Earnings call transcript: Playtika’s Q2 2025 earnings miss forecasts, stock dips

Playtika Holding Corp (PLTK) reported its Q2 2025 earnings, revealing a significant miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.09, falling short of the forecasted $0.19, a surprise of -52.63%. Revenue came in at $696 million, missing the anticipated $705.4 million by 1.33%. Despite these misses, InvestingPro data shows the company maintains strong fundamentals with an EBITDA of $581.6M and a healthy current ratio of 1.38, indicating solid operational efficiency. The market reacted sharply, with the stock price dropping 12.64% in pre-market trading, from $4.35 to $3.8. Further declines were observed with the stock trading at $3.59 in pre-market, marking a 2.7% decrease from the last close. According to InvestingPro analysis, the stock appears undervalued at current levels, with 8 additional ProTips available for subscribers. The stock’s RSI indicates oversold conditions, while maintaining an impressive dividend yield of 11.11%.

Key Takeaways

• Playtika’s Q2 2025 EPS and revenue missed forecasts significantly.
• Stock price fell by 12.64% in pre-market trading.
• Revenue guidance for 2025 was revised downward.
• Disney Solitaire achieved a $100 million annual run rate.
• Playtika plans to launch a new slot game, Jackpot Tour, in Q4 2025.

Company Performance

Playtika’s overall performance in Q2 2025 showed mixed results. While revenue increased by 11% year-over-year, it fell 1.4% sequentially. The company’s GAAP net income was $33.2 million, an 8.5% increase from the previous quarter but a 61.7% decrease compared to the same period last year. InvestingPro’s comprehensive analysis reveals a strong free cash flow yield of 33% and a market capitalization of $1.36B. Get access to the full Pro Research Report, part of our coverage of 1,400+ US stocks, for detailed insights into Playtika’s financial health and growth prospects. Adjusted EBITDA also saw a decline, dropping 12.6% year-over-year to $167 million.

Financial Highlights

• Revenue: $696 million, 11% YoY increase, 1.4% sequential decline
• GAAP Net Income: $33.2 million, 8.5% sequential increase, 61.7% YoY decrease
• Adjusted EBITDA: $167 million, 12.6% YoY decrease
• Cash and Investments: $592.1 million as of June 30

Earnings vs. Forecast

Playtika’s EPS of $0.09 fell short of the $0.19 forecast, marking a negative surprise of 52.63%. Revenue also missed expectations, coming in at $696 million against a forecast of $705.4 million, a surprise of -1.33%. This marks a significant deviation from the company’s historical performance, where earnings typically aligned more closely with forecasts.

Market Reaction

The market reacted negatively to the earnings miss, with Playtika’s stock price dropping 12.64% in pre-market trading. The stock further declined to $3.59 in extended trading, representing a 2.7% decrease from the last closing price of $3.6. This movement places the stock near its 52-week low of $3.52, reflecting investor concerns over the company’s performance.

Outlook & Guidance

Playtika revised its 2025 revenue guidance downward to a range of $2.7-$2.75 billion from the previous $2.8-$2.85 billion. The company maintained its adjusted EBITDA guidance at $715-$740 million. Strategic initiatives include expanding direct-to-consumer operations and launching new games, such as Jackpot Tour in Q4 2025.

Executive Commentary

Craig Abrams, CFO, highlighted the success of Disney Solitaire, calling it "one of the most successful launches of the year." CEO Robert Anticol emphasized the company’s growth strategy, stating, "We launched a new game, we grew the category dramatically." Abrams also mentioned openness to partnerships, saying, "We are open to the right partnerships for the right IP."

Risks and Challenges

• Market Headwinds: The mobile gaming sector faces ongoing challenges, impacting growth potential.
• Social Casino Pressure: Significant pressure in the social casino category could affect revenue streams.
• Revenue Decline in Key Titles: Slotomania’s revenue decline poses a risk to overall portfolio performance.
• Competition: Increased competition in the gaming industry could impact Playtika’s market share.
• Economic Conditions: Macroeconomic pressures may affect consumer spending on gaming.

Q&A

During the earnings call, analysts questioned the impact of app store fee changes, which executives viewed as a positive tailwind. Concerns were raised about the uncertain impact of sweepstakes on the social casino business, and details about Disney Solitaire’s licensing were not disclosed.

