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]

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]