Revenues and Adjusted EBITDA grew YoY and QoQ
in the Fourth Quarter
Introducing FY2023 Financial Guidance
PLAYSTUDIOS, Inc. (NASDAQ: MYPS) (“PLAYSTUDIOS” or the
“Company”), the developer of the playAWARDS loyalty platform and an
award-winning developer of free-to-play mobile and social games,
today announced financial results for the fourth quarter and full
year ended December 31, 2022.
Fourth Quarter Financial Highlights
- Revenue was $79.4 million during the fourth quarter of 2022,
compared to $71.9 million during the fourth quarter of 2021.
- Net loss was $1.7 million during the fourth quarter of 2022,
compared to net income of $0.6 million during the fourth quarter of
2021.
- AEBITDA, a non-GAAP financial measure defined below, was $12.1
million during the fourth quarter of 2022, compared to $12.0
million during the fourth quarter of 2021.
Full Year Financial Highlights
- Revenue was $290.3 million in fiscal year 2022, compared to
$287.4 million in fiscal year 2021.
- Net loss was $17.8 million in fiscal year 2022, compared to net
income of $10.7 million in fiscal year 2021.
- AEBITDA was $38.3 million in fiscal year 2022, compared to
$39.5 million in fiscal year 2021.
Andrew Pascal, Chairman and Chief Executive Officer of
PLAYSTUDIOS, commented, “We finished the year with solid momentum,
with fourth quarter results ahead of our guidance and consensus
expectations. Revenue and AEBITDA exceeded year ago and third
quarter results despite an economic and industry backdrop that
continues to be challenging. AEBITDA margins were 170bps ahead of
third quarter results showing that we are not only growing, we’re
growing at a more profitable rate. DAU and MAU for the fourth
quarter of 2022 were up substantially over the fourth quarter of
2021 aided by the inclusion of Brainium, which we acquired last
October. Adjusted for Brainium, both metrics were largely flat with
year ago and third quarter 2022 results. ARPDAU continued to show
improvements versus last quarter, with notable gains in Tetris and
myVEGAS Bingo.” Pascal further noted, “playAWARDS grew meaningfully
in 2022 with partners, available rewards, and player purchases all
increasing by double digit percentages vs. year ago levels. 2023
will be a significant year for the platform as we incorporate our
playAWARDS loyalty program into our collection of casual games.
Integrating our loyalty model into Tetris and the Brainium
portfolio will nearly triple its DAU reach and, we believe,
demonstrate the 'loyalty lift' that can be achieved in any category
of gaming.”
He continued “Looking forward, we have exciting plans for 2023.
We remain committed to diversifying our collection of games,
expanding our player network, and demonstrating the power of
playAWARDS. In support of this, we have a balanced portfolio of
new, early-stage, and evergreen initiatives, including new Tetris
games, optimizations for our Brainium suite of casual games, and
new innovations for our social casino suite. This should allow us
to drive organic growth as we continue to act on additional
strategic M&A opportunities. As part of our ongoing focus on
optimizing our execution, we recently initiated some organizational
changes, realigning and consolidating key business activities.
Under this new structure, we believe we can better maximize the
productivity of our assets and drive higher returns on capital.” He
further highlighted, “We’ve also been actively repurchasing our
stock in the open market, spending $10 million to purchase 2.4
million shares of our stock. Finally, we are introducing 2023
guidance that represents revenue and AEBITDA growth from 2022
levels and a marked increase in our overall profitability. We are
excited about the initiatives we are undertaking in 2023 but remain
cautious given the continuing challenges in our marketplace and the
economy overall.”
Recent Business Highlights
- Integration of Brainium into PLAYSTUDIOS is proceeding smoothly
and on plan. While no explicit synergies are currently forecasted,
we continue to believe there are many opportunities for the
combined company.
- playAWARDS made continuing gains throughout 2022 with available
rewards, purchases, and retail value of purchases all growing by
double digit percentages versus year ago levels. We expect the
platform to be fully integrated into Tetris and the Brainium
portfolio in 2023, expanding its reach to approximately 3 million
DAU.
- Across the portfolio, the company has a compliment of
development-stage, growth-oriented, and evergreen initiatives. This
should enable the company to support its forever-franchises, while
seeding future growth with early-stage or altogether new
products.
- We initiated a $10 million share repurchase program in the
fourth quarter, which we recently completed. PLAYSTUDIOS has
approximately $40 million remaining of its current share repurchase
authorization.
- We continued to scale our studios in Vietnam and Serbia, which
now account for nearly 40% of our total development capacity.
