Aaron Lee

Aaron Lee inquired about Playtika's strategy and current utilization of AI within its business, seeking insights into early learnings and future opportunities, especially in light of recent workforce reductions. He also asked about the company's appetite for M&A and how it aligns with investing in high-return growth opportunities.

Answer

Robert Antokol, Co-founder and CEO, highlighted Playtika's long-term investment in AI, viewing it as a revolutionary new platform and a future growth engine for community and content. Craig Abrahams, President and Chief Financial Officer, affirmed M&A as a core growth strategy, emphasizing the success of the SuperPlay acquisition and prioritizing investment in its earn-out while remaining opportunistic for other M&A.

Aaron Lee inquired about Playtika's strategic view and current application of AI within its business, seeking insights into early learnings and future opportunities. He also asked about the company's appetite for M&A, specifically if it aligns with investing in high-return growth.

Answer

Co-founder and CEO Robert Antokol explained Playtika's long-standing investment in AI, viewing it as a revolutionary new platform and a future growth engine for its community and content assets. President and CFO Craig Abrahams affirmed M&A as a core growth strategy, highlighting the success of the SuperPlay acquisition and prioritizing investment in its earn-out while remaining opportunistic for other M&A.

Aaron Lee from Macquarie Group inquired about Playtika's appetite for more IP licensing arrangements following the success of Disney Solitaire and asked for details on the development and differentiation strategy for their upcoming new slot game.

Answer

President & CFO Craig Abrahams confirmed that Playtika is open to the right IP partnerships for the right categories. CEO Robert Antokol addressed the new slot game, stating that while he could not share many details, it will be a differentiated product that leverages their 15 years of category experience and is expected to help close the gap from recent declines in their organic games.

Aaron Lee from Macquarie asked for details on the performance and user engagement from the recently integrated IGT content, specifically Cleopatra II, and inquired about the future roadmap for rolling out more IGT content.

Answer

Craig Abrahams, President and CFO, noted that the IGT content rollout has been limited but that Cleopatra II performed very well in re-engaging players. He expressed excitement for the future roadmap, which includes rolling out more IGT content in Slotomania, Caesars, and House of Fun throughout the rest of the year.

Aaron Lee from Macquarie asked about potential synergies between the newly acquired SuperPlay and existing Playtika titles, and also requested an update on the development and launch strategy for Wooga's upcoming game, 'Claire's Chronicles'.

Answer

CEO Robert Antokol stated that synergies are not the immediate focus for the SuperPlay acquisition; the studio will operate independently to achieve its own roadmap. Regarding the new Wooga game, Antokol confirmed it is on track for a launch next year, is currently in beta, and is being developed by a separate team, independent of the strategy for the flagship title 'June's Journey'.

Aaron Lee asked about the level of conservatism embedded in Corsair's full-year 2026 guidance, particularly regarding market visibility, and inquired about the primary drivers behind the strong components margins in the quarter and their sustainability.

Answer

CFO Gordon Mattingly stated that the guidance includes a conservative outlook for the components segment due to semiconductor shortages, while projecting double-digit growth for peripherals. CEO Thi La explained that components margins improved year-on-year, benefiting from sim racing growth and a significant memory price increase that led to favorable inventory margins, alongside new product introductions and segment mix shifts.

Aaron Lee with Macquarie inquired about the level of conservatism embedded in Corsair's full-year 2026 guidance, seeking clarity on the visibility and confidence in the provided ranges amidst current market conditions. He also asked about the primary drivers behind the strong components margins in the quarter, specifically if memory products were the main factor, and the sustainability of these margin levels going forward.

Answer

CFO Gordon Mattingly stated that the guidance includes a conservative outlook for the component segment due to semiconductor shortages, while expecting double-digit growth in the peripheral segment. CEO Thi La explained that components margin improved year-on-year, with sim racing contributing positively and memory being a major contributor due to substantial price increases from October to December, leading to favorable inventory margins. He also noted traction in NPIs and mix shift.

Aaron Lee of Macquarie Group asked for an update on the Fanatec integration, inquiring about the next steps to maintain its strong momentum. He also sought clarification on whether Corsair's tariff outlook includes recently enacted duties and any potential impact from the 'big beautiful bill'.

Answer

CEO Thi La outlined a three-phase plan for Fanatec, focusing on infrastructure integration, expanded channel distribution, and a new product roadmap for Q4 2025. CFO Michael Potter and CEO Thi La clarified that their commentary includes recently enacted country-specific tariffs but not the potential, yet undefined, semiconductor tariffs. Potter noted the 'big beautiful bill' would have only a small tax benefit.

Aaron Lee asked about Corsair's confidence in the hardware refresh cycle driven by new NVIDIA GPUs amidst macro pressures like tariffs and inflation. He also inquired about the company's historical performance in recessions and the specific growth drivers for the peripherals and components segments.

