Executive Summary

Q4 2024 revenue was $67.8M, down 12% year over year; Consolidated AEBITDA was $12.5M with an 18.4% margin, pressured by category softness and restructuring costs .
Management introduced FY2025 guidance: Consolidated Net Revenue of $250–$270M and Consolidated Adjusted EBITDA of $45–$55M, reflecting core declines and investment in new initiatives (sweepstakes, new Tetris title) despite cost savings from the “Reinvention” program .
Engagement KPIs fell (DAU 2.7M, MAU 11.5M), but monetization improved (ARPDAU $0.27, +8% YoY); DTC revenue grew 93% to $4.7M, supporting margin mix improvement .
Management highlighted catalysts: sweepstakes rollout (phased; initial web offering, deeper native integration subject to regulatory backdrop) and a new Pixode-powered Tetris casual title targeted for 2H 2025 .

What Went Well and What Went Wrong

What Went Well

“2024 closed with revenue and Consolidated AEBITDA in line with guidance… entering 2025 with a more structured, cost-efficient business model geared towards growth and shareholder returns” .
DTC momentum: $4.7M in Q4 (+93% YoY), with an ultimate target to exceed 20% of virtual currency revenues to improve margins .
Strategic pipeline advancing: “our new sweepstakes effort has the potential to reinvigorate… social casino portfolio” and “Pixode… making solid progress with… new Tetris title” .

What Went Wrong

Revenue contracted 12% YoY to $67.8M; Consolidated AEBITDA fell to $12.5M (18.4% margin vs. 19.1% prior year) due to lower sales and category pressure .
Engagement metrics declined: Q4 DAU 2.7M (-19% YoY) and MAU 11.5M (-14% YoY), largely driven by Tetris and Brainium .
playAWARDS retail value of purchases dropped 38% YoY to $17.2M after management “reset” rewards to emphasize core value; redemption softness also reflected reduced play volumes .

Financial Results

Quarterly summary vs prior periods

Metric	Q2 2024	Q3 2024	Q4 2024
Net Revenue ($M)	$72.590	$71.229	$67.782
Net (Loss) ($M)	$(2.611)	$(3.097)	$(22.412)
Basic EPS ($)	$(0.02)	$(0.02)	$(0.18)
Diluted EPS ($)	$(0.02)	$(0.02)	$(0.18)
Consolidated AEBITDA ($M)	$14.138	$14.623	$12.473
Consolidated AEBITDA Margin (%)	19.5%	20.5%	18.4%

Context: Q4 revenue declined sequentially vs Q3 and YoY; margins compressed alongside restructuring and operating deleverage from lower sales .

Segment breakdown (Revenue and AEBITDA)

Segment	Q2 2024 Revenue ($M)	Q3 2024 Revenue ($M)	Q4 2024 Revenue ($M)	Q2 2024 AEBITDA ($M)	Q3 2024 AEBITDA ($M)	Q4 2024 AEBITDA ($M)
playGAMES	$72.588	$71.226	$67.725	$21.920	$23.233	$16.470
playAWARDS	$0.002	$0.003	$0.057	$(3.476)	$(3.991)	$(2.621)
Reportable Segments Total	$72.590	$71.229	$67.782	$18.444	$19.242	$13.849

Revenue mix and DTC (Q4 only)

Revenue Type	Q4 2024 ($K)	Q4 2023 ($K)	YoY Change ($K)	YoY %
Virtual Currency	54,643	60,365	(5,722)	(9.5%)
Advertising	13,136	16,628	(3,492)	(21.0%)
Other Revenue	3,119	(116)	3,235	nm
DTC Virtual Currency	4,707	2,439	2,268	93.0%
DTC % of Virtual Currency	8.6%	4.0%	4.6 pp	115.0%

KPIs – playGAMES

KPI	Q2 2024	Q3 2024	Q4 2024
Average DAU (000s)	3,220	2,961	2,723
Average MAU (000s)	13,597	12,658	11,472
ARPDAU ($)	$0.25	$0.26	$0.27

KPIs – playAWARDS

KPI	Q2 2024	Q3 2024	Q4 2024
Available Rewards (units)	561	547	471
Purchases (units)	520,000	451,000	301,000
Retail Value of Purchases ($)	$31,405,000	$24,980,000	$17,158,000

Balance sheet and share metrics (Q4)

Cash and cash equivalents: $109.179M; revolver ($81M) undrawn .
Basic weighted-average shares: 124.794M; diluted: 124.794M .
Treasury stock purchased: 19.5M shares repurchased cumulatively at $2.64 average; $43.5M buyback authorization remaining at year-end .

Non-GAAP adjustments impact (Q4)

Restructuring and related costs: $20.462M added back in AEBITDA; other adjustments include D&A $10.627M, stock-based comp $3.805M, and tax expense $1.344M .
Management noted offsets from cost savings expected in 2025, redeployed into new initiatives (sweepstakes, Tetris) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated Net Revenue	FY2024	$285–$295M (revised in Q2; maintained in Q3)	N/A (actual year reported in Q4)	Maintained (then actual reported)
Consolidated AEBITDA	FY2024	$55–$60M (revised in Q2; maintained in Q3)	N/A (actual year reported in Q4)	Maintained (then actual reported)
Consolidated Net Revenue	FY2025	N/A	$250–$270M	Introduced
Consolidated Adjusted EBITDA	FY2025	N/A	$45–$55M	Introduced

Management emphasized FY2025 AEBITDA will be down vs 2024 due to reinvestment in initiatives and continued core declines, despite structural cost savings .