Outlook
The Company expects full-year 2023 revenue to be in the range of
$300.0 million to $320.0 million. In addition, full-year AEBITDA is
expected to be in the range of $47.5 million to $52.5 million.
We have not provided the most directly comparable GAAP measure
for our AEBITDA outlook because certain items that are part of the
projected non-GAAP financial measure are outside of our control or
cannot be reasonably estimated without unreasonable effort.
Conference Call Details
PLAYSTUDIOS will host a conference call at 5:00 p.m. Eastern
Time today, which will include a brief discussion of the results
followed by a question and answer session.
The call will be accessible via the Internet through
https://ir.playstudios.com or by calling (866) 405-1203 for
domestic callers and (201) 689-8432 for international callers.
A replay of the call will be archived at
https://ir.playstudios.com.
About PLAYSTUDIOS, Inc.
PLAYSTUDIOS (Nasdaq: MYPS), creator of the groundbreaking
playAWARDS loyalty platform, is a publisher and developer of
award-winning mobile games, including the iconic Tetris® mobile
app, Pop! Slots, myVEGAS Slots, myVEGAS Blackjack, myKONAMI Slots,
myVEGAS Bingo, MGM Slots Live, Solitaire, Spider Solitaire and
Sudoku. The playAWARDS loyalty platform enables players to earn
real-world rewards from a global collection of iconic hospitality,
entertainment, and leisure brands. playAWARDS partners include MGM
Resorts International, Wolfgang Puck, Norwegian Cruise Line,
Resorts World, IHG, Bowlero, Gray Line Tours, and Hippodrome Casino
among others. Founded by a team of veteran gaming, hospitality, and
technology entrepreneurs, PLAYSTUDIOS apps combine the best
elements of popular casual games with compelling real-world
benefits. To learn more about PLAYSTUDIOS, visit
playstudios.com.
Performance Indicators
We manage our business by regularly reviewing several key
operating metrics to track historical performance, identify trends
in player activity, and set strategic goals for the future. Our key
performance metrics are impacted by several factors that could
cause them to fluctuate on a quarterly basis, such as platform
providers’ policies, seasonality, player connectivity, and the
addition of new content to games. We believe these measures are
useful to investors for the same reasons. The key performance
indicators may differ from similarly titled measures presented by
other companies. For more information on our key performance
indicators, please refer to the definitions below and the
“Supplemental Data—Key Performance Indicators” section of this
press release.
Daily Active Users (“DAU”): DAU is
defined as the number of individuals who played a game on a
particular day. We track DAU by the player ID, which is assigned
for each game installed by an individual. As such, an individual
who plays two different PLAYSTUDIOS games on the same day is
counted as two DAU while an individual who plays the same
PLAYSTUDIOS game on two different devices is counted as one DAU.
Brainium tracks DAU by app instance ID, which is assigned to each
installation of a game on a particular device. As such, an
individual who plays two different Brainium games on the same day
is counted as two DAU while an individual who plays the same game
on two different devices is counted as two DAU. The term “Average
DAU” is defined as the average of the DAU, determined as described
above, for each day during the period presented. We use DAU and
Average DAU as measures of audience engagement to help us
understand the size of the active player base engaged with our
games on a daily basis.
Monthly Active Users (“MAU”): MAU
is defined as the number of individuals who played a game in a
particular month. As with DAU, an individual who plays two
different PLAYSTUDIOS games in the same month is counted as two MAU
while an individual who plays the same game on two different
devices is counted as one MAU, and an individual who plays two
different Brainium games on the same day is counted as two MAU
while an individual who plays the same game on two different
devices is counted as two MAU. The term “Average MAU” is defined as
the average of the MAU, determined as described above, for each
calendar month during the period presented. We use MAU and Average
MAU as measures of audience engagement to help us understand the
size of the active player base engaged with our games on a monthly
basis.
Daily Paying Users (“DPU”): DPU is
defined as the number of individuals who made a purchase in a
mobile game during a particular day. As with DAU and MAU, we track
DPU based on account activity. As such, an individual who makes a
purchase on two different games in a particular day is counted as
two DPU while an individual who makes purchases in the same game on
two different devices is counted as one DPU. The term “Average DPU”
is defined as the average of the DPU, determined as described
above, for each day during the period presented. We use DPU and
Average DPU to help us understand the size of our active player
base that makes in-game purchases. This focus directs our strategic
goals in setting player acquisition and pricing strategy.
