Playtika at Morgan Stanley Conference: M&A Strategy and Market Expansion

On Thursday, 06 March 2025, Playtika Holding Corp (NASDAQ: PLTK) participated in the Morgan Stanley Technology, Media & Telecom Conference, where CFO and President Craig Abrams shared insights into the company’s strategic direction. While highlighting Playtika’s robust M&A strategy and plans for international expansion, Abrams also acknowledged challenges in the competitive mobile gaming market.

Key Takeaways

• Playtika plans to invest $300 million to $450 million in M&A over the next three years.
• The company aims to increase its direct-to-consumer revenue, which was 27% last quarter.
• New game releases, including Disney Solitaire, are expected to drive growth in international markets.
• Playtika’s dividend yield is nearly 8%, indicating strong cash flow.
• The company is focusing on stabilizing its Social Casino segment amid rising competition.

Financial Results

• Dividend yield stands at nearly 8%, reflecting strong cash flow.
• Direct-to-consumer revenue accounted for 27% of total revenue last quarter, with a historical target of 30%.
• Planned M&A investments range from $300 million to $450 million over the next three years, focusing on studios valued between $100 million and $150 million.
• Free cash flow has historically been between $350 million and $400 million.

Operational Updates

• Playtika is preparing to launch Disney Solitaire in Q2, currently in soft launch with promising metrics, aiming to leverage Disney’s brand in the APAC region.
• The company is developing new titles in the Social Casino and Slots categories to refresh market content.
• Recent acquisitions, including Superplay, are expected to contribute significantly to Playtika’s portfolio.

Future Outlook

• Playtika’s biggest franchises, such as Bingo Blitz and June’s Journey, are key growth drivers.
• The company is exploring international market penetration beyond the current 3% and enhancing conversion rates.
• AI tools are being tested to improve efficiency in game development and operations, with plans to deploy them by year-end.

Q&A Highlights

• In the Social Casino segment, Playtika is focusing on regaining market share through content and technology improvements.
• Bingo Blitz remains a stable and leading franchise, benefiting from technical complexity and market share.
• Playtika sees AI as a tool for enhancing operational efficiency rather than direct revenue growth.

For a deeper understanding of Playtika’s strategic plans and market positioning, readers are encouraged to review the full transcript below.

Full transcript - Morgan Stanley Technology, Media & Telecom Conference:

Nathan Feather, Analyst, Morgan Stanley: morning, everyone. Thanks so much for being here. I’m Nathan Feather on the Morgan Stanley U. S. Internet team stepping in for Matt Koss, pleased to be joined by Craig Abrams, Playtica’s CFO and President.

Thanks so much for joining us.

Craig Abrams, CFO and President, Playtika: Thank you for having us.

Nathan Feather, Analyst, Morgan Stanley: Before we begin, quick housekeeping item. Please note that all important disclosures including personal holdings disclosures are online at w w w dot morganslady dot com slash research disclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. And with that, let’s kick it off. Craig, I think it’d be helpful for people that are maybe less familiar with the story to give an overview of Playtica, the business and the evolution of strategy here.

Craig Abrams, CFO and President, Playtika: Perfect. Well, Playtika is one of the largest public independent mobile gaming companies. It was founded in 2011. Right now we have nine out of the top 100 franchises in the App Store. 12 of our 14 top titles came through M and A.

And I think that’s what differentiates us in terms of our initial strategy. We kind of took the viewpoint that we are experts at monetization and retention of customers. We love to find great entrepreneurs and products that are already established in the marketplace and further growing them leveraging our technology and live operations capabilities. And over the last thirteen years, we’ve executed on that strategy. We went public in 2021, kind of post the COVID and IDFA changes.

I think you saw the market become a bit more mature. And I think for us as a large player, it’s been a great opportunity to continue consolidating. We acquired n Play and Yuda Games in 2023 and we just completed the acquisition of Superplay in 2024, our largest acquisition in the company’s history. I definitely feel like it’s a name that’s misunderstood in the marketplace. I definitely feel like we are currently undervalued in the marketplace.

