Third Quarter 2023 Revenue of $75.9 Million and
Net Income of $3.8 Million
AEBITDA of $13.5 Million and AEBITDA Margins up
430bps from Year Ago Levels
PLAYSTUDIOS, Inc. (Nasdaq: MYPS) (“PLAYSTUDIOS” or the
“Company”), the creator of the playAWARDS loyalty platform and an
award-winning developer and publisher of free-to-play mobile and
social games, today announced financial results for the third
quarter ended September 30, 2023.
Third Quarter Financial Highlights
- Revenue was $75.9 million during the third quarter of 2023,
compared to $72.1 million during the third quarter of 2022.
- Net income was $3.8 million during the third quarter of 2023,
compared to $3.6 million during the third quarter of 2022.
- AEBITDA, a non-GAAP financial measure defined below, was $13.5
million during the third quarter of 2023, compared to $9.8 million
during the third quarter of 2022.
Andrew Pascal, Chairman and Chief Executive Officer of
PLAYSTUDIOS, commented, “Year-over-year profitability and margins
improved in the third quarter, continuing a trend we’ve seen since
the second half of 2022. Compared to 3Q22, AEBITDA margins grew by
430 basis points in the quarter while total AEBITDA was up 39%.
Year to date, AEBITDA margins have gained 790 basis points over the
prior year comparable period, evidence that our efforts around
operational efficiencies, revenue diversification, and cost
containment are working. We expect gains to continue and we remain
focused on reaching margin parity with our peers. While we’ve yet
to see the same level of momentum in our top-line revenues, I’m
confident in our growth pipeline. Specific revenue drivers include
further refinements in myVEGAS Slots and myKONAMI Slots, the
continued scaling up of our early-stage growth games, the
introduction of new game titles currently in development, and the
expansion of our playAWARDS loyalty marketing platform to external
partners.”
Momentum in the PLAYSTUDIOS collection of growth games continues
to drive overall portfolio performance, while Tetris remains the
largest single driver of the audience and revenue gains, with
players continuing to discover and rediscover this iconic
franchise. The company looks for DAUs to further increase in the
coming months and is working diligently to optimize the ad economy
around its growing player networks. At the same time, PLAYSTUDIOS
remains focused on expanding the Tetris universe and developing new
Tetris titles. These new games are intended for the broader puzzle
category where variants of the core Tetris format have emerged.
Pascal added, “We are encouraged by the Tetris team’s progress to
date and expect one or more of these new games to be introduced in
the coming months.”
PLAYSTUDIOS other growth games, myVEGAS Bingo, MGM Slots Live,
and the Brainium suite, also performed well in the quarter. The
Brainium products will be an area of particular focus for the
company in the coming months and into 2024 as the teams integrate
the playAWARDS loyalty platform under the player-facing myVIP
brand, and examine ways to further improve monetization. We are
encouraged by the results of our recent initiatives in Solitaire
and look forward to leveraging these enhancements across Brainium’s
entire portfolio.
The PLAYSTUDIOS core portfolio continues to track inline with
the broader social casino category. We remain focused on our two
recently transitioned titles. The company believes that an
increased cadence of new content for myKONAMI Slots and myVEGAS
Slots, along with adjustments to their economies and a more refined
segmentation and pricing approach can materially increase
monetization rates and bring them closer to peer levels. As a
reminder, both myKONAMI Slots and myVEGAS Slots are established
franchises with a relatively large base of daily active users.
Pascal further added, “We continue to make progress advancing
our playAWARDS business by adding new partners and functionality to
the platform. We are elevating the presence of our myVIP program in
Tetris and are pleased with the early results. As with our other
games, there is a clear and meaningful lift in engagement when
players interact with this valued-added program. We are in the
process of adding the myVIP loyalty program to our remaining games,
which will meaningfully increase the share of our audience that can
enjoy the program’s unique loyalty benefits. Our end goal remains
to dramatically scale the number of players and partners in our
loyalty ecosystem by offering playAWARDS to external publishers,
enabling us to ultimately grow it as a stand-alone business.”
He concluded “As we approach the close of 2023, I am very
excited about what lies ahead for PLAYSTUDIOS. We see meaningful
opportunities with our core social casino titles, are encouraged by
the momentum across our growth portfolio, and are excited to launch
new game formats under the Tetris banner. In addition to these game
initiatives, we look forward to advancing the features and
capabilities of our playAWARDS division, as we prepare to open up
our model by offering loyalty solutions to other strategically
aligned game publishers.”
