branding and functionality to be completed by year-end.

Speaker Change: Our direct business has been steadily increasing through the year and was roughly 4.5% of total revenues this quarter. Our goal remains to continue to increase our direct business by leveraging our loyalty model to incentivize off-platform purchases.

Speaker Change: Finally, on myVIP adoption, we made significant progress this quarter and expect a full refresh of myVIP branding and functionality to be completed by year end.

Andrew Pascal: Collectively, with these key initiatives in our plans going forward, we will remain keenly focused on expanding our audience, scaling revenues, improving margins, and driving higher profits.

Andrew Pascal: Collectively, with these key initiatives and our plans going forward, we'll remain keenly focused on expanding our audience, scaling revenues, improving margins, and driving higher profit. Now, let's shift our focus and share some highlights within our Play Awards Division.

Speaker Change: Collectively, with these key initiatives and our plans going forward, we remain keenly focused on expanding our audience, scaling revenues, improving margins, and driving higher profits.

Andrew Pascal: Let's shift our focus and share some highlights within our Play Awards division. We kicked off a key strategic initiative this quarter with the launch of our My VIP World Tournament and Sloss. This campaign embodies the unique position of our company, allowing us to integrate in-game features and content with real-world events and value in parallel ways. The inaugural tournament will be hosted by the Atlantis Paradise Island in the Bahamas and will take place October 24th through 27th. 500 dedicated players will be competing for a top cash prize of $1 million and the title of World's Greatest Law Player.

Speaker Change: Let's shift our focus and share some highlights within our Play Awards division. We kicked off a key strategic initiative this quarter with the launch of our MyVIP World Tournament of Slots.

Andrew Pascal: We kicked off a key strategic initiative this quarter with the launch of our MyVIP World Tournament in Sloch. This campaign embodies the unique position of our company, allowing us to integrate in-game features and content with real-world events and value in unparalleled ways. The inaugural tournament will be hosted by Atlantis Paradise Island in the Bahamas and will take place October 24th through 27th.

Speaker Change: This campaign embodies the unique position of our company, allowing us to integrate in-game features and content with real-world events and value in unparalleled ways. The inaugural tournament will be hosted by the Atlantis Paradise Island in the Bahamas and will take place October 24th through 27th.

Andrew Pascal: 500 dedicated players will be competing for a top cash prize of one million dollars and the title of world's greatest slot player. We're already seeing a buzz building across our games as players vie for one of the coveted tickets to the tournament. We expect the tournament to drive an increase in player engagement and increase the brand awareness of our game. It'll also continue the momentum we're seeing in our MyVIP program by bringing more attention to this industry-leading platform. We continue to work on advancing MyVIP's technologies and adding new players and rewards partners to this ecosystem. This quarter, we added numerous brands such as Sono, Six Flags, Regal Cinemas, and the Disneyland Resort.

Speaker Change: 500 dedicated players will be competing for a top cash prize of $1 million and the title of world's greatest slot player.

Andrew Pascal: We are already seeing a buzz building across our games as players buy for one of the coveted tickets to the tournament. We expect the tournament to drive an increase in player engagement and increase the brand awareness of our games. It will also continue the momentum we're seeing in our MIBIP program by bringing more attention to this industry-leading platform. We continue to work on advancing MIBIP's technologies and adding new players and rewards partners to the ecosystem. This quarter, we added numerous brands such as Sonos, Six Flags, Regal Cinemas, and the Disneyland Resort. We now have 131 rewards partners that offer over 160 million in retail rewards during the quarter.

Speaker Change: We're already seeing a buzz building across our games as players vie for one of the coveted tickets to the tournament.

Speaker Change: We expect the tournament to drive an increase in player engagement and increase the brand awareness of our games. It'll also continue the momentum we're seeing in our MyVIP program by bringing more attention to this industry-leading platform.

Speaker Change: We continue to work on advancing MyVIP's technologies and adding new players and rewards partners to this ecosystem. This quarter we added numerous brands such as Sono, Six Flags, Regal Cinemas, and the Disneyland Resort.

Andrew Pascal: We now have 131 rewards partners that offered over 160 million in retail rewards during the quarter. No other gaming publisher offers anything close to our collection of benefits, which we believe is a significant competitive advantage for our company. Before I turn the call over to Scott, I'd like to touch on a few other general topics.

Speaker Change: We now have 131 rewards partners that offered over $160 million in retail rewards during the quarter. No other gaming publisher offers anything close to our collection of benefits, which we believe to be a significant competitive advantage for our company.

Andrew Pascal: No other gaming publisher are presenting in close to our collection of benefits, which we really need to be a significant competitive advantage for our company.

Andrew Pascal: Before I turn the call over to Scott, I'd like to touch on a few other general topics. On the M&A front, we continue to aggressively seek and qualify additional opportunities. Our goal remains to find large transformative acquisitions that can increase the scope and reach of our business. These opportunities are limited and difficult to execute, but we remain diligent in their pursuit. As PICSO demonstrates, the search for these acquisitions does not disqualify smaller opportunities that we believe can be added to our business. Beyond M&A, we remain committed to using our capital to support the organic growth of our core businesses, in addition to repurchasing our stock.

Speaker Change: Before I turn the call over to Scott, I'd like to touch on a few other general topics.

Andrew Pascal: On the M&A front, we continue to aggressively seek and qualify additional opportunities. Our goal remains to find large transformative acquisitions that can increase the scope and reach of our business. These opportunities are limited and difficult to execute, but we remain diligent in their pursuit.

Scott Peterson: On the M&A front, we continue to aggressively seek and qualify additional opportunities.

Scott Peterson: Our goal remains to find large, transformative acquisitions that can increase the scope and reach of our business.

Scott Peterson: These opportunities are limited and difficult to execute, but we remain diligent in their pursuit. As PIXO demonstrates, the search for these acquisitions does not disqualify smaller opportunities that we believe can be added to our business.

Andrew Pascal: As PIXO demonstrates, the search for these acquisitions does not disqualify smaller opportunities that we believe can be added to our business. Beyond M&A, we remain committed to using our capital to support the organic growth of our core businesses, in addition to repurchasing our stock. On the latter, I was pleased we were able to execute the purchase of Microsoft's interest in 11.7 million shares in the quarter. The purchase was done at a meaningful discount to the average trading price of our shares and removed the potential overhang of a prolonged disposition by Microsoft in the secondary market.

Scott Peterson: Beyond M&A, we remain committed to using our capital to support the organic growth of our core businesses in addition to repurchasing our stock. On the latter, I was pleased we were able to execute the purchase of Microsoft's interest of 11.7 million shares in the quarter.

Andrew Pascal: On the latter, I was pleased we were able to execute the purchase of Microsoft's interest of 11.7 million shares in the quarter. The purchase was done at a meaningful discount to the average trading price of our shares and removed the potential overhang of a prolonged disposition by Microsoft in the secondary markets. Despite the continuing pressure on our stock price, we believe the intrinsic value of our company is well above where it's been marked by the public markets today. We have 46 million remaining on our sharey purchase authorization and will continue to evaluate opportunities to acquire our stock.

Scott Peterson: The purchase was done at a meaningful discount to the average trading price of our shares, and removed the potential overhang of a prolonged disposition by Microsoft in the secondary markets.

Andrew Pascal: Despite the continuing pressure on our stock price, we believe the intrinsic value of our company is well above where it's been valued by the public markets today. We have 46 million remaining on our share repurchase authorization, and we'll continue to evaluate opportunities to acquire our stock. So those are some of the more noteworthy highlights. I'll now turn the call over to Scott to discuss the quarterly results and our outlook for the year. Scott.

Scott Peterson: Despite the continuing pressure on our stock price, we believe the intrinsic value of our company is well above where it's been marked by the public markets today. We have $46 million remaining on our share repurchase authorization, and we'll continue to evaluate opportunities to acquire our stock.

Unknown Executive: So those are some of the more noteworthy highlights.

Scott Peterson: I'll now turn the call over to Scott to discuss the quarterly results and our outlook for the year.

Scott Peterson: So those are some of the more noteworthy highlights. I'll now turn the call over to Scott to discuss the quarterly results and our outlook for the year.

Scott Peterson: Scott? Thank you, Andrew. In addition to today's press release, our Form 10-Q will be filed shortly. Please look at those filings for a comprehensive summary of our second quarter results. Net revenues in the quarter were 72.6 million, a 7% decrease versus a year ago. We could results were driven by softness in our social casino portfolio, which continues to be negatively impacted by an industry-wide slowdown. We continue to expect this category to remain challenged throughout the year.

Scott Peterson: Thank you, Andrew. In addition to today's press release, our Form 10-Q will be filed shortly. Please look to those filings for a comprehensive summary of our second quarter results. Net revenues in the quarter were $72.6 million, a 7% decrease versus a year ago.

Scott Peterson: Thank you, Andrew. In addition to today's press release, our Form 10-Q will be filed shortly. Please look to those filings for a comprehensive summary of our second quarter results.

Scott Peterson: Net revenues in the quarter were $72.6 million, a 7% decrease versus a year ago. Weaker results were driven by softness in our social casino portfolio, which continues to be negatively impacted by an industry-wide slowdown.

Scott Peterson: Weaker results were driven by softness in our social casino portfolio, which continues to be negatively impacted by an industry-wide slowdown. We continue to expect this category to remain challenged throughout the year. As discussed in past calls, our focus remains on the opportunities unique to our games, and we believe that progress there can drive growth despite a challenging backdrop. Our casual portfolio continues to perform strongly, with notable strength at Brainium. Andrew discussed some of the other drivers, and I will reiterate that we expect the continued scaling of advertising and the full adoption of loyalty to support ongoing momentum. Likewise, Tetris Prime continues to grow, and our hope is that the addition of Tetris Block Puzzle will drive even more interest in the franchise.

Scott Peterson: We continue to expect this category to remain challenged throughout the year.

Scott Peterson: As discussed in past calls, our focus remains on the opportunity to be unique to our games, and we believe that progress there can drive growth despite a challenging backdrop. Our casual portfolio continues to plunge strongly, with notable strength of Brainiens. Andrew discussed some of the other drivers, and I will reiterate that we expect to continue scaling of advertising and a full adoption of loyalty to support ongoing momentum. Likewise, Tetris Prime continues to grow, and our hope is that the addition of Tetris block puzzle will drive even more interest in the franchise. The second quarter consolidated to just the EBITDA was $14.1 million, compared to $16.3 million a year ago.

Scott Peterson: As discussed in past calls, our focus remains on the opportunities unique to our games, and we believe that progress there can drive growth despite a challenging backdrop.

Scott Peterson: Our casual portfolio continues to perform strongly with notable strength at Brainium.

Scott Peterson: Andrew discussed some of the other drivers, and I will reiterate that we expect the continued scaling of advertising and the full adoption of loyalty to support ongoing momentum.

Andrew Pascal: Likewise, Tetris Prime continues to grow and our hope is that the addition of Tetris Block Puzzle will drive even more interest in the franchise.

Scott Peterson: Second quarter consolidated adjusted EBITDA was $14.1 million, compared to $16.3 million a year ago. As would be expected with a decline in revenue, we also experienced a decline in operating margins as the impact of our fixed costs was accentuated. We believe that our revenue will strengthen in the future, and as it does, we expect margins to return to their recent level. In the longer term, we still believe our business can reach margin parity with our peers.