When you look at the strength of our biggest franchises, the depth and breadth of the portfolio, the free cash flow that we generate, both the organic new game development pipeline, as well as the recent acquisitions and the growth there. If you look at the dividend yield that we pay almost at 8% right now, definitely feels like an opportunity for investors.

Nathan Feather, Analyst, Morgan Stanley: Okay, great. Really helpful overview. Maybe to kick things off, I’d love to discuss Playtika’s game pipeline. The team mentioned that there are three games slated to release in the next twelve to eighteen months. What can you share with us about these games and which is most exciting for you?

Craig Abrams, CFO and President, Playtika: Sure. Well, it’s exciting for us because there’s a bit of a shift in strategy. Historically, we did not develop new games internally. I think what changed is we acquired companies with core capabilities in development of new games and we’ve seen very specific market opportunities. The first being when we acquired Superplay, they had two games in the pipeline.

This is a team that has developed two games thus far in the market, both very successful, both top 100 games Dice Dreams and Domino Dreams. And the third game in the pipeline we recently announced is Disney Solitaire. Disney Solitaire is going to be launched in the second quarter of this year. It’s obviously in partnership with Disney taking the solitaire genre, which we know very well. We’re currently the number one player in the solitaire market within app purchases with Solitaire Grand Harvest.

And we see an opportunity to dramatically expand that category. It’s a big category when you look at traditional what we call green screen solitaire. We know there’s tens of millions of players that are playing those style games. And we think as we’ve seen in some other categories with a big brand an opportunity to really expand the category with Disney Solitaire. So excited about that.

The other opportunity is with Social Casino and Slots specifically. We’ve seen that our initial titles were developed in kind of the 2011 to 2014 timeframe. And so as those titles are mature, the complexity in the games and managing those games and the first time user experience isn’t what it is in a newly developed game. And we see an opportunity to bring our best content, our best features into a new game that we can bring to market that will have a better return on investment in our view. So excited about that.

We have not given a timeline other than said that all three titles will be out in the next twelve to eighteen months. And the third title is Claire’s Chronicles from our WUGA studio.

Nathan Feather, Analyst, Morgan Stanley: Okay, great. Well, I want to touch a little bit more on Disney Solitaire. As you mentioned, plan to release in 2Q. Talk to us about what you’re seeing so far in the test phase and the potential uplift for releasing this game given the strong brand recognition relative to the category?

Craig Abrams, CFO and President, Playtika: Sure. Well, as we mentioned on our earnings call last week, the game is in soft launch in a number of international markets. The initial metrics are very strong. We have not committed to the actual release date publicly, but we have said the intent is to launch in the second quarter. And I think what’s really exciting for me is that leveraging a big brand in the portfolio of over hundreds of characters within the Disney portfolio is that there’s new international markets that will become available to us that historically have not been available.

I think when you look at markets like Japan or others in APAC, the Disney characters resonate extremely well. We’ve seen Disney titles move up the charts there. And so I think for us, the opportunity to not just be big in The United States and Europe like with the rest of our portfolio, the opportunity to really move into APAC and some other markets is really exciting.

Nathan Feather, Analyst, Morgan Stanley: Okay. Great. Now, I want to talk a little bit more holistically. Given these new titles in the pipeline, one thing I’m curious about is what sort of framework the company uses when assessing the go or no go decision as it relates to launching these new games? Anything you can quantify or thoughts you could share would be helpful?

Craig Abrams, CFO and President, Playtika: Sure. I think there’s a couple of different gates that we look at. I think there’s the pre launch phase, which is when you’re deciding what category you’re entering, how big can it be, what is the competitive environment, what’s our differentiator, why are we going to be number one or number two in that respective category, and can it be $100,000,000 franchise? Those are some of the thoughts that come to mind when framing that decision. And then once the game has been greenlit and it’s in development and you go to soft launch, we’re very focused on retention metrics, right?

Everything from day two, day seven, day 14, day 30 and kind of on and on and monitoring those metrics. And then after retention becomes monetization, not only retaining customers, but are they paying within the game? And then the third layer is what’s the return on ad spend and can that scale. I think what’s exciting about leveraging a brand is the opportunity to really rapidly grow the organic traffic as well given the awareness and the organic traffic you get through the app stores. So definitely those are some of the frameworks we use when evaluating the launch of a new title.

