Core Insights - PlayStudios experienced a challenging third quarter with continued revenue and user declines attributed to category headwinds and cost-reduction efforts [1] - CEO Andrew Pascal indicated that the company's valuation is only slightly above its cash position, raising concerns among investors about the company's direction [1] Financial Performance - Revenue for Q3 was $57.65 million, missing analyst estimates of $59.45 million, representing a 19.1% year-on-year decline [6] - Adjusted EPS was -$0.01, missing estimates of $0.01, while adjusted EBITDA was $7.25 million, below the expected $10.06 million, resulting in a 12.6% margin [6] - The operating margin fell to -13.6%, down from -6.7% in the same quarter last year [6] - Daily Active Users decreased to 2.21 million, down 750,000 year on year [6] - Market capitalization stands at $100.9 million [6] Management Commentary - CEO Andrew Pascal described the operating environment as "extremely challenging," emphasizing a shift from content development to efficiency [1] - Positive early data from sweepstakes users was noted, with plans to expand the Win Zone to all available states before increasing marketing investment [6] - Pascal acknowledged the need to monitor the impact of recent regulatory bans in California on core games, with targeted marketing planned [6] Analyst Insights - Questions from analysts highlighted concerns about the balance between organic growth and M&A, with Pascal stating that both options are being considered but no deals are imminent [6] - Visibility into 2026 and guidance for sweepstakes contributions are expected to improve by year-end after broader launches and market tests [6] - CFO Scott Peterson confirmed that Q4 revenue from the core business is expected to decline further, reflecting current trends [6]

Company Overview - PLAYSTUDIOS, Inc. has developed a portfolio of free-to-play social casino games, including Tetris® and acquired Brainium in late 2022[127]. Revenue Generation - Revenue is primarily generated from in-game virtual currency sales, with a significant concentration in North America[130]. - The company incurs platform fees of approximately 30% for in-game purchases processed by third-party platforms like Apple App Store and Google Play Store[133]. - Virtual currency revenue for playGAMES decreased by $11.4 million, or 19.9%, to $46.1 million during the three months ended September 30, 2025, compared to $57.6 million in the same period of 2024[148]. - The net revenue for playAWARDS remained flat at $264,000 during the three months ended September 30, 2025, compared to $3,000 in the same period of 2024[152]. - Revenue for the three months ended September 30, 2025, was $57.6 million, a decrease from $71.2 million in the same period of 2024, representing a decline of approximately 19.1%[182]. User Engagement Metrics - Daily Active Users (DAU) and Monthly Active Users (MAU) are key metrics for measuring player engagement, with DAU defined as the number of individuals playing a game on a particular day[136][137]. - Daily Paying Users (DPU) is tracked to understand the size of the active player base making in-game purchases, with DPU defined as the number of individuals making a purchase in a game on a particular day[138]. - Average Daily Active Users (DAU) for playGAMES decreased by 750, or 25.3%, to 2,211 in the three months ended September 30, 2025, compared to 2,961 in the same period of 2024[148]. - Average Monthly Active Users (MAU) for playGAMES decreased by 3,153, or 24.9%, to 9,505 in the three months ended September 30, 2025, compared to 12,658 in the same period of 2024[148]. - Average Daily Revenue Per DAU (ARPDAU) is calculated to measure overall monetization, defined as game and advertising revenue divided by Average DAU[141]. Financial Performance - Net loss for the three months ended September 30, 2025, increased by $6.0 million, or 194.4%, to $9.1 million compared to $3.1 million in the same period of 2024[146]. - The operating loss for the three months ended September 30, 2025, increased by $3.1 million, or 64.6%, to $7.9 million compared to $4.8 million in the same period of 2024[146]. - Consolidated AEBITDA decreased by $7.4 million to $7.2 million for the three months ended September 30, 2025, representing a 50.5% decline compared to the same period in 2024[172]. - playGAMES AEBITDA decreased by $9.8 million to $13.4 million for the three months ended September 30, 2025, with a margin of 23.3% compared to 32.6% in 2024[174]. - Net loss for the three months ended September 30, 2025, was $(9.1) million, compared to a net loss of $(3.1) million in the same period of 2024, indicating a worsening loss margin from (4.3)% to (15.8)%[182]. Operating Expenses - Operating expenses for the three months ended September 30, 2025, decreased by $10.5 million, or 13.8%, to $65.5 million compared to $76.0 million in the same period of 2024[155]. - Total operating expenses for the nine months ended September 30, 2025, decreased by $38.3 million, or 16.5%, to $193.8 million compared to $232.1 million in the same period of 2024[156]. - Selling and marketing expenses decreased by $0.9 million to $14.2 million for the three months ended September 30, 2025, primarily due to a $0.7 million decrease in user acquisition expenses[159]. - Research and development expenses decreased by $1.8 million to $14.8 million for the three months ended September 30, 2025, mainly due to a $1.1 million reduction in employee costs[161]. - General and administrative expenses increased by $0.5 million to $12.1 million for the three months ended September 30, 2025, primarily due to a charitable donation of $1.3 million[163]. Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2025, totaled $106.3 million, with restricted cash of $0.6 million[184]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $22.6 million, down from $34.1 million in 2024, reflecting a decrease of approximately 33.8%[188]. - Net cash used in investing activities during the nine months ended September 30, 2025, was $(12.7) million, a reduction from $(22.1) million in 2024, indicating a decrease of approximately 42.3%[190]. - Net cash used in financing activities for the nine months ended September 30, 2025, was $(14.5) million, significantly lower than $(38.6) million in 2024, a reduction of approximately 62.4%[191]. - As of September 30, 2025, there were no outstanding amounts under the Credit Agreement, indicating a strong liquidity position[187]. Future Outlook - The company plans to continue making significant investments to support business growth and may require additional funds for new game development and acquisitions[186]. - The decrease in cash provided from operating activities was primarily due to a decrease in net revenue, offset by reduced costs and favorable changes in operating assets and liabilities[189].

