PLTK

• Mature Live Game Performance
  • Mature long-running titles have stable revenue driven by large built-up cohorts of existing players, who account for the majority of total revenue
  • Sequential revenue growth amid slowing new installs indicates strong player retention and durability for the existing portfolio
• Young Title Behavior (Disney Solitaire)
  • Disney Solitaire, launched 15 months prior, does not yet have a large enough legacy carryover base to offset reductions in user acquisition marketing spend, so sequential revenue is expected to decline; this is normal for a young title, not a sign of weak performance
• SuperPlay Acquisition and Earn-Out Framework
  • The SuperPlay earn-out is measured on a full-year basis, with two required conditions: year-over-year revenue growth and margin expansion
  • The intentional strategy for the earn-out is to front-load user acquisition investment early in the year to let new revenue compound, then step down spend in the second half to hit margin targets in the back half
  • Product investment and roadmap for SuperPlay titles remains unchanged, with new gameplay modes and content still scheduled to launch in Q3 and Q4
  • The full long-term potential of Disney Solitaire is still unknown, and the company will scale it in a profitable, retention and monetization-focused manner
• D2C Strategy
  • D2C revenue penetration continues to grow across the portfolio, and it is a core strategic priority that supports margin defense, with rapid growth achieved over the past 12 months

• Management reaffirms the full-year guidance range but now expects results to land at the bottom end of the range, based on current outlook for the remainder of the year
• Overall SuperPlay marketing investment will be reduced by roughly 70% in the second half of the year compared to the first half, with the largest spend reduction concentrated in Disney Solitaire
• No updated long-term target for D2C revenue penetration is provided, and management expects natural ongoing upside as DTC adoption grows across the game portfolio

No segment-level absolute financial figures or revenue contribution percentage data were provided in the partial transcript. Only general performance characteristics are noted: mature titles (Bingo Blitz, Slaughter Mania, June's Journey) have large, stable legacy cohort bases that generate the majority of their revenue, while 15-month-old Disney Solitaire is still building its carryover player base.

• Quarterly revenue variability will occur due to lumpy user acquisition cohort investment tied to the SuperPlay full-year earn-out framework
• Young titles like Disney Solitaire cannot offset marketing spend reductions with existing carryover revenue, leading to expected sequential revenue declines
• SuperPlay portfolio growth currently dilutes overall company margins in the current year

Q: Analyst Albert Kim asked how much of the 2024 outlook change comes from SuperPlay versus legacy game performance, and requested an update on the long-term D2C penetration target and upper penetration limit. / A: Management declined to break down the specific contribution of SuperPlay versus legacy games to the outlook change, but reaffirmed the full-year guidance range while noting results are expected to land at the bottom end of the range. Management stated current aggregate D2C penetration is 39%, with variation across individual games based on how long D2C initiatives have been active for each title. No updated long-term D2C penetration target was provided, but management confirmed D2C remains a core strategic priority that defends margins, with natural ongoing upside for penetration across the portfolio.

Q: An earlier analyst asked for context on expected sequential revenue declines and reduced marketing spend for the SuperPlay portfolio. / A: Management explained the 70% second-half marketing reduction is tied to the SuperPlay earn-out structure, which requires full-year revenue growth and margin expansion, making early front-loaded investment the optimal efficient path. The expected revenue decline is concentrated in young Disney Solitaire, which is still building its legacy player base and cannot offset lower UA spend with existing carryover revenue; this is normal young title behavior, not a sign of poor game performance. Product development investment for SuperPlay titles remains unchanged, and management asks investors to judge SuperPlay performance on full-year results rather than quarterly volatility.