Full transcript - Playtika Holding Corp (PLTK) Q2 2025:

Conference Operator: Good day and thank you for standing by. Welcome to the Platika Q2 twenty twenty five Earnings Conference Call. At this time, participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.

You will then hear an automated message advising your hand is raised. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Pei Li, SVP, Corporate Finance and Investor Relations. Please go ahead.

Pei Li, SVP, Corporate Finance and Investor Relations, Platika Holding Corp: Welcome, everyone, and thank you for joining us today for the second quarter twenty twenty five earnings call for Platika Holding Corp. Joining me on the call today are Robert Anticol, Co Founder and CEO of Platika and Craig Abrams, Playtica’s President and Chief Financial Officer. I’d like to remind you that today’s discussion may contain forward looking statements, including but not limited to the company’s anticipated future revenue and operating performance and more specifically, the future performance of our individual titles such as Lot of Mania or our recently launched Disney Solitaire. These statements and other comments are not a guarantee of future performance, but rather are subject to risks and uncertainties, some of which are beyond our control. These forward looking statements apply as of today, and you should not rely on them as representing our views in the future.

We undertake no obligation to update these statements after this call. We’ve posted an accompanying slide deck to our Investor Relations website, which contain information on forward looking statements and non GAAP measures. And we’ll also post our prepared remarks immediately following the call. For a more complete discussion of the risks and uncertainties, please see our filings with the SEC. With that, I’ll now turn the call over to Robert.

Robert Anticol, Co-Founder and CEO, Platika Holding Corp: Good morning and thank you everyone for joining our call today. I want to start by acknowledging the resilience and dedication of our team. Despite the ongoing headwinds facing mobile gaming, we remain firm in our commitment to our strategic priorities. For Q2 twenty twenty five, we are reporting revenue of $696,000,000 and adjusted EBITDA of 167,000,000 While these numbers reflect some outperformance, we have several positive developments to highlight. First, I am incredibly happy to share the success of our last launch.

Disney Solita, the game has already hit the $100,000,000 annual run rate revenue threshold, which is testament to the incredible work of our Super Play studio. Working in collaboration with Disney and Pixar Games. This achievement helped drive sequential growth in the Super Play portfolio, and we are optimistic about its continued performance. We have been pleased with the overall performance of Disney Solitaire and the Superplay portfolio since the acquisition. Second, coming off record quarter in Q1, Bingo Blitz continued to experience a strong engagement across the board.

The studio is seeing a strong ramp up in the D2C revenue. And we are pleased with the performance of the largest game in our portfolio. Third, we are increasing our long term target for D2C to 40%, up from 30%. The goal is to sustain EBITDA and free cash flow as we manage changes within our portfolio and respond to changing landscape of direct payments. During this period, our more mature titles are experiencing declines in revenue, while our more recently acquired titles are in process of transitioning from being EBITDA negative to positive.

We believe that continuing to increase our D2C penetration will help offset margin pressure during this transitional period. Turning to Slotomania, the game continues to face challenges. Our team is working hard on various tests to stabilize the game economy. As we mentioned previously, this is a part of getting growth before it’s getting better. Although players’ engagement continues to be strong, monetization has not kept pace, and the team is prioritizing efforts to improve this area.

Our new slot gain is critical component to our slot strategy, and we are taking a major approach to this development. We remain on track to launch it in the fourth quarter of this year. And while we do not expect a material impact on our 2025 results, we see it an important long term growth driver for Playtica. In addition, SUPERPLAY’s next new game has a potential to be a standout in its category, with the launch timing details to be shared at a future date. Beyond this project, we’re actively exploring opportunities to develop and launch additional new game in genres that are strategically important to us.

We are excited about the pipeline we are building and look forward to providing more updates as this project progress. Thank you. And I will now turn the call over to Craig for more detailed review of our financial performance.

Craig Abrams, President and Chief Financial Officer, Platika Holding Corp: Thank you, Robert. It is important to highlight the portfolio dynamics that have shaped our performance. This quarter, we experienced a slight sequential decline in revenue, primarily driven by the continued decline in Slotomania. Despite this, our year over year performance reflects the successful execution of our M and A strategy. Our acquired portfolio of games has been a significant driver of this growth.