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $57.6 million, down approximately 19.1% year-over-year and down 2.7% sequentially, primarily due to a decline in DAU [11] - Year-to-date revenue stands at $179.7 million, down 18.9% year-over-year [11] - Adjusted EBITDA for the quarter was $7.2 million, down 50.5% year-over-year, resulting in a 12.6% operating margin compared to 20.5% [11] - MAU declined 24.9% year-over-year and DAU decreased 25.3% year-over-year, with declines concentrated in the casual segment [11] Business Line Data and Key Metrics Changes - The direct-to-consumer business showed strong growth, with revenue of $7.7 million, a 48% quarter-over-quarter increase, representing 16.7% of total in-app purchase revenue, up from 9.1% in Q3 2024 [8] - The social casino category remains challenged, contributing to year-over-year declines in DAU and ARPDAU across most of the portfolio, except for MyKonami, which showed double-digit year-over-year increases in ARPDAU [7][8] Market Data and Key Metrics Changes - The broader sweepstakes market is facing regulatory contraction, reducing the total addressable market (TAM) by roughly 25%, but growth in remaining open states remains strong, with an addressable market of $3.5 billion to $4 billion [6] - The company is focused on expanding its sweepstakes effort, which is currently live in open beta across 15 states [5][6] Company Strategy and Development Direction - The company is focused on reshaping its business to navigate market headwinds, tighten expense structures, and reorient towards durable growth [3][4] - There is an emphasis on modernizing development approaches, particularly through the adoption of AI to improve efficiency across game development and player targeting [10] - The company aims to balance disciplined investment with improvements in operating efficiency while advancing initiatives that can re-energize growth over time [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment and the need to reposition the business, sharing concerns about valuation and direction [3] - The company expects full-year results for both net revenue and consolidated adjusted EBITDA to fall below the low end of previously provided guidance ranges due to recent softness in player activity and monetization [12] - Management remains hopeful about the potential for growth in the sweepstakes market and the upcoming launch of Tetris Block Party, which is seen as a promising initiative [26][27] Other Important Information - The playAWARDS loyalty platform has been streamlined to focus on higher-quality partners and more aspirational rewards, resulting in a 16% sequential increase in the retail value of rewards purchased [9] - The company ended the quarter with approximately $106.3 million in cash, no debt, and access to a fully undrawn $81 million credit facility, providing flexibility for future opportunities [12] Q&A Session Summary Question: Feedback on WinZone from World Series of Slots - Feedback has been generally positive, but the sample size is small. The company is encouraged by consistent improvements in retention and monetization metrics [18] Question: Impact of California's ban on social casino games - The company has not seen benefits yet, but is monitoring the situation closely as the ban goes into effect [19] Question: Reevaluation of business strategy - The company is looking at both organic and inorganic opportunities for growth, including potential M&A [20][22] Question: Visibility into 2026 business performance - The company hopes to have more clarity on contributions from sweepstakes and Tetris Block Party by year-end [25][26] Question: Marketing strategy for sweepstakes - The company plans to open all jurisdictions and then deploy modest marketing capital to gauge performance before scaling up [28] Question: Revenue and EBITDA guidance for 2025 - The company expects a sequential decline in Q4 revenue from the core business, with challenges in stabilizing the social casino segment [32] Question: Strategic opportunities with iGaming operators - The company sees potential for partnerships with iGaming operators as the sweepstakes market evolves [36][39] Question: Drivers of D2C revenue growth - Improved merchandising within apps and relaxed policies have driven growth in direct-to-consumer revenue [41]

Financial Performance - Third quarter revenue was $57.6 million, down from $71.2 million in the same quarter of 2024, representing a decrease of approximately 19.1%[8] - Net loss for the third quarter was $9.1 million, with a net loss margin of 15.8%, compared to a net loss of $3.1 million and a margin of 4.3% in the prior year[8] - Consolidated AEBITDA for the third quarter was $7.2 million, with a margin of 12.6%, down from $14.6 million and a margin of 20.5% in the same quarter of 2024[8] - Net revenue for Q3 2025 was $57,648,000, a decrease of 19.1% compared to $71,229,000 in Q3 2024[32] - The net loss for Q3 2025 was $9,118,000, compared to a net loss of $3,097,000 in Q3 2024, representing an increase in loss of 194.5%[32] - Consolidated AEBITDA for Q3 2025 was $7,245,000, down 50.5% from $14,623,000 in Q3 2024[39] - The net loss margin for Q3 2025 was 15.8%, significantly higher than 4.3% in Q3 2024[39] - For the three months ended September 30, 2025, total net revenue was $57,648, a decrease of 19.0% compared to $71,229 for the same period in 2024[41] - For the nine months ended September 30, 2025, total net revenue was $179,695, a decrease of 19.0% from $221,647 in the same period in 2024[42] User Engagement - Average Daily Active Users (DAU) and Average Monthly Active Users (MAU) were 2.2 million and 9.5 million, respectively, during the third quarter of 2025[9] - Average Daily Active Users (DAU) decreased by 25.3% to 2,211 in Q3 2025 from 2,961 in Q3 2024[45] - Average Monthly Active Users (MAU) fell by 24.9% to 9,505 in