Nathan Feather, Analyst, Morgan Stanley: Okay. I just want to talk about social casino games. Been under a little bit of pressure lately. How does management view the opportunity around this game genre as a whole? And how is that view and the opportunity evolved over the past few years and post IDFA?

Craig Abrams, CFO and President, Playtika: Sure. So historically, it’s one of the largest and most attractive categories within mobile. And I think you saw intense competition there. I think when you look at a lot of the categories where number one and you’ll see pretty significant market share. And it sort of becomes almost like winner take most given the liquidity characteristics or other gameplay characteristics socially in those genres.

If you look at Bingo or in June’s Journey with our narrative driven game or Solitaire, but then when you look at slots, it’s much more competitive. And even as the leader in the category, you’ll see that our market share there on a per title basis isn’t as high probably more like anywhere from around 10% to 12% or so. So when you look at the competitive intensity there, I think there’s a different dynamic. I think when you look at the last few years, we’ve seen the slot manufacturers bring real world content and be successful in deployment. We saw that as an opportunity in our recent partnership with IGT to bring their content to market across our top three slot games.

That content started to roll out the December. So we’re just at the initial phases of that partnership. And then I think we see the opportunity with the development of a new title. Given there really hasn’t been that many new titles brought to market there that are meaningful. We think there’s a big opportunity to bring consumers something new and fresh and exciting.

And so we’re excited about that.

Nathan Feather, Analyst, Morgan Stanley: Okay, great. And putting a little bit of finer point on that. How are you approaching stabilizing this side of the business and really returning it to being a growth category?

Craig Abrams, CFO and President, Playtika: So I think, well, let me kind of honest, when you look at the category over the last few years, it’s stagnated and matured. So I think the idea that you’re going to grow the category or grow, I think is something that probably isn’t realistic. And I think that’s why we made strategic decisions years ago to further grow our casual business. We saw casual as an opportunity to be much bigger, much higher growth, bigger TAM. And that’s why we’ve made such a concerted effort to kind of strategically transition.

And you look at the majority of our recent acquisitions, they’re all in casual. I think the exception there was poker, which we had a great acquisition of the Governor of Poker franchise to add to our World Series of Poker positioning. So I think when you look at the strategic steps we’ve taken, it’s been to kind of diversify away. That being said, we’re very focused on stabilization and regaining market share. And so that’s through improved content, upgrading technology, all the things that we’re doing in the new game to get a better return on ad spend.

And we continue to do well within that category on our direct to consumer channels. And I think that’s a differentiator for us and something that’s helped support the margins in that category as well.

Nathan Feather, Analyst, Morgan Stanley: And you mentioned the company is developing new slot game. How do you think new launches fit in the overall strategy?

Craig Abrams, CFO and President, Playtika: I think for us it is unlike most game companies that have huge R and D budgets focused on a new slate, we still stick to our coordinating, which is leveraging M and A as a path to kind of buy proven franchises. But we see new game development as an opportunistic way to attack specific opportunities where there isn’t necessarily an M and A opportunity or something that we believe strongly we can do in house. And I think the difference in mobile versus AAA and console is that the development budgets required aren’t nearly as big, it’s the marketing budgets. And so for us, we have an opportunity to test various genres with organic development and we’re not putting capital at risk unless we know or have a strong belief that it’s going to be successful based on early metrics.

Nathan Feather, Analyst, Morgan Stanley: Are there previous instances in which you’ve done something similar that provides a playbook to replicate the reactivation of dormant players in the category?

Craig Abrams, CFO and President, Playtika: I think that is a big focus for us is constantly how do you reactivate consumers. When you think about a big title like Slottomania that has historical revenue over $5,000,000,000 and over 100,000,000 downloads, like you’re really focused on bringing people back to the game. Most customers in this segment aren’t hearing about the title for the first time. And so the question is how do you make customers aware of all the new and great things that are available in that game, a unique promotion. I think we saw we did very well with reactivation, bringing people in with Cleopatra II and with the IGT content.

