[Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) [Forward-Looking Statements Disclosure](index=4&type=section&id=Forward-Looking%20Statements%20Disclosure) This section outlines forward-looking statements, emphasizing reliance on current expectations and known/unknown risks - Forward-looking statements are based on current expectations and projections, subject to known and unknown risks and uncertainties[12](index=12&type=chunk)[13](index=13&type=chunk) - Key factors that could cause actual results to differ include business strategy, financial performance, market acceptance, financing, operational changes, platform relationships, intellectual property, litigation, acquisitions, personnel, geopolitical conditions, and public health events[13](index=13&type=chunk)[14](index=14&type=chunk) - The company uses its Investor Relations website, SEC filings, press releases, conference calls, webcasts, and social media for material information disclosure[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)) PLAYSTUDIOS' unaudited condensed consolidated financial statements report a net loss of **$2.88 million** for Q1 2025 [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) [Condensed Consolidated Statements of Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) [Condensed Consolidated Statements of Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------- | :---------------- | :----- | :------- | | Total assets | $313,775 | $322,955 | $(9,180) | (2.8)% | | Total liabilities | $69,693 | $78,240 | $(8,547) | (10.9)% | | Total stockholders' equity | $244,082 | $244,715 | $(633) | (0.3)% | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | :----- | :------- | | Net revenue | $62,709 | $77,828 | $(15,119) | (19.4)% | | Loss from operations | $(2,741) | $(1,703) | $(1,038) | 61.0% | | Net loss | $(2,880) | $(567) | $(2,313) | 407.9% | | Basic net loss per share | $(0.02) | $0.00 | $(0.02) | nm | | Diluted net loss per share | $(0.02) | $0.00 | $(0.02) | nm | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | Net cash provided by operating activities | $3,300 | $4,998 | $(1,698) | (34.0)% | | Net cash used in investing activities | $(3,609) | $(6,522) | $2,913 | (44.7)% | | Net cash used in financing activities | $(2,456) | $(4,263) | $1,807 | (42.4)% | | Net change in cash, cash equivalents, and restricted cash | $(2,681) | $(5,909) | $3,228 | (54.6)% | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies, segment reporting, business combinations, and specific financial line items [NOTE 1—BACKGROUND AND BASIS OF PRESENTATION](index=13&type=section&id=NOTE%201%E2%80%94BACKGROUND%20AND%20BASIS%20OF%20PRESENTATION) [NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=14&type=section&id=NOTE%202%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) [NOTE 3—SEGMENT REPORTING](index=15&type=section&id=NOTE%203%E2%80%94SEGMENT%20REPORTING) [NOTE 4—BUSINESS COMBINATIONS](index=17&type=section&id=NOTE%204%E2%80%94BUSINESS%20COMBINATIONS) [NOTE 5—RELATED-PARTY TRANSACTIONS](index=18&type=section&id=NOTE%205%E2%80%94RELATED-PARTY%20TRANSACTIONS) [NOTE 6—RECEIVABLES, NET](index=18&type=section&id=NOTE%206%E2%80%94RECEIVABLES,%20NET) [NOTE 7—PREPAID EXPENSES AND OTHER CURRENT ASSETS](index=19&type=section&id=NOTE%207%E2%80%94PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) [NOTE 8—FAIR VALUE MEASUREMENT](index=19&type=section&id=NOTE%208%E2%80%94FAIR%20VALUE%20MEASUREMENT) [NOTE 9—PROPERTY AND EQUIPMENT, NET](index=20&type=section&id=NOTE%209%E2%80%94PROPERTY%20AND%20EQUIPMENT,%20NET) [NOTE 10—INTANGIBLE ASSETS AND INTERNAL-USE SOFTWARE, NET](index=21&type=section&id=NOTE%2010%E2%80%94INTANGIBLE%20ASSETS%20AND%20INTERNAL-USE%20SOFTWARE,%20NET) [NOTE 11—ACCRUED AND OTHER LIABILITIES](index=22&type=section&id=NOTE%2011%E2%80%94ACCRUED%20AND%20OTHER%20LIABILITIES) [NOTE 12—LEASES](index=24&type=section&id=NOTE%2012%E2%80%94LEASES) [NOTE 13—LONG-TERM DEBT](index=25&type=section&id=NOTE%2013%E2%80%94LONG-TERM%20DEBT) [NOTE 14—REVENUE FROM CONTRACTS WITH CUSTOMERS](index=26&type=section&id=NOTE%2014%E2%80%94REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) [NOTE 15—INCOME TAXES](index=27&type=section&id=NOTE%2015%E2%80%94INCOME%20TAXES) [NOTE 16—COMMITMENTS AND CONTINGENCIES](index=27&type=section&id=NOTE%2016%E2%80%94COMMITMENTS%20AND%20CONTINGENCIES) [NOTE 17—STOCKHOLDERS' EQUITY](index=29&type=section&id=NOTE%2017%E2%80%94STOCKHOLDERS'%20EQUITY) [NOTE 18—STOCK-BASED COMPENSATION](index=32&type=section&id=NOTE%2018%E2%80%94STOCK-BASED%20COMPENSATION) [NOTE 19—NET LOSS PER SHARE](index=32&type=section&id=NOTE%2019%E2%80%94NET%20LOSS%20PER%20SHARE) - PLAYSTUDIOS develops and operates online and mobile social gaming applications, primarily free-to-play, incorporating a loyalty program with 'real world' rewards[32](index=32&type=chunk) - The company adopted ASU 2023-07, Segment Reporting, for the year ended December 31, 2024, with no effect on financial position, results, or cash flows[42](index=42&type=chunk) - The company acquired Pixode Games Limited on July 1, 2024, for **$3.5 million cash** at closing, with potential additional contingent consideration up to **$113.5 million** based on product and financial milestones[53](index=53&type=chunk)[54](index=54&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) [Overview](index=34&type=section&id=Overview) PLAYSTUDIOS develops free-to-play mobile and social games, integrating a unique playAWARDS loyalty program for 'real world' rewards - PLAYSTUDIOS develops and publishes free-to-play casual games for mobile and social platforms, including social casino games and titles like Tetris and Brainium games[113](index=113&type=chunk) - The proprietary playAWARDS program allows players to earn loyalty points for 'real world' rewards, with most rewards provided by partners at no cost to the company[114](index=114&type=chunk)[120](index=120&type=chunk) - Primary revenue sources are in-game virtual currency sales and in-game advertising[116](index=116&type=chunk)[117](index=117&type=chunk) [Key Factors Affecting Our Performance](index=35&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) Performance is influenced by platform agreements, user acquisition, game development, and the playAWARDS loyalty program - Performance is significantly affected by third-party platform agreements (Apple App Store, Google Play Store) which charge transaction fees (typically **30%**) and can