Q2 2025 Playtika Holding Corp Earnings Call
Good day and thank you for standing by.
Welcome to the place.
Q2 2025 earnings conference call.
It's time. All participants are in a listen-only mode.
After the speaker's presentation, there will be a question and answer session.
To ask a question during the session, you will need to press *11 on your telephone.
You will then hear an automated message. Advising. Your hand is raised.
To a draw. Your question. Please, press star 1 1 again.
Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today. Ta Lee SVP, corporate finance and investor relations. Please go ahead.
Welcome everyone. And thank you for joining us today. For the second quarter of 2025 earnings call for Playa holding Court. Joining me on the call today, are Robert and to call to founder and CEO play Chica and Craig Abrams. Please keep this President and Chief Financial Officer.
I'd like to remind you that today's discussion may contain 4 looking statements including but not limited to the company's anticipated future revenue and operating performance, and more specifically, the feature performance of our individual titles such as Automania, or recently launched Disney Salter.
These statements and other comments are not a guarantee of future performance, but rather a subject to risk and uncertainties, some of which are beyond our control.
These 4 looking statements apply to today and you should not rely on them as representing our views in the future.
We undertake new obligations to update these statements after this call.
we've posted an accompanying, slide deck to our investor relations website with
This call will contain information on forward-looking statements and non-GAAP measures. We will also post prepared remarks immediately following the call.
For more complete discussion of the risks and uncertainties. Please see your filings with the FCC.
With that, I'll now turn the call over to Robert.
Good morning, and thank you everyone, for joining our call today.
I want to start by acknowledging the resilience and dedication of our team, despite the ongoing headwinds facing mobile gaming, we remain firm in our commitment to our strategic priorities.
For Q2 25, we are reporting revenue of 696 million and we just said ibida of 167 million.
While these numbers reflect some unper, we have several positive developments to highlight.
First, I am incredibly happy to share the success of our last launch.
this is Solita, the game is already hit the hundred million dollar annual run rate, Revenue threshold,
Which is Testament to the incredible work of our super play Studio.
Working in collaboration with Disney and pixel games.
This achievement helped Drive sequential growth in the super play portfolio and we are optimistic about its continued performance.
We have been pleased with the overall performance of this install and the super play portfolio since the acquisition.
Second coming of Records quarter in q1. Bingo Blitz continues to experience.
A strong engagement across the board.
The studio is seeing a strong Rim up in the d2c revenue.
And we are pleased with the performance of the largest game in our portfolio.
Third, we're increasing our long-term Target for d2c to 40% up from 30%.
The goal is to sustain ibida and free cash flow as we manage changes within our portfolio and respond to changing landscape of direct payments.
During this period, our more mature titles are experiencing decline in Revenue. While our more recently acquired titles are in process of translation from being EBA negative to positive.
We believe that continue to increase our d2c penetration will help offset margin pressure during this transitional period.
Test to stabilize the game economy.
As we mentioned previously, this is the part of getting goals before it's getting better.
Although players engagement continues to be strong, monetization has not kept pace.
And the team is prioritizing efforts to improve this area.
Our new flood game is critical component to our slot strategy?
And we are taking a major approach to this development.
We remain on track to launch it in the fourth quarter of this year. And while we do not expect a material impact on our 25 results, we see it an important long-term growth driver for platica.
In addition, super plays makes new game, has a potential to be a standout in its category.
With the launch timing details to be shared at a future date.
Beyond this project where actively exploring opportunities to develop a launch additional new game.
In general that there are strategically important to us.
We excited about the pipeline. We are building and look forward to providing more updates at this project progress.
Thank you. And I will now turn the call over to Craig for more details review of our financial performance.
Thank you, Robert.
It is important to highlight the portfolio dynamics, that have shaped our performance.
This quarter. We experienced a slight sequential decline in Revenue, primarily driven by the continued decline in Slaughter Mania.
Despite this our year-over-year performance, reflects the successful execution of our m&a strategy.
Our acquired portfolio of games has been a significant driver of this growth.
The super play portfolio, the UDA games card, portfolio, and animals, and coins have all contributed to our year-over-year Revenue growth.