Daily Payer Conversion: Daily Payer
Conversion is defined as DPU as a percentage of DAU on a particular
day. Daily Player Conversion is also sometimes referred to as
“Percentage of Paying Users” or “PPU.” The term “Average Daily
Payer Conversion” is defined as the Average DPU divided by the
Average DAU for a given period. We use Daily Payer Conversion and
Average Daily Payer Conversion to help us understand the
monetization of our active players.
Average Daily Revenue Per DAU
(“ARPDAU”): ARPDAU is defined for a given period as the
average daily revenue per Average DAU, and is calculated as game
and advertising revenue for the period, divided by the number of
days in the period, divided by the Average DAU during the period.
We use ARPDAU as a measure of overall monetization of our active
players.
playAWARDS Platform Metrics
Available Rewards: Available
Rewards is defined as the monthly average number of unique rewards
available in our applications’ rewards stores. A reward appearing
in more than one application’s reward store is counted only once. A
reward is counted only once irrespective of the inventory available
through that reward. For example, one reward for a free night in a
hotel room with ten rooms available for such free night is counted
as one reward. Available Rewards only include real-world partner
rewards and exclude PLAYSTUDIOS digital rewards. We use Available
Rewards as a measure of the value and potential impact of the
program for an interested player. It is assumed that the greater
the variety and breadth of rewards offered, the more likely players
will be to ascribe value to the program.
Purchases: Purchases is defined as
the total number of rewards purchased for the period identified in
which a player exchanges loyalty points for a reward. Purchases are
not adjusted for refunds. Purchases only include purchases of
real-world partner rewards and exclude any PLAYSTUDIOS digital
rewards. The Company does not receive any compensation or revenues
from Purchases. We use Purchases as a measure of audience interest
and engagement with our playAWARDS platform.
Retail Value of Purchases: Retail
Value of Purchases is defined as the cumulative retail value of all
rewards listed as Purchases for the period identified. The retail
value of each reward listed as Purchases is the retail value as
determined by the partner upon creation of the reward. In the case
where the retail value of a reward adjusts depending on time of
redemption, the average retail value is used. Retail Value of
Purchases only include the retail value of real-world partner
rewards and exclude the cost of any PLAYSTUDIOS branded
merchandise. We use Retail Value of Purchases to help us understand
the real-world value of the rewards that are purchased by our
players.
Non-GAAP Financial Measures
To provide investors with information in addition to results as
determined by GAAP, the Company discloses Adjusted Earnings Before
Interest Taxes Depreciation and Amortization (“AEBITDA”) as a
non-GAAP measure that management believes provides useful
information to investors. This measure is not a financial measure
calculated in accordance with GAAP and should not be considered as
a substitute for revenue, net income or any other operating
performance measure calculated in accordance with GAAP.
We define AEBITDA as net income (loss) before interest, income
taxes, depreciation and amortization, restructuring and related
costs (consisting primarily of severance and other restructuring
related costs), stock-based compensation expense, and other income
and expense items (including special infrequent items, foreign
currency gains and losses, and other non-cash items). We also
present AEBITDA margin, a non-GAAP measure, which we calculate as
AEBITDA as a percentage of net revenues.
We believe that the presentation of AEBITDA provides useful
information to investors regarding the Company’s results of
operations because the measure assists both investors and
management in analyzing and benchmarking the performance and value
of our business. AEBITDA provides an indicator of performance that
is not affected by fluctuations in certain costs or other items.