unilaterally change terms[119](index=119&type=chunk) - User acquisition and player monetization are vital, involving substantial spending on advertising and optimizing virtual currency sales while managing game economies[119](index=119&type=chunk) - Continuous investment in game development, new content, and enhancements to the playAWARDS and myVIP programs is necessary to maintain player engagement and retention[119](index=119&type=chunk) - The ability to provide desirable real-world rewards, at no cost to the company from partners, directly impacts players' willingness to make in-game purchases[120](index=120&type=chunk) [Key Performance Indicators](index=36&type=section&id=Key%20Performance%20Indicators) PLAYSTUDIOS tracks KPIs for playGAMES and playAWARDS segments to monitor audience engagement, monetization, and program value [playGAMES KPIs](index=36&type=section&id=playGAMES%20KPIs) [playAWARDS KPIs](index=37&type=section&id=playAWARDS%20KPIs) - Key performance indicators are used to track historical performance, identify player activity trends, and set strategic goals, but can fluctuate due to platform policies, seasonality, and new content[121](index=121&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Net revenue decreased by **19.4%** to **$62.7 million** in Q1 2025, leading to a net loss of **$2.88 million** [Overall Financial Performance](index=38&type=section&id=Overall%20Financial%20Performance) [Net Revenue by Reportable Segment](index=38&type=section&id=Net%20Revenue%20by%20Reportable%20Segment) [playGAMES Segment Performance](index=39&type=section&id=playGAMES%20Segment%20Performance) [playAWARDS Segment Performance](index=39&type=section&id=playAWARDS%20Segment%20Performance) [Operating Expenses Analysis](index=40&type=section&id=Operating%20Expenses%20Analysis) [Other Income, Net](index=41&type=section&id=Other%20Income,%20Net) [Provision for Income Taxes](index=41&type=section&id=Provision%20for%20Income%20Taxes) [Segment AEBITDA Comparison](index=41&type=section&id=Segment%20AEBITDA%20Comparison) Consolidated Results of Operations (in thousands, except percentages) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | % Change | | :---------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Net revenue | $62,709 | $77,828 | $(15,119) | (19.4)% | | Operating expenses | $65,450 | $79,531 | $(14,081) | (17.7)% | | Operating loss | $(2,741) | $(1,703) | $(1,038) | 61.0% | | Net loss | $(2,880) | $(567) | $(2,313) | 407.9% | | Net loss margin | (4.6)% | (0.7)% | (3.9)pp | 557.1% | Net Revenue by Reportable Segment (in thousands) | Segment | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :-------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | playGAMES | $62,555 | $77,828 | $(15,273) | (19.6)% | | playAWARDS | $154 | $0 | $154 | nm | playGAMES Net Revenues and Key Performance Indicators (in thousands, except percentages and ARPDAU) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | Virtual currency revenue | $50,692 | $60,247 | $(9,555) | (15.9)% | | Advertising revenue | $11,863 | $17,442 | $(5,579) | (32.0)% | | Net revenue | $62,555 | $77,828 | $(15,273) | (19.6)% | | Average DAU | 2,632 | 3,495 | (863) | (24.7)% | | Average MAU | 11,422 | 14,752 | (3,330) | (22.6)% | | Average DPU | 21 | 27 | (6) | (22.2)% | | ARPDAU (in dollars) | $0.26 | $0.24 | $0.02 | 8.3% | Operating Expenses (in thousands) | Expense Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------- | | Cost of revenue | $15,779 | $18,951 | $(3,172) | | Selling and marketing | $13,169 | $18,576 | $(5,407) | | Research and development | $13,674 | $18,021 | $(4,347) | | General and administrative | $11,861 | $11,779 | $82 | | Depreciation and amortization | $9,632 | $11,566 | $(1,934) | | Restructuring expenses | $1,335 | $638 | $697 | | Total operating expenses | $65,450 | $79,531 | $(14,081) | [Non-GAAP Measures](index=44&type=section&id=Non-GAAP%20Measures) This section defines and reconciles Consolidated Adjusted EBITDA (AEBITDA) and Consolidated AEBITDA Margin - Consolidated Adjusted EBITDA (AEBITDA) is a non-GAAP measure defined as net income before interest, income taxes, depreciation and amortization, restructuring costs, stock-based compensation, changes in fair value of warrant liabilities, and other income/expense items[152](index=152&type=chunk) - Consolidated AEBITDA Margin is calculated as the percentage of Consolidated AEBITDA to revenue[152](index=152&type=chunk) Consolidated AEBITDA and Margin (in thousands, except percentages) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | % Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Consolidated AEBITDA | $12,487 | $15,314 | $(2,827) | (18.5)% | | Consolidated AEBITDA Margin | 19.9% | 19.7% | 0.2pp | 1.0% | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) PLAYSTUDIOS maintains **$107.1 million** in cash, with sufficient liquidity for the next 12 months [Debt](index=46&type=section&id=Debt) [Cash Flows](index=46&type=section&id=Cash%20Flows) [Contractual Obligations, Commitments, and Contingencies](index=46&type=section&id=Contractual%20Obligations,%20Commitments,%20and%20Contingencies) - Cash and cash equivalents totaled **$107.1 million** as of March 31, 2025[157](index=157&type=chunk) - The company believes current liquidity is sufficient for operations and capital expenditures for at least the next twelve months, but may seek additional financing opportunistically for growth investments[157](index=157&type=chunk)[158](index=158&type=chunk) - No outstanding balances under the **$75.0 million** revolving credit facility as of March 31, 2025[159](index=159&type=chunk) Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Net cash provided by operating activities | $3,300 | $4,998 | $(1,698) | | Net cash used in investing activities | $(3,609) | $(6,522) | $2,913 | | Net cash used in financing activities | $(2,456) | $(4,263) | $1,807 | [Critical Accounting Policies and Estimates](index=46&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statements adhere to U.S. GAAP, with no material changes to critical accounting policies since the 2024 10-K - Financial statements require estimates and assumptions affecting reported amounts of assets, liabilities, revenue, and expenses[165](index=165&type=chunk) - No material changes to critical accounting policies and estimates compared to the 2024 Annual Report on Form 10-K[166](index=166&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) [Market