With that, let us get into the details of the quarter.
We generated 696 million of Revenue. In the quarter, reflecting a 1.4% sequential Decline and an 11% year-over-year increase.
Gaap net income for the quarter was 33.2 Million. Representing an 8 and a half percent sequential increase, and a 61.7% year-over-year decrease.
Adjusted ibida for the quarter was 167 million, showing a slight sequential decline of 02 percentage of 12.6%.
This decline in adjusted. Eva margins was primarily driven by increased sales and marketing expenses associated with our super play games which resulted in margin dilution following the super play acquisition.
DC revenue for the quarter was slightly off. Our record, high Revenue last quarter, achieving 175.9 million, a 1.8%, sequential Decline, and a 1.3% increase year-over-year.
Growth in D Toc was driven by several titles.
Our leading casual games, including Bingo Blitz, June's journey and salt. Our grand Harvest all setting record, D to see numbers for the quarter.
However, this growth was offset by sequential decline in slot mania, as D Toc Revenue.
We are putting more effort into expanding our GDC business and expect to see stronger results in the second half of the year.
It's incremental margin will help offset the ebit. Dot pressure, we are experiencing from the revenue declines. In some of our more mature titles especially in the slot side of the business.
Historically, we had spoken about 30% of revenues, as the target for D Toc.
But we now believe that a more realistic long-term Target for DC is closer to 40% of total revenues.
With that. Let us dive into the performance of our top 3 titles from the quarter beginning with Bingo Blitz.
Bingo Blitz, Revenue was 160.2 Million down, 1.3% sequentially in up 2.9% year-over-year.
We are pleased to see that Bingo held strong sequentially against its record first quarter.
Additionally, Bingo recorded. Its own record revenues from our DC Platforms, in the second quarter.
As the largest title in our portfolio. Bingo Blitz continues to execute at a high level reinforcing its leadership position in a winner. Take most category
The game remains a strong contributor to our overall performance in a clear example of our strategy to invest in category, leading games with durable growth potential.
DC business, which we expect will enhance our DC mix and help preserve margins over time.
Slot Mania Revenue was 86.5 Million down 22.7% sequentially in 35.4% year-over-year.
It's a lot of mania faced an acceleration and its declining Trend during Q2 as we began implementing changes to address the game economy challenges, we discussed last quarter
These adjustments are aimed at rebalancing, the game economy, to support healthier, long-term engagement and monetization, but they are contributing to near-term. Pressure on Revenue performance.
We recognize that this is a difficult phase, when our results may continue to soften before we begin to see improvement. At the same time, we remain focused on executing our broader strategy in the social slots category.
The development of our new slot title which is designed to complement. Our existing portfolio is progressing. Well,
we view this title as a key pillar in our efforts to regain lost market, share and expect to have our Global launch in Q4 of this year.
June's Journey Revenue was 69.1 Million up, 3%, sequentially, and down 7.4% year-over-year.
June's Journey has shown several quarters are encouraging sequential stability. Following a period of decline in the first half of 2024.
As we look to reignite growth, the focus is Shifting towards deeper monetization supported by a refreshed leadership, team and our wuga studio.
Earlier this year, we appointed a new GM and leadership team at wuga bringing a renewed, Focus to June's journey and its long-term road map.
In addition, we made the decision to discontinue the development of Claire's Chronicles to focus our resources on new games, showing the strongest momentum.
We believe these changes will allow the wuga team to focus on the execution and lay the foundation for renewed growth. In June's journey in the second half of the year and Beyond
Turning now to specific line items in our p&l for the second quarter.
Cost of Revenue, increased 16.4% year-over-year driven by our Revenue growth, and the increase in amortization expenses and our p&l resulting from the acquisition of super play.
Operating expenses increased by 22.6% year-over-year.
Increase the increase was primarily driven by higher Performance Marketing spending, which was also a direct result of our super play acquisition.
R&D increased by 13.8% year-over-year.
Growth in R&D was primarily driven by an increase in average headcount during the quarter compared to the same period last year.
