管理層發言
Good afternoon, everyone, and welcome to the PLAYSTUDIOS' Second Quarter 2025 Earnings Call. As a reminder, this conference is being recorded. I would now like to turn the call over to Jason Hahn, PLAYSTUDIOS' Chief Strategy Officer and Head of Investor Relations. Mr. Hahn, you may begin.
Thank you, operator. Good afternoon and thank you for joining us for PLAYSTUDIOS' Q2 2025 Earnings Call. Joining me on the call today are our Chairman and CEO, Andrew Pascal; and our CFO, Scott Peterson. Before we begin, please note that during this call, we may make forward-looking statements. These statements are based on our current expectations and are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our SEC filings for a more detailed discussion of these risks. We will also discuss certain non-GAAP financial measures. These should not be considered a substitute for measures prepared in accordance with GAAP. Reconciliations to comparable GAAP measures can be found in our earnings release and SEC filings. With that, I'll turn it over to Andrew.
Great. Thanks, Jason. Good afternoon, everyone. The dominant theme in Q2 and across the broader market continues to be the rapid rise of social casinos leveraging Sweepstakes mechanics. This structural shift is reshaping player behavior and monetization across the category with more players gravitating towards social casino products powered by Sweepstakes. This trend is pressuring traditional offerings, including our core social casino portfolio. That said, these dynamics were anticipated, and that's exactly why we launched our reinvention program last year. We entered Q2 knowing the headwinds would persist, and we remain focused on advancing the new initiatives that will define our next chapter. While our core business continued to soften this quarter, we're encouraged by the early signals we're seeing in areas like Sweepstakes, direct-to-consumer purchases and new game development. These signals validate our strategic direction and give us confidence in the path ahead.
Let me walk you through some of the key updates. Let's start with our Sweepstakes initiative. After just 9 months since formalizing this effort, we're now live in open beta across 7 states and the early signals are promising. Player retention, engagement and monetization are all trending in the right direction. We're seeing clear evidence that our proposition resonates with players. We're taking a measured and rigorous approach to scaling, focused on ensuring that when we open the product to all eligible states, the experience is fully optimized and delivers on our high standards, player expectations and return on ad spend thresholds. We expect to be live across the full footprint of qualified U.S. states later this year. I want to remind everyone on the call that our strategy consists of a phased approach. We're beginning with a standalone web-based platform, allowing us to build operating excellence and refine our core Sweepstakes mechanics.
Over time, this will evolve into a fully integrated promotional engine that drives chip sales across our social casino portfolio. In parallel, we continue to actively explore complementing our own efforts with strategic acquisitions that could accelerate our momentum and position us for market leadership in the category. Let's turn to our other growth opportunity, Tetris Block Party. Development progressed steadily throughout Q2 with meaningful product improvements and early marketing tests that offer valuable insights into player engagement and acquisition efficiency. As with any new title, we're in a phase of continuous iteration, refining the gameplay, tuning the economy and sharpening the funnel. We're currently in the mid-stages of that cycle. And while there's still work to do, we're increasingly confident in the game's potential. We remain on track for a Q4 launch. I'd like to provide a bit more color on our overall play games publishing business.
As I already highlighted, the casino portfolio continues to be impacted by the broader market shift towards Sweepstakes products. We're seeing ongoing softness in core titles with DAU declines across the board as the primary driver. This was partially offset by stronger unit-level monetization, particularly in myKONAMI, which was a bright spot in the quarter. We also continue to scale our direct-to-consumer business, which remains a standout. In Q2, direct-to-consumer generated $6.7 million of in-app purchase revenue, up 107% year-over-year and 34% sequentially and represented 13.9% of total in-app purchase revenue. This momentum is driven by increased adoption and deeper engagement with our MyVIP direct-to-consumer offerings. And with Apple's recent policy changes giving us more flexibility to promote the channel, we see even greater opportunity to build on this momentum. Let's talk casual.
Our casual portfolio also remains under pressure due to challenging market and competitive dynamics. During the quarter, we focused on product updates aimed at improving engagement and retention. We believe these enhancements will better position us to deploy user acquisition more profitably in future quarters. In the meantime, we've deliberately scaled back marketing spend to prioritize margin contribution from this portfolio, and we'll continue to evaluate our approach going forward. On the playAWARDS front, playAWARDS remains our core differentiator, and we continue to invest in the platform to deepen engagement and drive long-term loyalty. In Q2, players purchased nearly 200,000 rewards with a retail value of $13 million. While rewards purchases were down compared to Q1, we're seeing encouraging signs as we focus on higher-value partners and more curated strategic offerings that align with player preferences and our broader engagement goals.