Speaker Change: Second quarter consolidated adjusted EBITDA was $14.1 million compared to $16.3 million a year ago.

Scott Peterson: As we'd be expected with a decline in revenue, we also experienced a decline in operating margins as the impact of our fixed costs were accentuated. We believe that our revenue will strengthen in the future, and as it does, we expect margins to return to their recent levels. Longer term, we still believe our business can reach margin parity with our peers.

Speaker Change: As would be expected with a decline in revenue, we also experienced a decline in operating margins as the impact of our fixed costs were accentuated.

Speaker Change: We believe that our revenue will strengthen in the future, and as it does, we expect margins to return to their recent levels.

Speaker Change: Longer term, we still believe our business can reach margin parity with our peers.

Scott Peterson: The second quarter also marked the last period in 24 where we will compare against the previously disclosed non-recurring licensing agreement. That agreement added nearly $2 million to our revenue in the second quarter of '23, most of which flow directly to adjusted EBITDA. DAU was $3.2 million, and MAU was $13.6 million, down 12% and 2% respectively for last year. DAU declines were driven by social casino and premium, continuing the first quarter trends. Tetris continued to see a pickup in users, though the growth was moderated from the first quarter when increased peak due to Willis Gibson beating the game.

Scott Peterson: The second quarter also marked the last period in 24 where we will compare against the previously disclosed non-recurring licensing. That agreement added nearly $2 million to our revenue in the second quarter of 23, most of which flowed directly to adjusted EBITDA. DAU was $3.2 million, and MAU was $13.6 million, down 12% and 2%, respectively, from last year. DAU declines were driven by social casino and Brainium, continuing the first quarter trend.

Speaker Change: The second quarter also marked the last period in 24 where we will compare against the previously disclosed non-recurring licensing agreement.

Speaker Change: That agreement added nearly $2 million to our revenue in the second quarter of 2023, most of which flowed directly to adjusted EBITDA.

Speaker Change: DAU was $3.2 million and MAU was $13.6 million, down 12% and 2% respectively from last year.

Speaker Change: DAU declines were driven by social casino and Brainium, continuing the first quarter trends.

Scott Peterson: Tetris continued to see a pickup in users, though the growth was moderated from the first quarter when interest peaked due to Willis Gibson beating the game. ARPDAU for the first quarter was $0.25, up 9% from year-ago results. Similar to the first quarter, we saw double-digit ARPDAU gains in MyVegas, MyKonami, and Brainiac.

Speaker Change: Tetris continued to see a pickup in users, though the growth was moderated from the first quarter when interest peaked due to Willis Gibson beating the game.

Scott Peterson: Arctow for the first quarter was $0.25, up 9% from year-ago results. Similar to the first quarter, we saw double-digit Arctow games in my Vegas, my Konami, and Braini. We've been working on specific monetization initiatives in these games, so the results are very encouraging. We are still implementing changes and believe further gains are possible.

Speaker Change: ARPDAU for the first quarter was $0.25, up 9% from year-ago results.

Speaker Change: Similar to the first quarter, we saw double-digit ARPDAU gains in MyVegas, MyKonami, and Brainiac.

Scott Peterson: We've been working on specific monetization initiatives in these games, so the results are very encouraging. We are still implementing changes, and believe further gains are possible. Turning to Play Awards, we continue to make progress expanding the functionality and scope of the platform. We closed the quarter with 570 available and 131 reward partners. Partners added this quarter include the Disneyland Resort, Regal Cinemas, Sonos, and Six Flags. Additionally, over 500,000 rewards were purchased during the quarter, a 12% increase from a year ago.

Speaker Change: We've been working on specific monetization initiatives in these games, so the results are very encouraging. We are still implementing changes and believe further gains are possible.

Scott Peterson: Turning to play awards, we continue to make progress expanding the functionality and scope of the platform. We closed the quarter with 570 available rewards and 131 reward partners. Partners out of this quarter include the digital and resort, Regal Cinemas, Sonos and Six Flags. Over 500,000 rewards were purchased during the quarter, a 12% increase from a year ago. We remain focused on the full integration of play awards in my BIP and continue to seek out opportunities to monetize the platform.

Speaker Change: Turning to Play Awards, we continue to make progress expanding the functionality and scope of the platform.

Speaker Change: We close the quarter with 570 available rewards and 131 reward partners.

Speaker Change: Partners added this quarter include the Disneyland Resort, Regal Cinemas, Sonos, and Six Flags.

Speaker Change: Over 500,000 rewards were purchased during the quarter, a 12% increase from a year ago. We remain focused on the full integration of play awards in MyVIP and continue to seek out opportunities to monetize the platform.

Scott Peterson: We remain focused on the full integration of play awards in MyVIP and continue to seek out opportunities to monetize the platform. We ended the quarter with approximately $106 million in cash, no borrowings, and full availability of our $81 million repower. As Andrew mentioned, we purchased nearly 9% of our Class A shares from Microsoft, accounting for the majority of the sequential decline in our cash balance.

Scott Peterson: We ended the quarter with approximately 106 million cash, no borrowings, and full availability of our $81 million repulver. As Andrew mentioned, we purchased nearly 9% of our Class A shares from Microsoft, accounting for the majority of the sequential decline in our cash balance. Our share repurchase authorization stands at 46 million, and we continue to view share buybacks as an accretive and compelling use of our capital. Similarly, our broader capital allocation goals remain the same: investing in our games, building and scaling play awards, and the pursuit of strategic and accretive M&A.

Speaker Change: We ended the quarter with approximately $106 million in cash, no borrowings, and full availability of our $81 million recall work.

Speaker Change: As Andrew mentioned, we purchased nearly 9% of our Class A shares from Microsoft, accounting for the majority of the sequential decline in our cash balance.

Scott Peterson: Our share repurchase authorization stands at $46 million, and we continue to view share buybacks as an accretive and compelling use of our capital. Similarly, our broader capital allocation goals remain the same, investing in our games, building and scaling play awards, and the pursuit of strategic and accretive M&A. Lastly, our 2024 Outlook. Given the weakness in the broader social casino category in the first six months and our expectations for continued softness throughout the year, we are revising our 2024 guidance.

Speaker Change: Our share repurchase authorization stands at $46 million and we continue to view share buybacks as an accretive and compelling use of our capital.

Speaker Change: Similarly, our broader capital allocation goals remain the same, investing in our games, building and scaling play awards, and the pursuit of strategic and accretive M&A.

Scott Peterson: Lastly, our 2024 outlook. Given the weakness in the broader social casino category in the first six months and our expectations for continued softness throughout the year, we are revising our 2024 guidance. We now project revenue will be between 285 and 295 million, and consolidated adjusted EBITDA will be between 55 and 60 million. These compared to our prior forecast of between 315 and 325 million revenue and between 65 and 70 million of consolidated adjusted EBITDA.

Speaker Change: Lastly, our 2024 Outlook.

Speaker Change: Given the weakness in the broader social casino category in the first six months and our expectations for continued softness throughout the year, we are revising our 2024 guidance. We now project revenue will be between $285 and $295 million.

Scott Peterson: We now project revenue will be between $285 and $295 million, and Consolidated Adjusted EBITDA will be between $55 and $60 million. These compare to our prior forecast of between $315 and $325 million in revenue and between $65 and $70 million of consolidated adjusted EBIT. I will now turn the call back to Andrew for some closing remarks. Thank you, Scott.

Speaker Change: and Consolidated Adjusted EBITDA will be between $55 and $60 million. These compare to our prior forecast of between $315 and $325 million in revenue and between $65 and $70 million of Consolidated Adjusted EBITDA.

Andrew Pascal: I will now turn the call back to Andrew for some closing remarks.

Speaker Change: I will now turn the call back to Andrew for some closing remarks.

Andrew Pascal: Thank you, Scott. Despite the secular challenges in the social casino, I've been bullish on our business. And a little over a year, we've grown our mix of casual revenues from virtually zero to over 20 percent. We've expanded our justity, the Dow margins by over 600 basis points since 21 and raises justity, the Dow by close to 60 percent. We've secured the mobile license for the highly valuable Tetris brand for the next eight years and have already launched a Tetris game. We're hard at work developing new titles and making Tetris a multi-game franchise. With the purchase of our shares owned by Microsoft, we've bought back approximately 10% of our outstanding class they come and stock this year in close to 15% since we initiated our current program in November of 2022.

Andrew Pascal: Despite the secular challenges in the social casino, I remain bullish on our business. And in a little over a year, we've grown our mix of casual revenues from virtually zero to over 20%. We've expanded our adjusted EBITDA margins by over 600 basis points since 21, and we've raised adjusted EBITDA by close to 60%. We've secured the mobile license for the highly valuable Tetris brand for the next eight years and have already launched a new Tetris game.

Andrew Pascal: Thank you, Scott.

Andrew Pascal: Despite these secular challenges in the social casino, I remain bullish on our business.

Speaker Change: In a little over a year, we've grown our mix of cash flow revenues from virtually zero to over 20%. We've expanded our adjusted EBITDA margins by over 600 basis points since 21, and raised adjusted EBITDA by close to 60%.

Speaker Change: We secured the mobile license for the highly valuable Tetris brand for the next eight years and have already launched a new Tetris game. We're hard at work developing new titles and making Tetris a multi-game franchise.

Andrew Pascal: We're hard at work developing new titles and making Tetris a multi-game franchise. With the purchase of our shares owned by Microsoft, we've bought back approximately 10% of our outstanding Class A common stock this year and close to 15% since we initiated our current program in November of 2022. Our balance sheet remains pristine with no leverage and close to $1 in cash per share.

Speaker Change: With the purchase of our shares owned by Microsoft, we've bought back approximately 10% of our outstanding Class A common stock this year, and close to 15% since we initiated our current program in November of 2022.

Andrew Pascal: A balance sheet remains pristine with no leverage and close to a dollar and cash per share.

Speaker Change: Our balance sheet remains pristine with no leverage and close to a dollar in cash per share.

Andrew Pascal: While these accomplishments are absent from our share price, we remain committed to increasing the intrinsic value of the company and believe our stock price will ultimately reflect its true value. Lastly, I want to thank our talented teams across the globe who remain so committed to our company, our players, and our products. It's their passion and dedication that enables us to continue to move forward and further position the company for future success. Operator, please open the lines for questions. Thank you. And at this time, we'll conduct our.

Andrew Pascal: Well, these accomplishments are absent in our share price. We remain committed to increasing the intrinsic value of the company and believe our stock price will ultimately reflect its true value.

Speaker Change: While these accomplishments are absent in our share price, we remain committed to increasing the intrinsic value of the company and believe our stock price will ultimately reflect its true value.

Andrew Pascal: Lastly, I want to thank our talent to teams across the globe that remain so committed to our company, our players, and our products. It's their passion and dedication that enables us to continue to move forward and further position the company for future success.

Speaker Change: Lastly, I want to thank our talented teams across the globe that remain so committed to our company, our players, and our products. It's their passion and dedication that enables us to continue to move forward and further position the company for future success. Operator, please open the lines for questions.

