Playtika Holding Corp. Reports Q3 2023 Financial Results
November 08 2023 - 6:35AM
Playtika Holding Corp. (NASDAQ: PLTK) today released financial
results for its third quarter for the period ending September 30,
2023.
Financial Highlights:
- Revenue of $630.1 million decreased
(2.0)% sequentially and (2.7)% year over year.
- DTC platforms revenue of $161.0
million decreased (2.6)% sequentially and increased 6.8% year over
year.
- Net income of $37.9 million
decreased (49.9)% sequentially and (44.4)% year over year.
- Credit Adjusted EBITDA of
$205.6 million decreased (4.4)% sequentially and increased 1.0%
year over year.
- Cash and cash equivalents totaled
$878.2 million as of September 30, 2023.
“Our commitment to operational stability and
delivering exceptional immersive gaming experiences remains
unwavering amid the backdrop of conflict,” said Robert Antokol,
Chief Executive Officer. “It is in the very DNA and culture of
Playtika to persevere, adapt and thrive. Our team in Israel and
around the globe is dedicated to upholding our mission, serving our
players and delivering value to our investors, even in the face of
adversity.”
“Through resolute management we continue to
generate robust free cash flow and deliver strong Credit Adj.
EBITDA margins to invest in strategic, high-ROI activities like our
two recent acquisitions of InnPlay Labs and Youda Games,” said
Craig Abrahams, President and Chief Financial Officer. “We will
continue to focus on leveraging our proprietary technology and live
operations to optimize games and enhance the player
experience.”
Selected Operational Metrics and
Business Highlights
- Average Daily Paying Users of 299K
decreased (2.6)% sequentially and (3.5)% year over year.
- Average Payer Conversion of 3.6%,
flat vs. the prior quarter and increased from 3.4% in the prior
year period.
- Casual games revenue decreased
(2.1)% sequentially and flat year over year.
- Social casino-themed games revenue
decreased (1.7)% sequentially and (6.6)% year over year.
- Bingo Blitz revenue of $149.7
million decreased (4.3)% sequentially and (4.6)% year over
year.
- Solitaire Grand Harvest revenue of
$79.1 million decreased (3.3)% sequentially and increased 13.7%
year over year.
- Slotomania revenue of $141.9
million decreased (1.9)% sequentially and (5.5)% year over
year.
Financial Outlook
We are revising our revenue range to $2.550 to
$2.565 billion and we now expect Credit Adj. EBITDA between $825 to
$832 million. We expect capital expenditures of approximately $95
million.
Conference Call
Playtika management will host a conference call
at 5:30 a.m. Pacific Time (8:30 a.m. Eastern Time) today to discuss
the company’s results. The conference call can be accessed via a
webcast accessible at investors.playtika.com. A replay of the call
will be available through the website one hour following the call
and will be archived for one year.
Summary Operating Results of Playtika Holding
Corp.
|
Three months ended September 30, |
|
Nine months ended September 30, |
(in millions of dollars, except percentages, Average DPUs,
and ARPDAU) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues |
$ |
630.1 |
|
|
$ |
647.8 |
|
|
$ |
1,929.1 |
|
|
$ |
1,984.3 |
|
Total cost and expenses |
$ |
540.1 |
|
|
$ |
516.4 |
|
|
$ |
1,547.5 |
|
|
$ |
1,641.2 |
|
Operating
income |
$ |
90.0 |
|
|
$ |
131.4 |
|
|
$ |
381.6 |
|
|
$ |
343.1 |
|
Net
income |
$ |
37.9 |
|
|
$ |
68.2 |
|
|
$ |
197.7 |
|
|
$ |
187.8 |
|
Credit Adjusted
EBITDA |
$ |
205.6 |
|
|
$ |
203.5 |
|
|
$ |
643.3 |
|
|
$ |
602.5 |
|
Net income
margin |
|
6.0 |
% |
|
|
10.5 |
% |
|
|
10.2 |
% |
|
|
9.5 |
% |
Credit Adjusted EBITDA
margin |
|
32.6 |
% |
|
|
31.4 |
% |
|
|
33.3 |
% |
|
|
30.4 |
% |
|
|
|
|
|
|
|
|
Non-financial
performance metrics |
|
|
|
|
|
|
|
Average DAUs |
|
8.4 |
|
|
|
9.0 |
|
|
|
8.7 |
|
|
|
9.7 |
|
Average DPUs (in thousands) |
|
299 |
|
|
|
310 |
|
|
|
311 |
|
|
|
315 |
|
Average Daily Payer Conversion |
|
3.6 |
% |
|
|
3.4 |
% |
|
|
3.6 |
% |
|
|
3.3 |
% |
ARPDAU |
$ |
0.81 |
|
|
$ |
0.78 |
|
|
$ |
0.81 |
|
|
$ |
0.75 |
|
Average MAUs |
|
28.4 |
|
|
|
30.2 |
|
|
|
29.0 |
|
|
|
32.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
About Playtika Holding
Corp.