Earnings Call Themes & Trends

Topic	Q2 2024 (Q-2)	Q3 2024 (Q-1)	Q4 2024 (Current)	Trend
Sweepstakes initiative	Exploring build vs buy; category growth and dual-currency model; headwinds to social casino	Formal team constituted; building internal capabilities; pilot timeline 1H25	Phased rollout via web; cautious integration into native apps subject to regulatory backdrop; excluded from FY25 guidance top line initially	Accelerating; cautious execution due to regulatory complexities
Tetris franchise	Refresh of Tetris Prime; limited release of Tetris Block Puzzle; UA scaling challenges; Pixode acquired	Progress integrating Pixode; third Tetris game contemplated; timing variable	New Pixode-powered Tetris title targeted for 2H 2025; Tetris DAU declines cited; franchise optimization ongoing	Pipeline maturing; near-term DAU pressure
Monetization (ARPDAU, DTC)	ARPDAU up 9% YoY; DTC ~4.5% of total revenues	ARPDAU $0.26; DTC ~7.2% of revenues; Pop!, myVEGAS, Brainium showing gains	ARPDAU $0.27; DTC $4.7M (+93% YoY)	Improving monetization despite lower DAU
Cost structure (“Reinvention”)	Ongoing efficiency, support pipeline; later formalized RIF and refactoring	Launched >30% workforce reduction; $14–$16M Q4 charges expected	Reinvention largely behind; $25–$30M annualized savings; redeploy toward initiatives	Savings crystallizing; redeployment to growth
playAWARDS and loyalty	Expanding partners; large retail rewards per day; B2B offering deprioritized near-term	Integration of myVIP across major games; partners added (Topgolf etc.)	Reset reward catalog; purchases and retail value down; continued tournament-driven engagement	Refocused value; short-term metrics reset
Macro/consumer	Category softness persists; UA CPI high in puzzles	DAU declines broad-based; ARPDAU gains offset	No clear macro firming; cautious outlook embedded in guidance	Persistent caution

Management Commentary

“With the ‘Reinvention’ program largely behind us, our focus is now on growing our two new business initiatives, sweepstakes and a new Tetris title… believe these businesses can start contributing… this year.” – Andrew Pascal .
“Our goal is to have the [Pixode/Tetris] game complete and in the market in 2025.” – Andrew Pascal .
“We estimate that [FY2025] revenues will range between $250 million and $270 million… Consolidated adjusted EBITDA… $45 million and $55 million… we have not included any revenue contributions from these efforts [sweepstakes, Tetris].” – Scott Peterson .
“Our direct-to-consumer business… $4.5 million this quarter or 8% of total in-app purchase revenues… ultimate target of over 20%.” – Andrew Pascal .
“We purchased $31.2 million in stock, including… roughly 9%… from Microsoft… remain very well capitalized with $109 million in cash…” – Andrew Pascal .

Q&A Highlights

Sweepstakes timing and integration: Initial stand-alone web launch “in the coming months,” then measured native integration; excluded from guidance until performance visibility improves .
Retail value decline in playAWARDS: Management “reset” partner mix and rewards to emphasize core value; expects redemption to ramp as catalog aligns; also impacted by lower overall play .
Workforce reduction and capacity: >30% headcount cut, complemented by third-party development, lower-cost regions, and “fairly extensive use of artificial intelligence” in creative and content production .
Regulatory perspective on sweeps: Intent to be a “gold standard” operator leveraging sweeps as promotional mechanic for virtual goods (not pure stand-alone), with deliberate compliance-minded rollout amid evolving state oversight .
Macro tone: No evidence of imminent firming; guidance assumes continuation of recent trajectory; investments target changing top-line slope via new initiatives .

Estimates Context

Q3 2024 came in above consensus expectations according to the company’s press release .
Wall Street consensus via S&P Global for Q4 2024 and the prior two quarters was unavailable in our request window (SPGI daily limit exceeded). Use company outperformance commentary (Q3 beat) and management guidance framing for context; note estimates may need to adjust lower given FY2025 guide below FY2024 actuals .
Values retrieved from S&P Global: unavailable due to access limit; consensus commentary based on company disclosures.

Key Takeaways for Investors

Near-term revenue/margin headwinds persist, but monetization trends are positive (ARPDAU up; DTC up 93% YoY in Q4), offering margin mix support as DAU declines .
FY2025 guidance embeds conservative assumptions (no contribution from sweeps/Tetris), implying potential upside if initiatives gain traction in 2H 2025 as management suggests .
Structural cost reset ($25–$30M savings) should underpin profitability, though redeployment to growth will temper AEBITDA near term; watch evidence of payback on sweeps/Tetris spend .
Regulatory trajectory for sweepstakes is the key risk/catalyst; management’s phased, compliance-centered approach and promotional focus (vs pure cash-out model) may de-risk execution .
Asset-light capital position (cash $109M, no debt; $43.5M buyback capacity remaining) provides flexibility for M&A and buybacks; continued repurchases could support per-share metrics .
Segment dynamics: playGAMES remains core profit driver; playAWARDS currently loss-making but strategically differentiates engagement; tournament/event strategy can catalyze loyalty-driven retention .
Watch operational KPIs: stabilization or recovery in Pop! Slots and Tetris engagement, rising DTC share toward the 20% target, and cadence of sweepstakes feature rollouts across core titles .

PLAYSTUDIOS, Inc. (MYPS)·Q4 2024 Earnings Summary