We also ran several promotions for the upcoming MyVIP World tournament of slots across our games, which were very well received by our players. We're excited about the momentum building around this high-impact franchise activation, and we believe it will play a meaningful role in reenergizing our community in the coming quarters ahead. Lastly, I'd like to briefly touch on our balance sheet and capital allocation. Our balance sheet remains rock solid. We ended the quarter with approximately $112.9 million in cash, up from $107 million in Q1, even after deploying over $2 million to repurchase shares during the quarter. We remain debt-free with full access to our $81 million credit facility, providing us with the strategic latitude to deploy capital to high-returning initiatives in the quarters ahead.
Thanks, Andrew. Good afternoon, everyone. Second quarter revenue was $59 million, down approximately 18.3% year-over-year and 5.4% sequentially. This reflects continued softness in our core casino and casual games, which, as Andrew mentioned, was driven by market disruption and DAU declines across most titles. Adjusted EBITDA for the quarter was $10.7 million, down 24% year-over-year and 14.2% sequentially, reflecting limited flow-through given revenue softness. Adjusted EBITDA margin was 18.1% compared to 19.5% in the second quarter of '24 and 19.9% in the first quarter of '25. DAU was 2.3 million, down from 2.6 million in the first quarter and 3.2 million in the second quarter of '24. MAU was 10 million, also down from 11.4 million in the first quarter. ARPDAU was $0.28, up slightly from $0.26 last quarter and $0.25 a year ago, reflecting stronger monetization. Direct-to-consumer revenue for the second quarter was $6.7 million, representing 13.9% of total in-app purchase revenue.
This was up from $5 million in the first quarter and $3.2 million in the second quarter of '24. For the first half of the year, direct-to-consumer revenue totaled $11.7 million, up 109.8% year-over-year. We ended the quarter with approximately $112.9 million in cash, no debt and an outstanding share count of 125.2 million. While we're currently pacing below our full-year revenue and adjusted EBITDA guidance as revenue softness has more than offset cost savings, we are not changing guidance at this time. We will continue to evaluate how the investments we've made in recent quarters translate and see how this very dynamic market continues to evolve as we approach the back half of the year.
Thanks, Scott. To close, we're clear-eyed about the challenges in our core business, but also confident that we're taking the right steps to adapt and evolve. Our focus remains firmly on executing our core strategic priorities, those being developing our Sweepstakes capabilities, expanding our direct-to-consumer sales, unlocking the potential of Tetris and modernizing our core games, and we're encouraged by the early traction we're seeing across these initiatives. The investments we're making today are building a stronger, more diversified foundation that we believe will drive renewed momentum in the quarters ahead. We appreciate your continued support as we move forward with purpose in this dynamic market. Operator, let's open it up for questions.
分析師問答
Our first question comes from the line of Ryan Sigdahl with Craig-Hallum Capital Group.
I want to start with the DAU, MAU, both down by high 20% year-over-year. I get the challenges with everything going on in the environment. But can you split that out between social casino and casual games? I guess, was it similar between the 2, one better, worse? And then anything within the game construct of either of those categories?
Yes. Look, the DAU and MAU declines were pretty substantial in both cases. I think, obviously, a lot of that's a result of our having pulled back pretty materially on user acquisition investments as well. And so I would say that it's a bit more dramatic in the casual space than the social casino space, but meaningful in both portfolios.
Got you. Then just Sweepstakes, I appreciate kind of the player engagement, monetization encouraging commentary. But anything you can comment from whether it's a quantitative KPI or anything you're willing to share number of users, how ARPDAU compares, just anything kind of from that early launch? And then I guess, given the challenges that don't seem to be abating anytime soon, why not accelerate kind of the full launch of Sweepstakes?
Yes. Today, we are operating our service in seven different locations, having started this initiative around nine months ago. We successfully completed our platform development in about seven months and began initial trials in two locations, using the data from these trials to enhance our platform and service operations. As we gained confidence, we expanded to additional locations. I can report that we are seeing continuous positive improvements across all key metrics. Retention rates are rising, conversion rates are increasing, and the revenue per monetizer is growing. We feel optimistic about our progress and evolution. Now, nine and a half to ten months into this cycle, we believe we are in a solid position. In the upcoming months, we plan to open more locations and allocate additional marketing resources to meet our target returns, which will enable us to scale. The focus is on optimizing our marketing and becoming comfortable with the conversion metrics while observing retention, engagement, and monetization. This will help us achieve the returns necessary for significant investment in expanding the business. We are on track and encouraged by the ongoing evolution of our platform, content, and features, as well as our ability to effectively manage this business.
As someone that lives in one of those 2 initial states, I was a positive contributor for you guys in the quarter. And I do have to say that the experience is, albeit early and evolving, was impressive, I guess, comparable to many of the other Sweepstakes out there. Last question for me. It's probably for Scott, but just any guidepost you can put around Q3. I guess, as a starting point, I think Q3 typically from a seasonality standpoint is pretty similar to Q2. I guess, would you agree with that? And any guidepost you can give around next quarter expectations would be helpful.