Playtika (NASDAQ: PLTK) is a mobile gaming
entertainment and technology market leader with a portfolio of
multiple game titles. Founded in 2010, Playtika was among the first
to offer free-to-play social games on social networks and, shortly
after, on mobile platforms. Headquartered in Herzliya, Israel, and
guided by a mission to entertain the world through infinite ways to
play, Playtika has employees across offices worldwide.
Forward Looking Information
In this press release, we make “forward-looking
statements” within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements can be
identified by the fact that they do not relate strictly to
historical or current facts. Further, statements that include words
such as "anticipate," "believe," "continue," "could," "estimate,"
"expect," "intend," "may," "might," "present," "preserve,"
"project," "pursue," "will," or "would," or the negative of these
words or other words or expressions of similar meaning may identify
forward-looking statements.
Important factors that could cause actual
results to differ materially from estimates or projections
contained in the forward-looking statements include without
limitation:
- our reliance on third-party
platforms, such as the iOS App Store, Facebook, and Google Play
Store, to distribute our games and collect revenues, and the risk
that such platforms may adversely change their policies;
- our reliance on a limited number of
games to generate the majority of our revenue;
- our reliance on a small percentage
of total users to generate a majority of our revenue;
- our free-to-play business model,
and the value of virtual items sold in our games, is highly
dependent on how we manage the game revenues and pricing
models;
- our inability to complete
acquisitions and integrate any acquired businesses successfully
could limit our growth or disrupt our plans and operations;
- we may be unable to successfully
develop new games;
- our ability to compete in a highly
competitive industry with low barriers to entry;
- we have significant indebtedness
and are subject to the obligations and restrictive covenants under
our debt instruments;
- the impact of the COVID-19 pandemic
on our business and the economy as a whole;
- our controlled company status;
- legal or regulatory restrictions or
proceedings could adversely impact our business and limit the
growth of our operations;
- risks related to our international
operations and ownership, including our significant operations in
Israel, Ukraine and Belarus and the fact that our controlling
stockholder is a Chinese-owned company;
- our reliance on key personnel;
- security breaches or other
disruptions could compromise our information or our players’
information and expose us to liability; and
- our inability to protect our
intellectual property and proprietary information could adversely
impact our business.
Additional factors that may cause future events
and actual results, financial or otherwise, to differ, potentially
materially, from those discussed in or implied by the
forward-looking statements include the risks and uncertainties
discussed in our filings with the Securities and Exchange
Commission. Although we believe that the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee
that the future results, levels of activity, performance or events
and circumstances reflected in the forward-looking statements will
be achieved or occur, and reported results should not be considered
as an indication of future performance. Given these risks and
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements.
Except as required by law, we undertake no
obligation to update any forward-looking statements for any reason
to conform these statements to actual results or to changes in our
expectations.