The Super Play portfolio, the YUTA Games card portfolio and Animals and Coins have all contributed to our year over year revenue growth. With that, let us get into the details of the quarter. We generated $696,000,000 of revenue in the quarter, reflecting a 1.4% sequential decline and an 11% year over year increase. GAAP net income for the quarter was $33,200,000 representing an 8.5% sequential increase and a 61.7% year over year decrease. Adjusted EBITDA for the quarter was $167,000,000 showing a slight sequential decline of 0.2% and a year over year decrease of 12.6%.

This decline in adjusted EBITDA margins was primarily driven by increased sales and marketing expenses associated with our Super Play games, which resulted in margin dilution following the Super Play acquisition. D2C revenue for the quarter was slightly off our record high revenue last quarter, achieving $175,900,000 a 1.8% sequential decline and a 1.3% increase year over year. Our year over year growth in D2C was driven by several titles. Our leading casual games including Bingo Blitz, June’s Journey and Solitaire Grand Harvest, all setting record D2C numbers for the quarter. However, this growth was offset by a sequential decline in Slotomania’s D2C revenue.

We are putting more effort into expanding our D2C business and expect to see stronger results in the second half of the year. This incremental margin will help offset the EBITDA pressure we are experiencing from the revenue declines in some of our more mature titles, especially in the slot side of the business. Historically, we had spoken about 30% of revenues as the target for D2C, but we now believe that a more realistic long term target for D2C is closer to 40% of total revenues. With that, let us dive into the performance of our top three titles from the quarter, beginning with Bingo Blitz. Bingo Blitz revenue was 160,200,000 down 1.3% sequentially and up 2.9% year over year.

We are pleased to see that Bingo held strong sequentially against its record first quarter. Additionally, Bingo recorded its own record revenues from our D2C platforms in the second quarter. As the largest title in our portfolio, Bingo Blitz continues to execute at a high level, reinforcing its leadership position in a winner take most category. The game remains a strong contributor to our overall performance and a clear example of our strategy to invest in category leading games with durable growth potential. Importantly, Bingo Blitz is also showing a meaningful upside in expanding its D2C business, which we expect will enhance our D2C mix and help preserve margins over time.

Slotomania revenue was $86,500,000 down 22.7% sequentially and 35.4% year over year. Slotomania faced an acceleration in its declining trend during Q2 as we began implementing changes to address the game economy challenges we discussed last quarter. These adjustments are aimed at rebalancing the game economy to support healthier long term engagement and monetization, but they are contributing to near term pressure on revenue performance. We recognize that this is a difficult phase when our results may continue to soften before we begin to see improvement. At the same time, we remain focused on executing our broader strategy in the social slots category.

The development of our new slot title, which is designed to complement our existing portfolio, is progressing well. We view this title as a key pillar in our efforts to regain lost market share and expect to have our global launch in Q4 of this year. June’s Journey revenue was $69,100,000 up 0.3% sequentially and down 7.4% year over year. June’s Journey has shown several quarters of encouraging sequential stability following a period of decline in the 2024. As we look to reignite growth, the focus is shifting towards deeper monetization, supported by a refreshed leadership team at our WUGO studio.

Earlier this year, we appointed a new GM and leadership team at WUGA, bringing a renewed focus to June’s journey and its long term roadmap. In addition, we made the decision to discontinue the development of Claire’s Chronicles to focus our resources on new games showing the strongest momentum. We believe these changes will allow the WUGA team to focus on the execution and lay the foundation for renewed growth in June’s journey in the second half of the year and beyond. Turning now to specific line items in our P and L for the second quarter. Cost of revenue increased 16.4% year over year, driven by our revenue growth and the increase in amortization expenses in our P and L resulting from the acquisition of Super Play.

Operating expenses increased by 22.6% year over year. The increase was primarily driven by higher performance marketing spending, which was also a direct result of our Super Play acquisition. R and D increased by 13.8% year over year. The growth in R and D was primarily driven by an increase in average headcount during the quarter compared to the same period last year. This was largely due to the acquisition of Super Play, which bolstered their R and D workforce.

Sales and marketing increased by 52.1% year over year. The increase in sales and marketing was primarily driven by the incremental performance marketing spend from our acquisition of Super Play. In the last quarter, we mentioned that we anticipated a sequential step down in sales and marketing expenses, and we observed this trend in the second quarter. We expect the sequential step down to continue for the second half of this year. G and A expenses decreased by 62.8% year over year.

