Executive Summary

Q1 revenue declined to $62.7M (down ~19% y/y and ~7.5% q/q), but Consolidated AEBITDA margin improved to 19.9% (+150bps q/q) as cost savings began to flow through .
Management reaffirmed FY2025 guidance ($250–$270M revenue; $45–$55M Consolidated AEBITDA) and emphasized that guidance excludes potential revenue from the new sweepstakes offering and Tetris Block Party, which are expected to begin contributing later in 2025 .
Direct-to-consumer (DTC) revenue rose 114% y/y to $5.0M (9.8% of virtual currency sales), and management expects Apple/Epic-related policy changes to further enable DTC adoption and margins .
Key near-term catalysts: limited external launch of sweepstakes in Q2 with scaling in 2H25; continued DTC ramp; and progress toward a Q4 launch of Tetris Block Party, each with potential to reaccelerate growth if execution and engagement meet thresholds .

What Went Well and What Went Wrong

What Went Well

Margin execution: Consolidated AEBITDA margin reached 19.9% in Q1 (up 150bps q/q), reflecting early benefits from the cost “Reinvention” plan and improved monetization in key titles .
DTC progress: DTC revenue was $5.0M (9.8% of virtual currency), up 113.9% y/y; management expects Apple/Epic developments to reduce friction and improve conversion and margins over time .
Pipeline and platform: Sweepstake capability hit internal alpha, on track for limited Q2 release and H2 scale; Tetris Block Party targeted for Q4 launch; playAWARDS added premium partners and announced the second annual myVIP World Tournament of Slots .

What Went Wrong

Top-line pressure: Revenue fell to $62.7M (from $77.8M y/y) amid DAU declines (2.6M avg, -25% y/y), weaker ad environment, and category headwinds, especially in Tetris and Brainium .
Mix headwinds: Advertising revenue declined 32% y/y, and overall player engagement metrics (DAU/MAU/DPU) were lower versus prior year despite ARPDAU improvement .
playAWARDS activity softness: Purchases fell and retail value of purchases declined 58% y/y as management curated toward higher-quality rewards, tempering volume .

Financial Results

Core P&L and Margins

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$71.2	$67.8	$62.7
Net (Loss) ($M)	$(3.10)	$(22.41)	$(2.88)
Diluted EPS ($)	$(0.02)	$(0.18)	$(0.02)
Consolidated AEBITDA ($M)	$14.62	$12.47	$12.49
Consolidated AEBITDA Margin (%)	20.5%	18.4%	19.9%
Net (Loss) Margin (%)	(4.3%)	(33.1%)	(4.6%)

Notes: Q1 AEBITDA excludes D&A ($9.63M), SBC ($4.26M), restructuring ($1.34M), and other items per reconciliation .

Segment Net Revenue

Segment Net Revenue ($M)	Q3 2024	Q4 2024	Q1 2025
playGAMES	$71.226	$67.725	$62.555
playAWARDS	$0.003	$0.057	$0.154
Total	$71.229	$67.782	$62.709

Revenue Mix and DTC Penetration

Net Revenue Mix ($M)	Q4 2024	Q1 2025
Virtual Currency	$54.643	$50.840
Advertising	$13.136	$11.863
Other	$3.119	$0.006
Total	$67.782	$62.709
DTC Virtual Currency	$4.707	$4.970
DTC as % of Virtual Currency	8.6%	9.8%

KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
Average DAU (M)	2.961	2.723	2.632
Average MAU (M)	12.658	11.472	11.422
Average DPU (000s)	23	22	21
Avg Daily Payer Conversion (%)	0.8%	0.8%	0.8%
ARPDAU ($)	$0.26	$0.27	$0.26

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenue	FY 2025	$250–$270M	$250–$270M	Maintained
Consolidated AEBITDA	FY 2025	$45–$55M	$45–$55M	Maintained

Additional context: Management reaffirmed that guidance excludes revenue contributions from sweepstakes and Tetris Block Party; costs to develop these are included in Opex/AEBITDA outlooks, but not revenue, reflecting conservatism until unit economics are proven .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3–Q4 2024)	Current Period (Q1 2025)	Trend
Sweepstakes initiative	Formally constituted; a 2025 growth vector alongside cost reinvention .	Internal alpha completed; limited external release targeted for Q2 with scaling in H2 2025; compliance focus emphasized .	Accelerating toward launch.
DTC channel	Ongoing initiative; Q4 DTC VC $4.7M (8.6%) .	Q1 DTC VC $5.0M (9.8%); Apple/Epic to reduce friction, aiding conversion/margins .	Improving penetration and economics.
Reinvention (cost savings)	Program announced (~$25–$30M annual savings target) .	Early benefits lifting margins; tracking to plan .	Savings flowing through.
Tetris Block Party	Work initiated, 2025 market goal .	Technical validation in select European markets; targeting Q4 2025 launch .	On plan; launch risk remains.
User trends/engagement	Q3 DAU 3.0M; ongoing category pressure .	DAU 2.6M; MAU 11.4M; ad eCPMs softer; ARPDAU up y/y .	DAU under pressure; monetization offsets.
playAWARDS ecosystem	myVIP tournament franchise launched; platform integration ongoing .	Premium partner adds; tournament announced; daily rewards inventory value up, but purchases/retail value down y/y .	Mixed: curated quality over volume.