PLAYTIKA HOLDING CORP.CONSOLIDATED BALANCE
SHEETS |
|
(In millions, except
par value) |
September 30, |
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
$ |
878.2 |
|
|
$ |
768.7 |
|
Restricted cash |
|
1.9 |
|
|
|
1.7 |
|
Accounts receivable |
|
168.3 |
|
|
|
141.1 |
|
Prepaid expenses and other current assets |
|
119.5 |
|
|
|
113.4 |
|
Total current assets |
|
1,167.9 |
|
|
|
1,024.9 |
|
Property and equipment,
net |
|
109.5 |
|
|
|
125.7 |
|
Operating lease right-of-use
assets |
|
104.7 |
|
|
|
104.2 |
|
Intangible assets other than
goodwill, net |
|
303.6 |
|
|
|
354.0 |
|
Goodwill |
|
1,005.2 |
|
|
|
811.2 |
|
Deferred tax assets, net |
|
71.9 |
|
|
|
68.3 |
|
Investments in unconsolidated
entities |
|
54.1 |
|
|
|
52.6 |
|
Other non-current assets |
|
160.7 |
|
|
|
156.7 |
|
Total assets |
$ |
2,977.6 |
|
|
$ |
2,697.6 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
Current
liabilities |
|
|
|
Current maturities of long-term debt |
$ |
16.9 |
|
|
$ |
12.4 |
|
Accounts payable |
|
38.2 |
|
|
|
50.7 |
|
Operating lease liabilities, current |
|
18.4 |
|
|
|
13.5 |
|
Accrued expenses and other current liabilities |
|
327.1 |
|
|
|
385.2 |
|
Total current liabilities |
|
400.6 |
|
|
|
461.8 |
|
Long-term debt |
|
2,402.4 |
|
|
|
2,411.2 |
|
Contingent consideration |
|
77.4 |
|
|
|
— |
|
Other long-term liabilities,
including employee related benefits |
|
247.6 |
|
|
|
252.1 |
|
Operating lease liabilities,
long-term |
|
89.6 |
|
|
|
94.5 |
|
Deferred tax liabilities |
|
41.9 |
|
|
|
46.6 |
|
Total liabilities |
|
3,259.5 |
|
|
|
3,266.2 |
|
Commitments and
contingencies |
|
|
|
Stockholders' equity
(deficit) |
|
|
|
Common stock of $0.01 par value; 1,600.0 shares authorized; 367.1
and 363.6 shares issued and outstanding at September 30, 2023
and December 31, 2022, respectively |
|
4.1 |
|
|
|
4.1 |
|
Treasury stock at cost (51.8 shares at both September 30, 2023
and December 31, 2022) |
|
(603.5 |
) |
|
|
(603.5 |
) |
Additional paid-in capital |
|
1,237.9 |
|
|
|
1,155.8 |
|
Accumulated other comprehensive income |
|
24.5 |
|
|
|
17.6 |
|
Accumulated deficit |
|
(944.9 |
) |
|
|
(1,142.6 |
) |
Total stockholders' deficit |
|
(281.9 |
) |
|
|
(568.6 |
) |
Total liabilities and
stockholders’ deficit |
$ |
2,977.6 |
|
|
$ |
2,697.6 |
|
|
PLAYTIKA HOLDING CORP.CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME(In millions,
except for per share
data)(Unaudited) |
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues |
$ |
630.1 |
|
|
$ |
647.8 |
|
|
$ |
1,929.1 |
|
|
$ |
1,984.3 |
|
Costs and
expenses |
|
|
|
|
|
|
|
Cost of revenue |
|
173.9 |
|
|
|
181.8 |
|
|
|
537.9 |
|
|
|
554.8 |
|
Research and development |
|
102.2 |
|
|
|
115.1 |
|
|
|
304.9 |
|
|
|
353.0 |
|
Sales and marketing |
|
142.8 |
|
|
|
145.4 |
|
|
|
427.7 |
|
|
|
476.9 |
|
General and administrative |
|
79.6 |
|
|
|
74.1 |
|
|
|
225.7 |
|
|
|
256.5 |
|
Impairment of intangible assets |
|
41.6 |
|
|
|
— |
|
|
|
51.3 |
|
|
|
— |
|
Total costs and expenses |
|
540.1 |
|
|
|
516.4 |
|
|
|
1,547.5 |
|
|
|
1,641.2 |
|
Income from
operations |
|
90.0 |
|
|
|
131.4 |
|
|
|
381.6 |
|
|
|
343.1 |
|