Unknown Executive: Operator, please open the lines for questions. Thank you. And at this time, we'll conduct our question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions.

Operator: Thank you. And at this time, we'll conduct our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: Thank you.

Speaker Change: And at this time, we'll conduct our question and answer session.

Speaker Change: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue.

Speaker Change: You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions.

Operator: One moment, please, while we pull for questions. And our first question comes from Ryan Sigdahl with Craig Hallam Capital Corp. Please state your question. Hey.

Ryan Sigdahl: And our first question comes from Ryan Sigdal with Craig Hallam Capital Court.

Speaker Change: And our first question comes from Ryan Sigdahl with Craig Hallam Capital Corp. Please state your question.

Unknown Executive: Please state your question. Hey, good afternoon, guys. Hey Ryan.

Ryan Sigdahl: Hey, good afternoon guys. Hey Ryan,

Ryan Sigdahl: Hey, good afternoon guys.

Ryan Sigdahl: Maybe we want to start with guidance that is fully kind of aware of the industry challenges that are present for you guys and everybody. But looking at the second half, implied revenue guidance, previously it was implying kind of up mid-single digits. Now it's down, high single digits. I guess anything besides the industry headwinds to call out whether anything is slipped or puts takes, I guess, within your business. I guess for such a wide swing in the back half.

Ryan Sigdahl: Maybe we want to start with guidance, fully kind of aware of the industry challenges that are present for you guys and everybody, but looking at the second half implied revenue guidance. Previously, it was implying kind of up mid-single digits. Now it's down to high-single digits, I guess. Anything besides the industry headwinds to call out, whether anything is slipped or put stakes, I guess, within your business, I guess, for such a wide swing in the back half?

Speaker Change: Hey Ryan.

Ryan Sigdahl: Maybe I want to start with guidance, fully kind of aware of the industry challenges that are present for you guys and everybody, but looking at the second half, implied revenue guidance, previously it was implying kind of up mid-single digits, now it's down high single digits.

Speaker Change: Anything besides the industry headwinds to call out, whether anything is slipped or put stakes, I guess, within your business, I guess, for such a wide swing in the back half?

Andrew Pascal: No, it's really the change and the trajectory of the business is concentrated in, I think, two areas relative to what was our forecast. First is what's happening in social casino, and quite frankly, if you look across our three core titles, the short falls almost entirely attributed to one. And there's actually, I think, more positive signs associated with the other two. But, you know, the social casino category just continues to be challenging.

Andrew Pascal: No, I mean, the change in the trajectory of the business is concentrated in, I think, two areas relative to what was our forecast. First is what's happening in social casino, and, quite frankly, if you look across our three core titles. The shortfall is almost entirely attributed to one, and there are actually, I think, more positive signs associated with the other two, but, you know, the social casino category just continues to be challenging.

Speaker Change: No, I mean it's really the change in the trajectory of the business is concentrated in I think two areas relative to what was our forecast.

Speaker Change: First is what's happening in social casino, and quite frankly, if you look across our three core titles,

Speaker Change: The shortfall is almost entirely attributed to one.

Speaker Change: And there's actually, I think, more positive signs associated with the other two. But, you know, the social casino category just continues to be challenging. And then the other is we had anticipated that we would be scaling, at this point, our Tetris block puzzle product.

Andrew Pascal: And then the other is we had anticipated that we would be scaling at this point in our Tetris block puzzle product. It's in the market. It's open more generally across all of the primary markets, but we're not yet investing as aggressively as we originally anticipated and scaling it up. We certainly hope to be doing that in the coming months. The game's a great game. All of the metrics are very healthy. The challenge that we're having right now is just optimizing our capacity to acquire players. And so we get some amount of organic traffic, but it's modest relative to other Tetris products.

Andrew Pascal: And then the other thing is that we had anticipated that we would be scaling at this point our Tetris block puzzle product. It's in the market, and it's open more generally across all of the primary markets.

Speaker Change: It's in the market. It's open more generally across all of the primary markets.

Andrew Pascal: But we're not yet investing as aggressively as we originally anticipated in scaling it up. We certainly hope to be doing that in the coming months. The game's a great game. All of the metrics are very healthy.

Speaker Change: But we're not yet investing as aggressively as we originally anticipated in scaling it up. We certainly hope to be doing that in the coming months.

Speaker Change: The game's a great game. All of the metrics are very healthy. The challenge that we're having right now is just optimizing our capacity to acquire players.

Andrew Pascal: The challenge that we're having right now is just optimizing our capacity to acquire players. And so we get some amount of organic traffic, but it's modest relative to our other Tetris products. And we need to stimulate more growth by being able to go and invest in and acquire new users affordably and profitably. And it's just proven to be super challenging. There are incumbents in the category that are spending a lot of money making the cost per install nearly prohibitive.

Speaker Change: And so we get some amount of organic traffic, but it's modest relative to our other Tetris products.

Andrew Pascal: And we need to stimulate more growth by being able to go and invest in acquiring new users affordably and profitably. And it's just proven to be super challenging. There are incumbents in the category that are spending a lot of money, making the cost for install nearly prohibitive. We think we'll overcome it because we have what we believe is, without question, the strongest product in the category. And so we're exploring and testing a variety of different strategies and tactics.

Speaker Change: And we need to stimulate more growth by being able to go and invest and acquire.

Speaker Change: New users, affordably and profitably.

Speaker Change: And it's just proven to be super challenging. There are incumbents in the category that are spending a lot of money making the cost per install.

Andrew Pascal: We think we'll overcome it because we have what we believe is, without question, the strongest product in the category. And so we're exploring and testing a variety of different strategies and tactics. So we hope to be able to do that before the end of the year, but those are the two reasons really for the change in the overall forecast: Social Casino, one product within the portfolio specifically, and the delay in scaling our Block Puzzle product.

Speaker Change: [inaudible]

Andrew Pascal: So we hope to be able to do that before the end of the year, but those are the two reasons really for the change in the overall forecast. social casino, one product within the portfolio specifically, and the delay in scaling our block puzzle product.

Speaker Change: So, we hope to be able to do that before the end of the year, but those are the two reasons really for the change in the overall forecast.

Speaker Change: Social Casino, one product within the portfolio specifically, and the delay in scaling our Block Puzzle product.

Operator: Thank you for watching.

Ryan Sigdahl: Hopefully, they're just switching over to play awards. Any update, I guess, can you update on the pipeline of potential customers and monetizing that in a B2B fashion? Nothing material to really provide, just yet. I can tell you that we're continuing to look at those opportunities. We've been a bit more consumed with the focus on stabilizing the core casino portfolio and a bunch of initiatives in rationalizing the cost structure of the business in light of where revenues are pacing.

Speaker Change: Helpful. Then just switching over to PlayAwards, any update, or I guess, any update on the pipeline of potential customers and monetizing that in a B2B fashion?

Andrew Pascal: No, nothing material to really provide just yet, but I can tell you that we're continuing to look at those opportunities. We've been a bit more consumed with the focus on stabilizing the core casino portfolio and a bunch of initiatives to rationalize the cost structure of the business in light of where revenues are pacing. So the team's intensely focused right now on the cost structure of the business and will continue to refine it. And then we'll be able to free up the mindshare that's needed in order to really advance that aspect of our business.

Speaker Change: No, nothing material to really provide just yet. I can tell you that we're continuing to look at those opportunities. We're been a bit more consumed with

Speaker Change: The focus on stabilizing the core casino portfolio and a bunch of

Speaker Change: initiatives in rationalizing the cost structure of the business in light of where revenues are pacing.

Andrew Pascal: So, the team's intensely focused right now on the cost structure of the business and continue to refine it, and then we'll be able to free up the mine share that's needed in order to really advance that aspect of our business. But right now, stay wise to core business, focus on what we believe to be the more near-term drivers of growth, and also make sure that the cost structure of the business is being tended to. So, that's what we're focused on.

Speaker Change: So the team's intensely focused right now on the cost structure of the business and continue to refine it.

Speaker Change: And then we'll be able to free up the mindshare that's needed in order to really advance that aspect of our business. But right now, it's stabilize the core business.

Andrew Pascal: But right now, we need to stabilize the core business, focus on what we believe to be the more near-term drivers of growth, and also make sure that the cost structure of the business is being tended to. So that's what we're focused on.

Speaker Change: focus on what we believe to be the more near-term drivers of growth and also, make sure that the cost structure of the business is being tended to. So that that's what we're focused on.

Ryan Sigdahl: Last one for me, just anything from a Q3 to Q4 cadence from a cost standpoint, whether it be advertising, customer acquisition, competing against the election, or the My VIP World Tournament of Slots. How much of material potentially impact that is, but just anything to be aware of from kind of a cost and or sequential standpoint in the Q3, Q4. Nothing meaningful; I mean there's obviously the fourth quarter seasonality, and you highlight the election. Not entirely sure how it's going to impact some of the investments we'd make on the U.S. on, but no nothing meaningful to add.

Ryan Sigdahl: Last one for me, just anything from a Q3 to Q4 cadence from a cost standpoint, whether it be advertising for a customer acquisition, competing against the election, or the MyVIP world tournament of slots, how much of a material potentially impact that is, but just anything to be aware of from kind of a cost and or sequential standpoint in Q3, Q4.

Speaker Change: Last one for me, just anything from a Q3 to Q4 cadence from a cost standpoint, whether it be advertising a customer acquisition.

Speaker Change: You know, competing against the election or the MyVIP World Tournament of slots, how much of material potentially impact that is, but just any, anything to be aware of from kind of, a cost and or sequential standpoint into Q3, Q4.

Andrew Pascal: Nothing meaningful. I mean, there's obviously the fourth quarter seasonality, and you highlight the election. Not entirely sure how it's going to impact. Some of the investments we've made on the UA front, but no, nothing meaningful to add.

Speaker Change: Nothing meaningful. I mean there's obviously the fourth quarter seasonality and you highlight the election, not entirely sure how that's going to impact.

Speaker Change: Some of the investments we've made on the UA front, but no, nothing meaningful to add.

Unknown Executive: Very good.

Ryan Sigdahl: Very good. Turn it over to the others. Thanks, Andrew.

Unknown Executive: Turn it over to the others. Thank you, Andrew. All right, thanks, Ryan.

Speaker Change: Turn it over to the others. Thanks, Andrew. Thanks, Ryan.

Operator: Our next question comes from Corey Carpenter with J.P. Morgan. Please state your question.

Cory Carpenter: Our next question comes from Corey Carpenter with JP Morgan. Please see your question. Hey, good afternoon. Thanks for the questions. I have two.

Speaker Change: Our next question comes from Corey Carpenter with J.P. Morgan. Please state your question.

Corey Carpenter: Hey, good afternoon. Thanks for the question. I have two.

Andrew Pascal: Maybe to start just hoping you could expand a bit on my Vegas and coming to shift. Maybe what exactly you're doing and how far along you're on that journey. And then you just mentioned, Andrew, there's one game of flagging. Or the things you're doing here that you think could be expanded to other games in the portfolio and apply it in a helpful manner. Sure. So my Vegas and Konami. I'll start with my Vegas. I mean, my Vegas continues to be the bright spot in the portfolio. I've actually been growing at a double-digit rate year over year, quarter to quarter, month over month.

