PLBY (US:PLBY)2022-11-10 03:34Financial Data and Key Metrics Changes - Third quarter revenue grew 9% year-over-year to $63.6 million, impacted by $1.2 million of FX headwinds and a 27% reduction in marketing spend [38][43] - On a constant currency basis, revenue growth was up 11% [38] - Adjusted EBITDA for the third quarter was over $700,000, a sequential improvement of $3.3 million despite $1.8 million less revenue compared to the second quarter [50] Business Line Data and Key Metrics Changes - Revenue in the direct-to-consumer segment was up 22% year-over-year to $44 million, with a constant currency growth of 25% [38] - Honey Birdette posted a solid growth of 34% year-over-year to just over $21 million, with a constant currency growth of 41% [39] - Playboy e-commerce revenue increased by 58% year-over-year, driven by a 338% increase in email and SMS engagement [41] - Yandy revenue declined 50% year-over-year, while Lovers revenue declined 10% [43] Market Data and Key Metrics Changes - The licensing segment revenue declined 13% year-over-year to $14.9 million, primarily due to a $1.7 million reduction in overages [44] - The macroeconomic environment continues to negatively impact discretionary spending habits, particularly affecting Yandy and Lovers consumers [43] Company Strategy and Development Direction - The company aims to consolidate its DTC businesses and build a recruiter-led digital platform [8] - Continued investment in the Playboy creator platform is seen as a strategic opportunity to lower customer acquisition costs and drive revenue [20][21] - The company plans to integrate the Playboy brand into Lovers stores, launching Playboy pleasure products in time for Valentine's Day [56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of inflation, rising interest rates, and declining discretionary spending on consumer behavior [9][10] - The company has removed nearly $18 million of annualized operating expenses and is focused on further cost reductions [10][49] - Management remains optimistic about the long-term potential of the Playboy brand and its ability to drive growth through creator engagement [35][36] Other Important Information - The company recognized approximately $306 million of impairment charges related to the write-down of goodwill and other intangible assets due to a reduction in financial outlook [45][46] - The company has a stable cash position with over $65 million in cash equivalents, including crypto and restricted cash [50][81] Q&A Session Summary Question: Integration of Playboy and Lovers brands - Management discussed plans to launch Playboy pleasure products in Lovers stores and evaluate new store opportunities branded as Playboy pleasure [56][58] Question: Licensing business in China - Management confirmed no revenue impact from COVID lockdowns as partners pay in advance, but there have been delays due to banking regulations [59][60] - Long-term plans include transitioning the China business into a joint venture for stability and growth [63] Question: Inventory and demand trends - Management noted strong demand for Playboy products during Halloween, while Yandy faced challenges due to reduced paid media spend [67][68] Question: Centerfold go-to-market strategy and competition - Management expressed confidence in the Centerfold product and its integration with the overall Playboy ecosystem, highlighting improvements in technology and creator onboarding [71][75] Question: Cash balances and liquidity - Management reported stable cash balances and discussed balancing reinvestment in growth initiatives with maintaining liquidity [81][84] Question: Potential asset sales - Management indicated a focus on consolidating businesses around core brands and improving operational efficiency, without confirming specific asset sales [96][97]