Risk Disclosures](index=47&type=section&id=Market%20Risk%20Disclosures) PLAYSTUDIOS is exempt from market risk disclosures as a 'smaller reporting company' - PLAYSTUDIOS is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a 'smaller reporting company'[167](index=167&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) [Evaluation of Disclosure Controls and Procedures](index=47&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, ensuring timely and accurate reporting - The company's CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025[168](index=168&type=chunk) - Disclosure controls provide reasonable assurance for timely and accurate information recording, processing, summarizing, and reporting[168](index=168&type=chunk) [Changes in Internal Control over Financial Reporting](index=47&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes occurred in internal control over financial reporting during Q1 2025 - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2025[169](index=169&type=chunk) [Part II. OTHER INFORMATION](index=48&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) PLAYSTUDIOS is involved in routine litigation, not expected to materially affect its financial position - The company is party to ordinary and routine litigation incidental to its business[170](index=170&type=chunk) - Management believes the final outcome of current legal matters will not have a material adverse effect on the company's business[170](index=170&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the 2024 Annual Report on Form 10-K - No material changes to risk factors previously disclosed in the 2024 Annual Report on Form 10-K[171](index=171&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) PLAYSTUDIOS repurchased **1.33 million shares** of Class A common stock, with **$41.4 million** remaining in the program Share Repurchases (Quarter Ended March 31, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of a Publicly Announced Program | Dollar Value of Shares that May Yet be Purchased Under the Program (in thousands) | | :-------------------------------- | :------------------------------- | :--------------------------- | :--------------------------------------------------------------------- | :----------------------------------------------------------------------------- | | January 1, 2025 - January 31, 2025 | 542,877 | $1.82 | 416,884 | $42,734 | | February 1, 2025 - February 28, 2025 | 527,870 | $1.77 | 244,922 | $42,306 | | March 1, 2025 - March 31, 2025 | 258,751 | $1.37 | 248,030 | $41,964 | - The stock repurchase program was extended through November 1, 2025, with **$41.4 million** remaining availability after subsequent purchases post-March 31, 2025[105](index=105&type=chunk)[106](index=106&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - No defaults upon senior securities[174](index=174&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to PLAYSTUDIOS - Mine Safety Disclosures are not applicable to PLAYSTUDIOS[174](index=174&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) Joel Agena adopted a Rule 10b5-1 trading plan for Class A common stock sales, effective through March 16, 2026 - Joel Agena, General Counsel and Secretary, adopted a Rule 10b5-1 trading plan on March 12, 2025[174](index=174&type=chunk) - The plan provides for the sale of up to **225,391 shares** of Class A common stock, up to **100%** of shares received from vesting RSUs (**125,000 gross**), and up to **233,044 shares** from vested stock option exercises[174](index=174&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed or incorporated by reference into the Quarterly Report on Form 10-Q - Exhibits include Certificate of Incorporation, Bylaws, Certifications of CEO and CFO, and Inline XBRL documents[179](index=179&type=chunk) [Signatures](index=52&type=section&id=Signatures) The report was signed by Andrew Pascal (CEO) and Scott Peterson (CFO) on May 9, 2025 - The report was signed by Andrew Pascal (Chairman and CEO) and Scott Peterson (CFO) on May 9, 2025[182](index=182&type=chunk)

Company Performance - PLAYSTUDIOS, Inc. reported a quarterly loss of $0.02 per share, aligning with the Zacks Consensus Estimate, compared to break-even earnings per share a year ago [1] - The company posted revenues of $62.71 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.91% and down from $77.83 million year-over-year [2] - Over the last four quarters, PLAYSTUDIOS has surpassed consensus EPS estimates three times, but has topped consensus revenue estimates only once [2] Stock Movement and Outlook - PLAYSTUDIOS shares have declined approximately 27.4% since the beginning of the year, contrasting with the S&P 500's decline of 3.3% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $63.44 million, and -$0.01 on revenues of $263.76 million for the current fiscal year [7] Industry Context - The Gaming industry, to which PLAYSTUDIOS belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact PLAYSTUDIOS' stock performance [5]

Financial Data and Key Metrics Changes - First quarter revenue was $63 million, down approximately 19% year over year, reflecting continued softness in both social casino and casual portfolios [17] - Adjusted EBITDA for the quarter was $12 million, an 18.5% decline year over year and flat sequentially [18] - DAU was 2.6 million, down 25% year over year and down 3% sequentially [19] - MAU was 11.4 million, down 23% year over year and largely flat sequentially [19] - Adjusted EBITDA margin was 20%, up 20 basis points from the same period last year [18] Business Line Data and Key Metrics Changes - The social casino portfolio faced category-wide headwinds, but monetization improved across several core titles, with ARPDAU increasing year over year in POP slots, Mykonami, and especially in the MyVegas franchise [9] - Direct to consumer channel generated approximately $5 million in in-app purchase revenue, representing 9.8% of total IAP revenue in the quarter, compared to $2.3 million or 3.9% in Q1 2024 [10] - Casual segment performance remained soft across both Brame and Tetris Prime, with Brame showing early signs of monetization improvement [11] Market Data and Key Metrics Changes - The social casino category is being impacted by the rising popularity of sweepstakes-style offerings, which are capturing increasing mindshare and spend from players [6] - The daily average retail value of