Playtika(PLTK) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For the full year 2024, the company generated $2.549 billion in revenue, a decrease of 0.7% year-over-year, with GAAP net income of $162.2 million compared to $235 million in 2023, and credit adjusted EBITDA of $757.7 million, reflecting a 9% decline year-over-year [17][18] - In Q4 2024, revenue was $650.3 million, up 4.8% sequentially and 1.9% year-over-year, while GAAP net income was negative $16.7 million compared to $39.3 million in Q3 and $37.3 million in Q4 2023 [18][19] - The company reported a credit adjusted EBITDA of $183.9 million for Q4, down 6.7% sequentially and 2.6% year-over-year, with a credit adjusted EBITDA margin of 28.3% compared to 31.8% in Q3 and 29.6% in Q4 last year [18][19] Business Line Data and Key Metrics Changes - Revenue from direct-to-consumer platforms was $174.6 million, up 0.1% sequentially and 8% year-over-year [19] - Bingo Blitz generated $159.1 million in revenue, down 0.5% sequentially but up 5.8% year-over-year, while Slotomania's revenue was $118.4 million, down 7.9% sequentially and 13.5% year-over-year [19][20] - Solitaire Grand Harvest revenue was $72.5 million, down 8.1% sequentially and 4.3% year-over-year, indicating underperformance [21] Market Data and Key Metrics Changes - The company noted that acquired titles like Animals & Coins and Governor of Poker 3 showed robust performance, with Animals & Coins achieving record results during the Black Friday period [22][23] - SuperPlay contributed approximately $48 million in revenue for the quarter, reflecting only a partial period contribution due to the timing of the acquisition [23] Company Strategy and Development Direction - The company is focused on executing a return to growth strategy, which includes a capital allocation framework, quarterly dividends, a buyback program, and a plan to restart M&A activities [7][10] - Over the next 12 to 18 months, the company plans to launch three new games, including Disney's Solitaire and Claire's Chronicles, while continuing to explore M&A opportunities [8][9] - The company is transitioning its portfolio away from declining legacy titles and investing in new studios to enhance growth potential [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about generating consistent top-line growth through new game launches and investments in existing titles [10][32] - The company anticipates a transitional year in 2025, with expected revenue between $2.8 billion and $2.85 billion and adjusted EBITDA between $715 million and $740 million [28][32] - Management highlighted the importance of stabilizing the business while investing in new titles, expecting in-play and SuperPlay studios to become positive EBITDA contributors by 2026 [33][34] Other Important Information - The company is adopting a more market-based executive compensation structure to align leadership interests with shareholder returns [16] - Free cash flow for the year was $396.8 million, reflecting a 9.1% decline year-over-year [17] Q&A Session Summary Question: What is the organic growth trajectory for 2025? - Management indicated that the existing portfolio and recently acquired titles are expected to trend around flat, with high singles growth anticipated for the casino business [39][40] Question: What are the key learnings from the DTC strategy in 2024? - Management noted that DTC has been a significant growth driver for EBITDA, with a successful strategy in place [51][52] Question: How is the new game pipeline trending? - Management expressed excitement about the upcoming launch of Disney's Solitaire, expecting it to be one of the top games in the next year [55][56] Question: How does the company view the social casino genre's growth? - Management sees stability in the genre with opportunities to gain market share, despite not expecting significant overall growth [72][73] Question: What is the roadmap for introducing more IGT content? - Management reported positive engagement from Cleopatra II and is excited about rolling out more IGT content throughout the year [84]