Management Commentary

“The social casino category is being impacted by the rising popularity of sweepstakes styles offerings… we’ve been hard at work on the development of a sweepstakes solution… expect to make the service available to select players in Q2 and begin scaling in the back half of the year.” — Andrew Pascal, CEO .
“Direct-to-consumer remains a bright spot… approximately $5 million in in-app purchase revenue, representing 9.8% of total IAP… growth of 114% y/y and 6% q/q.” — Andrew Pascal .
“Adjusted EBITDA margin was 20%, up 20 bps y/y… driven by early savings from our reinvention plan, partially offset by lower revenues.” — Scott Peterson, CFO .
“We are reaffirming our full year 2025 guidance… Notably, our guidance continues to exclude revenue contributions from sweepstakes and our new Tetris title.” — Scott Peterson .
On Apple/Epic: “We now have the ability to route purchases to a direct channel more aggressively… enabling deeper loyalty tie-ins… and margin improvement (no 30% cut on those purchases).” — Jason Hahn, IR/exec .

Q&A Highlights

Sweepstakes timing and scaling: Limited multi-jurisdiction introduction in Q2, with measured rollout and optimization before scaling spend in H2; emphasis on compliance, breadth of content, and integrity of product .
DTC strategy tailwinds: Apple/Epic ruling should allow deeper promotion/routing to direct channels, increasing DTC mix and margins; no specific long-term target disclosed yet .
Guidance construction: FY25 AEBITDA includes investment costs for sweepstakes and Tetris Block Party, but excludes their revenue until performance is validated; UA for Block Party not in guidance yet .
playAWARDS integration: Loyalty program viewed as complementary to sweepstakes, enhancing engagement and differentiation; continued curation toward high-quality experiential partners .

Estimates Context

Wall Street consensus (S&P Global) for Q1 2025 revenue/EPS was unavailable in our data pull this quarter; as a result, we cannot determine beat/miss versus consensus. Values would typically be retrieved from S&P Global.

Key Takeaways for Investors

Execution on sweepstakes is the swing factor: a successful Q2 soft launch and H2 scale could stabilize DAU and reaccelerate revenue into 2026; watch early cohort engagement/monetization signals and compliance milestones .
DTC traction is a structural margin lever: with DTC at ~10% of VC revenue and Apple/Epic easing frictions, incremental routing could support margins even if DAU remains pressured .
Cost discipline is real: AEBITDA margin improved 150bps q/q to 19.9%; continued realization of $25–$30M annualized savings should buffer volatility and fund new initiatives .
Engagement headwinds persist: DAU/MAU continue to decline amid category pressure and ad softness; ARPDAU optimization helps, but sustained growth likely requires sweepstakes/differentiated product impact .
Guidance steady but conservative: Maintaining FY25 outlook while excluding revenue from sweepstakes and Tetris suggests room for upside if launches perform; conversely, delays could maintain current trajectory .
Product pipeline risk/reward: Tetris Block Party targets Q4 launch; UA ramp will depend on proven unit economics; success could diversify revenue beyond social casino .
Capital allocation optionality: ~$107M cash, undrawn $81M revolver, and ongoing buybacks offer flexibility for M&A and shareholder returns while weathering near-term softness .

Additional Reference Data (Q1 2025 highlights)

Q1 Revenue $62.7M; Net loss $(2.9)M; AEBITDA $12.5M; AEBITDA margin 19.9% .
Virtual currency $50.8M; Advertising $11.9M; DTC VC $5.0M (9.8% of VC) .
KPIs: Avg DAU 2.6M; Avg MAU 11.4M; ARPDAU $0.26 .
Liquidity: Cash & equivalents $107.1M; $81M revolver undrawn .

Sources: Q1 2025 8-K/press release and exhibits -; Q1 2025 earnings call transcript -; Q4 2024 press release -; Q3 2024 press release -; myVIP World Tournament announcement -.

PLAYSTUDIOS, Inc. (MYPS)·Q1 2025 Earnings Summary