Q3 2025 compared to 12,658 in Q3 2024[45] Revenue Streams - Direct-to-consumer revenue increased by 48% to $7.7 million compared to $5.2 million in the third quarter of 2024[8] - Virtual currency revenue for the three months ended September 30, 2025, was $46,381, down 19.4% from $57,564 in the prior year[43] - Advertising revenue for the three months ended September 30, 2025, was $11,257, down 17.3% from $13,613 in Q3 2024[43] - Direct-to-consumer (DTC) revenue as a percentage of virtual currency revenue increased to 16.6% in Q3 2025 from 9.0% in Q3 2024, representing a growth of 84.4%[43] Cash and Assets - As of September 30, 2025, cash and cash equivalents were $106.3 million, with an undrawn $81 million revolving credit facility[8] - Cash and cash equivalents at the end of Q3 2025 were $106,320,000, slightly down from $109,179,000 at the end of Q4 2024[34] - Total assets decreased to $299,153,000 as of September 30, 2025, from $322,955,000 as of December 31, 2024[34] - Total liabilities decreased to $60,228,000 as of September 30, 2025, down from $78,240,000 as of December 31, 2024[34] - The company reported cash flows from operating activities of $22,601,000 for the nine months ended September 30, 2025, compared to $34,124,000 for the same period in 2024[37] Operational Developments - The company expects full-year results for both net revenue and Consolidated Adjusted EBITDA to fall below the low end of previously provided guidance ranges due to recent softness in player activity and monetization[6] - The soft launch of Tetris Block Party and the beta launch of The Win Zone were significant recent developments[9] - The company is focused on stabilizing the business while building capabilities for future growth, particularly in the direct-to-consumer channel and new initiatives[4] Purchases and Rewards - Players purchased 202,666 rewards with a retail value of $15 million during the third quarter[9] - Available Rewards decreased by 40.6% year-over-year to 325 units in Q3 2025, down from 547 units in Q3 2024[47] - Purchases fell by 55.1% year-over-year to 203 units in Q3 2025, compared to 451 units in Q3 2024[47] - Retail Value of Purchases declined by 41.2% year-over-year to $14.695 million in Q3 2025, down from $24.980 million in Q3 2024[47] - Total Purchases for the nine months ended September 30, 2025, were 683 units, a decrease of 53.6% from 1,472 units in the same period of 2024[47] - Total Retail Value of Purchases for the nine months ended September 30, 2025, was $44.342 million, down 54.3% from $96.977 million in the same period of 2024[47] - Retail Value of Daily Rewards Inventory increased by 9.6% year-over-year to $2.421 million in Q3 2025, up from $2.208 million in Q3 2024[47] - Retail Value of Daily Rewards Inventory for the nine months ended September 30, 2025, increased by 27.2% to $2.495 million, compared to $1.962 million in the same period of 2024[47]

Core Points - PLAYSTUDIOS, Inc. will release its third quarter 2025 results after the market closes on November 3, 2025 [1][10] - A conference call and audio webcast will be held on the same day at 5:00 pm Eastern Time to discuss the results [2] Company Overview - PLAYSTUDIOS, Inc. is known for its playAWARDS loyalty platform and develops free-to-play mobile and social games, including popular titles like Tetris®, Solitaire, and myVEGAS Slots [3] - The playAWARDS platform allows players to earn real-world rewards from various hospitality and entertainment brands, partnering with companies like MGM Resorts International and Norwegian Cruise Line [3]

[Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) [Forward-Looking Statements Overview](index=4&type=section&id=Forward-Looking%20Statements%20Overview) Outlines inherent risks and uncertainties for forward-looking statements, detailing factors that could cause actual results to differ and official disclosure channels - Forward-looking statements are based on current expectations and projections about future events and are subject to **known and unknown risks, uncertainties, and assumptions**[12](index=12&type=chunk)[13](index=13&type=chunk) - Key factors that might cause actual results to differ include **business strategy, financial performance, market acceptance of games, financing ability, competitive and regulatory changes, platform relationships, accounting for warrants, internal controls, intellectual property rights, litigation, acquisitions, personnel, geopolitical conditions, and legal/regulatory factors**[13](index=13&type=chunk)[14](index=14&type=chunk) - The company uses its **Investor Relations website, SEC filings, press releases, public conference calls, public webcasts, and social media** to announce material information[16](index=16&type=chunk) [Part I - Financial Information](index=7&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements, including balance sheets, operations, comprehensive loss, equity, cash flows, and detailed accounting notes [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030,%202025%20and%20December%2031,%202024) Condensed Consolidated Balance Sheets Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total assets | $316,233 | $322,955 | | Total liabilities | $70,942 | $78,240 | | Total stockholders' equity | $245,291 | $244,715 | | Cash and cash equivalents | $112,860 | $109,179 | | Total current assets | $151,104 | $147,102 | | Total current liabilities | $41,436 | $49,418 | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%20June%2030,%202024) Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net revenue | $59,338 | $72,590 | $(13,252) | (18.3)% | $122,047 | $150,418 | $(28,371) | (18.9)% | | Total operating costs and expenses | $62,825 | $76,553 | $(13,728) | (17.9)% | $128,275 | $156,084 | $(27,809) | (17.8)% | | Loss from operations | $(3,487) | $(3,963) | $476 | (12.0)% | $(6,228) | $(5,666) | $(562) | 9.9% | | Net