available rewards increased by 5% to approximately $2 million per day [14] Company Strategy and Development Direction - The company is focused on a reinvention plan to improve clarity, efficiency, and discipline, with a strong emphasis on compliance in developing a sweepstakes solution [5][7] - Development continues on the new casual Tetris title, Tetris Block Party, with a planned Q4 launch [8] - The Play Awards platform is central to the strategy of being a leader in rewarded play, with new award partnerships launched to enhance the loyalty ecosystem [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the market but expressed confidence in the reinvention plan and the potential for future growth [5] - The company reaffirmed its full-year 2025 guidance of net revenue between $250 million and $270 million and consolidated adjusted EBITDA between $45 million and $55 million [21] Other Important Information - The balance sheet remains strong, ending the quarter with approximately $107 million in cash and no outstanding debt [15] - The company is actively assessing strategic M&A opportunities that align with growth priorities [15] Q&A Session Summary Question: Confidence in executing the Q2 launch of the new sweepstakes product - Management expressed confidence in the ability to introduce and slowly scale the sweepstakes offering in Q2, with a measured introduction in several jurisdictions initially [25][26] Question: Success factors driving DTC revenue growth - The success is attributed to a focus on driving more consumption directly through incentives and a loyalty program, with expectations for continued momentum due to recent legal rulings [27][30] Question: Changes in the sweepstakes development phase - Management indicated that the focus has been on validating the technical stability and performance of the platform, with plans for a measured market introduction [35][36] Question: Benefits expected from the Apple Epic Games lawsuit - The ruling allows for more aggressive routing of purchases through direct channels, which is expected to improve user conversion and margin [38][40] Question: Integration of Play Awards with sweepstakes - Management believes that the loyalty program will enhance the sweepstakes promotional mechanic, driving deeper player engagement [45][46]

Financial Data and Key Metrics Changes - First quarter revenue was $63 million, down approximately 19% year over year, reflecting continued softness in both social casino and casual portfolios [16] - Adjusted EBITDA for the quarter was $12 million, an 18.5% decline year over year and flat sequentially [17] - DAU was 2.6 million, down 25% versus Q1 of 2024, and MAU was 11.4 million, down 23% year over year [18] - Adjusted EBITDA margin was 20%, up 20 basis points from the same period last year [17] Business Line Data and Key Metrics Changes - The social casino portfolio faced category-wide headwinds, but monetization improved across several core titles, with ARPDAU increasing year over year in POP slots, Mykonami, and especially in the MyVegas franchise [8][10] - Direct to consumer channel generated approximately $5 million in in-app purchase revenue, representing 9.8% of total IAP revenue in the quarter, compared to $2.3 million or 3.9% in Q1 of 2024 [10][11] - Casual segment performance remained soft across both Brame and Tetris Prime, with Brame showing early signs of monetization improvement [11][12] Market Data and Key Metrics Changes - The social casino category is being impacted by the rising popularity of sweepstakes-style offerings, which are capturing increasing mindshare and spend from players [5] - The company is developing a sweepstakes solution to address the competitive landscape and has launched an internal alpha of its sweepstakes promotional platform [5][6] Company Strategy and Development Direction - The company is focused on a reinvention plan to operate with more clarity, efficiency, and discipline, aiming to stabilize its core business and unlock future growth [4][6] - Development continues on the new casual Tetris title, Tetris Block Party, with a planned Q4 launch [7][12] - The Play Awards platform is central to the company's strategy of being a leader in rewarded play, enhancing player engagement and loyalty [13][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the market but expressed confidence in the reinvention plan and the potential for future growth [4][16] - The company reaffirmed its full-year 2025 guidance of net revenue between $250 million and $270 million and consolidated adjusted EBITDA between $45 million and $55 million [20] Other Important Information - The company ended the quarter with approximately $107 million in cash and no outstanding debt [15] - The daily average retail value of available rewards increased by 5% to approximately $2 million per day [14] Q&A Session Summary Question: Confidence in Q2 launch of the new sweepstakes product - Management expressed confidence in the ability to introduce and slowly scale the sweepstakes offering in Q2, with a measured introduction in several jurisdictions initially [23][25] Question: Success factors driving DTC revenue growth - The growth in DTC revenue is driven by offering incentives for users to transact directly, with expectations for continued momentum due to recent legal rulings [26][28] Question: Changes in sweepstakes development phase - The focus has been on validating the technical stability and performance of the platform, with plans for a measured market introduction [32][34] Question: Benefits expected from the Apple Epic Games lawsuit - Management anticipates improved user adoption of direct purchases and margin improvement due to reduced fees on direct sales [36][38] Question: Integration of Play Awards with sweepstakes - Management believes that the loyalty program and sweepstakes promotional mechanic will complement each other, enhancing player engagement [42][44]

