First Quarter Revenue of $80.1 million and Net
loss of $2.6 million
AEBITDA of $17.8 million, AEBITDA Margins up
930bps from year ago levels
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 first quarter ended March
31, 2023.
First Quarter Financial Highlights
- Revenue was $80.1 million during the first quarter of 2023,
compared to $70.5 million during the first quarter of 2022.
- Net loss was $2.6 million during the first quarter of 2023,
compared to net loss of $25.2 million during the first quarter of
2022.
- AEBITDA, a non-GAAP financial measure defined below, was $17.8
million during the first quarter of 2023, compared to $9.1 million
during the first quarter of 2022.
Andrew Pascal, Chairman and Chief Executive Officer of
PLAYSTUDIOS, commented, “Our momentum exiting 2022 continued as we
posted another terrific quarter. Revenue and AEBITDA exceeded year
ago and fourth quarter results, continuing to validate our unique
strategy and focus on execution. We’ve accomplished this despite
numerous industry and economic headwinds that continue to make
operating conditions challenging.”
He added, “Of particular note this quarter were our AEBITDA
margins which grew 930bps from year ago levels and 700bps from just
last quarter. Our margins have been steadily increasing since 2022
and are approaching those of our peers. Reaching these levels is a
goal of ours and something we believe can be achieved. I’m
particularly encouraged by our progress with our growth portfolio,
which includes Tetris, myVEGAS Bingo, MGM Slots Live, and the
Brainium suite. Led by Tetris, these products are evolving and
gaining footholds with players and partners alike. Our established
businesses are also performing as expected. The transition of
myKONAMI and myVEGAS Slots to our Tel Aviv studio is progressing
smoothly and there are numerous enhancements planned for both
games. The implementation and impact of these changes will take
time, but I’m hopeful we’ll start seeing the benefits towards year
end. The transition of the games was part of our corporate
restructuring plan announced last quarter. As a reminder, this plan
also included the creation of two distinct operating divisions -
playGAMES and playAWARDS - along with a reduction in our overall
headcount. Though we are still early in the cycle of these changes,
I believe they position us for improved performance in the coming
quarters.”
Pascal further noted, “playAWARDS continued to expand its reach
with its initial integration into Tetris late this quarter. We
remain on track to fully incorporate the playAWARDS loyalty
platform into our entire collection of casual games by year end.
Attaching our loyalty model to 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 concluded, “Given the recent momentum, we are raising our
revenue and AEBITDA guidance for the year. We now estimate we will
generate revenue of $305 to $325 million and AEBITDA of $50 to $60
million. At the midpoint, this would suggest year over year revenue
growth and AEBITDA growth of 9% and 44%, respectively. It also
suggests an AEBITDA margin of 17.5% at the midpoint, 430 basis
points higher than 2022 figures. We have continued to buy stock
under our previously announced share repurchase program and
continue to search for compelling M&A opportunities.”
Recent Business Highlights
- Successfully launched and implemented our corporate
reorganization plan that included the creation of two distinct
operating divisions (playGAMES and playAWARDS), movement of
myKONAMI and myVEGAS Slots to our Tel Aviv studio, and a
significant reduction in the overall levels of our global
personnel.
- Launched playAWARDS on Tetris. The March 31, 2023 introduction
coincides with the release of the Tetris Movie on Apple TV. We have
seen an increase in organic traffic to Tetris since the launch and
remain excited about the game’s momentum. We continue to work
towards a full rollout of playAWARDS across our entire casual games
portfolio.
- Continued to repurchase stock in the open market. As of May 8,
2023, we had repurchased an aggregate of 3,764,938 shares of our
Class A common stock at an average price of $4.17 per share under
our $50 million share repurchase authorization and had
approximately $34.3 million remaining capacity.
- playAWARDS relaunched its partnership with Norwegian Cruise
Line and expanded its relationship with Gateway Casinos in the
quarter. At quarter end, playAWARDS had over 100 rewards partners
with players making purchases of over $27 million in retail
value.
Outlook
The Company is increasing its full-year 2023 revenue to be in
the range of $305 million to $325 million. This compares to
previous guidance of $300.0 million to $320.0 million. In addition,
full-year AEBITDA is now expected to be in the range of $50 million
to $60 million. This compares to previous guidance 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 revenue
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 revenue.
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 (including statements regarding outlook or
guidance), 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,” “goal,”
“work towards,” “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, 2022 filed with the
Securities and Exchange Commission (the “SEC”) on March 10, 2023,
and in other filings we make with the SEC from time to time. 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 March
31,
2023
2022
Net revenue
$
80,123
$
70,451
Operating expenses:
Cost of revenue(1)
19,527
21,033
Selling and marketing
18,066
20,540
Research and development
17,755
16,981
General and administrative
11,901
9,691
Depreciation and amortization
11,033
8,394
Restructuring and related
4,048
8,655
Total operating costs and expenses
82,330
85,294
Loss from operations
(2,207
)
(14,843
)
Other (expense) income, net:
Change in fair value of warrant
liabilities
(1,058
)
(2,716
)
Interest income (expense), net
895
(5
)
Other income, net
60
187
Total other expense, net
(103
)
(2,534
)
Loss before income taxes
(2,310
)
(17,377
)
Income tax expense
(260
)
(7,835
)
Net loss
$
(2,570
)
$
(25,212
)
Net loss per share attributable to Class A
and Class B common stockholders:
Basic
$
(0.02
)
$
(0.20
)
Diluted
$
(0.02
)
$
(0.20
)
Weighted average shares of common stock
outstanding:
Basic
132,131
126,337
Diluted
132,131
126,337
(1) Amounts exclude depreciation
and amortization.