Corey Carpenter: Hey, good afternoon. Thanks for the question. I have two. Maybe to start, just hoping you could expand a bit on the MyVegas and Konami initiatives. Maybe what exactly you're doing and how far along you're on that journey.

Speaker Change: And then you just mentioned, Andrew, there's one game that's lagging. Are there things you're doing here that you think could be expanded to other games in the portfolio and applied and helpful in that manner?

Corey Carpenter: Maybe to start, just hoping you could expand a bit on the MyVegas and Konami initiatives, you know, maybe what exactly you're doing and how far along you are on that journey. And then you just mentioned, Andrew, there's one game that's lagging. You know, are there things you're doing here that you think could be expanded to other games in the portfolio and applied and helpful in that manner? Sure.

Speaker Change: Sure.

Speaker Change: So, MyVegas and Konami. I'll start with MyVegas. MyVegas continues to be the bright spot in the portfolio.

Andrew Pascal: So, MyVegas and Konami. I'll start with MyVegas. MyVegas continues to be the bright spot in the portfolio. It's actually been growing at a double-digit rate year-over-year, quarter-over-quarter, month-over-month, so it has solid momentum and it gives us a sense that there is an opportunity for us to stabilize the overall casino portfolio and enjoy some modest growth from it. There's work to do, though.

Speaker Change: It's actually been growing at a double-digit rate year-over-year, quarter-over-quarter, month-over-month. So it has solid momentum, and it's actually...

Andrew Pascal: So it has solid momentum and sexually gives us a sense that there is an opportunity for us to stabilize the overall casino portfolio and enjoy some modest growth from it.

Speaker Change: It gives us a sense that there is an opportunity for us to stabilize the overall casino portfolio.

Andrew Pascal: There's work to do, though. In the case of Konami, its performance is generally flat, so it's stable. It's not enjoying in growth for the moment, but we believe that it too is on a path where it can enjoy some modest growth. Post-loss has seen contraction, particularly over this last quarter. There was a pretty meaningful deceleration in its performance. A lot of it was a function of some things that we did in the way that we were managing the economy of that product and about getting specifics. I would say that its underperformance was as much a function of how we operated the product as it was a reflection of overall market conditions.

Speaker Change: and enjoy some modest growth from it.

Andrew Pascal: In the case of Konami, its performance is generally flat, so it's stable. It's not enjoying any growth for the moment, but we believe that it, too, is on a path where it can enjoy some modest growth. Pop Slots has seen contraction, particularly over this last quarter. There was a pretty meaningful deceleration in its performance. A lot of it was a function of some things that we did in the way that we were managing the economy of that product, without getting into specifics.

Speaker Change: There's work to do, though. In the case of Konami, its performance is generally flat, so it's stable. It's not enjoying any growth for the moment. But we believe that it, too, is on a path where it can enjoy some modest growth.

Speaker Change: Pop Slots has seen contraction particularly over this last quarter. There was a pretty meaningful deceleration in its performance.

Speaker Change: A lot of it was a function of some things that we did in the way that we were managing the economy of that product, and without getting into specifics, I would say that its underperformance was as much a function of how we operated the product as it was a reflection of overall market conditions.

Andrew Pascal: I would say that its underperformance was as much a function of how we operated the product as it was a reflection of overall market conditions. Historically, that product has been a major contributor for us, and we expect as we address the issues that we've identified it will continue to be. You know, as far as the changes that we made, if you recall back in the second quarter of last year, we went through a fairly meaningful restructuring of the casino portfolio.

Andrew Pascal: Historically, that product has been a major contributor for us, and we expect that as we address the issues that we've identified, that it'll continue to be.

Speaker Change: Historically that product has been a major contributor for us and we expect that as we address the issues that we've identified that it'll continue to be. You know, as far as the changes that we made, if you recall back in the second quarter of last year,

Andrew Pascal: As far as the changes that we made, if you recall back in the second quarter of last year, we went through a fairly meaningful restructuring of the casino portfolio. My Vegas and Kenami were owned and managed; when I say, oh, they were run by teams that were based one in Asia. My Vegas's case and out of office in the case, Kenami, we elected to concentrate Arcasino portfolio and run it out of our televised studio where there was deep talent and we felt the products could benefit from their shared experience. So we went through that restructuring and completed it in the second quarter, started to stabilize and get some traction as we move through the third quarter.

Speaker Change: We went through a fairly meaningful restructuring of the casino portfolio.

Andrew Pascal: MyVegas and Konami were owned and managed, and when I say owned, they were run by teams that were based, one in Asia, in MyVegas' case, and out of Austin, in the case of Konami. We elected to concentrate our casino portfolio and run it out of our Tel Aviv studio, where there was deep talent, and we felt that the products could benefit from their shared experience. So we went through that restructuring and completed it in the second quarter, and we started to stabilize and get some traction as we moved through the third quarter.

Speaker Change: MyVegas and Konami were run by teams that were based, one in Asia, MyVegas' case, and out of Austin, the case of Konami. We elected to concentrate our casino portfolio and run it out of our Tel Aviv studio.

Speaker Change: where there was deep talent and we felt that the products could benefit from their shared experience.

Speaker Change: So, we went through that restructuring and completed it in the second quarter, started to stabilize and get some traction as we moved through the third quarter. That momentum was disrupted a little bit with the conflict in Israel, which has proven to continue to add complexity.

Andrew Pascal: That momentum was disruptive a little bit with the conflict in Israel, which is proven to continue to add complexity to the things that we're trying to do. But we ultimately did, in fact, accomplish what we set out to do, which was reconstitute new leadership teams focused on advancing those products. In the case of both my Vegas and Kenami, we're seeing encouraging results. We unfortunately have not seen or had the same experience with POP, but I continue to bear down on stabilized and feel like there's an opportunity for us to reset that product.

Andrew Pascal: That momentum was disrupted a little bit by the conflict in Israel, which has proven to continue to add complexity to the things that we're trying to do. But we ultimately did, in fact, accomplish what we set out to do, which was to reconstitute new leadership teams focused on advancing those products. In the case of both MyVegas and Konami, we're seeing encouraging results. We unfortunately have not seen or had the same experience with POP but continue to bear down on, stabilize, and feel like there's an opportunity for us to reset that product.

Speaker Change: to the things that we're trying to do. But we ultimately did, in fact, accomplish what we set out to do, which was reconstitute new leadership teams focused on advancing those products.

Speaker Change: In the case of both MyVegas and Konami, we're seeing encouraging results. We unfortunately have not seen or had the same experience with POP, but continue to bear down on it, stabilize, and feel like there's an opportunity for us to reset that product.

Cory Carpenter: Thanks, and then, James, for a follow-up.

Corey Carpenter: And then, for a follow-up... I'm sorry, for a follow-up, just could Tetris, so the big uplift in one cue from the player beating the game, how was the response to the 40th anniversary in terms of just consumer excitement, and I know Tetris did some specific marketing around it, how did consumers respond to that relative to your expectations? Thank you.

Speaker Change: Thanks, and then, James, for a follow-up.

Andrew Pascal: Yeah, I'm sorry for a follow-up. Just could Tetris, so big up what did want you from the player being the game. How was the response to the 40th anniversary in terms of just consumer excitement, and I know Tetris did some specific marketing around it. How did consumers respond to that relative to DRS expectations? Thank you. Yeah, I mean, relative to our expectations, it felt quite short of them. We saw some uptick in organic traffic, but relative to our experience from the first quarter with what we would produce, the Willis effect, not nearly the same. So we didn't see the same kind of interest and social engagement and activation that would have translated to the kind of results that we had imagined.

Speaker Change: Yeah.

Speaker Change: I'm sorry.

James: For follow-up, Tetris, so big uplift in one cue from the player beating the game, how was the response to the 40th anniversary in terms of just consumer excitement? And I know Tetris did some specific marketing around it. How did consumers respond to that relative to your expectations? Thank you.

Andrew Pascal: I mean, relative to our expectations, it fell quite short of them. We saw some uptick in organic traffic, but relative to our experience from the first quarter with what we refer to as the Willis effect, not nearly the same. So we didn't see the same kind of interest and social engagement and activation that would have translated to the kind of growth that we had imagined.

Andrew Pascal: I mean, relative to our expectations, it fell quite short of them.

Speaker Change: Yeah, I mean, relative to our expectations, it fell quite short of them. We saw some uptick in organic traffic, but relative to our experience from the first quarter with what we refer to as the Willis effect...

Speaker Change: not nearly the same, so we didn't see the same kind of interest and social engagement and activation that would have translated to the kind of growth that we had imagined.

Andrew Pascal: So it felt short of our expectations.

Andrew Pascal: With that said, you know, we've kind of reloaded. This is the year of Tetris's 40th anniversary. We've got some other cool things that we're doing with some interesting campaigns and influencers that, you know, will continue to take advantage of its milestone birthday, and we'll see if we can't find a way to generate that organic interest. But we still feel like there's an opportunity there. And with that said, you know, the year-over-year performance for Tetris continues to be strong, so when you look at how it performed this quarter relative to the same quarter last year, you know, it's up, and we'll continue, as I said, to support it and take advantage of these opportunities.

Andrew Pascal: With that said, we kind of reloaded. This is the year of Tetris' 40th anniversary. We've got some other cool things that we're doing with some interesting campaigns and influencers that will continue to take advantage of its milestone birthday, and we'll see if we can find a way to generate that organic interest. But we still feel like there's an opportunity there. And with that said, you know, the year-over-year performance for Tetris continues to be strong. So when you look at how it's performed, this quarter relative to the same quarter last year, you know, it's up, and we'll continue, as the said, support it and take advantage of these opportunities.

Speaker Change: So, it fell short of our expectations.

Speaker Change: With that said, we've kind of reloaded. This is the year of Tetris's 40th anniversary. We've got some other cool things that we're doing with some interesting campaigns and influencers that we'll continue to take advantage of.

Speaker Change: It's a milestone birthday and we'll see if we can't

Speaker Change: Find a way to generate that organic interest.

Speaker Change: But we still feel like there's an opportunity there. And with that said, you know, the year-over-year performance.

Speaker Change: for Tetris continues to be strong. So when you look at how it's performed this quarter relative to the same quarter last year, you know, it's up and we'll continue, as I said, support it and take advantage of these opportunities.

Speaker Change: So.

Speaker Change: Thank you.

Aaron Lee: Our next question comes from Aaron Lee with McQuarrie. Please take your question. Hey, good afternoon. Thank you for taking my question. Just want to dig in a little deeper on the Tetris, the new Tetris product.

Operator: Our next question comes from Aaron Lee with Macquarie. Please state your question.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Aaron Lee with Macquarie. Please state your question.

Aaron Lee: Hey, good afternoon. Thanks for taking my question. I just want to...

Aaron Lee: Hey, good afternoon. Thanks for taking my question.

Aaron Lee: I just want to dig in a little deeper on the new Tetris product. Can you just talk a little bit more about what you're seeing in the early days, the engagement, retention, and maybe any cross-sell opportunities to your existing Tetris games? And, you know, I know you mentioned, um, you guys just feel it wasn't in the right place to kind of scale up the marketing, but let me just talk about how you would judge what the right time to kind of lean into this game a little bit more or you know what you would like to see before you make that choice. Thank you.