Yes. I mean I can weigh in and Scott, he can offer his color, too. But as you highlighted, no meaningful differences that we see in Q3 relative to Q2. Our primary focus is on executing on all of these things that we think are going to restore momentum in our business. And so there's a lot that's changing and a lot that's happening within the portfolio of initiatives that we're actively investing in. We're always reluctant to provide guidance that's based upon all of these new initiatives until we have a clear line of sight as to their predictability, both in terms of timing when they'll be in the market and their capacity to scale and contribute to our operating performance. So for that reason, we're just going to kind of hold to where we are. And I think Q3 won't look that different from what we've seen in Q2.
Our next question comes from the line of Aaron Lee with Macquarie.
I want to stay on Sweepstakes for a little bit more. I just want to make sure I have this right. But as it relates to the Sweepstakes launch, are there any more technical aspects that you still need to hammer out for the platform? Or is it really just about optimizing and refining how you operate at this point?
Yes, all the essential functionality required to launch the service has been in place for the last few months. We are continuing to refine the features, the content we offer, and the best practices to ensure robust fraud detection and overall integrity of the service. Additionally, a significant part of our efforts involves testing various marketing strategies, channels, and campaigns to determine the optimal unit economics for meaningfully investing in scaling the business. We are making progress on multiple fronts, which is significant but also complex, particularly because our competitors have been in the market for a couple of years and have already established solid operational capabilities. We are concurrently working on all these aspects, and it's essential for us to ensure the integrity of our system, our operational processes, and our ability to invest in growth. That is why we've gradually expanded from 2 to 4 and now 7 jurisdictions. I expect that in the coming months, we will start to expand further, and by the end of the year, as I previously mentioned, we aim to be in all qualified jurisdictions. It’s crucial for us to be methodical in qualifying and ensuring we are prepared to move forward.
Understood. Yes. I think that's the right approach. And then for my follow-up, on Sweepstakes again, you've obviously been building out the platform organically. You mentioned you're exploring strategic acquisitions. Any color on what those acquisitions could look like? Would it be targeting tech, talent, a database? Any color you can provide there would be helpful.
Yes, of course. Our aim in this category is to be a market leader, and we are enthusiastic about the changes brought by Sweepstakes in the social casino space, which we see as a growth catalyst. We recognize and admire several competitors in this space that have achieved significant scale and profitability with efficient capital use. We are committed to an organic growth strategy and believe in its effectiveness. However, we are also open to pursuing strategic acquisitions if the right opportunities arise, which would help us gain market share more rapidly and support our goal of being among the top three in this category. Our focus on acquisitions would not primarily be to fill capability gaps but rather to accelerate our progress toward a leadership position.
Our next question comes from the line of Martin Yang with Oppenheimer & Company. Martin, are you on mute?
Can you hear me?
We can hear you now, Martin, but we didn't hear you. So if you could repeat the question, that would be great.
Sure. My question is on the casual portfolio. Aside from new product launches, what's the medium or long-term goal or expectation for the segment? Do you expect the rest of the portfolio to continue gradual decline? Or do you expect a turnaround at a certain point regardless of the macro impact?
Thank you for the question. There are two components to our casual strategy. First, we have our existing portfolio, which includes a range of established products. As I mentioned earlier, we've been concentrating on margin contributions and have significantly reduced our investments in user acquisition for this portfolio. We are focusing on upgrading these products with more advanced technology to enhance our speed and adaptability for new features and content. This should lead to improved retention and engagement, which is crucial for our in-app advertising revenue. Over the past six to eight months, we have been making adjustments in this area. We've also substantially decreased our user acquisition investments in the legacy casual portfolio. We will keep monitoring our progress until we feel confident enough to reinvest in attracting new groups of players, ultimately generating more revenue from our ad products and units.
I don't anticipate substantial growth from the legacy casual portfolio. The second part of our casual strategy involves the Tetris franchise. We are refining our current Tetris product, but most of our resources are dedicated to a new version called Tetris Block Party, which has been in development for nearly two years. The metrics from this product are promising and continue to improve. The market demands high standards for launching a new AAA quality casual game, with a rich feature set and substantial content. We are not only refining the product to meet essential metrics but also enhancing our ability to produce the necessary volume of content for a successful launch. To achieve the scale we envision for Tetris Block Party, we need to ensure we are prepared. Our goal is to stabilize the core legacy casual portfolio, and once we identify it as a viable investment, we will reconsider how much we are investing in user acquisition there. Simultaneously, we will continue to prepare for the launch and scaling of our Tetris Block Party product.