Accordingly, management believes that this measure is useful for
comparing general operating performance from period to period, and
management relies on this measure for planning and forecasting of
future periods. Additionally, this measure allows management to
compare results with those of other companies that have different
financing and capital structures. However, other companies may
define AEBITDA differently, and as a result, our measure of AEBITDA
may not be directly comparable to that of other companies. For
further information regarding these non-GAAP measures, including
the reconciliation of these non-GAAP financial measures to their
most directly comparable GAAP financial measures, please refer to
the “Reconciliation of Net Income (Loss) to AEBITDA” section of
this press release.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding our future financial and
operating performance, our liquidity and capital resources, the
development and release plans of our games, our plans to
commercialize the playAWARDS platform as a stand-alone service for
use by third parties, our increased capacity and use of personnel
in European and Asian studios, and our mergers and acquisition
strategy (including our acquisition of Brainium and its expected
impact and financial performance), all of which involve risks and
uncertainties. Actual results may differ materially from the
results predicted, and reported results should not be considered as
an indication of future performance. Forward-looking statements
include all statements that are not historical facts and can be
identified by terms such as “may,” “might,” “will,” “should,”
“expects,” “plans,” “anticipates,” “intends,” “believes,”
“estimates,” “predicts,” “potential” or “continue,” the negative of
these terms and other comparable terminology that conveys
uncertainty of future events or outcomes. These forward-looking
statements involve known and unknown risks, uncertainties,
assumptions and other factors that may cause actual results to
differ materially from statements made in this press release,
including our ability to develop and publish our games; risks
related to defects, errors, or vulnerabilities in our games and IT
infrastructure; our ability to attract new, and retain existing,
players of our games; the failure to timely develop and achieve
market acceptance of new games and maintain the popularity of our
existing games; rapidly evolving technological developments in the
gaming market; competition in the industry in which we operate; our
financial performance; our ability to execute merger and
acquisition transactions; legal and regulatory developments; and
general market, political, economic and business conditions. Other
potential risks and uncertainties that could cause actual results
to differ from the results predicted include, among others, those
risks and uncertainties included under the captions “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2021 filed with the Securities
and Exchange Commission (the “SEC”) on March 3, 2022, and in other
filings we make with the SEC from time to time, including our
Annual Report on Form 10-K for the fiscal year ended December 31,
2022, to be filed with the SEC. All information provided in this
release is based on information available to us as of the date of
this press release and any forward-looking statements contained
herein are based on assumptions that we believe are reasonable as
of this date. Undue reliance should not be placed on the
forward-looking statements in this press release, which are
inherently uncertain. We undertake no duty to update this
information unless required by law.
PLAYSTUDIOS, INC.
CONSOLIDATED STATEMENT OF
OPERATIONS
(Unaudited and in thousands,
except per share data)
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Net revenues
$
79,378
$
71,929
$
290,309
$
287,419
Operating expenses:
Cost of revenue(1)
21,743
21,840
85,400
91,642
Selling and marketing
21,483
18,581
80,819
79,042
Research and development
16,754
14,792
63,315
61,343
General and administrative
11,511
5,512
40,274
27,902
Depreciation and amortization
10,297
7,253
35,562
27,398
Restructuring and related
2,052
703
13,020
3,082
Total operating costs and expenses
83,840
68,681
318,390
290,409
(Loss) income from operations
(4,462
)
3,248
(28,081
)
(2,990
)
Other income (expense), net:
Change in fair value of warrant
liabilities
(92
)
1,947
1,047
13,933
Interest expense (income), net
875
(29
)
1,925
(235
)
Other income (expense), net
2,327
13
1,491
(229
)
Total other income, net
3,110
1,931
4,463
13,469
(Loss) income before income taxes
(1,352
)
5,179
(23,618
)
10,479
Income tax benefit (expense)
(351
)
(4,561
)
5,835
258
Net (loss) income
$
(1,703
)
$
618
$
(17,783
)
$
10,737
Net (loss) income per share attributable
to Class A and Class B common stockholders:
Basic
$
(0.02
)
$
0.00
$
(0.14
)
$
0.10
Diluted
$
(0.02
)
$
0.00
$
(0.14
)
$
0.09
Weighted average shares of common stock
outstanding:
Basic
130,799
126,074
128,353
111,718
Diluted
130,799
138,635
128,353
124,898
(1)
Amounts exclude depreciation and
amortization.
PLAYSTUDIOS, INC.
CONSOLIDATED BALANCE
SHEETS
(Unaudited and in thousands,
except par value amounts)
December 31,
2022
2021
ASSETS
Current assets:
Cash and cash equivalents
$
134,000
$
213,502
Receivables
27,016
20,693
Prepaid expenses
5,148
5,059
Income tax receivable
1,372
2,117
Other current assets
8,443
413
Total current assets
175,979
241,784
Property and equipment, net
17,532
5,289
Operating lease right-of-use assets
15,562
—
Internal-use software, net
36,118
43,267
Goodwill
47,133
5,059
Intangibles, net
41,113
18,755
Deferred income taxes
13,969
6,282
Other long-term assets
4,603
14,408
Total non-current assets
176,030
93,060
Total assets
$
352,009
$
334,844
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
4,425
7,793
Warrant liabilities
3,682
6,521
Operating lease liabilities, current
4,571
—
Accrued liabilities
21,473
15,599
Total current liabilities
34,151
29,913
Minimum guarantee liability
1,500
—
Deferred income taxes
—
—
Operating lease liabilities,
non-current
11,660
—
Other long-term liabilities
2,385
1,464
Total non-current liabilities
15,545
1,464
Total liabilities
$
49,696
$
31,377
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value
(100,000 shares authorized, 0 shares issued and outstanding as of
December 31, 2022 and December 31, 2021)
—
—
Class A common stock, $0.0001 par value
(2,000,000 shares authorized, 116,756 and 110,066 shares issued,
and 115,635 and 110,066 shares outstanding as of December 31, 2022
and December 31, 2021, respectively)
11
11
Class B common stock, $0.0001 par value
(25,000 shares authorized, 16,457 and 16,130 shares issued and
outstanding as of December 31, 2022 and December 31, 2021,
respectively).