Aaron Lee: I just want to...

Andrew Pascal: Can you just talk a little bit more about what you're seeing in the early days and engagement with tension and maybe any cross-sell opportunities to your existing Tetris game? And you know, I know you mentioned you guys just feel it wasn't in the right place to kind of scale up the marketing, but let me just talk about how you would judge what is the right time to kind of lean into this game a little bit more or know what you would like to see before you make that choice. Thank you. Sure. So, you know, as far as the game is concerned, what we're seeing, you know, the retention is very strong.

Aaron Lee: I just want to dig in a little deeper on the Tetris, the new Tetris product. Can you just talk a little bit more about what you're seeing in the early days, the engagement, retention, and maybe any cross-sell opportunities to your existing Tetris game? And, you know, I know you mentioned

Speaker Change: You guys just feel it wasn't in the right place to kind of scale up the marketing, but can you just talk about how you would judge what is the right time to kind of lean into this game a little bit more, or what you would like to see before you make that choice? Thank you.

Andrew Pascal: So as far as the game is concerned and what we're seeing, retention is very strong. Early retention is definitely where you would want and need it to be so that you can go and start stacking cohorts and scaling to the audience. And that's holding up as we see those cohorts mature. So the day 30 retention is strong, again, in keeping with what we would want to see in order to stack cohorts.

Speaker Change: Sure.

Speaker Change: So, you know, as far as the game is concerned and what we're seeing, you know, the retention is very strong. Early retention is definitely where you would want and need it to be so that you can go and start stacking cohorts and scale and grow the audience.

Andrew Pascal: The early retention is definitely where you would want and need it to be so that you can go and start stacking cohorts and scaling the audience, and that's holding up as we see those cohorts mature. So, you know, the day 30 retention is strong again, in keeping with what we would want to see in order to stack cohorts. But then it's really about our capacity to go and acquire new players at a price that allows us to get the returns that we're looking for within the time or holding the game to, currently look for at about an 18 months payback on the paid acquisition.

Speaker Change: And that's holding up as we see those cohorts mature. So, you know, the Day 30 retention is strong, again, in keeping with what we would want to see in order to stack cohorts. But then it's really about...

Andrew Pascal: Then it's really about our capacity to go and acquire new players at a price that allows us to get the returns that we're looking for within the time horizon we're holding the game to, currently looking for about an 18-month payback on the paid acquisition. And in light of where we're seeing CPIs right now, that's a bit challenged. With that said, I can share that in the last 30 days, the team's done a great job, and we see CPIs coming down.

Speaker Change: our capacity to go and acquire new players at a price

Speaker Change: That allows us to get the returns that we're looking for within the time horizon we're holding the game to.

Speaker Change: currently look for about an 18-month payback on the paid acquisition.

Andrew Pascal: And in light of where we're seeing CPIs right now, that's a bit challenging. With that said, I can share that in the last 30 days, teams done a great job, and we see CPIs coming down. So, the way that we are talking about the product, converting traffic in ultimately, driving installs, and retained installs, the metrics are improving. And that is what will dictate when we're ready to invest in it more aggressively. It's when the cost of acquiring a player, it's a certain threshold that allows us to confidently achieve a return on that player within the 18-month horizon that we've set for it.

Speaker Change: And in light of where we're seeing CPIs right now, that's a bit challenged. With that said, I can share that in the...

Speaker Change: last 30 days

Speaker Change: The team has done a great job and we see CPIs coming down.

Andrew Pascal: So the way that we are talking about the product, converting traffic, and ultimately driving installs and retained installs, the metrics are improving. And that will dictate when we're ready to invest in it more aggressively. It's when the cost of acquiring a player hits a certain threshold that allows us to confidently achieve a return on that player within the 18-month horizon that we've set for it. As we hit that threshold, we'll start layering in more UA investment.

Speaker Change: So the way that we are.

Speaker Change: talking about the product, converting traffic, and ultimately...

Speaker Change: driving installs.

Speaker Change: and retained installs as the metrics are improving.

Speaker Change: And that is what will dictate when we're ready to invest in it more aggressively. It's when the cost of acquiring a player hits a certain threshold that allows us to confidently achieve a return on that player within the 18-month horizon that we've set for it.

Aaron Lee: As we hit that threshold, we'll start layering in more UA investment. Got it. Thank you. That's very helpful.

Speaker Change: As we hit that threshold, we'll start layering in more UA investment.

Aaron Lee: Got it. Thank you. That's very helpful. And broadly, I want to touch on your cost structure. How are you guys thinking about your cost structure right now? Do you feel like it's in the right place, or are there opportunities to become more efficient while also making sure that you know you don't impact your product pipeline and the things that you have.

Andrew Pascal: And just broadly, you want to touch on your cost structure. How are you guys thinking about your cost structure right now? Do you feel like it's in the right place, or are there opportunities to become more efficient while also making sure that you don't impact your product pipeline and the things that you have planned? Well, it's not in the right place in light of our current revenue pace. And so I can tell you, as a senior team and as a broader leader team, we're constantly looking at how and where we can improve our efficiency and productivity and support our products more efficiently and take costs out of the business.

Speaker Change: Got it. Thank you. That's very helpful. And just broadly, I want to touch on your cost structure. How are you guys thinking about your cost structure right now? Do you feel like it's in the right place or are there opportunities to become more efficient while also making sure that, you know, you don't impact your product pipeline and the things that you have planned?

Andrew Pascal: Well, it's not in the right place in light of our current revenue, and so I can tell you, as a senior team and as a broader leadership team, we're constantly looking at how and where we can improve our efficiency and productivity and support our products more efficiently and take costs out of the business. That is an active, ongoing discipline that the team's intensely focused on. With that said, it's complicated because we want to continue to service and support our products with the new content and features that they need in order to sustain or ultimately improve their performance.

Speaker Change: Well, it's not in the right place in light of our current revenue pace.

Speaker Change: And so I can tell you as a senior team and as a broader leadership team, we're constantly looking at how and where we can improve our efficiency and productivity and support our products more efficiently and take costs out of the business.

Andrew Pascal: That is an active, ongoing discipline that the teams intensely focused on. With that said, it's complicated because we want to continue to service and support our products with the new content and features that they need in order to sustain or ultimately improve their performance. and then in addition to sustaining the existing products, they're the investments that we're making and the initiatives that we think are going to drive our future growth, which are largely focused on Tetris as a franchise. So we believe in those opportunities between Tetris and Play awards. We're going to continue to invest in them because we're both oriented as a business.

Speaker Change: That is an active, ongoing discipline that the team is intensely focused on. With that said...

Speaker Change: It's complicated because...

Speaker Change: We want to continue to service and support our products with the new content and features that they need in order to sustain or ultimately improve their performance.

Andrew Pascal: And then, in addition to sustaining the existing products, they're the investments that we're making in the initiatives that we think are going to drive our future growth, which are largely focused on Tetris as a franchise. So we believe in those opportunities between Tetris and Play Awards. We're going to continue to invest in them because we're growth-oriented as a business. And, of course, we don't get credit for that today. In fact, it compromises our margins and overall performance because those initiatives aren't yet contributing to our top-line performance or growth.

Speaker Change: And then, in addition to sustaining the existing products, they're the investments that we're making in the initiatives that we think are going to drive our future growth, which are largely focused on Tetris as a franchise.

Speaker Change: So, we believe in those opportunities between Tetris and Play Awards. We're going to continue to invest in them because we're both oriented as a business.

Speaker Change: And of course, we don't get credit for that today. In fact, it compromises our margins and our overall performance because those initiatives aren't yet contributing to our top-line performance or growth.

Andrew Pascal: And all of our performance because those initiatives aren't yet contributing to our top-line performance or growth. So, but, you know, we believe in them. I think that we're applying the right level of rigor in the way that we're analyzing our progress and the performance of those initiatives and looking at and testing their market fit in order to get them right and ready to scale. And we believe that the investments we make in them, in relationship to the asymmetrical upside that they represent, or it's absolutely the right thing for us to be doing. So we're being, I think, vigilant about looking for and taking the cost out of our business without adversely impacting its current momentum.

Andrew Pascal: So, you know, we believe in them. I think that we're applying the right level of rigor in the way that we're analyzing our progress and the performance of those initiatives and looking at and testing their market fit in order to get them right and ready to scale. And we believe that the investments we make in them, in relationship to the asymmetrical upside that they represent, are absolutely the right thing for us to be doing.

Speaker Change: So, but, you know, we believe in them. I think that we're applying the right level of rigor in the way that we're analyzing our progress and the performance of those initiatives.

Speaker Change: Looking at and testing their market fit in order to get them right and ready to scale and we believe that the investments we make in them in relationship to the Asymmetrical upside that they represent or it's absolutely the right thing for us to be doing

Andrew Pascal: So we're being, I think, vigilant about looking for and taking the cost out of our business without adversely impacting its current momentum, and then strategically investing in our new initiatives that are gonna drive our future growth.

Speaker Change: So, we're being, I think, vigilant about looking for and taking the cost out of our business without adversely impacting its current momentum, and then strategically investing in our initiatives that are going to drive our future growth.

Aaron Lee: And then strategically investing in our new initiatives are going to drive our future growth. Got it. Thank you very much. Appreciate the color.

Aaron Lee: Got it. Thank you very much. I appreciate the color.

Clark Lampen: Thanks. Our next question comes from Clark Lampen with BTIG. Please state your question. Thanks. Good evening, everybody. I appreciate you taking the questions out. But the game you were talking about within your social casino portfolio, where you're seeing some pressure right now. Is this sort of similar to what you're talking about with, you know, the new Tetris powder trying to scale up a map where the sort of LTV's relevancy got to sort of match your threshold, or is there an issue with engagement? And it just looks out to me, and I get through what's behind on the pressure, and then maybe more of what will be how favorable.

Speaker Change: Got it. Thank you very much. Appreciate the color.

Operator: Our next question comes from Clark Lampen with BTIG. Please state your question.

Speaker Change: Thanks.

Speaker Change: Our next question comes from Clark Lampen with BTIG. Please state your question.

Clark Lampen: Thanks. Good evening, everybody.

Clark Lampen: I appreciate you taking the time. But the game that you were talking about within your social casino portfolio, where you're seeing some pressure right now, is this sort of similar to what you're talking about with... (inaudible) The second question I have is I just wanted to follow up on your comments around the team play award opportunity. Could you help, I guess, kind of articulate for us what it is that you see, and understand that resources are being devoted elsewhere right now? What is it so far that sort of hurts the scale average for us right now? Is there kind of a set of emotions you've experienced that have caused a little bit more friction with software on-demand?

Clark Lampen: But the game that you were talking about within your social casino portfolio, where you're seeing some pressure right now, is this sort of similar to what you're talking about with...

Clark Lampen: [inaudible]

Clark Lampen: Just you guys think it is.