[First Quarter 2025 Earnings Release](index=1&type=section&id=PLAYSTUDIOS%2C%20INC.%20ANNOUNCES%20FIRST%20QUARTER%20RESULTS) PLAYSTUDIOS reported first-quarter 2025 revenue of $62.7 million and a net loss of $2.9 million, reflecting continued challenging market conditions [First Quarter 2025 Overview and Highlights](index=1&type=section&id=First%20Quarter%20Financial%20Highlights) PLAYSTUDIOS reported first-quarter 2025 revenue of $62.7 million and a net loss of $2.9 million, reflecting continued challenging market conditions - CEO Andrew Pascal noted a focused start to 2025 amidst a business and industry transition, with progress in sweepstakes capabilities, direct-to-consumer channels, playAWARDS ecosystem, and 'Tetris Block Party' development[3](index=3&type=chunk) Financial Metric Comparison (Q1 2025 vs. Q1 2024) | Financial Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $62.7 million | $77.8 million | | Net Loss | $2.9 million | $0.6 million | | Consolidated AEBITDA | $12.5 million | $15.3 million | | AEBITDA Margin | 19.9% | 19.7% | | Direct to Consumer Revenue | $5.0 million | $2.3 million | - Recent business developments include progress on the Reinvention plan targeting **$25-$30 million** in annualized cost savings, 'Tetris Block Party' on track for Q4 2025 launch, and repurchase of **0.9 million** shares at an average price of **$1.71** per share[10](index=10&type=chunk) [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025%20Guidance) PLAYSTUDIOS has maintained its full-year 2025 financial guidance, signaling confidence in its operational strategy and cost-saving initiatives despite the challenging first quarter Full Year 2025 Guidance Range | Guidance Metric | Full Year 2025 Range | | :--- | :--- | | Net Revenue | $250 to $270 million | | Consolidated AEBITDA | $45 to $55 million | [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents the company's condensed consolidated financial statements, including the statement of operations and balance sheets [Condensed Consolidated Statement of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20OPERATIONS) For the first quarter of 2025, the company's net revenue decreased to $62.7 million from $77.8 million, resulting in a wider loss from operations and a net loss of $2.9 million Condensed Consolidated Statement of Operations (In thousands) | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net revenue | $62,709 | $77,828 | | Total operating costs and expenses | $65,450 | $79,531 | | Loss from operations | $(2,741) | $(1,703) | | Net loss | $(2,880) | $(567) | | Net loss per share, diluted | $(0.02) | $— | [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, PLAYSTUDIOS reported a solid liquidity position with $107.1 million in cash and cash equivalents and an undrawn $81 million revolving credit facility Condensed Consolidated Balance Sheets (In thousands) | (In thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $107,097 | $109,179 | | Total current assets | $145,449 | $147,102 | | Total assets | $313,775 | $322,955 | | Total current liabilities | $40,385 | $49,418 | | Total liabilities | $69,693 | $78,240 | | Total stockholders' equity | $244,082 | $244,715 | - As of March 31, 2025, the company's **$81 million** revolving credit facility remains undrawn, indicating strong liquidity[4](index=4&type=chunk) [Non-GAAP Measures and Supplemental Data](index=8&type=section&id=Supplemental%20Data) This section provides reconciliations of non-GAAP financial measures and detailed supplemental data on segment performance and key performance indicators [Reconciliation of Net Loss to Consolidated AEBITDA](index=8&type=section&id=RECONCILIATION%20OF%20NET%20LOSS%20TO%20CONSOLIDATED%20AEBITDA) Consolidated AEBITDA for Q1 2025 was $12.5 million, down from $15.3 million in Q1 2024, with a slight margin improvement to 19.9% due to lower operating costs Reconciliation of Net Loss to Consolidated AEBITDA (In thousands) | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net loss | $(2,880) | $(567) | | Depreciation & amortization | $9,632 | $11,566 | | Stock-based compensation expense | $4,258 | $4,794 | | Restructuring and related | $1,335 | $638 | | **Consolidated AEBITDA** | **$12,487** | **$15,314** | | **Consolidated AEBITDA Margin** | **19.9%** | **19.7%** | [Segment Information](index=9&type=section&id=SUPPLEMENTAL%20DATA%20-%20SEGMENT%20INFORMATION) The playGAMES segment remains the primary revenue driver, generating $62.6 million in revenue and $18.3 million in segment AEBITDA for Q1 2025, despite a decline from the prior year Segment Information (In thousands) | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **playGAMES Net Revenue** | $62,555 | $77,828 | | **playGAMES Segment AEBITDA** | $18,309 | $23,451 | | **playAWARDS Net Revenue** | $154 | $— | | **playAWARDS Segment AEBITDA** | $(2,289) | $(3,622) | [Net Revenue Breakdown](index=10&type=section&id=SUPPLEMENTAL%20DATA%20-%20NET%20REVENUE) Total net revenue declined in Q1 2025, with virtual currency and advertising revenue falling, but direct-to-consumer platform revenue grew significantly by 113.9% Net Revenue Breakdown (In thousands) | Revenue Type (In thousands) | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Virtual currency | $50,840 | $60,247 | (15.6%) | | Advertising | $11,863 | $17,442 | (32.0%) | | **Total net revenue** | **$62,709** | **$77,828** | **(19.4%)** | - Direct-to-consumer (DTC) revenue increased by **113.9%** to **$4.97 million** from **$2.32 million** in the prior year quarter[36](index=36&type=chunk) [Key Performance Indicators (KPIs)](index=11&type=section&id=SUPPLEMENTAL%20DATA%20%E2%80%93%20KEY%20PERFORMANCE%20INDICATORS) In Q1 2025, playGAMES user engagement metrics declined, but monetization efficiency improved with an 8.3% increase in ARPDAU, while playAWARDS platform activity significantly contracted playGAMES Key Performance Indicators | playGAMES KPIs | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Average DAU (in thousands) | 2,632 | 3,495 | (24.7%) | | Average MAU (in thousands) | 11,422 | 14,752 | (22.6%) | | ARPDAU (in dollars) | $0.26 | $0.24 | 8.3% | playAWARDS Key Performance Indicators | playAWARDS KPIs | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Purchases (in thousands of units) | 281 | 501 | (44.0%) | | Retail Value of Purchases (in thousands) | $16,984 | $40,591 | (58.2%) | [Definitions and Disclosures](index=2&type=section&id=Definitions%20and%20Disclosures) This section outlines the definitions of key performance indicators, non-GAAP financial measures, and important disclosures regarding forward-looking statements [Performance Indicators Definitions](index=2&type=section&id=Performance%20Indicators) The company uses several key performance indicators (KPIs) to manage its business, including audience and monetization metrics for playGAMES and engagement metrics for playAWARDS - playGAMES metrics measure audience