Playstudios, Inc ((MYPS)) has held its Q4 earnings call. Read on for the main highlights of the call.
PLAYSTUDIOS recently held its earnings call, where the sentiment was a mix of achievements and challenges. The company successfully met its full-year revenue and EBITDA guidance, optimized its cost structure, and launched new promotional efforts. However, it faced hurdles with declining revenues, particularly in its Tetris franchise and social casino user base.
Achievement of Full Year Guidance
Despite the pressures in the industry, PLAYSTUDIOS managed to achieve its full-year guidance for revenue and adjusted EBITDA in 2024. This accomplishment highlights the company’s resilience and strategic planning in a challenging market environment.
Cost Structure Optimization
In a bid to enhance efficiency and economies of scale, PLAYSTUDIOS restructured its business by reducing the workforce by over 30% and suspending select sub-scale games. These measures were part of the company’s broader strategy to optimize its cost structure.
Launch of World Tournament of Slots
The company successfully launched the World Tournament of Slots, a new promotional effort that was well-received by players. The tournament featured a $1 million prize and attracted 500 participants, showcasing PLAYSTUDIOS’ ability to engage its audience with innovative offerings.
Strong Cash Position
PLAYSTUDIOS ended the year with a robust cash position of $109 million and full availability of their $81 million revolving credit facility. This strong financial footing provides the company with flexibility for future investments and initiatives.
Direct-to-Consumer Sales Growth
The company reported growth in direct-to-consumer sales, which reached $4.5 million this quarter. This figure represents 8% of total in-app purchase revenues, doubling from 4% year-over-year, indicating a successful shift towards more direct sales channels.
Decline in Quarterly Revenue
PLAYSTUDIOS experienced a decline in revenues during the fourth quarter, with a $9.3 million or 12% drop compared to the previous year. Both social casino and casual games contributed to this decline, reflecting broader industry challenges.
Challenges in Tetris Franchise
The Tetris franchise faced significant challenges, with a decline in daily active users (DAU) leading to lower advertising revenues. Recent product changes did not yield the expected positive outcomes, posing a challenge for future growth.
Social Casino User Challenges
The company reported a decrease in daily active users (DAU) and monthly active users (MAU) by 19% and 14%, respectively, from the same period last year. This decline was largely driven by the underperformance of the Tetris and Brainium games.
Forward-Looking Guidance
Looking ahead to 2025, PLAYSTUDIOS provided guidance projecting revenues between $250 million and $270 million, with consolidated adjusted EBITDA ranging from $45 million to $55 million. The company plans to focus on improving core casino game productivity, expanding its casual portfolio, and advancing new developments. Despite the challenges, PLAYSTUDIOS aims to achieve cost savings of $25 million to $30 million annually, offset by strategic investments in new initiatives.
In summary, PLAYSTUDIOS’ earnings call reflected a balanced sentiment of achievements and challenges. The company successfully met its financial guidance and launched new initiatives, but faced declines in key areas such as the Tetris franchise and social casino user base. Looking forward, PLAYSTUDIOS remains focused on strategic growth and efficiency improvements to navigate the evolving market landscape.