Playtika Holding Corp. Q3 FY2025 earnings call

• SuperPlay portfolio, led by Disney Solitaire, is driving exceptional growth; Disney Solitaire has an annualized run rate above $200 million and a new collaboration with Disney and Pixel Games for a new title in the SuperPlay pipeline. • Playtika delivered a record direct-to-consumer revenue, with broad-based contribution from various titles. • Focus on portfolio transition, including stabilizing Slotomania and reallocating resources from underperforming titles. • Advanced targeted investments in new games pipeline and platform capabilities, including AI-driven initiatives in House of Fun Studio to improve efficiency. • Reassessing cost structure to sharpen operating efficiency while protecting capacity to invest in high-return opportunities.

In the third quarter, Playtika generated $674.6 million in revenue, down 3.1% sequentially and up 8.7% year-over-year. GAAP net income was $39.1 million, up 17.8% sequentially and down 0.5% year-over-year. Adjusted EBITDA was $217.5 million, up 30.2% sequentially and up 10.3% year-over-year. D2C revenue reached $209.3 million, crossing the $200 million threshold, up 19% sequentially and 20% year-over-year, representing 31% of total revenue. Bingo Blitz had revenue of $162.6 million, Slotomania was $68.5 million, and June's Journey was $68.3 million. D2C is targeted to reach 40% of total revenue on a run rate basis in the next 2 years.

• D2C is targeted to reach 40% of total revenue on a run rate basis in the next 2 years. • Jackpot Tour is on track for a fourth quarter launch but is not expected to materially contribute to 2025 results. • Playtika expects to finish the year within its guidance range for both revenue and adjusted EBITDA. • Seasonal marketing spend pattern is expected to continue with a step down in the second half, not indicating a structural change to long-term margin levels.

• Google Play policy changes in the U.S. post-court rulings may impact D2C adoption, subject to final implementation and testing. • Contingent consideration from the SuperPlay acquisition may fluctuate, affecting GAAP G&A. • Potential cannibalization concerns with the launch of Jackpot Tour and its impact on the existing slot portfolio.

Q: Could you expand on reallocating resources and AI initiatives?

A: Craig Abrahams mentioned continuing to look at acquired titles, DTC expansion, capital allocation through dividends/buybacks and M&A, and AI for enhancing player experience and studio efficiency.

Q: Thoughts on dividend in 2026 and capital allocation?

A: Craig Abrahams stated they are constantly evaluating the capital allocation framework.

Q: Impact of Google Play policy changes on the business?

A: Craig Abrahams said they will monitor opportunities and deploy capital as needed.

Q: Cannibalization of current slot portfolio with Jackpot Tour?

A: Robert Antokol said Jackpot Tour is different and targets a different audience, not expected to cannibalize the current portfolio.

Q: D2C growth acceleration and SuperPlay titles?

A: Robert Antokol noted most games are on the DTC platform, and Craig Abrahams said U.S. iOS was a major catalyst in the third quarter.

Q: Stabilizing Slotomania and marketing allocation?

A: Robert Antokol and Nir Korczak discussed working on Slotomania's economy and different marketing allocations based on game key performance indicators.

Q: Impact of Disney Solitaire success on internally produced games?

A: Craig Abrahams said the success led to launching a fourth Disney title with SuperPlay, influencing internal game thoughts.

Q: EBITDA guide and user/payer metrics?

A: Craig Abrahams said the marketing step down helped EBITDA, and the pullback in Slotomania affected user metrics.

Q: Competitive dynamic and international opportunity?

A: Craig Abrahams said U.S. iOS D2C performance was strong, international growth is seen through the SuperPlay acquisition, and U.S. markets are the biggest for now.