size and engagement (**DAU**, **MAU**) and monetization (**DPU**, **ARPDAU**)[11](index=11&type=chunk)[12](index=12&type=chunk)[15](index=15&type=chunk) - playAWARDS metrics measure the value and engagement of the loyalty program, tracking the variety of rewards (**Available Rewards**), player redemptions (**Purchases**), and the real-world value provided to players (**Retail Value of Purchases**)[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) PLAYSTUDIOS discloses Consolidated Adjusted EBITDA (AEBITDA) and Consolidated AEBITDA Margin as non-GAAP financial measures, used by management to analyze and benchmark business performance - Consolidated AEBITDA is defined as net income (loss) adjusted for interest, taxes, depreciation, amortization, stock-based compensation expense, restructuring costs, and other infrequent or non-cash items[22](index=22&type=chunk) - Management uses Consolidated AEBITDA to compare operating performance across periods and against other companies, as it removes the impact of different financing and capital structures[23](index=23&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This press release includes forward-looking statements concerning future financial performance, game development plans, and the impact of restructuring, which are subject to significant risks and uncertainties - The report contains forward-looking statements regarding future financial and operating performance, game release plans, and anticipated cost reductions from restructuring[24](index=24&type=chunk) - These statements are subject to risks including competition, technological changes, ability to retain players, and general economic conditions, with no obligation for the company to update them[25](index=25&type=chunk)

Group 1 - The stock of PLAYSTUDIOS, Inc. (MYPS) is experiencing significant attention due to high implied volatility in the options market, particularly the May 16, 2025 $1.00 Call option [1] - Implied volatility indicates the market's expectation of future movement, suggesting that investors anticipate a significant price change or an upcoming event that could lead to a rally or sell-off [2] - Currently, PLAYSTUDIOS holds a Zacks Rank 3 (Hold) in the Gaming industry, which is in the bottom 38% of the Zacks Industry Rank, with no analysts increasing their estimates for the current quarter and one analyst revising estimates downward, leading to a consensus estimate shift from a profit of one cent per share to a loss of three cents [3] Group 2 - The high implied volatility surrounding PLAYSTUDIOS may indicate a developing trading opportunity, as options traders often seek to sell premium on options with high implied volatility to capture decay, hoping the underlying stock does not move as much as expected by expiration [4]

Game Portfolio and Revenue Generation - PLAYSTUDIOS has developed a portfolio of free-to-play social casino games, including Tetris®-branded mobile games and the acquisition of Brainium in late 2022[303]. - Revenue is primarily generated from in-game virtual currency sales, with a significant concentration in North America, and in-game advertising has been expanded since 2021[306][307]. - The company invests significantly in user acquisition and game development to maintain player engagement and drive revenue growth[308]. Key Performance Indicators - Daily Active Users (DAU) and Monthly Active Users (MAU) are key performance indicators, with DAU defined as the number of individuals playing a game on a particular day[312][313]. - Daily Paying Users (DPU) measures the number of individuals making purchases in a game daily, with Average DPU calculated for performance tracking[314]. - Average Daily Revenue Per DAU (ARPDAU) is used to assess overall monetization, calculated as game and advertising revenue divided by Average DAU[316]. Player Engagement and Rewards - The playAWARDS program offers real-world rewards, with the number of Available Rewards being a measure of program value and player engagement[317]. - Purchases of rewards through the playAWARDS platform are tracked, with the total number of rewards purchased indicating audience interest[318]. - The Retail Value of Purchases reflects the cumulative retail value of rewards redeemed, providing insight into the real-world value of rewards for players[319]. - The myVIP program enhances player engagement and retention through tiered benefits and personalized experiences[305]. Financial Performance - Net revenue decreased by $21.5 million, or 6.9%, to $289.4 million for the year ended December 31, 2024, compared to $310.9 million in 2023[320]. - Operating loss increased by $22.4 million, or 213.4%, to $32.9 million in 2024 from $10.5 million in 2023[320]. - Net loss rose by $9.3 million, or 47.9%, to $28.7 million in 2024 compared to $19.4 million in 2023[320]. - playGAMES revenue was $289.4 million in 2024, down $17.3 million, or 5.7%, from $306.7 million in 2023, primarily due to a $19.1 million decrease in virtual currency revenue[324][325]. - playAWARDS revenue plummeted by $4.1 million, or 98.5%, to $62, attributed to the non-renewal of a licensing arrangement[326]. - Average Daily Active Users (DAU) for playGAMES decreased by 424, or 12.0%, to 3,100 in 2024 from 3,524 in 2023[324]. - Total operating expenses increased slightly by $0.9 million, or 0.3%, to $322.3 million in 2024 compared to $321.4 million in 2023[327]. - Restructuring expenses surged by $17.1 million, or 199.5%, to $25.7 million in 2024, driven by non-cash impairments and management restructurings[333]. - Consolidated AEBITDA decreased by $5.7 million, or 9.2%, to $56.5 million in 2024 from $62.3 million in 2023[338]. - playGAMES AEBITDA for the year ended December 31, 2024, was $85.1 million, a decrease of 4.1% from $88.7 million in 2023, with an AEBITDA margin of 29.4% compared to 28.9% in 2023[339]. - playAWARDS AEBITDA was $(13.7) million for the year ended December 31, 2024, compared to $(10.4) million in 2023, attributed to the non-renewal of a licensing arrangement[340]. - Consolidated AEBITDA for the year ended December 31, 2024, was $56.5 million, down from $62.3 million in 2023, with a Consolidated AEBITDA margin of 19.5% compared to 20.0% in 2023[343]. - Net revenue decreased to $289.4 million in 2024 from $310.9 million in 2023, resulting in a net loss of $(28.7) million, with a net loss margin of (9.9)% compared to (6.2)% in 2023[343]. Cash Flow and