PlayStudios(MYPS) - 2021 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported revenue of $70.8 million for Q2 2021, with year-to-date revenue increasing by 6.4% to $144.9 million compared to $136.2 million in the same period last year [31] - Adjusted EBITDA for Q2 was $3.4 million, with a year-to-date total of $17.9 million [33] - The cost of sales as a percentage of revenue improved from approximately 34% last year to approximately 32.5% this year [32] - The company expects 2021 revenues to be between $290 million and $300 million, representing a year-over-year growth of roughly 10% at the midpoint [29][37] Business Line Data and Key Metrics Changes - Daily Active Users (DAU) were 1.25 million, and Monthly Active Users (MAU) were 4.3 million, down 3.8% year-over-year but up 15.1% quarter-over-quarter [34] - Average Revenue Per Daily Active User (ARPDAU) was $0.62, up 12.7% year-over-year but down 5% quarter-over-quarter [34] - The payer conversion rate was 2.7%, up approximately 40 basis points year-over-year and down approximately 10 basis points sequentially [34] Market Data and Key Metrics Changes - The company has expanded its loyalty program activity, with purchases returning to pre-COVID levels, totaling 534,000 purchases in the quarter, a 209% increase compared to the same period last year [35] - The myVEGAS Bingo product, launched in late March, scaled to over 100,000 players within a few months, with retention and engagement metrics comparable to long-standing leaders in the category [20] Company Strategy and Development Direction - The company aims to leverage its loyalty model across various game genres and plans to accelerate expansion through acquisitions [24] - The focus is on creating value over the long term, with 2021 intended as a formative period for investments in new products and M&A strategy [26] - The company is committed to optimizing its core franchises and launching new games while maintaining profitable growth [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term potential of the loyalty model in gaming, emphasizing the importance of demonstrating its value across genres [23] - The timeline for launching Kingdom Boss has shifted to late fall, with management prioritizing product optimization before launch [48] - The company expects modest growth from its core portfolio while continuing to invest in new products like myVEGAS Bingo [95] Other Important Information - The company ended the quarter with approximately $230 million in cash and has a new $75 million revolving credit facility [36] - Management highlighted the importance of investing in new studios and talent to improve operational efficiency and cost structure [88] Q&A Session Summary Question: Clarification on Kingdom Boss launch timing - Management indicated that the launch was initially expected in summer but has now shifted to late fall, emphasizing the need for product optimization before release [48] Question: Factors affecting revenue guidance - The majority of the revenue adjustment was attributed to the delay of Kingdom Boss and a later-than-expected launch of myVEGAS Bingo [57] Question: User acquisition leveraging award partners - The company utilizes its award partners to drive user acquisition and has expanded its partner base to align with the audience for Kingdom Boss [71] Question: Engagement trends and user behavior - Management reported healthy retention rates and engagement metrics, despite challenges in user acquisition costs due to market changes [75] Question: Changes in conversion rates - The increase in conversion rates is attributed to a deliberate focus on optimizing user acquisition campaigns and improving player retention [82]