loss | $(2,948) | $(2,611) | $(337) | 12.9% | $(5,828) | $(3,178) | $(2,650) | 83.4% | | Basic net loss per share | $(0.02) | $(0.02) | $0.00 | 0.0% | $(0.05) | $(0.02) | $(0.03) | 150.0% | | Diluted net loss per share | $(0.02) | $(0.02) | $0.00 | 0.0% | $(0.05) | $(0.02) | $(0.03) | 150.0% | [Condensed Consolidated Statements of Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%20June%2030,%202024) Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(2,948) | $(2,611) | $(5,828) | $(3,178) | | Total other comprehensive income (loss) | $2,134 | $(570) | $2,180 | $(1,678) | | Comprehensive loss | $(814) | $(3,181) | $(3,648) | $(4,856) | - Other comprehensive income in Q2 2025 was positively impacted by a **$1,611k change in foreign currency translation adjustment** and a **$758k unrealized gain from derivative financial instruments**[25](index=25&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%20June%2030,%202024) Stockholders' Equity Changes (in thousands) | Metric | Balance as of Dec 31, 2024 | Net loss (6M 2025) | Stock-based compensation (6M 2025) | Repurchase of common stock (6M 2025) | Other comprehensive income (6M 2025) | Balance as of June 30, 2025 | | :------------------------- | :------------------------- | :------------------ | :--------------------------------- | :----------------------------------- | :----------------------------------- | :-------------------------- | | Total Stockholders' Equity | $244,715 | $(5,828) | $9,152 | $(3,499) | $2,180 | $245,291 | - Treasury stock increased from **$51,293k (19,450 shares) at December 31, 2024, to $54,792k (21,739 shares) at June 30, 2025**, primarily due to common stock repurchases[28](index=28&type=chunk)[122](index=122&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%20June%2030,%202024) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net cash provided by operating activities | $16,942 | $19,531 | $(2,589) | (13.3)% | | Net cash used in investing activities | $(8,030) | $(13,060) | $5,030 | (38.5)% | | Net cash used in financing activities | $(6,961) | $(32,444) | $25,483 | (78.5)% | | Net change in cash, cash equivalents, and restricted cash | $3,087 | $(26,585) | $29,672 | nm | | Cash, cash equivalents, and restricted cash at end of period | $113,473 | $106,304 | $7,169 | 6.7% | [Notes to Unaudited Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures for financial statements, covering background, accounting policies, segment reporting, acquisitions, related-party transactions, and account specifics [NOTE 1—BACKGROUND AND BASIS OF PRESENTATION](index=14&type=section&id=NOTE%201%E2%80%94BACKGROUND%20AND%20BASIS%20OF%20PRESENTATION) - **PLAYSTUDIOS, Inc.** was incorporated on **August 14, 2020**, and domesticated into a **Delaware corporation on June

分组1 - PLAYSTUDIOS, Inc. reported a quarterly loss of $0.02 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.01, marking an earnings surprise of -100.00% [1] - The company posted revenues of $59.34 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 3.19% and down from $72.59 million year-over-year [2] - PLAYSTUDIOS shares have declined approximately 41.4% since the beginning of the year, contrasting with the S&P 500's gain of 6.1% [3] 分组2 - The earnings outlook for PLAYSTUDIOS is uncertain, with current consensus EPS estimates indicating breakeven on $64.42 million in revenues for the upcoming quarter and -$0.03 on $259.44 million in revenues for the current fiscal year [7] - The Zacks Industry Rank for Gaming is in the top 38% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8] - The estimate revisions trend for PLAYSTUDIOS was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

Financial Data and Key Metrics Changes - Second quarter revenue was $59 million, down approximately 18.3% year over year and 5.4% sequentially, reflecting continued softness in core casino and casual games [15] - Adjusted EBITDA for the quarter was $10.7 million, down 24% year over year and 14.2% sequentially, indicating limited flow through due to revenue softness [15] - DAU was 2.3 million, down from 2.6 million in the first quarter and 3.2 million in the previous year [16] - MAU was 10 million, down from 11.4 million in the first quarter [16] - ARPDAU was $0.28, up slightly from $0.26 last quarter and $0.25 a year ago, reflecting stronger monetization [16] Business Line Data and Key Metrics Changes - The core social casino portfolio continued to soften, with ongoing declines in DAU across most titles, partially offset by stronger unit level monetization in Mykonami [10] - Direct to consumer revenue for Q2 was $6.7 million, representing 13.9% of total in-app purchase revenue, up 107% year over year and 34% sequentially [10][17] - The casual portfolio remains under pressure due to challenging market dynamics, with a focus on product updates to improve engagement and retention [11] Market Data and Key Metrics Changes - The market is experiencing a rapid rise in social casinos leveraging sweepstakes mechanics, reshaping player behavior and monetization [4] - The company is seeing clear evidence that its sweepstakes proposition resonates with players, with player retention, engagement, and monetization trending positively [6] Company Strategy and Development Direction - The company launched a reinvention program last year to adapt to market changes, focusing on developing sweepstakes capabilities, expanding direct to consumer sales, and modernizing core games [5][18] - A phased approach is being taken to scale the sweepstakes initiative, with plans to be live across all eligible U.S. states later this year [7] - The company is exploring strategic acquisitions to accelerate momentum and position itself for market leadership in the sweepstakes category [8][40] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the core business but remains confident in the strategic steps being