Liquidity - Cash and cash equivalents as of December 31, 2024, were $109.2 million, with restricted cash of $1.2 million, indicating sufficient liquidity for operations and capital expenditures for at least the next 12 months[345]. - Net cash provided by operating activities was $45.7 million in 2024, down from $51.7 million in 2023, primarily due to lower net revenue[356]. - Net cash used in investing activities was $26.3 million in 2024, a decrease from $32.3 million in 2023, mainly due to reduced cash used for purchasing intangible assets and property[357]. - Financing activities used $41.9 million of net cash in 2024, compared to $20.2 million in 2023, driven by increased share repurchases and minimum guarantee payments[358]. - The company had a Total Net Leverage Ratio of 3.50:1.00 as of December 31, 2024, with a Fixed Charge Coverage Ratio of not less than 1.25:1.00[354]. - The company may require additional funds for business growth, including developing new games and enhancing existing ones, which may lead to equity or debt financings[345]. - The company had cash and cash equivalents totaling $109.2 million as of December 31, 2024, down from $132.9 million as of December 31, 2023, indicating a decrease of approximately 17.8%[382]. Revenue Recognition and Risks - The average consumption period for virtual currency is approximately one day, with a timing difference between purchase and consumption ranging from one to seven days[370]. - The company recognizes revenue from in-game purchases of virtual currency over the estimated average period between purchase and consumption[370]. - The company has entered into derivative contracts to purchase certain foreign currencies, with a notional value of approximately $2.5 million, expected to mature within the upcoming 12 months[386]. - The company does not have any borrowings outstanding under its Credit Agreement as of December 31, 2024, and December 31, 2023[380]. - The company’s advertising revenue is recognized at the point in time when advertisements are displayed or offers are completed, with payment terms ranging from 45 to 60 days after the end of the month[372][373]. - The company has determined that it is the principal in its revenue reporting, leading to revenues being reported gross of payment processing fees[374]. - A hypothetical 100 basis point change in interest rates would have an immaterial impact on the company's interest income due to the short-term nature of its investments[382]. - The company is exposed to foreign currency risks, particularly from transactions in currencies other than the U.S. Dollar, which could materially impact future operating results[383][385]. - The company continues to gather detailed player behavior data to assess its revenue recognition policy and make necessary adjustments based on changes in player behavior patterns[371].

Driven Brands Holdings, Inc. - A securities fraud class action complaint against Driven Brands has survived the defendants' motion to dismiss, indicating that the allegations were sufficiently pleaded [1][4] - The complaint alleges that certain officers and directors made materially false and misleading statements regarding the company's ability to integrate acquired businesses and the performance of its car wash segment [3] - Long-term shareholders who held Driven Brands shares since before October 27, 2021, can seek corporate reforms and a court-approved incentive award at no cost [2][5] Mercury Systems, Inc. - A securities fraud class action complaint against Mercury Systems has also survived the motion to dismiss, with key allegations being adequately pleaded [6][9] - The complaint claims that the company misled investors about its growth by using improper revenue recognition practices and misrepresenting the status of its projects [8] - Current shareholders who held shares since before February 3, 2021, can seek corporate reforms and a court-approved incentive award at no cost [7][9] Playstudios, Inc. - A securities fraud class action complaint against Playstudios has survived the motion to dismiss and has reached a settlement [10][14] - The complaint alleges that shareholders paid artificially inflated prices for their securities due to the defendants' wrongful conduct [13] - Shareholders who purchased or acquired Playstudios shares prior to August 11, 2021, can seek corporate reforms and a court-approved incentive award at no cost [11][15] Sage Therapeutics, Inc. - An investigation is underway regarding claims against Sage Therapeutics, focusing on whether certain officers and directors breached their fiduciary duties [15] - The underlying complaint alleges that the company made materially false and misleading statements about the effectiveness of its treatments and the prospects for FDA approval [17] - Shareholders who purchased Sage Therapeutics shares prior to April 12, 2021, can seek corporate reforms and a court-approved incentive award at no cost [16][18]

Financial Data and Key Metrics Changes - The company reported a revenue decline of $9.3 million or 12% year-over-year in Q4 2024, with full-year revenues down 7% compared to 2023 [34][41] - Adjusted EBITDA for Q4 was $12.5 million, a 15% decrease from the previous year, resulting in an adjusted EBITDA margin of 18.4%, down 70 basis points year-over-year [36][41] - Daily Active Users (DAU) decreased by 19% to 2.7 million, while Monthly Active Users (MAU) fell by 14% to 11.5 million [37] Business Line Data and Key Metrics Changes - The social casino segment experienced significant revenue declines, attributed to ongoing challenges in maintaining DAU [34] - The casual games segment also saw lower revenues, primarily driven by a decline in DAU for the Tetris franchise [34][36] - ARPDAU (Average Revenue Per Daily Active User) increased by 8% to $0.27, driven by improvements in the social casino portfolio [38] Market Data and Key Metrics Changes - The sweepstakes market has grown from $700 million to a forecasted $4.5 billion, indicating a significant opportunity for the company [59] - The company aims to integrate sweepstakes features into its existing games, which is expected to enhance player engagement and monetization [60][62] Company Strategy and Development Direction - The company has implemented a reinvention plan, reducing its workforce by over 30% and focusing on operational efficiency and cost reduction [9][40] - Strategic initiatives include