During the quarter, we recorded a $33,000,000 benefit in our G and A expenses related to the revaluation of contingent considerations tied to our past acquisitions. It is important to note that this is a non cash adjustment and reflects a change in estimated payouts rather than any operational improvement in G and A efficiency. The comparable quarter in 2024 also had an adjustment related to contingent considerations. Excluding adjustments in both periods, G and A would have declined year over year by 20.8%. As of June 30, we had approximately $592,100,000 in cash, cash equivalents and short term investments.

Looking at our operating metrics, average DPU declined 3.1 sequentially and increased 26.8% year over year to $378,000 The average DAU decreased 2.2% sequentially and increased 8.6% year over year to $8,800,000 ARPDAU was flat versus Q1 and increased 2.4% year over year to $0.87 Finally, we are revising our guidance for the year. Our updated revenue range for the year is 2,700,000,000.0 to $2,750,000,000 down from 2,800,000,000.0 to $2,850,000,000 Despite the decrease in our revenue range, we are maintaining our adjusted EBITDA range of $715,000,000 to $740,000,000 This demonstrates our ability to offset the EBITDA losses from Slotomania revenue weakness through increased efforts in our D2C platforms and other efficiencies we are executing throughout the organization. We’d be happy to answer your questions.

Conference Operator: Our first question comes from Arthur Chu with Bank of America Securities. Your line is open.

Arthur Chu, Analyst, Bank of America Securities: Hey, guys. This is Arthur on for Omar. Thanks for taking the question. So you guys have been working on stabilizing some of the oldest titles like Salt Mania for a while. Curious what are some of the learnings have taken away from this process, and if any of those learnings have perhaps led you to change your approach or change the way you’re thinking about turning around these titles?

Craig Abrams, President and Chief Financial Officer, Platika Holding Corp: Hey Arthur, thanks for the question. Sure, so when you’re dealing with game economy issues and hyperinflation within a game, these are complex issues, especially in games that are ten plus years old and have various monetization levers within the game. I think for us, we’ve learned a lot within Slotomania. It is one of the biggest franchises for slots within the category. We have an engaged player base.

If you look at the declines in DAU, they are better than the declines you’ve seen in DPU, so it’s clearly a monetization issue. And for us, it’s taking time to feel that through, but I think we’re encouraged, by the changes that we’ve been making and seeing the impact there. So it’s definitely something that we’re highly focused on and we’re seeing, we’re starting to see some benefits there of our efforts.

Arthur Chu, Analyst, Bank of America Securities: Got it. Thank you very much.

Conference Operator: Thank you. Our next question comes from Colin Sebastian with Baird. Your line is open.

Colin Sebastian, Analyst, Baird: Thanks. I appreciate the questions. I guess, first, congrats on Disney Solitaire. On that game, Craig, can you talk about the economics of the title, the licensing costs, the customer acquisition costs, I guess, the margin profile of that game versus broader portfolio? And then I have a follow-up.

Craig Abrams, President and Chief Financial Officer, Platika Holding Corp: Sure. So, well, the terms of our deal with Disney and Pixar Games is not publicly disclosed. I think you can imagine as with any top tier content provider, there’s a license fee associated with licensing their content. That being said, the title is one of the most successful launches of the year in terms of a new title, in any category. I think that it’s scaling much faster than any previous Super Play title, and we continue to be impressed with the results.

And so, it’s been a great collaboration, with Disney and Pixar Games and, we look forward to continuing to execute on growing that game.

Colin Sebastian, Analyst, Baird: Okay. Great. Then maybe as a follow-up to Arthur’s question, are are you guys thinking differently about, I guess, the the legacy or mature portfolio? If there’s any structural shift in the market among mobile gamers in terms of their preference for for, older versus newer games, or is that not really something you’re observing?

Craig Abrams, President and Chief Financial Officer, Platika Holding Corp: Think the way that we differentiate it is looking at category leading games. And so where we’re a category leader, we are making investments in the game. If it’s an older game that doesn’t have category leadership, we’re not seeing that same level of investment. We also continue to invest in our recently acquired titles. That’s a key area for growth for us.