And so I think we’re definitely working on a variety of strategic initiatives to bring people back.

Nathan Feather, Analyst, Morgan Stanley: Great. Now on the casual side, Bingo Blitz has been growing consistently for many years at this point. In your 4Q report, you reported year over year growth of almost 6%. Understanding that the natural lifespan of individual titles plays a role, how do you think about the durability of growth for this title?

Craig Abrams, CFO and President, Playtika: I think Bingo Blitz is one of the most impressive titles in the marketplace. We acquired it in 2012. It was probably initially launched in the market in 2010. And when you look at it kind of fifteen years later, fourth quarter was still up 6% year over year. It’s our biggest franchise.

We have significant market share in that category. It is very challenging for others to launch from both a technical perspective and sort of liquidity perspective. There’s so many bingo players competing with their friends, chatting with friends, sharing collectibles, that if anyone the switching costs are very high for someone to decide to go and find another bingo experience. And we bring so much content to bear, spend so much in marketing that it really has a high barrier to entry. So I think for us it’s one of our strongest and most stable franchises and one that we feel very confident in as we look at future growth.

Right.

Nathan Feather, Analyst, Morgan Stanley: Really helpful. Switching gears, direct to consumer clear opportunity for Playtica that you’ve been discussing for a while and it’s encouraging to see the revenues from the segment up 8% year over year in 4Q. What are some of the puts and takes investors should be aware of as they consider Playtica’s plans to expand this offering to more of the titles?

Craig Abrams, CFO and President, Playtika: Sure. So direct to consumer for us has always been a differentiator. This last quarter represented 27% of our revenue. Historically, we’ve given a target of 30%. I think that target is constantly moving as we acquire titles that are off the platforms.

The recent deployment of direct to consumer for both June’s Journey and Salt Our Grand Harvest has been going quite well and gives me a lot of confidence that we’re going to be able to execute on direct to consumer with other recently acquired titles. I think for a long time people questioned, you’re successful with some of these older franchises that took many, many years and started on web with these mobile first titles, can you be successful? And I think we’re proving that we can. And obviously Superplay is the largest addition to the portfolio. And as we look at the roadmap down the road, the idea of bringing those titles on direct to consumer is very exciting for us.

Nathan Feather, Analyst, Morgan Stanley: Okay, great. Now have a track record of using M and A to effectively enhance Playtika’s portfolio, Superplay, great example of that. How should we think about your appetite for M and A in 2025 and then more broadly long term?

Craig Abrams, CFO and President, Playtika: Sure. So as I mentioned earlier, M and A is a key part of our DNA in terms of how we look at expanding the portfolio. Superplay was extremely exciting acquisition for us, not only the top 100 franchises that we brought in and helped drive further growth and diversify the portfolio, but the future pipeline of games that they bring. I think we were very careful on how we structure the transaction so that we’re fully aligned in terms of growing, but growing in a profitable way. They have a structure where to be eligible for the earn out in 2025.

They can’t lose more than $10,000,000 of EBITDA. And then as you look out to ’26 and ’20 ’7, those margins need to scale as well. So very consistent with how we think about the games industry and focused on profitable growth. And I think as we look at expanding the portfolio further, last week we just announced that we’re going to deploy $300,000,000 to $450,000,000 in M and A over the last three years. Historically, we gave a target of $600,000,000 to $1,200,000,000 Obviously, we did the large Superplay transaction with our capital allocation strategy, really assessed our free cash flow and targeted around 50% of free cash flow towards M and A, about 50% towards capital returns.

And so I think the idea of studio a year in the $100,000,000 to $150,000,000 range as bolt ons to really strategically address key growth opportunities and genres that we see as exciting additions to the portfolio to continue to drive future growth. I think it’s important to be very consistent with our M and A executions. When you look at the cohorts of transactions over time, you’ll see that shift to profitability can take eighteen to twenty four months. And so to continue to drive EBITDA going forward, we need to continue to execute on those. I think when you look at like an in play, for example, we guided last week that that studio will turn to profitability in 2026.