Interest and other, net |
|
25.2 |
|
|
|
24.3 |
|
|
|
76.9 |
|
|
|
74.2 |
|
Income before income
taxes |
|
64.8 |
|
|
|
107.1 |
|
|
|
304.7 |
|
|
|
268.9 |
|
Provision for income taxes |
|
26.9 |
|
|
|
38.9 |
|
|
|
107.0 |
|
|
|
81.1 |
|
Net
income |
|
37.9 |
|
|
|
68.2 |
|
|
|
197.7 |
|
|
|
187.8 |
|
Other comprehensive
income (loss) |
|
|
|
|
|
|
|
Foreign currency translation |
|
(4.1 |
) |
|
|
(14.5 |
) |
|
|
(1.2 |
) |
|
|
(27.8 |
) |
Change in fair value of derivatives |
|
1.1 |
|
|
|
10.5 |
|
|
|
8.1 |
|
|
|
23.3 |
|
Total other comprehensive income (loss) |
|
(3.0 |
) |
|
|
(4.0 |
) |
|
|
6.9 |
|
|
|
(4.5 |
) |
Comprehensive
income |
$ |
34.9 |
|
|
$ |
64.2 |
|
|
$ |
204.6 |
|
|
$ |
183.3 |
|
|
|
|
|
|
|
|
|
Net income per share
attributable to common stockholders, basic |
$ |
0.10 |
|
|
$ |
0.17 |
|
|
$ |
0.54 |
|
|
$ |
0.46 |
|
Net income per share
attributable to common stockholders, diluted |
$ |
0.10 |
|
|
$ |
0.17 |
|
|
$ |
0.54 |
|
|
$ |
0.46 |
|
Weighted-average
shares used in computing net income per share attributable to
common stockholders, basic |
|
366.7 |
|
|
|
412.7 |
|
|
|
365.8 |
|
|
|
412.3 |
|
Weighted-average
shares used in computing net income per share attributable to
common stockholders, diluted |
|
367.6 |
|
|
|
412.7 |
|
|
|
366.3 |
|
|
|
412.6 |
|
|
PLAYTIKA HOLDING CORP.CONSOLIDATED
STATEMENTS OF CASH FLOWS(In
millions)(Unaudited) |
|
|
Nine months ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
Cash flows from
operating activities |
$ |
336.3 |
|
|
$ |
316.3 |
|
Cash flows from
investing activities |
|
|
|
Purchase of property and equipment |
|
(16.8 |
) |
|
|
(38.3 |
) |
Capitalization of internal use software costs |
|
(27.8 |
) |
|
|
(30.6 |
) |
Purchase of software for internal use |
|
(9.0 |
) |
|
|
(7.7 |
) |
Short-term bank deposits |
|
— |
|
|
|
100.1 |
|
Payments for business combination, net of cash acquired |
|
(160.6 |
) |
|
|
(29.9 |
) |
Other investing activities |
|
(1.1 |
) |
|
|
(9.8 |
) |
Net cash used in investing activities |
|
(215.3 |
) |
|
|
(16.2 |
) |
Cash flows from
financing activities |
|
|
|
Repayments on bank borrowings |
|
(9.5 |
) |
|
|
(14.2 |
) |
Net cash outflow for business acquisitions |
|
— |
|
|
|
(26.9 |
) |
Payment of tax withholdings on stock-based payments |
|
(2.6 |
) |
|
|
(2.1 |
) |
Net cash used in financing activities |
|
(12.1 |
) |
|
|
(43.2 |
) |
Effect of exchange
rate changes on cash and cash equivalents and restricted
cash |
|
0.8 |
|
|
|
(18.9 |
) |
Net change in cash,
cash equivalents and restricted cash |
|
109.7 |
|
|
|
238.0 |
|
Cash, cash equivalents
and restricted cash at the beginning of the period |
|
770.4 |
|
|
|
1,019.0 |
|
Cash, cash equivalents
and restricted cash at the end of the period |
$ |
880.1 |
|
|
$ |
1,257.0 |
|
|
Non-GAAP Financial Measures
Credit Adjusted EBITDA is a non-GAAP financial
measure and should not be construed as an alternative to net income
as an indicator of operating performance, nor as an alternative to
cash flow provided by operating activities as a measure of
liquidity, or any other performance measure in each case as
determined in accordance with GAAP.