Got it. My other question relates to Tetris Block Party and overall your D2C strategy. With a new game, do you think you can do something unique into the game launch for Tetris Block Party so that its D2C share can be different or can have another boost relative to your platform average?
Yes. I mean that's certainly what we hope for. We have a lot more latitude today in terms of merchandising within the app, alternative methods of more direct purchasing from our players. And so I think to your point, absolutely, we're going to do everything we can to make sure that our players are aware of the alternative and the benefits of purchasing with us directly. With that said, we don't want to introduce any friction that might limit or restrict the player from converting and starting to spend money with us. So we're going to actively look at and optimize how we do that. And I can tell you today that the monetization within the Tetris Block Party product is really solid. It's quite encouraging, and it's going to support and allow us to go into the market — a very competitive market and buy cohorts of players at and around where they're priced today, given how intense the competition is. So to your point, the more direct-to-consumer purchasing we can motivate, the more flow-through and margin that we have to then look at ultimately piling back and investing in scaling up and growing our audience until we achieve that critical mass and then start maturing the product and focusing on improving its margins and harvesting the value.
Our next question comes from the line of Mike Hickey with Benchmark.
Andrew, just on the regulatory pressure here that we're seeing from states to ban Sweepstakes. Just kind of curious your view on how that should trend moving forward and how you get comfortable launching and investing the product in states confident that the regulatory piece won't change and go against you in terms of a ban?
Look, it's the big question, right? And our approach is probably not all that different from most everybody else in the space, which is that we look at the market overall on a state-by-state basis, and we go deep into really qualifying what the regulatory and legal risks are within each of those different markets. And what are the ongoing or active efforts both in support and opposition of the Sweepstakes model within those markets? And then we allow that to inform where it is that we're ultimately going to be deploying our capital and how aggressively we get in and across these different markets. To the extent a market that we think is relatively reliable ends up becoming higher risk, then, of course, we immediately start to moderate our spend in that market. And so it's dynamic and it will be actively managed. So it's — and what I would also say is that we intend to be very active in trying to help bring more credibility and legitimacy to this opportunity.
So the way that we're approaching Sweepstakes and how it's employed, we have a multiphase strategy. The first, we're going to stand up a service that we think is incredibly well executed, and we'll compete with everything else that's in the market. But our ultimate strategy and plan are to more deeply integrate Sweepstakes mechanics and opportunities with our existing native apps and do it in a way that's focused on stimulating and driving the incremental sale of virtual chips that we've always sold. So I think that there's a position that we can take as we come into the market, which is that we're employing Sweepstakes mechanics as a promotional tool the way that they are intended. And so I think that there's a lot that we intend to do to try and legitimize just this opportunity overall and make the case for how and why it should be embraced and supported as opposed to opposed.
Yes, Andrew. The market — obviously, Sweepstakes mechanics market, I think you've characterized as very competitive with a bunch of sort of aggressive incumbents that have established share. So when you look to launch your app in your respective markets, how significant is the UA spend? How is that going to impact your sort of near-term EBITDA creation? Are you, I guess, most important, confident that with that spend that the quality of your app relative to your competition, that in fact, you'll achieve the retention you need to justify that?
Yes. I mean that's the model, right, as you establish and set a certain return horizon. And as long as you're achieving and meeting that horizon, then you should be able to confidently deploy more capital. And so the industry generally has a working towards a 4- to 6-month return horizon on their ad spend. I think that's a reflection of some of the regulatory uncertainty you alluded to a moment ago. The 4- to 6-month return horizon on ad spend for Sweepstakes products compares to what has been traditionally typical for the social casino industry, the more traditional social casino industry of anywhere from 12 to 24 months. So wildly different. I think your question, like to what extent do we think our investing in growing our Sweeps business might adversely impact EBITDA, well, it will during its growth cycle, but that's a good thing because we're seeing the opportunity to go grab customers and market share and to scale up our service so that ultimately can get to a place where we then start to focus on flow-through and improve margins and harvest the benefits. That's how we see it playing out.
Last question. I understand you kept the guidance the same. obviously, your core business is facing pretty significant pressure. And of course, you're also on the cusp of transitioning to the Sweepstakes, which clearly is exciting, but will also take some investment. Just curious if you're comfortable here that you have enough cash on the balance sheet to sort of manage through this transition.
For sure. I mean our cash position is very strong, as I alluded to earlier. We have all the capital we need to be very aggressive in the way that we approach investing in and getting into the space. And in fact, have enough capital to support both of our growth initiatives. Should they continue to show positive signs and we look to deploy tens of millions of capital into scaling and growing both Tetris Block Party and our Sweeps business, we're in a position where we can do that.
And we have reached the end of the question-and-answer session. And also, this does conclude today's conference, and you may disconnect your lines at this time. We thank you for your participation.