Andrew Pascal: The second question I have is, I wanted to follow up with your comments around sort of helping play a world opportunity. Could you help I guess kind of participate for us? What it is that you see, I guess, and understanding that resources are being devoted elsewhere right now. What is it so far that sort of hurt the scale effort for us right now? Is there a kind of sort of several motions you've experienced a little bit more friction without forwarding any insights, I guess, in contrast around the appreciate? Okay. You are breaking up quite a bit, but I think I was able to decipher the two questions.

Clark Lampen: [inaudible]

Clark Lampen: I just wanted to follow up on your comments around sort of helping play awards opportunity.

Speaker Change: I'm going to go over a couple of things that are particularly for us what it is that you see, I guess, and understanding that resources are being devoted elsewhere right now. What is it so far that sort of hurt the scale average for us right now?

Speaker Change: You've experienced a little bit more friction with after onboarding. Any insights, I guess, that you feel comfortable sharing would be appreciated.

Andrew Pascal: Okay, you're breaking up quite a bit, but I think I was able to decipher the two questions. The first one you asked about the game within the casino portfolio that is underperforming and not meeting our expectations was that... a result of a similar dynamic that we're seeing on the Tetris product that I just described, that it's a function of being able to go into the market and acquire players at a price that's warranted or justified in order to drive future growth.

Speaker Change: Okay, you're breaking up quite a bit, but I think I was able to decipher the two questions.

Andrew Pascal: The first one you were asking about the game within the casino portfolio that is underperforming and not meeting our expectations, and was that a result of a similar dynamic that we're seeing on the Tetris product that I just described. But it's a function of being able to go into the market and acquire players at a price that's warranted or justified in order to drive future growth. The short answer is no. That's not the reason. Postlocks has always been a strong game, and it's been the leader in terms of its capacity to monetize the existing audience.

Speaker Change: The first one you were asking about, the game within the casino portfolio that is underperforming and not meeting our expectations, and was that...

Speaker Change: a result of a similar dynamic that we're seeing on the Tetris product that I just described, that it's a function of being able to go into the market and acquire players at a price that's warranted or justified in order to drive future growth.

Andrew Pascal: The short answer is no, that's not the reason. Popslops has always been a strong game, and it's been the leader in terms of its capacity. The problems with the product have to do with some of the things we did in managing its underlying economy, meaning the amount of value and playtime that we afford to the players for free, and when it is that we introduce friction into their cycle of play that requires that they actually start to spend money.

Speaker Change: The short answer is no, that's not the reason. Popsbox has always been a strong game and it's been the leader in terms of its capacity to monetize the existing audience.

Andrew Pascal: The problems with the product have to do with some of the things we did in managing its underlying economy, meaning the amount of value and play time that we afford to the players for free, and when it is that we introduced friction into their cycle of play that requires that they actually start to spend money. It's complicated. We made some decisions that ultimately resulted in players not monetizing to the same degree. They're still active within our network in playing, but able to play without spending as much is the short of it. It's not entirely entire issue.

Speaker Change: The problems with the product have to do with

Speaker Change: Some of the things we did in managing its underlying economy.

Speaker Change: Meaning the amount of value and play time that we afford to the players for free and when it is that we introduce friction into their cycle of play.

Andrew Pascal: It's complicated. We made some decisions that ultimately resulted in players not monetizing to the same degree. They're still active within our network playing, but able to play without spending as much is the short of it.

Speaker Change: that requires that they actually start to spend money.

Speaker Change: It's complicated. We made some decisions that...

Speaker Change: ultimately resulted in players not monetizing to the same degree. They're still active within our network in playing.

Speaker Change: but able to play without spending as much is the short of it.

Andrew Pascal: It's not the entire issue. It is one of the fundamental issues. It's been focused on, and there are a number of things we're going to do to address it. Some of the initial things we've already done, and we've seen some improvement already. And so I would say a very different set of issues that have impacted the performance of that product. Unfortunately, it's the largest of our products in our entire portfolio.

Andrew Pascal: It is one of the fundamental issues. Since it's been focused on, but there's a number of things we're going to do to address it. Some of the initial things we've already done, and we've seen some improvement already. And so I would say a very different set of issues that have impacted the performance of that product. Unfortunately, it's the largest of our products in our entire portfolio. So, you know, 8% and 9% reduction in its performance is pretty material as far as the overall pace and outlook. So, while most of our other products, whether they're the other two social casino products or our casual games, are actually stable or growing year over year, that growth was more than offset by the compromises within past thoughts.

Speaker Change: It's not the entire issue, it is one of the fundamental issues.

Speaker Change: has been focused on, and there's a number of things we're going to do to address it. Some of the initial things we've already done, and we've seen some improvement already. And so I would say a very different set of issues that have impacted the performance of that product.

Speaker Change: Unfortunately, it's the largest of our products in our entire portfolio.

Andrew Pascal: So, you know, an 8% to 9% reduction in its performance is pretty material as far as the overall pace and outlook. And while most of our other products, whether they're the other two social casino products or our casual games, are actually stable and growing year over year, that growth was more than offset by the compromises within Posh Spots. So different sets of issues, the team is intensely focused on them, and they've done a bunch of things already to rehabilitate that product. And we feel like we have a clear plan for how it is that we're going to restore it and get it to a place where it's at least stable, it's not growing modestly.

Speaker Change: So, you know, an 8% to 9% reduction in its performance.

Speaker Change: is pretty material as far as the overall pace and outlook. So, while most of our other products...

Speaker Change: whether they're the other two social casino products or our casual games are actually stable and growing year over year, that growth was more than offset by the compromises within Posh Spots.

Andrew Pascal: So, different set of issues; the team is intensely focused on them. We've done a bunch of things already to rehabilitate that product. And we feel like we have a clear plan for how it is that we're going to restore it and get it to a place where it's at least stable, which is not growing mostly.

Speaker Change: So, different set of issues, the team is intensely focused on them. We've done a bunch of things already to rehabilitate that product, and we feel like we have a clear plan for how it is that we're going to restore it and get it to a place where it's at least stable, it's not growing modestly.

Andrew Pascal: I think with your second question, you just wanted a bit more color on play awards, and it is an opportunity. And I alluded in responding to an earlier question that the leadership team across the company is intensely focused on really looking at rationalizing our business and how and where it is that we can pull costs out of the company and make sure that the things that we are focused on are the more immediate things that will translate to value.

Andrew Pascal: I think on your second question, you just wanted a bit more color on play awards, and it is an opportunity. And I alluded in responding to an earlier question that the leadership team across the company is intensely focused on really looking at rationalizing our business and how and where it is that we can pull costs out of that. So, you know, I think we're going to have a lot of work to do with our company and make sure that the things that we are focused on are the more immediate things that will translate to value.

Speaker Change: I think on your second question, you just wanted a bit more color on play awards and it is an opportunity.

Speaker Change: And I alluded in responding to an earlier question that...

Speaker Change: The leadership team across the company is intensely focused on

Speaker Change: really looking at rationalizing our business and how and where it is that we can pull costs out of the company and make sure that the things that we are focused on are the more immediate things that will translate to value. And so the Play Awards team is very focused on

Andrew Pascal: And so the Play Awards team is very focused on adopting and optimizing the Play Awards program within our own portfolio of games, so not spending as much time advancing the platform to be provided to a third party. We have done a bunch of work, which I alluded to in the last couple of calls, around getting out into the market and speaking with a number of different game publishers about their potential interests in teaming up with us and serving as a pilot partner to adopt the programs so that they, too, could test whether or not they would enjoy the same kinds of long-term retention and loyalty lift benefits that we see in our portfolio. And so, while we still believe there So, I hope that answers the Play Awards question.

Andrew Pascal: And so, the play awards team is very focused on adopting and optimizing the play awards program within our own portfolio of games. So, not spending as much time advancing the platform to be provided to a third party. We have done a bunch of work, which I alluded to in the last couple calls, around getting out into the market and speaking with a number of different game publishers about their potential interest in teaming up with us and serving as a pilot partner to adopt the programs that they, too, could test whether or not they would enjoy the same kinds of long-term retention.

Speaker Change: adopting and optimizing the Play Awards program within our own portfolio of games.

Speaker Change: So, not spending as much time advancing the platform to be provided to a third party. We have done a bunch of work, which I alluded to in the last couple calls.

Speaker Change: around getting out into the market and speaking with a number of different game publishers about their potential interest in teaming up with us and serving as a pilot partner.

Speaker Change: to adopt the programs that they too could test whether or not they would enjoy the same kinds of long-term retention and loyalty lift benefits that we see in our portfolio. And so while we still believe there is that opportunity,

Andrew Pascal: And loyalty lift benefits that we see in our portfolio. And so, while we still believe there is that opportunity, it's not commanding or getting as much of our attention right now. So, I hope that answers the play awards question.

Speaker Change: It's not commanding or getting as much of our attention right now. So I hope that answers the Play Awards question.

Martin Yang: And our next question comes from Martin Yang with Oppenheimer and Company. Please. Thank you for taking my question.

Operator: And our next question comes from Martin Yang with Oppenheimer and Company. Please state your question. Thank you.

Speaker Change: Thank you. And our next question comes from Martin Yang with Oppenheimer & Company. Please state your question.

Martin Yang: Good afternoon. Thank you for taking my question. My one question is about the timing of the third Tetris game. Is the launch plan relating to the third game tied to how you scale the Tetris block puzzle and how the current UA campaign trends would that inform your decision on the third game's launch date?

Martin Yang: My long question is about the timing of the third Tetris game. Is the launch plan relating to the third game tied to how you skip Tetris block puzzle and how the current U.A. campaign trend would get informed on your division on the third Tetris game spawn state?

Martin Yang: Thank you for taking my question. My one question is about the timing of the third Tetris game.

Martin Yang: Is the launch plan relating to the third game tied to how you scale Tetris block puzzle and how the current UA campaign trend would that inform on your decision on the third Tetris games launch date?

Andrew Pascal: No. The short answer is no.

Andrew Pascal: The short answer is no. I mean, we really look at each of these games in terms of they each, you know, we have an overall strategy for Tetris. There's a continuum of products that satisfy what the Tetris purist would want to play and what we believe a new, more casual Tetris player might react. And respond to, and the games each have a distinct position along that kind of strategic continuum, as you will. And so they're all advancing independent of one another. We believe that as we get them into the market and start to scale them, that we can look at the opportunities to cross promote if someone moves from being a more casual player to a more sophisticated player to then a Tetris purist.

Speaker Change: Is the third game dependent on how long Puzzle Dusk the release date? No. The short answer is no. I mean, we really look at each of these games

Speaker Change: We have an overall strategy for Tetris.

Andrew Pascal: I mean, we really look at each of these games in terms of, you know, we have an overall strategy for Tetris. There's a continuum of products that satisfy what the Tetris purist would want to play and what we believe a new, more casual Tetris player might react to and respond to. And the games each have a distinct position along that kind of strategic continuum, if you will. And so, they're all advancing independently of one another.

Speaker Change: There's a continuum of products that satisfy what the Tetris purist would want to play and what we believe a new, more casual Tetris player might react and respond to.

Speaker Change: And the games each have a distinct position along that kind of strategic continuum, if you will.