taken to adapt and evolve [18] - The company is not changing its full-year revenue and adjusted EBITDA guidance despite pacing below expectations, as it continues to evaluate investments and market dynamics [17] Other Important Information - The balance sheet remains strong, with approximately $112.9 million in cash and no debt, providing strategic latitude for capital deployment [13] - The company is committed to building a stronger, more diversified foundation to drive renewed momentum in the future [18] Q&A Session Summary Question: Can you split DAU and MAU declines between social casino and casual games? - Management indicated that declines were substantial in both categories, with more dramatic impacts in the casual space due to reduced user acquisition investments [24] Question: Any quantitative KPIs on sweepstakes performance? - Management reported positive improvements across key metrics such as retention and conversion rates, feeling optimistic about the progress made [27] Question: Guidance for Q3 expectations? - Management stated that Q3 is not expected to differ significantly from Q2, focusing on executing initiatives to restore momentum [31] Question: Any technical aspects remaining for the sweepstakes platform? - All core functionality is in place, with ongoing refinements and testing of marketing approaches to ensure effective scaling [36] Question: What types of strategic acquisitions are being considered? - The company is open to meaningful M&A opportunities to bolster efforts in the sweepstakes category and gain market share [40] Question: How does the company manage regulatory pressures regarding sweepstakes? - Management evaluates regulatory risks on a state-by-state basis and adjusts capital deployment accordingly, aiming to legitimize the sweepstakes opportunity [52] Question: Is there enough cash to manage through the transition? - Management confirmed a strong cash position, allowing for aggressive investment in growth initiatives [61]

Financial Data and Key Metrics Changes - Second quarter revenue was $59 million, down approximately 18.3% year over year and 5.4% sequentially, reflecting continued softness in core casino and casual games [16] - Adjusted EBITDA for the quarter was $10.7 million, down 24% year over year and 14.2% sequentially, indicating limited flow through due to revenue softness [16] - DAU was 2.3 million, down from 2.6 million in the first quarter and 3.2 million in the previous year [16] - MAU was 10 million, down from 11.4 million in the first quarter [16] - ARPDAU was $0.28, up slightly from $0.26 last quarter and $0.25 a year ago, reflecting stronger monetization [16] Business Line Data and Key Metrics Changes - The core social casino portfolio continued to soften, with ongoing declines in DAU across most titles, partially offset by stronger unit level monetization in Mykonami [11] - Direct to consumer revenue for Q2 was $6.7 million, representing 13.9% of total in-app purchase revenue, up 107% year over year and 34% sequentially [11][18] - The casual portfolio remains under pressure due to challenging market dynamics, with a focus on product updates to improve engagement and retention [12] Market Data and Key Metrics Changes - The market is experiencing a rapid rise in social casinos leveraging sweepstakes mechanics, reshaping player behavior and monetization [4] - The company is seeing positive early signals in player retention, engagement, and monetization from its sweepstakes initiative, which is currently live in seven states [6][27] Company Strategy and Development Direction - The company launched a reinvention program last year to adapt to market changes, focusing on developing sweepstakes capabilities, expanding direct to consumer sales, and modernizing core games [5][20] - A phased approach is being taken to scale the sweepstakes initiative, with plans to open the product to all eligible states later this year [7] - The company is exploring strategic acquisitions to accelerate momentum and position itself for market leadership in the sweepstakes category [8][40] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges in the core business but remains confident in the strategic steps being taken to adapt and evolve [19] - The company is not changing its full-year revenue and adjusted EBITDA guidance despite current performance being below expectations [18] - Management is optimistic about the early traction seen in new initiatives and believes investments made today will build a stronger foundation for future growth [20] Other Important Information - The balance sheet remains strong, with approximately $112.9 million in cash and no debt, providing strategic latitude for future investments [14][18] - The company is committed to maintaining a robust cash position to support growth initiatives [62] Q&A Session Summary Question: Can you split DAU and MAU declines between social casino and casual games? - Management indicated that declines were substantial in both categories, with more dramatic impacts in the casual space due to reduced user acquisition investments [25] Question: Any quantitative KPIs or user numbers from the sweepstakes initiative? - Management reported positive improvements across key metrics, including retention and conversion rates, and plans to open more jurisdictions as confidence grows [27] Question: What are the expectations for Q3? - Management expects Q3 to be similar to Q2, focusing on executing initiatives to restore momentum [32] Question: What is the medium or long-term goal for the casual portfolio? - Management does not expect meaningful growth from the legacy casual portfolio but is investing in upgrading products to drive better retention and engagement [44] Question: How will the company manage regulatory pressures regarding sweepstakes? - Management is actively assessing regulatory risks on a state-by-state basis and intends to help legitimize the sweepstakes opportunity [52][55] Question: Is the company comfortable with its cash position during this transition? - Management confirmed a strong cash position, allowing for aggressive investment in growth initiatives [62]