PLAYSTUDIOS, INC.
CONSOLIDATED BALANCE
SHEETS
(Unaudited and in thousands,
except par value amounts)
March 31, 2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
127,484
$
134,000
Receivables
33,353
27,016
Prepaid expenses and other current
assets
12,238
14,963
Total current assets
173,075
175,979
Property and equipment, net
17,345
17,532
Operating lease right-of-use assets
14,395
15,562
Intangibles assets and internal-use
software, net
78,818
77,231
Goodwill
47,133
47,133
Deferred income taxes
16,208
13,969
Other long-term assets
4,658
4,603
Total non-current assets
178,557
176,030
Total assets
$
351,632
$
352,009
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
3,412
4,425
Warrant liabilities
4,740
3,682
Operating lease liabilities, current
4,506
4,571
Accrued liabilities
22,941
21,473
Total current liabilities
35,599
34,151
Minimum guarantee liability
1,500
1,500
Operating lease liability, noncurrent
10,574
11,660
Other long-term liabilities
2,240
2,385
Total non-current liabilities
14,314
15,545
Total liabilities
$
49,913
$
49,696
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value
(100,000 shares authorized, no shares issued and outstanding as of
March 31, 2023 and December 31, 2022)
—
—
Class A common stock, $0.0001 par value
(2,000,000 shares authorized, 118,867 and 116,756 shares issued,
and 116,447 and 115,635 shares outstanding as of March 31, 2023 and
December 31, 2022, respectively)
11
11
Class B common stock, $0.0001 par value
(25,000 shares authorized, 16,457 and 16,457 shares issued and
outstanding as of March 31, 2023 and December 31, 2022.
2
2
Additional paid-in capital
297,662
290,337
Retained earnings
14,186
16,756
Accumulated other comprehensive income
(94
)
(151
)
Treasury stock, at cost, 2,420 and 1,166
shares at March 31, 2023 and December 31, 2022, respectively
(10,048
)
(4,642
)
Total stockholders’ equity
301,719
302,313
Total liabilities and stockholders’
equity
$
351,632
$
352,009
PLAYSTUDIOS, INC.
RECONCILIATION OF NET LOSS 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 revenue, to net loss and net loss
margin, the most directly comparable GAAP measures.
Three Months Ended March
31,
2023
2022
Net loss
$
(2,570
)
$
(25,212
)
Depreciation & amortization
11,033
8,394
Income tax expense
260
7,835
Stock-based compensation expense
4,853
6,868
Change in fair value of warrant
liability
1,058
2,716
Change in fair value of contingent
considerations
(53
)
—
Restructuring and related(1)
4,048
8,655
Other, net(2)
(864
)
(182
)
AEBITDA
17,765
9,074
GAAP revenue
80,123
70,451
Margin as a % of
revenue
Net loss margin
(3.2
)%
(35.8
)%
AEBITDA margin
22.2
%
12.9
%
(1)
Amounts reported during the three
months ended March 31, 2023 relate to the internal reorganization
including severance-related costs, and fees related to evaluating
various merger and acquisition opportunities. Amounts reported
during the three months ended March 31, 2022 consist of fees
related to evaluating various merger and acquisition opportunities,
severance-related costs, and a non-cash impairment charge related
to the suspension of Kingdom Boss development.
(2)
Amounts reported in “Other, net”
include interest expense, interest income, gains/losses from equity
investments, foreign currency gains/losses, and non-cash
gains/losses on the disposal of assets.
PLAYSTUDIOS, INC.
SUPPLEMENTAL DATA – KEY
PERFORMANCE INDICATORS
(Unaudited and in thousands,
except percentages and ARPDAU)
Three Months Ended March
31,
2023
2022
Change
% Change
Average DAU
3,565
1,555
2,010
129.3
%
Average MAU
13,082
6,913
6,169
89.2
%
Average DPU
28
31
(3
)
(9.7
)%
Average Daily Payer Conversion
0.8
%
2.0
%
(1.2
)pp
(60.0
)%
ARPDAU (in dollars)
$
0.24
$
0.50
$
(0.26
)
(52.0
)%
pp = percentage points
PLAYSTUDIOS, INC.
SUPPLEMENTAL DATA – PLAYAWARDS
PLATFORM METRICS
(Unaudited and in thousands,
except available rewards)
Three Months Ended March
31,
2023
2022
Change
% Change
Available Rewards (in units)
534
521
13
2.5
%
Purchases (in units)
440
592
(152
)
(25.7
%)
Retail Value of Purchases (in dollars)
$
27,340
$
33,704
$
(6,364
)
(18.9
%)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509005917/en/
PLAYSTUDIOS CONTACTS
Investor Relations Samir Jain, CFA
samir.jain@playstudios.com (917) 224-1058
Media Relations BerlinRosen media@playstudios.com
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