2
2
Additional paid-in capital
290,337
268,522
Retained earnings
16,756
34,539
Accumulated other comprehensive (loss)
income
(151
)
393
Treasury stock, at cost, 1,166 and no
shares at December 31, 2022 and December 31, 2021, respectively
(4,642
)
—
Total stockholders’ equity
302,313
303,467
Total liabilities and stockholders’
equity
$
352,009
$
334,844
PLAYSTUDIOS, INC.
RECONCILIATION OF NET (LOSS)
INCOME TO AEBITDA
(Unaudited and in thousands,
except percentages)
The following table sets forth the
reconciliation of AEBITDA and AEBITDA margin, which we calculate as
AEBITDA as a percentage of net revenues, to net (loss) income and
net (loss) income margin, the most directly comparable GAAP
measures.
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Net (loss) income
$
(1,703
)
$
618
$
(17,783
)
$
10,737
Depreciation & amortization
10,297
7,253
35,562
27,398
Income tax (benefit) expense
351
4,561
(5,835
)
(258
)
Stock-based compensation expense
4,164
775
17,727
4,455
Change in fair value of warrant
liability
92
(1,947
)
(1,047
)
(13,933
)
Change in fair value of contingent
consideration
(2,411
)
—
(2,411
)
—
Special infrequent(1)
—
—
—
7,500
Restructuring and related(2)
2,052
703
13,020
3,082
Other
(768
)
20
(980
)
565
AEBITDA
12,074
11,983
38,253
39,546
GAAP revenue
79,378
71,929
290,309
287,419
Margin as a % of
revenue
Net (loss) income margin
(2.1
%)
0.9
%
(6.1
%)
3.7
%
AEBITDA margin
15.2
%
16.7
%
13.2
%
13.8
%
(1)
Amounts reported during the year ended
December 31, 2021 consist of a transaction bonus and a charitable
contribution per the terms of the merger agreement related to the
Acies Merger.
(2)
Amounts reported during the three months
and year ended December 31, 2021 and December 31, 2022 consist of
severance-related costs and fees related to evaluating various
merger and acquisition opportunities. In addition, amounts reported
during the year ended December 31, 2022 also consist of (i)
non-cash impairment charge related to the suspension of Kingdom
Boss development, (ii) fees related to evaluating various merger
and acquisition opportunities, and (iii) fees related to the Tender
Offer for the Warrants.
PLAYSTUDIOS, INC.
SUPPLEMENTAL DATA – KEY
PERFORMANCE INDICATORS
(Unaudited and in thousands,
except percentages and ARPDAU)
Three Months Ended December
31,
Year Ended December
31,
2022
2021
Change
% Change
2022
2021
Change
% Change
Average DAU
3,169
1,292
1,877
145.3
%
1,917
1,244
673
54.1
%
Average MAU
11,463
4,834
6,629
137.1
%
7,932
4,111
3,821
92.9
%
Average DPU
29
33
(4
)
(12.1
%)
29
34
(5
)
(14.7
%)
Daily Payer Conversion
0.9
%
2.6
%
(1.7)pp
(65.4
%)
1.5
%
2.7
%
(1.2)pp
(44.4
%)
ARPDAU (in dollars)
$
0.26
$
0.61
$
(0.35
)
(57.4
%)
$
0.41
$
0.63
$
(0.22
)
(34.9
%)
PLAYSTUDIOS, INC.
SUPPLEMENTAL DATA – PLAYAWARDS
PLATFORM METRICS
(Unaudited and in thousands,
except available rewards)
Three Months Ended December
31,
Year Ended December
31,
2022
2021
Change
% Change
2022
2021
Change
% Change
Available Rewards (in units)
574
542
32
5.9
%
556
477
79
16.6
%
Purchases (in units)
512
482
30
6.2
%
2,224
1,970
254
12.9
%
Retail Value of Purchases
$
30,212
$
28,804
$
1,408
4.9
%
$
127,803
$
114,426
$
13,377
11.7
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230309005610/en/
Investor Relations Samir Jain, CFA
samir.jain@playstudios.com (917) 224-1058
Media Relations BerlinRosen media@playstudios.com
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