Andrew Pascal: We believe that as we get them into the market and start to scale them, we can look at the opportunities to cross-promote. If someone moves from being a more casual player to a more sophisticated player, then to a Tetris purist, we think we can help move some of those players across the portfolio of products. But they all get advanced independently, put on the market, and tested independently, and they have to justify their ongoing investment both in the development effort as well as, ultimately, in the scaling and marketing of them.

Speaker Change: And so, they're all advancing independent of one another. We believe that as we get them into the market and start to scale them, that we can look at the opportunities to cross-promote as someone moves from being a more casual player.

Andrew Pascal: We think we can help move some of those players across the portfolio products, but they all get advanced independently, put in the market and tested independently, and they have to justify their ongoing investment both in the development effort as well as ultimately the scaling and marketing of them.

Speaker Change: to a more sophisticated player to then a Tetris purist, we think we can help move some of those players across the portfolio of products.

Speaker Change: But they all get advanced independently, put in the market, and tested independently.

Speaker Change: and they have to justify their...

Speaker Change: their ongoing investment both in the development effort as well as ultimately the scaling and marketing of them.

Martin Yang: So what I do hope, though, is that the products that are in the market today, Tetris Prime and Tetris Long Puzzle, and both the successes and challenges that we're having, the way that we're marketing them, will definitely inform our strategy and approach for how it is that we look to launch the successive or the next set of products within the franchise, but they're not dependent on one game working for us to continue to advance and invest in another product. Thanks for answering. I have a follow up.

Andrew Pascal: So, what I do hope, though, is that the products that are in the market today, Tetris Prime and Tetris Block Puzzle, and both the successes and challenges that we're having in the way that we're marketing them, will definitely inform our strategy and approach for how it is that we look to launch the subsequent or next set of products within the franchise. But they're not dependent on one game working for us to continue to advance and invest in another product.

Speaker Change: So, what I do hope, though, is that the products that are in the market today, Tetris Prime and Tetris Block Puzzle and...

Speaker Change: Both the successes and challenges that we're having and the way that we're marketing them will definitely inform our strategy and approach for how it is that we look to launch the successive or the next set of products within the franchise.

Speaker Change: But they're not dependent on one game working for us to continue to advance and invest in another product.

Martin Yang: Thanks for the answer, Andrew. As a follow-up, since you referenced cross-promotion, can you maybe generally describe how much cross-promotion you have applied across all the games, including Social Casino and Casual Portfolio?

Andrew Pascal: This is a reference cross promotion, going to be generally described how much cross promotion. Have you applied across all the games, including social casino and the casual portfolio. Yeah, that's a great question: not nearly enough. So it was one of the core aspects of our whole thesis, and frankly, our own experience in the past. When we introduce new products, we incorporate the loyalty program, we aggressively cross-promote, and we communicate all the benefits to the player of actually adopting and engaging with one of our new games. are adopting our loyalty program into our other titles so that we have the capacity to not just cross promote them, but to incentivize the adoption and playing of our other products is not something that we've executed on to our expectations.

Speaker Change: Thanks for the answer, Andrew. I have a follow-up. Since you referenced cross-promotion, can you maybe generally describe how much cross-promotion have you applied across all the games, including Social Casino and Casual Portfolio?

Andrew Pascal: Yeah, it's a great question, Martin, but not nearly enough.

Speaker Change: Yeah, it's a great question. Not nearly enough.

Andrew Pascal: So it was one of the core aspects of our whole thesis and, frankly, our own experience in the past. When we introduced new products, we'd incorporate the loyalty program, we'd aggressively cross-promote, and we'd communicate all the benefits to the player of actually adopting and engaging with one of our new games. We are incorporating our loyalty program into our other titles so that we have the capacity to not just cross-promote them but to incentivize the adoption and playing of our other products.

Speaker Change: So it was one of the core aspects of our whole thesis and frankly our own experience.

Speaker Change: in the past, when we introduced new products, we'd incorporate the loyalty program, we'd aggressively cross promote, and we'd communicate all the benefits to the player of actually adopting and engaging with one of our new games.

Speaker Change: are adopting our loyalty program into our other titles so that we have the capacity to not just cross-promote them but to incentivize the adoption and playing of our other products is not something that we've executed on to our expectations.

Andrew Pascal: It's not something that we've executed on to our expectations yet. We're in the cycle of that. We're just a few months away from having the program unified and being able to manage it as I just described. So, we should be able to see better performance and harvesting of players from our existing network that we've not yet really seen the full benefit of.

Andrew Pascal: So we're in the cycle of that. We're just a few months away from having the program unified and being to manage it as I just described. So we should be able to see better performance and harvesting of players from our existing network that we've not yet really seen the full benefit.

Speaker Change: So we're in the cycle of that, we're just a few months away from having the program unified and being able to manage it as I just described.

Speaker Change: So, we should be able to see better performance and harvesting of players from our existing network that we've not yet really seen the full benefit of.

Unknown Executive: Thank you very much for me. Okay, thanks, Ryan.

Martin Yang: Got it. Thank you very much. That's it for me. Okay.

Speaker Change: Got it. Thank you very much. That's it for me.

David Pang: Our next question comes from David Pang with Steve Folt. Please state your question. Good afternoon, everyone. Thanks for the question. Just one that will follow up on the My Vegas title, and given the improving trends for the title, are there plans to invest in marketing for the game? Yeah, we do today. In fact, we just recently were constantly on a cycle of every two weeks doing a wholesale evaluation of every title in the portfolio and what its marketing budget is and whether there need to be adjustments. And keep in mind that campaigns for these titles are managed literally daily, if not in for day, but the overall budget that we're allocating gets revisited every two weeks, and we've just elected to allocate more marketing dollars to that title.

Operator: Our next question comes from David Pang with Stiefel. Please state your question.

Martin Yang: Okay, thanks, Martin.

Speaker Change: Our next question comes from David Pang with Steeple. Please state your question.

David Pang: Good afternoon everyone. Thanks for the question. I just wanted to follow up on the MyVegas title. Given the improving trends for the title, are there plans to invest in marketing for the game?

David Pang: I just wanted to follow up on the MyVegas title and given the improving trends for the title, are there plans to invest in marketing for the game?

David Pang: Yeah, we do today. In fact, we just recently were constantly on a cycle of every two weeks, doing a wholesale evaluation of every title in the portfolio and what its marketing budget is and whether there need to be adjustments. And keep in mind, the campaigns for these titles are managed literally daily, if not intraday. But the overall budget that we're allocating gets revisited every two weeks, and we've just elected to allocate more marketing dollars to that title. So yes, it's worthy of it, and we're going to start spending money on it. More money.

Speaker Change: Yeah, we do today. In fact, we just recently, we're constantly on a cycle of every two weeks doing a wholesale evaluation of every title in the portfolio and what its marketing budget is and whether there need to be adjustments.

Speaker Change: And keep in mind, the campaigns for these titles are managed literally daily, if not intraday. But the overall budget that we're allocating gets revisited every two weeks, and we've just elected to allocate more marketing dollars to that title. So yes, it's worthy of it, and we're going to start spending money on it.

Andrew Pascal: So yes, it's worthy of it, and we're going to start spending more money than we have.

David Pang: Got it. And I just would love to hear your thoughts on what's causing the persistent weakness for the overall social casino category. Is it, are you seeing any impact from iGaming? Is there any kind of overlap there on the player base?

Andrew Pascal: Good, and just the would love to hear your thoughts on what's causing the persistent weakness for the overall social casino category. Is it, are you seeing any impact from eye gaming? Is there any kind of overlap there on the player base? I don't think it's coming from Eye Gaming. I think it's coming from a new form of free-to-play casino products, which is the sweepstakes category. If you're looking at the sweepstakes industry and its growth over the past several years, it's gone from a half a million dollar industry to nearly a three billion dollar industry this year.

Speaker Change: More money than we have.

Speaker Change: I would love to hear your thoughts on what's causing the persistent weakness for the overall social casino category. Are you seeing any impact from iGaming? Is there any kind of overlap there on the player base?

Andrew Pascal: I don't think it's coming from iGaming. I think it's coming from a new form of free-to-play casino products, which is the sweepstakes category. If you're looking at the sweepstakes industry and its growth over the past several years, it's gone from a half-million dollar industry to nearly a three billion dollar industry this year. And these sweepstakes products are free-to-play social casino products. They're just accessed initially through the web, but they have companion mobile apps. Most of the activity, 70% plus of the engagement in these products, is through a mobile device.

Speaker Change: I don't think it's coming from iGaming. I think it's coming from a new form of free-to-play casino products, which is the sweepstakes category.

Speaker Change: If you're looking at the sweepstakes industry and its growth over the past several years, it's gone from a half a million dollar industry to nearly a three billion dollar industry this year. And these sweepstakes products are free-to-play social casino products.

Andrew Pascal: And these sweepstakes products are free-to-play social casino products. They're just accessed initially through the web. They have companion mobile apps; most of the activity, 70% plus of the engagement, these products is through a mobile device. So it is, I would say, a compliment to it's not part of what I would characterize as part of the social casino category. And so if you were to look at really the headwinds that everybody, the pure social casino players on mobile and desktop, like the primary I think headwinds are coming out of this emergence of these sweepstakes opportunities. And so what is it about them that is so interesting and compelling?

Speaker Change: They're just accessed initially through the web. They have companion mobile apps. Most of the activity, 70% plus, of the engagement in these products is through a mobile device. So it is...

Andrew Pascal: I would say complement to, if not part of, what I would characterize as part of the social casino category. And so if you were to look at really the headwinds that everybody, the pure social casino players on mobile and desktop, the primary, I think, headwinds are coming out of this emergence of these sweepstakes opportunities. And so what is it about them that is so interesting and compelling?

Speaker Change: I would say a compliment to, if not part of, what I would characterize as part of the social casino category.

Speaker Change: And so if you were to look at, really, the headwinds...

Speaker Change: that everybody that's a pure social casino player is on mobile and desktop. Like the primary, I think, headwinds are coming out of this emergence of these sweepstakes opportunities.

Speaker Change: And so what is it about them that is so interesting and compelling?

Andrew Pascal: They have a dual currency model. When they initiate play, they get a bunch of currency that they play for free. And then there's a mode that they can toggle into that allows them to actually play with a currency that they can accumulate and cash out for real cash value. And that fits within the sweepstakes laws and statutes across all the different states. There's about 45 states that accommodate or allow for sweepstakes form of gaming. So I would say more than the pure interactive gambling is the sweepstakes products that are really biting into the more traditional social casino market.

Andrew Pascal: They have a dual currency model. When they initiate play, they get a bunch of currency that they can play with for free. And then there's a mode that they can toggle into that allows them to actually play with currency that they can accumulate and cash out for real cash value. And that fits within the sweepstakes laws and statutes across all the different states. There are about 45 states that accommodate or allow for this form of gaming. So I would say more than pure interactive gambling, it's these sweepstakes products that are really biting into the more traditional social casino market.

David Pang: Great, thank you.

Speaker Change: They have a dual currency model.

Speaker Change: When they initiate play, they get a bunch of currency that they play for free.

Speaker Change: And then there's a mode that they can...

Speaker Change: play with a currency that they can accumulate and cash out for real cash value.

Speaker Change: And that fits within the sweepstakes laws and statutes across all the different states. There's about 45 states that accommodate or allow for sweepstakes form of gaming.