Recent Business Highlights
- Executed a new agreement with the Tetris Company, extending
PLAYSTUDIOS’ exclusive mobile rights through at least August of
2029. With this commitment in place, PLAYSTUDIOS can confidently
pursue a more comprehensive and long-term growth strategy for this
beloved gaming franchise.
- Fully launched myVIP in POP! Slots and added an MGM Slots Store
to our direct purchasing site, myVIP.co.
- As of September 30, 2023, PLAYSTUDIOS had a net cash balance of
$130 million and full availability on its $81 million loan
facility. The company did not repurchase any stock in the open
market during the quarter. On November 1, 2023, the Board extended
the share repurchase authorization through November 10, 2024 and
increased the total amount authorized to $50 million, up from $30
million remaining under the previous authorization.
- playAWARDS extended partnerships with AEG, Merlin
Entertainment, and Big Bus Tours in the quarter. At quarter end,
playAWARDS had over 120 rewards partners with players making
purchases of over $24 million in retail value in the quarter.
Outlook
The Company is increasing its 2023 AEBITDA guidance to $60
million from the previous range of $55 to $60 million. 2023 Revenue
guidance is now $305 to $315 million, compared to our previous
guidance of $305 to $325 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, my KONAMI 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. For Tetris and our free-to-play social casino
games, we track DAU by the player ID, which is assigned for each
game installed by an individual. As such, an individual who plays
two of these 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 one DAU. For our Brainium suite of casual games, we
track 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 non-Brainium games in the same month is counted as two
MAU while an individual who plays the same non-Brainium 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 Payer 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 accounting principles generally accepted in the
United States of America (“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; adverse economic or political
conditions in the U.S. and abroad, including changes resulting from
increases in inflation or interest rates and impacts of
geopolitical instability, such as the Ukraine-Russia war and the
Israel-Hamas war; legal and regulatory developments; and general
market 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, including our
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2023, 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.
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(Unaudited and in thousands,
except per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Net revenue
$
75,858
$
72,127
$
233,774
$
210,931
Operating expenses:
Cost of revenue(1)
19,862
21,703
58,276
63,657
Selling and marketing
18,786
19,249
55,283
59,336
Research and development
17,367
15,110
53,503
46,561
General and administrative
10,747
9,864
33,688
28,763
Depreciation and amortization
11,537
8,583
33,686
25,265
Restructuring and related
1,280
796
7,112
10,968
Total operating costs and expenses
79,579
75,305
241,548
234,550
Loss from operations
(3,721
)
(3,178
)
(7,774
)
(23,619
)
Other income (expense), net:
Change in fair value of warrant
liabilities
4,216
4,676
1,381
1,139
Interest income, net
1,364
843
3,521
1,050
Other (loss) income, net
(198
)
(475
)
906
(836
)
Total other income, net
5,382
5,044
5,808
1,353
Income (loss) before income taxes
1,661
1,866
(1,966
)
(22,266
)
Income tax benefit
2,139
1,763
2,437
6,186
Net income (loss)
$
3,800
$
3,629
$
471
$
(16,080
)
Net income (loss) attributable to common
stockholders per share:
Basic
$
0.03
$
0.03
$
0.00
$
(0.13
)
Diluted
$
0.03
$
0.02
$
0.00
$
(0.13
)
Weighted average shares of common stock
outstanding:
Basic
133,351
129,032
132,546
127,529
Diluted
149,655
146,920
148,911
127,529
(1)
Amounts exclude depreciation and
amortization.