Answer

Executive Andrew Paul explained that the hardware refresh cycle has started but its magnitude is contingent on potential tariffs on semiconductors. He expressed a belief that home entertainment, including gaming, tends to be resilient during recessions. Paul attributed the 5% growth in peripherals directly to the Fanatec acquisition and confirmed that the strong components segment growth was due to organic demand constrained by GPU availability, not pull-forward demand ahead of tariffs.

Aaron Lee asked for an update on the Fanatec acquisition, inquiring about the integration timeline, remaining steps, and growth expectations for 2025. He also questioned how recent partnerships with Activision and Apple have impacted brand awareness and sales volumes.

Answer

CEO Andy Paul confirmed the Fanatec integration is largely complete, with the focus shifting to expansion through retail and sim rig builder networks. President and COO Thi La added that the Call of Duty partnership drove significant web traffic and is a valuable multi-year relationship, while the Apple collaboration produced positive holiday season results.

Aaron Lee asked for a breakdown of the updated guidance, questioning how much of the change was due to Q3 performance versus Q4 expectations, and also requested an update on the Stream Deck marketplace's growth and revenue potential.

Answer

CFO Michael Potter explained that the guidance reduction was primarily due to a Q3 shortfall in gross margin from lower-end components, with some conservatism built into Q4. CEO Andy Paul added that the delayed NVIDIA launch created channel apprehension in Q3. Regarding Stream Deck, Paul noted its marketplace has over a million accounts and is driving hardware sales, though direct software revenue remains insignificant for now.

Aaron Lee inquired about DoubleDown's decision to moderate customer acquisition spending for SuprNation, asking if this signals a shift towards profitability or is a temporary measure, and what the long-term margin structure for the iGaming business might be. He also asked for updated thoughts on the direct-to-consumer (DTC) growth trajectory for the traditional DoubleDown Casino over the next few quarters.

Answer

Joseph Sigrist (CFO) explained that the moderation in SuprNation's customer acquisition spend was a disciplined reaction to measuring ROI, as they had begun to approach their payback threshold. He noted that while spending was maintained from Q3 to Q4, the *increase* was moderated, and future spending would be influenced by factors like UK gaming tax changes and investment in their new fourth brand. Regarding DTC, Joseph Sigrist stated that the growth for traditional DoubleDown Casino has exceeded expectations, and the company is not yet at a plateau, planning to continue ramping DTC revenue as a percentage of overall social casino revenue through product and messaging optimizations.

Aaron Lee followed up on the impressive Direct-to-Consumer (DTC) growth, particularly in traditional DoubleDown Casino, asking for updated thoughts on its growth potential over the next few quarters.

Answer

CFO Joseph Sigrist expressed that the DTC growth, especially in the traditional business, has been faster than anticipated and has not yet plateaued. He affirmed the company's commitment to continuing to ramp DTC revenue as a percentage of overall social casino revenue through product and messaging optimizations.

Aaron Lee of Macquarie Group inquired about the strategy for balancing growth and profitability for the newly acquired Wow Games and asked for an updated long-term target for the direct-to-consumer (DTC) business, which has already surpassed its 2025 goal.

Answer

CFO Joseph Sigrist explained that the Wow Games acquisition is an exciting opportunity to leverage Double Down's expertise in a growing European social casino market. Regarding DTC, Sigrist expressed satisfaction with reaching over 15% of social casino revenue and confirmed that while they expect continued growth through year-end, they are not providing a new specific long-term target at this time.

Aaron Lee inquired about current trends in SuperNation's markets, the impact of major sporting events, and the company's M&A strategy, particularly in light of its experience growing SuperNation.

Answer

CFO Joseph A. Sigrist explained that SuperNation's growth is driven by a quick ROI on marketing spend in the U.K. and Sweden, allowing for continued investment. He clarified that since the business is entirely iGaming slots, it is not directly impacted by sporting events. Regarding M&A, Sigrist noted that deal flow remains steady across both mobile and iGaming, and the company's success with SuperNation enhances its credibility as a potential acquirer in the iGaming space.

Aaron Lee asked for a reflection on the SuperNation acquisition's first year, including successes and surprises, and inquired about the product roadmap for maintaining monetization momentum in the social casino business given tough upcoming comparisons.

Answer

CFO Joseph A. Sigrist highlighted that the ROI on SuperNation's user acquisition has significant potential, giving them confidence to increase marketing spend. Executive In Keuk Kim added that the focus is on scaling SuperNation's brands through geo-expansion and leveraging their core strength in improving user LTV. Regarding the product roadmap, Kim detailed plans to combine features like daily missions, card collections, and personalized AI experiences to maintain user engagement and longevity in their core casino games.

Aaron Lee from Macquarie Group asked about the timeline for realizing synergies with SuprNation, such as game development and live ops, and inquired about key learnings from recent monetization successes that could be applied in the future.