Below is a reconciliation of Credit Adjusted
EBITDA to net income, the closest GAAP financial measure. Our
Credit Agreement defines Adjusted EBITDA (which we call “Credit
Adjusted EBITDA”) as net income before (i) interest expense, (ii)
interest income, (iii) provision for income taxes, (iv)
depreciation and amortization expense, (v) impairment of intangible
assets, (vi) stock-based compensation, (vii) contingent
consideration, (viii) acquisition and related expenses, and (ix)
certain other items. We calculate Credit Adjusted EBITDA Margin as
Credit Adjusted EBITDA divided by revenues.
Credit Adjusted EBITDA and Credit Adjusted
EBITDA Margin as calculated herein may not be comparable to
similarly titled measures reported by other companies within the
industry and are not determined in accordance with GAAP. Our
presentation of Credit Adjusted EBITDA and Credit Adjusted EBITDA
Margin should not be construed as an inference that our future
results will be unaffected by unusual or unexpected items.
RECONCILIATION OF NET INCOME TO CREDIT ADJUSTED
EBITDA(In millions) |
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net
income |
$ |
37.9 |
|
|
$ |
68.2 |
|
|
$ |
197.7 |
|
|
$ |
187.8 |
|
Provision for income taxes |
|
26.9 |
|
|
|
38.9 |
|
|
|
107.0 |
|
|
|
81.1 |
|
Interest expense and other, net |
|
25.2 |
|
|
|
24.3 |
|
|
|
76.9 |
|
|
|
74.2 |
|
Depreciation and amortization |
|
38.4 |
|
|
|
39.6 |
|
|
|
116.0 |
|
|
|
121.7 |
|
EBITDA |
|
128.4 |
|
|
|
171.0 |
|
|
|
497.6 |
|
|
|
464.8 |
|
Impairment of intangible assets |
|
41.6 |
|
|
|
— |
|
|
|
51.3 |
|
|
|
— |
|
Stock-based compensation(1) |
|
28.0 |
|
|
|
31.6 |
|
|
|
82.5 |
|
|
|
106.8 |
|
Contingent consideration |
|
— |
|
|
|
(11.4 |
) |
|
|
— |
|
|
|
(14.1 |
) |
Acquisition and related expenses(2) |
|
5.6 |
|
|
|
6.1 |
|
|
|
8.7 |
|
|
|
19.7 |
|
Other items(3) |
|
2.0 |
|
|
|
6.2 |
|
|
|
3.2 |
|
|
|
25.3 |
|
Credit Adjusted
EBITDA |
$ |
205.6 |
|
|
$ |
203.5 |
|
|
$ |
643.3 |
|
|
$ |
602.5 |
|
Net income
margin |
|
6.0 |
% |
|
|
10.5 |
% |
|
|
10.2 |
% |
|
|
9.5 |
% |
Credit Adjusted EBITDA
margin |
|
32.6 |
% |
|
|
31.4 |
% |
|
|
33.3 |
% |
|
|
30.4 |
% |
|
_________ |
|
(1) Reflects, for the three and nine months ended
September 30, 2023 and 2022, stock-based compensation expense
related to the issuance of equity awards to certain of our
employees. |
(2) Amounts for the three and nine months ended
September 30, 2023 and 2022 primarily relate to expenses
incurred by the Company in connection with the evaluation of
strategic alternatives for the Company. |
(3) Amounts for the three and nine months ended September 30,
2023 consist primarily of $0.8 million and $1.5 million,
respectively, incurred by the Company for severance and, for the
three and nine months ended September 30, 2023,
$1.0 million for tax settlement paid under protest. Amounts
for the three and nine months ended September 30, 2022 consist
of $1.9 million and $12.1 million, respectively, incurred by the
Company for severance and for the nine months ended September 30,
2022, $4.0 million incurred by the Company for relocation and
support provided to employees due to the war in Ukraine. Amounts
for the three and nine months ended September 30, 2022 also
include $2.7 million and $6.1 million, respectively, incurred
related to the restructuring activities announced last year. |
|
Contacts |
Investor Relations |
|
Press Contact |
Tae Lee |
|
Darlan Monterisi |
Tael@playtika.com |
|
Darlanm@playtika.com |
Playtika (NASDAQ:PLTK)
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