the development of new games, particularly in the Tetris franchise, and the expansion of the playAWARDS loyalty program [12][26] - The company is committed to pursuing strategic M&A opportunities while maintaining a disciplined approach to capital allocation [30][78] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the gaming industry but expressed confidence in returning to growth, particularly with the introduction of new initiatives [7][35] - The company expects to generate positive cash flows and maintain a strong balance sheet with $109 million in cash and no borrowings [41][50] - Guidance for 2025 estimates revenues between $250 million and $270 million, with adjusted EBITDA ranging from $45 million to $55 million [43] Other Important Information - The company repurchased $31 million worth of stock in 2024, representing 13% of total issued common stock [42] - The inaugural World Tournament of Slots event was held, generating significant player engagement and excitement [28] Q&A Session Summary Question: Timing and Integration of Sweepstakes Initiatives - Management indicated that the sweepstakes initiative will initially be a separate offering, with plans for integration into existing games as regulatory clarity improves [62][64] Question: Decline in playAWARDS Retail Value - The decline in retail value of playAWARDS purchases was attributed to a reset of the rewards program and reduced overall play activity [66][68] Question: Balancing Development with Reduced Workforce - The company plans to leverage third-party development resources and transition teams to lower-cost regions to balance development needs with workforce reductions [74][75] Question: M&A Strategy and Market Opportunities - The company remains focused on M&A as a core strategy but is currently prioritizing internal development for sweepstakes capabilities [88] Question: Impact of Sweepstakes on Social Casino Games - Management believes that sweepstakes will not detract from social casino games but rather provide an additional value proposition to the same consumer base [90][92] Question: Consumer Spending and Economic Conditions - Management noted cautious consumer spending but emphasized that the guidance reflects ongoing market dynamics and investment in growth opportunities [98][100] Question: Regulatory Concerns Regarding Sweepstakes - The company plans to approach the sweepstakes market cautiously, ensuring compliance with regulations while leveraging its experience in the gaming industry [106][108] Question: Effectiveness of Loyalty Program - Management believes the loyalty program adds value and is working to enhance its offerings to improve engagement and retention [113][115]

Financial Performance - Fourth quarter 2024 revenue was $67.8 million, a decrease of 12.1% from $77.1 million in the fourth quarter of 2023[5] - Net loss for the fourth quarter 2024 was $22.4 million, compared to a net loss of $19.9 million in the same quarter of 2023[5] - For the full year 2024, revenue was $289.4 million, down from $310.9 million in 2023, with a net loss of $28.7 million compared to a net loss of $19.4 million in the prior year[5] - Net revenue for Q4 2024 was $67,782,000, a decrease of 12.9% from $77,112,000 in Q4 2023[29] - The net loss for Q4 2024 was $22,412,000, compared to a net loss of $19,864,000 in Q4 2023, indicating a 12.8% increase in losses[29] - Total net revenue for the year ended December 31, 2024, was $289,429,000, down 6.9% from $310,886,000 in 2023[38] - Net loss for the year ended December 31, 2024, was $28,687,000, compared to a net loss of $19,393,000 in 2023[38] User Metrics - Average Daily Active Users (DAU) and Monthly Active Users (MAU) were 2.7 million and 11.5 million, respectively, with an Average Revenue Per Daily Active User (ARPDAU) of $0.27[5] - Average Daily Active Users (DAU) declined by 19.0% to 2,723 in Q4 2024 compared to 3,361 in Q4 2023[41] - Average Monthly Active Users (MAU) decreased by 13.7% to 11,472 in Q4 2024 from 13,288 in Q4 2023[41] - Average Daily Payer Conversion remained stable at 0.8% for both Q4 2024 and Q4 2023[41] Cost and Expenses - Total operating costs and expenses increased to $90,202,000 in Q4 2024, up from $79,825,000 in Q4 2023, representing a 12.5% rise[29] - Restructuring and related expenses for Q4 2024 were $20,462,000, a substantial increase from $1,472,000 in Q4 2023[34] - The company executed a cost reinvention program, resulting in an expected annual cost savings of approximately $25 million to $30 million[9] Cash and Assets - As of December 31, 2024, the company had $109.2 million in cash and cash equivalents, with an undrawn $81 million revolving credit facility[5] - Cash and cash equivalents decreased to $109,179,000 as of December 31, 2024, down from $132,889,000 in 2023, a decline of 17.9%[32] - Total assets decreased to $322,955,000 in 2024 from $366,321,000 in 2023, reflecting a reduction of 11.8%[32] - The accumulated deficit increased to $31,324,000 in 2024 from $2,637,000 in 2023, showing a significant rise in losses[32] Revenue Streams - Direct to Consumer revenue increased by 93.0% to $4.7 million in the fourth quarter 2024, compared to $2.4 million in the same quarter of 2023[5] - Virtual currency revenue fell by 9.5% to $54,643,000 in Q4 2024 from $60,365,000 in Q4 2023[39] - Advertising revenue decreased by 21.0% to $13,136,000 in Q4 2024 compared to $16,628,000 in Q4 2023[39] Future Outlook - The company expects full year 2025 Consolidated Net Revenue to range between $250 million and $270 million, with Consolidated Adjusted EBITDA expected to be between $45 million and $55 million[7] - The company has integrated Pixode Games Limited and is working on a new Tetris title, aiming for market release in 2025[9] Profitability Metrics - Consolidated AEBITDA for the fourth quarter 2024 was $12.5 million, down from $14.7 million in the fourth quarter of 2023, with a margin of 18.4%[5] - Consolidated AEBITDA for Q4 2024 was $12,473,000, with a margin of 18.4%, compared to $14,728,000 and a margin of 19.1% in Q4 2023[34] - The company reported a net loss margin of 33.1% for Q4 2024, compared to 25.8% in Q4 2023, indicating worsening profitability[34] - AEBITDA margin for playGAMES was 24.3% in Q4 2024, down from 29.6% in Q4 2023[38] Shareholder Information - The weighted average shares of common stock outstanding decreased to 124,794,000 in Q4 2024 from 134,259,000 in Q4 2023[29]