I think if you look across all three acquisitions, they all grew year over year. And then continuing to expand our DTC business throughout all of our titles, more recently acquired and existing titles. I think a new growth factor for us that we’ll talk about more in the future is growing our advertising business. We saw double digit growth sequentially as well there. And lastly, developing and scaling new games as well is something that’s newer for us, but something that we’re focused on.

Robert Anticol, Co-Founder and CEO, Platika Holding Corp: One thing I would like to add that we saw with this what happened with the DISTE SOLITER that we launched a new game in a category that we’re already dominating there for a long time, and the category grew. So this kind of example is making us to think about other categories that were leaders right now, and it’s going to change the thing that we are looking at launching a new game, because the example of Solitaire Disney is unusual example. We launched a new game, we grew the category dramatically, we’re still leading the category with our old game. So for us, it’s a win win situation.

Colin Sebastian, Analyst, Baird: Okay. Thanks, Robert. Thanks, Craig.

Conference Operator: Thank you. Our next question comes from Eric Handler with Roth Capital. Your line is open. Eric, please check your mute button.

Craig Abrams, President and Chief Financial Officer, Platika Holding Corp: Sorry about that. I’m curious with your social casino business, are you seeing any negative impact from sweepstakes?

Robert Anticol, Co-Founder and CEO, Platika Holding Corp: So it’s a good question. It’s a good question that we cannot give you a straight answer because we are not sure about it. We see a big pressure on the social casino category in the last year. I’m sure there is a part of these activities, but I cannot give you any special numbers or to tell you some special example because I really don’t know.

Craig Abrams, President and Chief Financial Officer, Platika Holding Corp: Okay. And is that an area that you’d ever look to move into?

Robert Anticol, Co-Founder and CEO, Platika Holding Corp: No, definitely no. This is not where we’re going. It’s an area that we don’t believe and it’s not in our plans. Thank you.

Conference Operator: Thank you. Our next question comes from Aaron Lee with Macquarie. Your line is open.

Aaron Lee, Analyst, Macquarie: Hey guys, good morning. Thanks for taking the question. Maybe want to start on, I guess, Disney Solitaire. Just, yeah, congrats on all the success there. I guess, what is your appetite for pursuing more IP or licensing type arrangements for games, whether organically or through M and A?

Craig Abrams, President and Chief Financial Officer, Platika Holding Corp: Sure. So we are looking at a variety of new game opportunities. I think licensed IP in this environment has done very well. So I think we’re open to the right partnerships for the right IP in categories where it makes sense.

Aaron Lee, Analyst, Macquarie: Okay. And a quick follow-up on Jackpot Tour. Any color on your development of this and how you plan to differentiate that from the competition? And I guess any early testing that you’ve done that you can share? Thank you.

Robert Anticol, Co-Founder and CEO, Platika Holding Corp: So thanks for the question. I cannot give a lot of information about this game, but I can tell you that this game is going to make a difference. This is what we’re looking for. This is how we’re going to launch this game. We have the most, I think, experience in this category for fifteen years.

And our last casino launch was I think twelve years ago. We are very excited about launching this game. I’m sure it’s going to close the gap of what we lost in our current organic games. It’s going to be different. And when we will have more details, I will be more than happy to share with you guys.

Aaron Lee, Analyst, Macquarie: Okay, got it. Thank you.

Conference Operator: Thank you. Our next question comes from Albert Kim with UBS. Your line is open.

Albert Kim, Analyst, UBS: Hey guys, thanks for taking the question. Recently we’ve been seeing some multiple headlines and greater scrutiny around kind of the mobile store markets. Any impact, if any, does the app store fee changes have on your duties and visions and any factors we should be mindful as we think about the new longer term post and if you could share any like timeline to get to the 40% goal? Thank you.

Craig Abrams, President and Chief Financial Officer, Platika Holding Corp: Sure. So the changes in the payment landscape and in the app stores, has been a positive tailwind for us. In The US specifically, we’re seeing upside in iOS. I think in terms of our execution now for the last few years, we’ve been very consistent in terms of increasing B2C penetration. We’re seeing that accelerate now with those changes and we updated our long term target as a result from 30% to 40%.

Conference Operator: Thank you. I’m showing no further questions at this time. This concludes today’s conference call. Thank you for participating. You may now

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