And so sorry, it will drive to EBITDA positive contribution in 2026 and same thing with the Superplay acquisition. So having that as a systematic part of our strategy for us is important.

Nathan Feather, Analyst, Morgan Stanley: Okay. Now given how active you’ve been with M and A, one thing that investors wonder about is potential for organic growth. And so help us think through what sort of organic growth is embedded within your outlook for 2025? And then how should we think about organic growth in more long term cadence?

Craig Abrams, CFO and President, Playtika: Sure. So we didn’t actually split out what’s organic versus Superplay in terms of our guidance for 2025. But what I can say is that we have our biggest franchises whether it’s Bingo Blitz, June’s Journey, Salter, Grand Harvest that we are confident in our ability to continue to execute and grow over time. I think we have our recently acquired titles like Yuta and in play and obviously Superplay that we believe will be growth drivers in the years to come. We have titles like World Series of Poker, which are number one introspective category and has been very steady.

And I think in terms of the social casino portfolio for us the key focus there is stabilization and the smaller titles that you see are kind of on a managed decline as we pull back marketing dollars and manage cash flow contribution. So I think as you look at the portfolio as a whole, with the M and A activities and the acquisitions that we’re doing, we foresee getting back to growth in the years to come. Obviously, there’s a mix shift and the impact of the mix shift this year impacts the EBITDA margins, but we’re focused obviously on increasing the margins in the acquired studios over time.

Nathan Feather, Analyst, Morgan Stanley: Okay. Focusing a little bit more on that margin part. How should we think about the investments required to scale these new games in your pipeline?

Craig Abrams, CFO and President, Playtika: So as you look into the guidance, all of the development activities are built in, in terms of the actual marketing dollars that you have to deploy to execute and launching them is probably the biggest growth driver. And I think we’re deploying that with success. The payback periods on a new game can be very quick and so you may not see it as a big investment driver or we’ll basically reallocate marketing dollars to try and maintain our margins. So I think we’re very careful. We have a lot of tools that we have given we have such a large portfolio.

But it definitely the idea of having these higher growth titles and launching new titles does impact our margins in the near term. But we think it’s going to pay off in terms of revenue growth and changing the trajectory of the overall business.

Nathan Feather, Analyst, Morgan Stanley: Okay. And anything to call out as far as the shape of margins as we work through ’25 and ’26 given some of those puts and takes you mentioned?

Craig Abrams, CFO and President, Playtika: Well, I think you see it in the guidance. You see that last year we’re closer to 30% margins and this year we’re a few hundred basis points below that. So I think if you look at the range of guidance that we’ve given. So there definitely is an impact and we’re focused on driving that top line consistent growth to be in a position to improve margins down the line.

Nathan Feather, Analyst, Morgan Stanley: Okay, great. And then on to a topic that’s been top of mind for many investors here at the conference and AI, talk to us about areas of the company where you’re most excited about AI’s potential impact to the business.

Craig Abrams, CFO and President, Playtika: Sure. So I think throughout the video game industry, I think there’s probably a variety of impacts. I think if you’re in AAA or console and you have massive budgets related to art and the creation of games, there’s probably a much bigger impact and obviously lowering maybe barriers to entry and development of those games. I think within mobile gaming, the biggest barrier to entry for someone isn’t done in development side, it’s on the marketing side. And so I think when I look at the opportunities with AI, it’s really about it’s going to help us be more efficient in the development of games.

It’s going to help us be more efficient in how we manage live operations, how we deploy marketing dollars. So I definitely see it more on the efficiency side than maybe helping out on the top line side. But I definitely see it as a positive impact. I think the question for us is really timing. When are these tools going to be ready to really deploy in mass across games.

I think now we’re doing a lot of testing. We’ve always been very close to investing in sort of internal AI tools. I think now we’re seeing a lot of excellent third party tools and it’s something that we’re really excited about.

Nathan Feather, Analyst, Morgan Stanley: And then can you help us think about from an investment standpoint, where are those concentrated today and what the timing of that might be as you see some of the tools continue to improve and create more efficacy?