Speaker Change: So I would say more than like pure interactive gambling, it's these sweepstakes products that are really biting into the more traditional social consumer market.

Unknown Executive: Great, thank you.

Unknown Executive: Welcome. Thanks and a reminder to ask a question. Press star one on your phone to remove your question. Press star two.

Speaker Change: Great, thank you.

Operator: Thanks, and a reminder to ask a question, press star 1 on your phone. To remove your question, press star 2. Our next question comes from Greg Gibas with Northland Securities. Please state your question.

Speaker Change: You're welcome.

Speaker Change: Thanks and a reminder to ask a question, press star 1 on your phone. To remove your question, press star 2.

Greg Gibas: Our next question comes from Greg Gibas with Northland Securities. Please state your question. Hey, thanks for taking the questions, Andrew. It's got one of the good sense of kind of within your updated guidance, what you assume for performance, you know, within the social casino versus the casual categories in the back half. Yeah, we generally kind of assumed similar trends to what we're seeing today in terms of pace. I mean, we believe that we'll stabilize pop. But that generally we're going to continue to be pressure on social casino as a category. Coming from, as I just described, we think some of the broader market dynamics, the emergence of sweeps.

Speaker Change: Our next question comes from Greg Gibas with Northland Securities. Please state your question.

Greg Gibas: Hey, thanks for taking the questions, Andrew and Scott. I wanted to get a sense of, within your updated guidance, what you assume for performance, you know, within the social casino versus the casual categories in the back half.

Greg Gibas: Hey, thanks for taking the questions, Andrew and Scott. Wanted to get a sense of, kind of, within your updated guidance, what you assume for performance, you know, within the social casino versus the casual categories in the back half.

Andrew Pascal: Yeah, we generally kind of assumed similar trends to what we're seeing today. In terms of pace, I mean, we believe that we'll stabilize pop, but that, generally, we're going to continue to depress social casino as a category, coming from, as I just described, we think some of the broader market dynamics, the emergence of sweeps. So, we'll talk about our strategies and plans for sweeps on a future call when we're in a better position to, but as far as the social casino category is concerned, we're generally forecasting similar performance to what we've experienced so far this year.

Samir Jain: and Samir Jain.

Speaker Change: Yeah, we generally kind of assumed similar trends to what we're seeing today in terms of pace. I mean, we believe that we'll stabilize POP, but that generally we're going to continue to depressure social casino as a category.

Speaker Change: coming from as I just described, we think some of the broader market dynamics, the emergence of sweeps,

Andrew Pascal: So we'll talk about kind of our strategies and plans for sweeps on a future call. Won't want a better position to. But, but as far as the social casino category, we're generally forecasting similar performance to what we've experienced so far this year. Okay, sure enough.

Speaker Change: So we'll talk about kind of our strategies and plans for sweeps on a future call when we're in a better position to. But as far as the social casino category, we're generally forecasting similar performance to what we've experienced so far this year.

Greg Gibas: Okay, fair enough, and Regarding kind of what you said about M&A, you know, seeking large transformative acquisitions, kind of hard to come by, hard to get over the finish line, you know, how active should we expect you to be maybe in the back half? Should we expect some smaller opportunities like we saw from Pixote? And then, you know, given your commentary on this week's stakes category, does it, you know, make sense for you guys to maybe pursue that?

Jason Hahn: And you know, regarding kind of what you said about M&A, you know, seeking large transformative acquisitions, kind of hard to come by, hard to get over the finish line. You know, how active should we expect to be maybe in the back half. Should we expect some smaller opportunities like we saw from Pixel and then, you know, given your commentary on this week's category, does it, you know, make sense for you guys that maybe pursue that.

Speaker Change: Okay, fair enough.

Speaker Change: You know, regarding kind of what you said about M&A, you know, seeking large transformative acquisitions, kind of hard to come by, hard to get over the finish line, you know, how active should we expect you to be maybe in the back half? Should we expect some smaller opportunities like we saw from Pixode? And then, you know, given your commentary on this week's stakes category, does it, you know, make sense for you guys to maybe pursue that?

Jason Hahn: I'll see if Jason. Do you want to take that question? Yes, sure. So we remain, you know, aggressive but disciplined in our pursuit of M&A. It's certainly something we're focused on at all times. We have an active pipeline of companies that we are pursuing that fit into the various buckets, some of which are in that transformative bucket that are meaningful scale. But we'll obviously are more complex and hard to pull off, as you alluded to, and some of which are really attracted more tuck-in acquisitions that we think are strategically compelling and a creative that we can go active.

Jason Hahn: I'll see if Jason, do you want to take that question? Yes, sure.

Speaker Change: I'll see if Jason, do you want to take that question?

Jason Hahn: So we remain, you know, aggressive but disciplined in our pursuit of M&A. It's certainly something we're focused on at all times. We have an active pipeline of companies that we are pursuing that fit into the various buckets, some of which are in that transformative bucket that are meaningful scale, but will obviously be more complex and harder to pull off, as you alluded to, and some of which are really attractive, more tuck-in acquisitions that we think are strategically compelling and accretive that we can go after.

Jason: Yes, sure.

Jason: So we remain, you know, aggressive but disciplined in our pursuit of M&A.

Jason: It's certainly something we're focused on at all times. We have an active pipeline of companies that we are pursuing.

Jason: That fit into the various buckets, some of which are in that transformative bucket that are meaningful scale, but will obviously are more complex and harder to pull off as you alluded to.

Jason: and some of which are really attractive, more tuck-in acquisitions that we think are strategically compelling and accretive that we can go after.

Jason Hahn: And so we remain, you know, open to all of those different opportunities that can add value to the business and be accretive to either our growth or to our margin profile. When it comes to the sweepstakes business, we continue to look at different opportunities to evaluate that space. We're being very thoughtful in the way that we enter that space and consider all the different opportunities there as well, given how big of a market it's become and how dynamic it is. We want to be thoughtful, but you can expect to hear more from us around that in the future.

Jason Hahn: And so we remain, we remain, you know, open to all of those different opportunities that can add value to the business and be a creative either our growth or to our margin profile. When it comes to the switch takes business, we continue to look at different opportunities to evaluate that space where we're being very thoughtful in the way that we enter that space and consider all the different opportunities there as well, given how big a market has become and how dynamic is.

Jason: And so, we remain open to all of those different opportunities that can add value to the business and be accretive to either our growth or to our margin profile.

Jason: When it comes to the sweepstakes business, we continue to look at different opportunities to evaluate that space. We're being very thoughtful in the way that we enter that space.

Jason: and consider all the different opportunities there as well, given how big of a market it's become and how dynamic it is. We want to be thoughtful, but you can expect to hear more from us around that in the future.

Jason Hahn: We want to be thoughtful, but we can expect to hear more from us around the future. Okay, got it.

Greg Gibas: Okay, I got it. Thanks very much.

Greg Gibas: Thanks very much. Thank you, Greg.

Speaker Change: Okay, got it. Thanks very much.

Unknown Executive: Thank you. There are no further questions at this time.

Operator: Thank you. There are no further questions at this time. I'll hand the floor back to management for closing remarks. Thank you very much.

Greg Gibas: Thank you, Greg.

Andrew Pascal: I'll hand the floor back to management for close remarks. Thanks very much. So, before we conclude the call, I just want to reaffirm a couple of key things. First of all, as a management leadership team, we are intensely focused on making sure that our business is operating efficiently and productively, and that where there is an opportunity for us to take costs out of the business and improve our margins. We're going to find it, and we're going to do it. But we're also a company that is deeply committed to future growth. It's not as deterministic as we'd like it to be.

Speaker Change: Thank you. There are no further questions at this time. I'll hand the floor back to management for closing remarks.

Andrew Pascal: So look, before we conclude the call, I just want to reaffirm a couple key things. First of all, as a management leadership team, we are intensely focused on making sure that our business is. Operating efficiently and productively, and where there is an opportunity for us to take costs out of the business and improve our margins, we're going to find it, and we're going to do it. But we're also a company that is deeply committed to future growth. It's not as deterministic as we'd like it to be. We're creating products that don't have functional utility. They're entertainment products that appeal to people on more of an emotional plane.

Speaker Change: Thanks very much.

Speaker Change: So look, before we conclude the call, I just want to reaffirm a couple key things. First of all, as a management leadership team, we are intensely focused on making sure that our business is...

Speaker Change: operating efficiently and productively and that where there is an opportunity for us to pay costs out of the business and improve our margins, we're going to find it and we're going to do it.

Speaker Change: But we're also a company that is deeply committed to future growth.

Andrew Pascal: We're creating products that don't have functional utility; they're entertainment products that appeal to people more of an emotional claim. We believe in the opportunities that we're investing in. We're going to continue to invest in those things because of the future growth they represent, and hopefully we'll continue to find the right balance between optimizing the performance of our businesses it is today, as challenging as the environment is, while still investing in those things are going to drive our future growth. So I appreciate that it's certainly difficult to engender the kind of confidence from the investor community that we would hope and want, particularly when we're having to adjust our guidance.

Speaker Change: It's not as deterministic as we'd like it to be. We're creating products that don't have functional utility. They're entertainment products that appeal to people on more of an emotional plane.

Andrew Pascal: We believe in the opportunities that we're investing in, and we're going to continue to invest in those things because of the future growth they represent. And hopefully, we'll continue to find the right balance between optimizing the performance of our business as it is today, as challenging as the environment is, while still investing in those things that are going to drive our future growth. So, I appreciate that it's certainly difficult to engender the kind of confidence from the investor community that we would hope and want, particularly when we're having to adjust our guidance, but I believe that I, along with the team, am doing So, I appreciate everybody's time and continued support, and I look forward to talking about our progress on our upcoming calls.

Speaker Change: We believe in the opportunities that we're investing in. We're going to continue to invest in those things because of the future growth they represent.

Speaker Change: And hopefully, we'll continue to find the right balance between optimizing the performance of our business as it is today, as challenging as the environment is, while still investing in those things that are going to drive our future growth.

Speaker Change: So I appreciate that it's certainly difficult to engender the kind of confidence from the investor community that we would hope and want.

Andrew Pascal: But I believe that I, along with the team, are doing all the things that we need to do to be responsible and reacting to both our current performance while still staying focused on what we can and should be investing in in order to scale up our business and build the kind of confidence going forward. So I appreciate everybody's time, continued support, and I look forward to talking about our progress on our clean calls.

Speaker Change: particularly when we're having to adjust our guidance.

Speaker Change: But I believe that I, along with the team, are doing all the things that we need to do to be responsible and reacting to both our current performance while still staying focused on what we can and should be investing in in order to scale up our business and build the kind of confidence going forward.

Speaker Change: So, I appreciate everybody's time, continued support, and I look forward to talking about our progress on our upcoming calls.

Unknown Executive: Thank you very much.

Unknown Executive: Thank you, and with that we conclude today's conference.

Operator: And with that, we conclude today's conference. All parties may disconnect. Have a good day. Thank you.

Speaker Change: Thank you very much.

Unknown Executive: All parties may disconnect.

Unknown Executive: Have a good day.

Speaker Change: Thank you. And with that, we conclude today's conference. All parties may disconnect. Have a good day. Thank you.