This was largely due to the acquisition of super play which bolstered their R&D Workforce.
Sales and marketing increased by 52.1%, year-over-year increase in sales and marketing was primarily driven by the incremental Performance Marketing spend from our acquisition of super play.
In the last quarter, we mentioned that we anticipated a sequential step down in sales and marketing expenses and we observed this trend in the second quarter.
We expect the sequential step down to continue for the second half of this year.
G&A expenses decreased by 62.8% year-over-year.
During the quarter, we recorded a 33 million benefit in our G&A expenses, related to the revaluation of contingent considerations tied to our past acquisitions.
It is important to note that this is a non-cash adjustment and reflects a change in estimated payouts rather than any operational Improvement in GNA efficiency.
Be comparable quarter in 2024 also had an adjustment related to contingent. Considerations excluding adjustments in both periods GNA would have declined year-over-year by 20.8%
As of June 30th, we had approximately 592.1 million in cash, cash equivalents and short-term Investments.
Looking at our operating metrics.
Average dpu declined, 3.1% sequentially, and increased 26.8% year-over-year to 378,000.
The average Dau decreased, 2.2% sequentially and increased 8.6% year-over-year to 8.8 million.
Our Dao was flat versus q1 and increased 2.4% year-over-year to 87 cents.
Finally, we are revising our guidance for the year, our updated Revenue range for the year is 2.7 to 2.75 billion down from 2.8 to 2.85 billion. Despite the decrease, in our Revenue range, we are maintaining our adjusted, Eva range of 715 million to 740 million.
We'd be happy to answer your questions.
As a reminder to ask a question. Please press star 1, 1 on your telephone, and wait, for your name to be announced.
To withdraw your question. Please press star 1 1, again please, stand by while we compile the Q&A roster.
Our first question comes from Arthur Chu with Bank of America Securities, your line is open.
Hey guys. Uh, this is Arthur on the former, thanks for taking the question. So um, you guys have been working on, you know, stabilizing some of the oldest titles, like both Mania for a while. Um, curious. What uh, you know, what are some of the learnings that have taken away from this process and if any of those learnings have perhaps uh LED you to change your approach or uh you know change the way you're thinking about like an attorney around these titles.
Hey, are the events for the question? Sure. So when you're dealing with game economy issues and hyperinflation within a game, these are complex issues. Um, especially in games that, um, you know, are 10 plus years old and have
Various, uh, monetization levels within the game, I think for us, you know, we've learned a lot within Slot Mania. Um, we, you know, it is 1 of the biggest franchises, uh, for slots within the category, we have an Engaged player base. Uh, if you look at the declines in Dau, um, they are better than the declines, you've seen in GPU, so it's clearly a monetization issue. Um, and for us, you know,
It's taking time to peel that through, but I think we're encouraged, um, by the changes that we've been making and seeing the impact there. So it's definitely, uh, something that I highly focused on and, um, we're seeing we're starting to see some some benefits there of our efforts.
Got it. Thank you very much.
Thank you. Our next question comes from Colin Sebastian with Baird. Your line is open.
Uh thanks uh appreciate uh the questions um, I guess I guess first congrats on Disney Solitaire, on that game. Craig can you talk about the economics of the title? You know, the licensing costs, the customer acquisition costs. I guess the, the margin profile of that game versus the the broader portfolio and then I have a follow-up.
Sure. So. Well, you know, the terms of our deal with Disney and Pixar games is
Uh, not publicly disclosed, I think you can imagine as with any um top tier content provider. Uh, there's a license fee associated with licensing, their content that being said, the title is 1 of the most successful launches of the year, in terms of a new title. Um, in any category, um I think that it's scaling much faster than any previous super play title um and we continue to be impressed with the results. And so uh it's been a great collaboration uh with Disney and Pixar games and uh we look forward to continuing to execute on on growing that game.
Okay, great. And then maybe as a follow-up to our other question are, are you guys thinking differently about? I guess the, the legacy of mature portfolio, if there's any structural shift in the market, among mobile gamers, in terms of their preference, for for, um, you know, older versus newer games or, or is that not really something you're observing?