Craig Abrams, CFO and President, Playtika: I I think we’ll see towards the end of this year, we’re hopeful that in terms of the generative AI tools that we’ll be able to deploy more things there. It’s hard to say specifics. I think as we think about it, it’s really about how can we bring the best experience to our consumers and if we can optimize content and bring them content that we can AB test faster and that they can get to things that resonate that much faster, it’s a win for everyone.

Nathan Feather, Analyst, Morgan Stanley: Okay. And as a follow-up, how are you evaluating the ROI and revenue incrementality from these investments? And any difference compared with traditional kind of investments, just given the earlier portion of the tech curve, Warren?

Craig Abrams, CFO and President, Playtika: I think for us, it’s we’re always evaluating what’s the lift. When we do anything, it’s AB testing, control group versus the test group and seeing what kind of lift we have top line, are we seeing, where are we seeing on the expense side in terms of savings And what are the returns there? So I don’t think it’s any different than any other initiative that we take on. I think what’s it’s just obviously an area where there’s a lot of focus and a lot of excitement. And I think we’re trying to do it in a way where we’re mindful of giving consumers the best experience we can do the gameplay.

Okay.

Nathan Feather, Analyst, Morgan Stanley: Great. Now, interested to hear your thoughts in the mobile gaming markets growth and what we can expect to see from here over the medium to long term?

Craig Abrams, CFO and President, Playtika: Sure. So, if I was on stage probably four years ago, you probably saw high single digits in terms of market growth. The latest market projections I’ve seen has around 3% market growth. So, it is definitely a maturing market. It’s been one that’s consolidating.

And I view us as a consolidator. So I think that from an M and A perspective, there’s going to continue to be strong opportunities for us. I think it has become kind of post IDFA. It’s been more challenging for newer startups to scale. And that’s where we can come in as a partner and help them scale.

So I think that has been something that’s been good for us. I think that there has been a kind of a void of new games relative to if you look sort of five, ten years ago at the amount of new games deployed in the marketplace, there was a lot more new games that were scaling and successful. I think the challenges in the market has had fewer new games coming to market. So I think the idea that we’re bringing new titles to market is really exciting for consumers to see some new and exciting things that they can play on their device. And I think it’s going to give it a better chance of success in the current market.

Nathan Feather, Analyst, Morgan Stanley: Okay, great. And interested to hear some of the trends you’re seeing, what are potential catalyst for industry growth above that current low single digit range?

Craig Abrams, CFO and President, Playtika: Listen, I think international penetration into new markets is something that people have talked about for a long time, but you haven’t really seen from Western developers going kind of beyond Europe and The U. S. So I think that idea could if we’re able to penetrate further in some of these markets, you’ll see growth beyond that. I think the market as a whole, you’re not getting handset penetration or increased bandwidth or increased screen size, all the things that were sort of tailwinds for a long period of time. And so I think now where we’re seeing a lot of the growth is coming from increased conversion.

Consumers are just getting that much more adept at and used to paying in games. And I think that driving conversion, you’ve seen our conversion numbers go up now over 4% on our payer conversion. So I think when you look at growth going forward, that’s another area of opportunity. And I think the other growth will be on the margin side as you continue to offer opportunities for more direct to consumer channels that creates margin opportunity for growth as well. So not necessarily on the growth side, but on the net side.

Nathan Feather, Analyst, Morgan Stanley: Okay, great. And speaking of conversion, you mentioned 4%. What are the levers you think you could pull that could bring that continue to increase over the next few years?

Craig Abrams, CFO and President, Playtika: I think as we look at our conversion rates, it’s probably tied most closely to the maturity of the game since we’ve owned and operated it. So it’s something where it just takes time where it’s constant optimization, constant new feature launches. It’s not something that you do quickly. It’s not consumers have to really make that decision that they want to become a payer in your game and the experience is worthy of that. And so for us, it’s just continuing to develop great content and new features and being innovative and that innovation is what drives the growth.

Okay, great.

Nathan Feather, Analyst, Morgan Stanley: And then same question, but on the flip side, a revenue per payer metric, where do you think that can trend for the next few years?

