PlayStudios(US:MYPS)2025-11-06 14:15Company 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].