I think the way that we differentiate it is looking at category leading games and so where we're a category leader, we are making investments in the game. If it's an older game that doesn't have category leadership, we're not seeing that same levels of investment. We also all continue to invest in our recently acquired titles that the key area for growth for us. I think if you look across all 3 Acquisitions, they all grew year-over-year. Um, and then continuing to expand our d2c business throughout all of our titles most recently, acquired and existing titles I think
Big growth factor for us, they'll talk about more in the future as growing. Our advertising business. We saw double digit growth sequentially as well there. Uh, and lastly developing and scaling new games as well is something that's, you know, new
for us but something that that we're focused on.
Uh, 1 thing, I would like to add uh that we saw with this uh what happened with the this the solitary that we launched a new game in the category that we already dominating there for a long time and the category grew. So this kind of example is a a making us to think about other categories that were leaders right now and it's going to change the thing that we are looking at launching new game because the example of solitary, Disney is unusual example. We launched a new game with good category dramatically. We still leading the category with our old game. So for us it's a win-win situation.
Okay. Thanks Robert. Thanks Craig.
Thank you. Our next question comes from Eric Handler with Roth Capital. Your line is open.
Eric, please check your mute button.
Sorry about that. Um I'm curious with uh your social casino business. Are you seeing any negative impact uh, from sweepstakes
So it's it's a good question. It's a good question that we cannot give you a straight answer because we are not sure about it. Uh, we see a big pressure on the Social Casino category in the last year. I'm sure there is a part of this activities, uh, but uh, I cannot give you any special numbers or to tell you some special example because I really don't know.
Okay. And is is that an area that you'd ever looked to
uh, move into
No, definitely, no. This is not where we're going. It's an area that we don't believe. And uh, it's not in our plans.
Thank you.
Thank you. Our next question comes from Aaron Lee with McCoy. Your line is open.
Hey, you guys? Good morning. Thanks for taking the question.
Uh, maybe want to start on, I guess, Disney Solitaire. Just, um, yeah, congrats on all the success there. I guess, what is your appetite for pursuing more IP or licensing type arrangements for games, whether organically or through M&A?
Sure.
Uh, so we we are looking at a variety of new game opportunities. I think licensed IP and this environment has done very well. Um,
so I think I think we're open to to the right Partnerships for the right IP in categories, where it makes sense.
Okay. And, um,
A quick follow-up on jackpot tour, any color on your development of this and how you plan to differentiate that from the competition.
And I guess any early testing that you've done that. You can share thank you.
So, thanks for the question. The
I cannot give a lot of information about this game but I can tell you that this game is going to make a difference. This is a, this is what we're looking for. This is how we're going to launch this game. Uh, we have the most, I think long experience in this category for a 15 years and I will ask the casino launch was
I think 12 years ago, we are very excited about the launching this game. I'm sure it's going to close the gap.
Of what we lost in our current organic games. It's going to be different. And when we will have more details, will be more than happy to share with you guys.
Okay, got it. Thank you.
Thank you. As a reminder, please press *1, 1 to ask a question. Again, that is *1, 1 to ask a question.
Our next question comes from Albert. Kim with UBS, your line is open.
Hey guys, thanks for taking the question. Um so recently we've been seeing some multiple headlines and greater scrutiny around kind of the Mobile store markets. Um,
Any impact, uh, if any, uh, does the App Store if it changes have on your TV's Ambitions and any factors we should be mindful of as we think about the new longer term post. And uh, if you could share any like timeline to get to the 40% goal. Thank you.
Sure. So
The changes in the payment landscape and in the App Stores, uh, has been a positive Tailwind for us. Uh, in, you know, the the US specifically, uh, we're seeing upside in iOS. I think in terms of our execution. Now, for the last few years, uh, you know, we've been very consistent in terms of increasing DDC
Concentration. Um, we're seeing that accelerate now with those changes. And we updated our long-term Target as a result from 30% to 40%.
Thank you. I'm showing no further questions at this time.
This concludes today's conference call.
Thank you for participating. You may now. Disconnect