Answer

CFO Joseph A. Sigrist stated that groundwork for SuprNation synergies is underway, with projects initiated and benefits expected to become more evident in 2025. CEO In Keuk Kim added that recent success in monetization stems from refactoring the user experience and introducing engaging meta features, a strategy they will continue to pursue.

Aaron Lee from Macquarie Group inquired about the growth strategy for the subscription business, asking about pricing power, and also requested an update on the RotoWire brand refresh.

Answer

Co-Founder and CEO Charles Gillespie identified the sports data services business (OpticOdds) as the most straightforward growth opportunity, driven by strong product-market fit and new sales efforts. For RotoWire, he noted that the brand and product refresh was completed mid-summer, with year-on-year numbers up double digits, but the full impact won't be clear until after the NFL season starts.

Aaron Lee asked for clarification on the sweepstakes launch, questioning if technical development was complete and the focus was now on operational optimization. He also inquired about the potential scope of strategic acquisitions in the sweepstakes category, such as whether they would target technology, talent, or user databases.

Answer

Andrew Pascal, Co-Founder, Chairman, & CEO, confirmed that the core platform functionality for sweepstakes is in place and the current phase focuses on refining features, content, and marketing economics to ensure a scalable and profitable launch. Jason Hahn, Chief Strategy Officer & Head of IR, added that any potential M&A would be strategic, aimed at accelerating the company's path to becoming a market leader in the category and gaining market share more rapidly.

Aaron Lee from Macquarie questioned how the playAWARDS externalization strategy works in conjunction with the new sweepstakes business and whether one initiative takes priority. He also asked about the company's strategy for expanding its reward partners into sectors beyond casinos.

Answer

CEO Andrew Pascal explained that the playAWARDS loyalty program and the new sweepstakes mechanic are complementary, with the loyalty program amplifying the value proposition of the sweepstakes offering. He added that the company is curating reward partners to align with an 'entertainment and leisure' positioning, actively looking at music festivals, theme parks, and other non-casino destinations based on player demand.

Aaron Lee asked how PLAYSTUDIOS intends to balance its development requirements following the 'Reinvention plan' which significantly reduced its workforce. He also questioned if the company's M&A parameters, such as target size or genre, have changed with the new corporate structure and focus.

Answer

CEO Andrew Pascal responded that the company is managing development by leveraging lower-cost third-party capacity, shifting team composition to more affordable regions like Asia and Europe, and extensively using AI in creative and content creation. Executive Jason Hahn addressed M&A, stating that the core strategy remains consistent, so the criteria for targets have not changed. However, he acknowledged that market pressures and the company's stock value have made it more challenging to win deals, reinforcing their commitment to remaining disciplined.

Aaron Lee asked about the primary drivers behind the double-digit ARPDAU growth in myVEGAS and Brainium, its sustainability, and for more details on the company's sweepstakes initiatives.

Answer

CEO Andrew Pascal explained that Brainium's growth was driven by new ad units, which he expects to continue providing lift. For the social casino portfolio, he attributed the gains to improved conversion and higher average revenue per paying user. Regarding sweepstakes, Pascal detailed the company's plan to build its own system to leverage the large market, using it as a promotional mechanic to reinvigorate its social casino games and drive engagement, confirming a formal team is now developing the technology.

Aaron Lee, on for Chad Beynon, asked about the company's capital expenditure needs for retail opportunities and the resulting impact on cash flow. He also inquired about growth opportunities and system benefits within the lottery business for 2025.

Answer

Executive Brooks Pierce confirmed that CapEx for pub and MSA customer upgrades is planned, budgeted, and expected to be in line with recent years. He then detailed a multi-faceted lottery strategy, highlighting the imminent handover of a new advanced system in the Dominican Republic, an exciting online Virtual Sports launch with the Virginia Lottery in April, and continued development of instant lottery content.

Aaron Lee from Macquarie Asset Management inquired about the long-term potential for the direct booking mix at the STRAT and the anticipated pace of tavern portfolio expansion in the coming years.

Answer

Charles Protell, President and CFO, stated the goal is to reduce the OTA mix from the current 60-65% to an ideal 50% through enhanced direct booking efforts. Blake Sartini, Founder, Chairman and CEO, added that ADRs are up 20% over 2019 levels. Regarding taverns, Protell indicated a shift towards ground-up development, targeting 1-2 new locations next year and 3-4 annually thereafter. Sartini emphasized a focus on '5-star' locations that deliver a 25% cash-on-cash return.

Asked about the primary growth drivers for the Interactive segment, associated reinvestment needs, and the rationale behind maintaining R&D spending at 12% of revenue.

Answer

Interactive growth is expected to be driven by releasing more games (both ports of land-based content and unique online-only titles), expanding into new customer bases and geographies, and leveraging strong game performance. The 12% R&D spending level is considered appropriate based on past returns and future opportunities, allowing for continued investment in talent and product development without requiring a major step-up in spending.