PLAYSTUDIOS, Inc. (MYPS)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 revenue was $57.6M and diluted EPS was $(0.07); AEBITDA fell to $7.2M (12.6% margin), reflecting continued DAU softness and mix shifts; management cut FY guidance, now expecting net revenue and consolidated AEBITDA “below the low end” of prior ranges .
• Sequentially, revenue declined ~2.7% and AEBITDA compressed versus Q2; YoY declines were driven by lower virtual currency and advertising revenue, despite direct-to-consumer (DTC) strength .
• DTC revenue grew 48% YoY to $7.7M and now represents 16.6% of virtual currency revenue; liquidity remains strong at $106.3M cash with an undrawn $81M revolver .
• Strategic catalysts: WinZone sweepstakes nearing broad jurisdictional rollout; Tetris Block Party entering go‑to‑market testing ahead of a broader Q1 launch; both cited as potential 2026 contributors .
• Stock narrative drivers: Guidance reset, sequential decline in core portfolio, and progress in DTC/sweepstakes/Tetris; management emphasized optionality including potential strategic partnerships in regulated iGaming over time .

What Went Well and What Went Wrong

What Went Well

• DTC monetization accelerated: DTC revenue reached $7.7M (+48% YoY) and accounted for 16.6% of virtual currency revenue, aided by relaxed Apple policies and better in‑app merchandising .
• Sweepstakes (WinZone) traction: Open beta across 15 states, with improving retention and monetization metrics; targeting live in all available jurisdictions by year‑end, enabling scaled UA deployment .
• Tetris Block Party momentum: Early open‑beta metrics encouraging; initiating focused go‑to‑market test ahead of broader rollout in Q1 .

Management quote: “Nothing is off the table as we work through this transition…we’re seeing growing traction in our direct‑to‑consumer channel, continued progress with the development of our sweepstakes initiative, and promising early momentum in Tetris Block Party.”

What Went Wrong

• Core portfolio headwinds: Revenue down 19% YoY; DAU and MAU declined ~25% YoY; adjusted EBITDA down ~50% YoY with margin compression to 12.6% .
• Guidance cut: FY 2025 net revenue and consolidated AEBITDA now expected “below the low end” of prior ranges ($250–$270M revenue; $45–$55M AEBITDA previously) .
• Social casino category pressure: Ongoing audience and monetization softness, with share loss to sweepstakes alternatives; management expects Q4 core revenue to decline sequentially absent new launches .

Financial Results

Consolidated Metrics vs Prior Periods

YoY Comparison (Q3)

Segment Breakdown (Q3 2025)

KPIs (playGAMES)

KPIs (playAWARDS)

Notes: Available Rewards in press exhibits are listed as monthly averages; exhibit labels present “in units” with three‑digit values denoting thousands (e.g., 325 equals 325,000) .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategic posture: “Nothing is off the table as we work through this transition…we’re focused on reshaping the company with discipline…reorienting the business toward durable growth.”
• DTC strategy: “It’s easier for our players to launch the off‑platform store and transact…Reducing that friction and improving the monetization has been the primary driver.”
• Sweepstakes rollout: “We expect…by the end of the year, we’ll be live in all of the available jurisdictions…and start scaling up that part of the business.”
• Tetris Block Party: “Early performance…has been very encouraging…begin a focused go‑to‑market test ahead of a broader rollout in Q1.”
• Category headwinds: “Declines aren’t specific to us…losing players…to alternatives, Sweepstakes notably, is very real.”

Q&A Highlights

• Sweepstakes scale‑up: After nationwide availability in qualified jurisdictions, management plans modest marketing to validate CAC/cohort metrics before scaling UA spend .
• Guidance cadence: Core business trends from Q3 continued into early Q4; absent new launches, expect Q4 revenue to decline sequentially .
• DTC margin relationship: Margin improvement expected with rising DTC and web‑based sweepstakes mix, though not strictly linear given ad monetization interplay .
• Strategic optionality: Potential to partner with regulated iGaming operators and/or distribute slot content via RGS platform as markets evolve .

Estimates Context

• S&P Global consensus estimates for Q1–Q3 2025 EPS and revenue were unavailable at the time of this report; therefore, beat/miss analysis vs Street consensus cannot be provided. Values retrieved from S&P Global.*

Key Takeaways for Investors

• Guidance reset is a clear negative surprise; absent near‑term launch contributions, management signaled Q4 core revenue likely down sequentially — a caution for short‑term positioning .
• DTC mix shift is a structural positive for margins and control of monetization; continued merchandising/personalization could expand contribution in 2026 .
• Sweepstakes rollout provides a hedge against category migration and opens a web‑based revenue stream; watch post‑New Year California dynamics for potential core portfolio lift .
• Tetris Block Party offers asymmetric upside if GTM tests convert; monitor Q4 test readouts and Q1 rollout progress .
• Liquidity is robust ($106.3M cash; undrawn $81M revolver), enabling disciplined investment and optionality in M&A or partnerships without near‑term balance sheet stress .
• Segment AEBITDA shows playGAMES profitable and playAWARDS investment drag; trajectory depends on loyalty platform optimization and mix shift execution .
• Without consensus estimates, the narrative — not the print — drives the stock: focus on evidence of stabilization in DAU/MAU, sustained DTC momentum, and tangible sweepstakes/Tetris KPIs in upcoming updates .