PLAYSTUDIOS, Inc. Q2 FY2024 earnings call

• Strategic initiatives: Focus on expanding game portfolio, strengthening myVIP program, diversifying business. - Tetris efforts: Refreshed Tetris Prime, launched Tetris Block Puzzle, acquired Pixode to combine block puzzle game with Tetris brand. - myVIP program: Progress on refresh, added 131 rewards partners with over $160M in retail rewards. - PlayAWARDS: Continued expanding platform, integrating with myVIP, and seeking monetization opportunities. - M&A: Actively seeking large transformative acquisitions, with Pixode as a recent smaller additive acquisition. - Share repurchases: Purchased nearly 9% of Class A shares from Microsoft, with $46M remaining on repurchase authorization.

PlayGAMES division: Expanded game portfolio to 20 games, including Tetris franchise. Tetris Prime refreshed with new animations, sound effects, and modes. Tetris Block Puzzle launched globally with positive early metrics. Brainium saw ARPDAU growth driven by new advertising formats. PlayAWARDS division: Launched myVIP World Tournament of Slots, added rewards partners like Disneyland Resort, Regal Cinemas, Sonos, and 6 Flags. PlayAWARDS had over 500,000 rewards purchased in the quarter, up 12% year-over-year. Revenue contribution: AdMon games ~19%, direct off platform purchases ~4%.

• Revised 2024 revenue guidance to $285 million to $295 million, down from prior forecast of $315M-$325M. - Revised consolidated adjusted EBITDA guidance to $55 million to $60 million, down from prior $65M-$70M. - Weakness in social casino and slower scaling of Tetris Block Puzzle contributed to the guidance revision. - Anticipate continued softness in social casino category and ongoing efforts to scale Tetris Block Puzzle.

• Structural challenges in user acquisition due to Apple/Google data privacy and advertising changes. - Secular contraction in the primary social casino game genre. - Competition for game assets among companies pursuing inorganic growth. - Lack of trading volume putting downward pressure on stock price. - Challenges in scaling Tetris Block Puzzle due to high customer acquisition costs and market competition.

Q: Ryan Sigdahl asked about the wide swing in second half revenue guidance, asking if anything slipped within the business besides industry headwinds.

A: Andrew Pascal said it's due to social casino challenges (one core title underperforming) and slower scaling of Tetris Block Puzzle than anticipated.

Q: Cory Carpenter asked about myVEGAS and KONAMI initiatives and if changes could be applied to other games.

A: Andrew Pascal said myVEGAS is growing, KONAMI is stable, Pop! Slots underperformed due to operational issues, and changes are being made to rehabilitate it.

Q: Cory Carpenter also asked about Tetris 40th anniversary response.

A: Andrew Pascal said response fell short of expectations but they have other campaigns planned.

Q: Aaron Lee asked about Tetris Block Puzzle engagement, retention, and cross-sell opportunities.

A: Andrew Pascal said retention is strong, but it's about acquiring players at a justified price to drive growth.

Q: Clark Lampen asked about pressure in social casino and playAWARDS opportunities.

A: Andrew Pascal said Pop! Slots issues not due to acquisition costs, and playAWARDS is focused on internal adoption rather than third-party partnerships for now.

Q: Martin Yang asked about timing of third Tetris game and cross-promotion.

A: Andrew Pascal said third game is advanced independently, and cross-promotion across games is not yet optimized but plans to improve.

Q: David Pang asked about marketing investment in myVEGAS.

A: Andrew Pascal said they are allocating more marketing dollars to myVEGAS.

Q: David Pang also asked about persistent weakness in social casino category.

A: Andrew Pascal attributed it to the emergence of sweepstakes products with dual currency models.