[Company Overview and Financial Highlights](index=1&type=section&id=company-overview-and-financial-highlights) PLAYSTUDIOS reported Q2 and YTD 2025 financial declines in revenue and net loss, but strong direct-to-consumer growth, while maintaining full-year guidance despite current pace [Second Quarter 2025 Financial Highlights](index=1&type=section&id=second-quarter-2025-financial-highlights) PLAYSTUDIOS reported Q2 2025 revenue of $59.3 million, a decrease from $72.6 million in Q2 2024, with a net loss of $2.9 million and consolidated AEBITDA declining to $10.7 million, while Direct-to-Consumer revenue grew by 107% to $6.7 million | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | % Change | | :----------------------------- | :----------------- | :----------------- | :---------------- | :------- | | Revenue | $59.3 | $72.6 | $(13.3) | (18.3%) | | Net loss | $(2.9) | $(2.6) | $(0.3) | (11.5%) | | Consolidated AEBITDA | $10.7 | $14.1 | $(3.4) | (24.1%) | | Direct to Consumer revenue | $6.7 | $3.2 | $3.5 | 107% | - As of June 30, 2025, cash and cash equivalents on the balance sheet was **$112.9 million**[6](index=6&type=chunk) - PLAYSTUDIOS' **$81 million** revolving credit facility remains undrawn[6](index=6&type=chunk) - The Company had **125.2 million** shares outstanding[6](index=6&type=chunk) [Year to Date 2025 Financial Highlights](index=1&type=section&id=year-to-date-2025-financial-highlights) For the six months ended June 30, 2025, PLAYSTUDIOS' revenue was $122.0 million, down from $150.4 million in the same period of 2024, with net loss increasing to $5.8 million and Consolidated AEBITDA decreasing to $23.2 million, while Direct-to-Consumer revenue rose 110% to $11.7 million | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change (Millions) | % Change | | :------------------ | :------------------ | :------------------ | :---------------- | :------- | | Revenue | $122.0 | $150.4 | $(28.4) | (18.9%) | | Net loss | $(5.8) | $(3.2) | $(2.6) | (81.3%) | | Consolidated AEBITDA | $23.2 | $29.5 | $(6.3) | (21.4%) | | Direct to Consumer revenue | $11.7 | $5.6 | $6.1 | 110% | [CEO Commentary and Strategic Priorities](index=1&type=section&id=ceo-commentary-and-strategic-priorities) CEO Andrew Pascal acknowledged significant market headwinds impacting the core business but highlighted growing traction in the direct-to-consumer channel, promising early momentum in the sweepstakes initiative, and continued progress on Tetris Block Party development as key strategic priorities for future growth and business stabilization - The core business continues to navigate meaningful market headwinds[3](index=3&type=chunk) - Strategic priorities include growing traction in the direct-to-consumer channel, promising early momentum in the sweepstakes initiative, and continued progress on the development of Tetris Block Party[3](index=3&type=chunk) [Recent Business Highlights](index=2&type=section&id=recent-business-highlights) Recent business highlights include the continued development of sweepstakes promotional capabilities targeting a Q4 2025 launch, expanded direct-to-consumer monetization, progress on Tetris Block Party development for a Q4 2025 launch, strengthening of the playAWARDS platform, and the repurchase of 1.4 million shares of Class A common stock - Continued development of sweepstakes promotional capabilities, expected to launch externally in available markets in **Q4 2025**[12](index=12&type=chunk) - Progressed development of Tetris Block Party, targeting launch in **Q4 2025**[12](index=12&type=chunk) - Repurchased an aggregate of **1.4 million** shares of Class A common stock at an average price of **$1.41** per share in the quarter[12](index=12&type=chunk) [Full Year 2025 Guidance](index=2&type=section&id=full-year-2025-guidance) The Company maintains its full year 2025 guidance for net revenue in the range of $250 million to $270 million and Consolidated AEBITDA in the range of $45 million to $55 million, despite not currently being on pace to meet these targets | Metric | Full Year 2025 Guidance (Millions) | | :------------------- | :------------------------------- | | Net Revenue | $250 - $270 | | Consolidated AEBITDA | $45 - $55 | - The Company is not changing its full year 2025 guidance, although it is currently not on pace to meet it[8](index=8&type=chunk) [About PLAYSTUDIOS, Inc.](index=2&type=section&id=about-playstudios-inc) PLAYSTUDIOS is an award-winning developer of free-to-play mobile and social games, also known for its playAWARDS loyalty platform offering real-world rewards [Company Description and Offerings](index=2&type=section&id=company-description-and-offerings) PLAYSTUDIOS is an award-winning developer of free-to-play mobile and social games, known for titles like Tetris® mobile app, Pop! Slots, and myVEGAS Slots, and is the creator of the playAWARDS loyalty platform, which allows players to earn real-world rewards from global hospitality, entertainment, and leisure brands - PLAYSTUDIOS is an award-winning developer of free-to-play mobile and social 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[10](index=10&type=chunk) - Creator of the groundbreaking playAWARDS loyalty platform, which enables players to earn real-world rewards from a global collection of hospitality, entertainment, and leisure brands[10](index=10&type=chunk) - playAWARDS partners include MGM Resorts International, Wolfgang Puck, Norwegian Cruise Line, Resorts World, IHG, Bowlero, Gray Line Tours, and Hippodrome Casino among others[10](index=10&type=chunk) [Performance Indicators Definitions](index=2&type=section&id=performance-indicators-definitions) This