PLAYSTUDIOS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited and in thousands,
except par value amounts)
September 30,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
129,807
$
134,000
Receivables
29,501
27,016
Prepaid expenses and other current
assets
10,777
14,963
Total current assets
170,085
175,979
Property and equipment, net
18,027
17,532
Operating lease right-of-use assets
10,212
15,562
Intangibles assets and internal-use
software, net
74,717
77,231
Goodwill
47,133
47,133
Deferred income taxes
20,991
13,969
Other long-term assets
3,534
4,603
Total non-current assets
174,614
176,030
Total assets
$
344,699
$
352,009
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
2,658
4,425
Warrant liabilities
2,301
3,682
Operating lease liabilities, current
4,219
4,571
Accrued liabilities
25,413
21,473
Total current liabilities
34,591
34,151
Minimum guarantee liability
—
1,500
Operating lease liability, noncurrent
6,545
11,660
Other long-term liabilities
1,327
2,385
Total non-current liabilities
7,872
15,545
Total liabilities
$
42,463
$
49,696
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value
(100,000 shares authorized, no shares issued and outstanding as of
September 30, 2023 and December 31, 2022)
—
—
Class A common stock, $0.0001 par value
(2,000,000 shares authorized, 122,090 and 116,756 shares issued,
and 117,367 and 115,635 shares outstanding as of September 30, 2023
and December 31, 2022, respectively)
12
11
Class B common stock, $0.0001 par value
(25,000 shares authorized, 16,457 and 16,457 shares issued and
outstanding as of September 30, 2023 and December 31, 2022.
2
2
Additional paid-in capital
306,111
290,337
Retained earnings
17,227
16,756
Accumulated other comprehensive income
(1,022
)
(151
)
Treasury stock, at cost, 4,723 and 1,166
shares at September 30, 2023 and December 31, 2022,
respectively
(20,094
)
(4,642
)
Total stockholders’ equity
302,236
302,313
Total liabilities and stockholders’
equity
$
344,699
$
352,009
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 revenue, to net (loss) income and net (loss) income margin, the
most directly comparable GAAP measures.
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Net income (loss)
$
3,800
$
3,629
$
471
$
(16,080
)
Depreciation & amortization
11,537
8,583
33,686
25,265
Income tax expense
(2,139
)
(1,763
)
(2,437
)
(6,186
)
Stock-based compensation expense
4,344
3,554
14,391
13,563
Change in fair value of warrant
liability
(4,216
)
(4,676
)
(1,381
)
(1,139
)
Change in fair value of contingent
considerations
—
—
(950
)
—
Restructuring and related(1)
1,280
796
7,112
10,969
Other, net(2)
(1,081
)
(367
)
(3,328
)
(213
)
AEBITDA
13,525
9,756
47,564
26,179
GAAP revenue
75,858
72,127
233,774
210,931
Margin as a % of
revenue
Net (loss) income margin
5.0
%
5.0
%
0.2
%
(7.6
)%
AEBITDA margin
17.8
%
13.5
%
20.3
%
12.4
%
(1)
Amounts reported during the three and nine
months ended September 30, 2022 consist of fees related to
evaluating various merger and acquisition opportunities. Amounts
reported during the nine months ended September 30, 2022 relate to
non-cash impairment charges related to the suspension of Kingdom
Boss development and fees related to a tender offer for the
warrants. Amounts reported during the three and nine months ended
September 30, 2023 relate to non-cash impairment charges related to
certain investments and fees related to evaluating various merger,
acquisition and restructuring opportunities.
(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 September
30,
Nine Months Ended September
30,
2023
2022
Change
% Change
2023
2022
Change
% Change
Average DAU
3,520
1,462
2,058
140.8
%
3,579
1,495
2,084
139.4
%
Average MAU
13,712
6,683
7,029
105.2
%
13,557
6,743
6,814
101.1
%
Average DPU
26
29
(3
)
(10.3
)%
27
30
(3
)
(10.0
)%
Average Daily Payer Conversion
0.8
%
2.0
%
(1.2
)PP
(60.0
)%
0.8
%
2.0
%
(1.2
)PP
(60.0
)%
ARPDAU (in dollars)
$
0.23
$
0.52
$
(0.29
)
(55.8
)%
$
0.24
$
0.51
$
(0.27
)
(52.9
)%
pp = percentage points
PLAYSTUDIOS, INC.
SUPPLEMENTAL DATA – PLAYAWARDS
PLATFORM METRICS
(Unaudited and in thousands,
except percentages and available rewards)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
Change
% Change
2023
2022
Change
% Change
Available Rewards (in units)
598
595
3
0.5
%
578
549
29
5.2
%
Purchases (in units)
433
553
(120
)
(21.8
%)
1,338
1,712
(374
)
(21.9
%)
Retail Value of Purchases (in dollars)
$
24,165
$
31,409
$
(7,244
)
(23.1
%)
$
78,145
$
97,591
$
(19,446
)
(19.9
%)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102839636/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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PLAYSTUDIOS (NASDAQ:MYPS)
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From Jul 2023 to Jul 2024