section defines key metrics for playGAMES, including DAU, MAU, and ARPDAU, and for the playAWARDS platform, such as Available Rewards and Retail Value of Purchases [playGAMES Key Performance Indicators Definitions](index=3&type=section&id=playgames-key-performance-indicators-definitions) This section defines key metrics used to track player engagement and monetization for playGAMES, including Daily Active Users (DAU), Monthly Active Users (MAU), Daily Paying Users (DPU), Daily Payer Conversion, and Average Daily Revenue Per DAU (ARPDAU) - DAU (Daily Active Users): Number of individuals who played a game on a particular day, tracked by player ID for PLAYSTUDIOS games and app instance ID for Brainium games[14](index=14&type=chunk) - MAU (Monthly Active Users): Number of individuals who played a game in a particular month, tracked similarly to DAU[15](index=15&type=chunk) - ARPDAU (Average Daily Revenue Per DAU): Average daily revenue per Average DAU, calculated as game and advertising revenue for the period divided by days and Average DAU, used to measure overall monetization[18](index=18&type=chunk) [playAWARDS Platform Metrics Definitions](index=3&type=section&id=playawards-platform-metrics-definitions) This section defines key metrics for the playAWARDS platform, such as Available Rewards, Purchases, Retail Value of Purchases, and Retail Value of Daily Rewards Inventory, which are used to measure audience interest, engagement, and the real-world value of rewards - Available Rewards: Monthly average number of unique real-world partner rewards available in applications' rewards stores, excluding PLAYSTUDIOS digital rewards[19](index=19&type=chunk) - Purchases: Total number of real-world partner rewards purchased for the period in which a player exchanges loyalty points for a reward, net of refunds, excluding PLAYSTUDIOS digital rewards[20](index=20&type=chunk)[21](index=21&type=chunk) - Retail Value of Purchases: Cumulative retail value of all rewards listed as Purchases for the period, as determined by the partner, used to understand the real-world value of rewards purchased by players[22](index=22&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=non-gaap-financial-measures) This section defines Consolidated AEBITDA as a non-GAAP measure, explaining its calculation and management's rationale for its use in performance analysis [Consolidated AEBITDA Definition and Rationale](index=4&type=section&id=consolidated-aebitda-definition-and-rationale) Consolidated AEBITDA is presented as a non-GAAP measure, defined as net income (loss) before interest, income taxes, depreciation and amortization, restructuring and related costs, stock-based compensation, and other income/expense items, which management believes provides useful information for analyzing and benchmarking business performance by excluding certain fluctuating or non-cash costs - Consolidated AEBITDA is defined as net income (loss) before interest, income taxes, depreciation and amortization, restructuring and related costs, stock-based compensation expense, and other income and expense items[25](index=25&type=chunk) - Management believes Consolidated AEBITDA provides useful information to investors regarding the Company's results of operations because it assists in analyzing and benchmarking performance and value, providing an indicator not affected by fluctuations in certain costs or other items[26](index=26&type=chunk) [Forward-Looking Statements](index=4&type=section&id=forward-looking-statements) This section provides a cautionary statement regarding forward-looking statements, highlighting potential material differences in actual results due to various known and unknown risks and uncertainties [Disclaimer and Risk Factors](index=4&type=section&id=disclaimer-and-risk-factors) This section serves as a cautionary statement, indicating that the press release contains forward-looking statements regarding future financial performance, operations, and strategic plans, and highlights that actual results may differ materially due to known and unknown risks, uncertainties, and assumptions - This press release contains forward-looking statements regarding future financial and operating performance, liquidity, capital resources, game development and release plans, business restructuring, and M&A strategy[27](index=27&type=chunk) - Actual results may differ materially from predictions due to known and unknown risks, uncertainties, and assumptions, including those related to the ability to develop and publish games, defects in IT infrastructure, player attraction and retention, market acceptance of new games, competition, financial performance, and legal/regulatory developments[27](index=27&type=chunk)[28](index=28&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=condensed-consolidated-financial-statements) This section presents the Condensed Consolidated Statement of Operations, showing net revenue and loss trends, and the Condensed Consolidated Balance Sheets, detailing assets, liabilities, and equity [Condensed Consolidated Statement of Operations](index=6&type=section&id=condensed-consolidated-statement-of-operations) The Condensed Consolidated Statement of Operations shows a net loss of $2.9 million for Q2 2025 (vs. $2.6 million in Q2 2024) and $5.8 million for YTD 2025 (vs. $3.2 million in YTD 2024), with net revenue decreasing significantly from $72.6 million to $59.3 million in Q2 and from $150.4 million to $122.0 million YTD, while operating expenses also saw reductions | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $59,338 | $72,590 | $122,047 | $150,418 | | Total operating costs and expenses | $62,825 | $76,553 | $128,275 | $156,084 | | Loss from operations | $(3,487) | $(3,963) | $(6,228) | $(5,666) | | Net loss | $(2,948) | $(2,611) | $(5,828) | $(3,178) | | Basic Net loss per share | $(0.02) | $(0.02) | $(0.05) | $(0.02) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=condensed-consolidated-balance-sheets) As of June 30, 2025, PLAYSTUDIOS reported total assets of $316.2 million, a decrease from $323.0 million at December 31, 2024, with cash and cash equivalents increasing slightly to $112.9 million, total liabilities decreasing to $70.9 million, and total stockholders' equity seeing a slight increase to $245.3 million | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $112,860 | $109,179 | | Total current assets | $151,104 | $147,102 | | Total assets | $316,233 | $322,955 | | Total current liabilities | $41,436 | $49,418 | | Total liabilities | $70,942 | $78,240 | | Total stockholders' equity | $245,291 | $244,715 | [Reconciliation of Net Loss to Consolidated AEBITDA](index=8&type=section&id=reconciliation-of-net-loss-to-consolidated-aebitda) This section provides a detailed reconciliation of net loss to Consolidated AEBITDA, illustrating the adjustments made and the resulting AEBITDA margins for the reported periods [AEBITDA Reconciliation and Margin](index=8&type=section&id=aebitda-reconciliation-and-margin) The reconciliation shows that Consolidated AEBITDA for Q2 2025 was $10.7 million (18.1% margin), down from $14.1 million (19.5% margin) in Q2 2024, and for the six months ended June 30, 2025, AEBITDA was $23.2 million (19.0% margin), compared to $29.5 million (19.6% margin) in the prior year, with key adjustments including depreciation & amortization and stock-based compensation expense | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(2,948) | $(2,611) | $(5,828) | $(3,178) | | Depreciation & amortization | $9,535 | $11,654 | $19,167 | $23,220 | | Stock-based compensation expense | $4,608 | $4,930 | $8,866 | $9,724 | | Consolidated AEBITDA | $10,714 | $14,138 | $23,201 | $29,452 | | Consolidated AEBITDA Margin | 18.1% | 19.5% | 19.0% | 19.6% | [Supplemental Data](index=9&type=section&id=supplemental-data) This section provides disaggregated financial data by segment, a detailed net revenue breakdown by type and platform, and key performance indicators for both playGAMES and playAWARDS [Segment Information](index=9&type=section&id=segment-information) This section provides financial data disaggregated by reportable segments, playGAMES and playAWARDS, for Q2 and YTD 2025 versus 2024, detailing their respective net revenues, expenses, and AEBITDA contributions | Metric (in thousands) | Q2 2025 playGAMES | Q2 2024 playGAMES | Q2 2025 playAWARDS | Q2 2024 playAWARDS | YTD 2025 playGAMES | YTD 2024 playGAMES | YTD 2025 playAWARDS | YTD 2024 playAWARDS | | :-------------------- | :---------------- | :---------------- | :----------------- | :----------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Net revenue | $59,109 | $72,588 | $229 | $2 | $121,664 | $150,416 | $383 | $2 | | Reportable segment AEBITDA | $16,475 | $21,920 | $(2,386) | $(3,476) | $34,784 | $45,371 | $(4,675) | $(7,098) | [Net Revenue Breakdown](index=11&type=section&id=net-revenue-breakdown) This section details the breakdown of net revenue by type (virtual currency, advertising, other) and by platform (third-party, direct-to-consumer) for Q2 and YTD 2025 versus 2024, highlighting overall revenue decline but strong growth in direct-to-consumer channels | Metric (in thousands) | Q2 2025 | Q2 2024 | % Change (QoQ) | YTD 2025 | YTD 2024 | % Change (YoY) | | :-------------------- | :------ | :------ | :------------- | :------- | :------- | :------------- | | Virtual currency revenue | $48,208 | $56,477 | (14.6%) | $99,049 | $116,724 | (15.1%) | | Advertising revenue | $11,128 | $16,006 | (30.5%) | $22,991 | $33,448 | (31.3%) | | Direct-to-consumer (DTC) platforms revenue | $6,683 | $3,232 | 106.8% | $11,654 | $5,556 | 109.8% | | DTC revenue as a percentage of virtual currency revenue | 13.9% | 5.7% | 143.9% | 11.8% | 4.8% | 145.8% | [playGAMES Key Performance Indicators](index=12&type=section&id=playgames-key-performance-indicators) This section presents key operational metrics for playGAMES, including Average DAU, MAU, DPU, Daily Payer Conversion, and ARPDAU, for Q2 and YTD 2025 versus 2024, indicating a decline in user engagement but improved monetization per active user | Metric | Q2 2025 | Q2 2024 | Change | % Change | YTD 2025 | YTD 2024 | Change | % Change | | :----------------------------- | :------ | :------ | :----- | :------- | :------- | :------- | :----- | :------- | | Average DAU (in thousands) | 2,347 | 3,220 | (873) | (27.1%) | 2,489 | 3,357 | (868) | (25.9%) | | Average MAU (in thousands) | 10,046 | 13,597 | (3,551) | (26.1%) | 10,730 | 14,174 | (3,444) | (24.3%) | | Average DPU (in thousands) | 19 | 24 | (5) | (20.8%) | 20 | 26 | (6) | (23.1%) | | ARPDAU (in dollars) | $0.28 | $0.25 | $0.03 | 12.0% | $0.27 | $0.25 | $0.02 | 8.0% | [playAWARDS Key Performance Indicators](index=12&type=section&id=playawards-key-performance-indicators) This section presents key operational metrics for the playAWARDS platform, including Available Rewards, Purchases, Retail Value of Purchases, and Retail Value of Daily Rewards Inventory, for Q2 and YTD 2025 versus 2024, showing a decrease in rewards and purchases but an increase in the retail value of daily rewards inventory | Metric (in thousands) | Q2 2025 | Q2 2024 | Change | % Change | YTD 2025 | YTD 2024 | Change | % Change | | :-------------------------------- | :------ | :------ | :----- | :------- | :------- | :------- | :----- | :------- | | Available Rewards (in units) | 331 | 561 | (230) | (41.0%) | 349 | 541 | (192) | (35.5%) | | Purchases (in units) | 199 | 520 | (321) | (61.6%) | 480 | 1,020 | (540) | (52.9%) | | Retail Value of Purchases | $12,662 | $31,405 | $(18,743) | (59.7%) | $29,647 | $71,997 | $(42,350) | (58.8%) | | Retail Value of Daily Rewards Inventory | $3,060 | $1,775 | $1,285 | 72.4% | $2,532 | $1,838 | $694 | 37.8% |