Craig Abrams, CFO and President, Playtika: I mean, I think that is mostly driven by conversion. I think when you look at, there are games where especially games that we’ve acquired where the entrepreneurs were very product focused and didn’t have the understanding around monetization that we do, and the opportunity to kind of give consumers truly personalized offerings that are really tailored to their personal preferences. And so I think with that, we do a better job at increasing monetization. But I definitely don’t think that that is something that’s something you have to carefully manage because you’re trying to retain users for a very long time.

Nathan Feather, Analyst, Morgan Stanley: Okay, great. And on the marketing environment, interested here, as the mobile game market has matured, how have you seen the marketing environment evolve and then any kind of key changes as we think over the past few quarters?

Craig Abrams, CFO and President, Playtika: It’s definitely a much more dynamic market than it had been historically in that. There’s constantly new channels to explore and evaluate. We’re constantly moving dollars from one channel to another for the best ROI possible. It’s differentiated by game, by platform. And so I definitely think that if you look back to it kind of pre IDFA, I think there’s definitely more consistency to how you deploy marketing dollars.

We’ve done a good job leveraging offline campaigns, influencers, international market takeovers where you really can concentrate the spend and really drive your app up the app rankings in that particular market. And so I just think it takes more creativity and more continued focus on return on investment than it did historically.

Nathan Feather, Analyst, Morgan Stanley: Okay, great. And on the international side, kind of outside U. S. And Europe, interested to hear where you see the biggest opportunity, where you’re most focused as we think about ’25 and ’26, where you think you can really drive that incremental penetration?

Craig Abrams, CFO and President, Playtika: Sure. So historically, we’re biggest in Tier one English speaking markets. I think with the Yuta acquisition and the Superplay acquisition, we really grew our European base. We’ve done some European takeovers that have done quite well, especially in markets like Germany. So I think that localization and continued penetration in Europe is something that we’re always focused on.

I think the big unlock as I referenced earlier is if you can break into a market like Japan within our casual portfolio, it’s definitely something that we think about all the time. The question is what content could resonate there and what could scale. You don’t see many Western game makers scale up those charts, but when you do it’s pretty tremendous.

Nathan Feather, Analyst, Morgan Stanley: Okay, great. And then, I know we talked about capital allocation a little bit earlier. I want to put a touch of a finer point on here. More holistically, how do you think about your capital allocation philosophy and what would cause kind of updates or diversions from where you currently stand?

Craig Abrams, CFO and President, Playtika: Sure. So, the start of last year, we came out with our capital allocation strategy, which was 50% of free cash flow towards M and A and 50% towards capital returns. We currently pay around $0.1 a share per quarter in dividends. And the rest is really around a share buyback program. We authorize $150,000,000 share buyback and that’s really intended to offset dilution from the vesting of employee equity awards.

So that framework is still intact. I think when you look at the historical free cash flow, it’s been around in the $350,000,000 to $400,000,000 range of free cash flow. And so that’s kind of how we sized the opportunity to kind of deploy half for M and A and half for capital return. I don’t think there’s anything that I can think of in the near term that’s going to kind change that thinking. I think we feel pretty good about that and are executing under that plan.

Nathan Feather, Analyst, Morgan Stanley: Okay. Great. Well, a few minutes left. I want to wrap up with a little more of a high level question. What do you think are the one or two things investors most underappreciate or misunderstand about the Plataeka store?

Craig Abrams, CFO and President, Playtika: Sure. So I think first would be the value of the franchises. I think when you see these long lasting franchises like Bingo Blitz, Engine’s Journey and Salt Dragon Harvest and World Series of Poker and all these franchises, the fact that the stability and the growth potential and the cash flows that they generate and the consistency over time, I think is something that is unique. I think our market leadership in six categories is very unique. And I think the fact that we just recently acquired three studios and four games that all are on a very impressive growth trajectory, I think I don’t think people really understand just Super Play and two games that were growing historically over 100% a year.

And you can track them in third party app stores continuing as a portfolio continuing to grow at a clip far beyond the industry. And so I think when you have we view it as we acquired the crown jewel within the industry with two titles in the top 100 that are combined growing at a clip much faster than anything else that we’ve seen in the marketplace. And so, I think the last layer would be just the evergreen nature of the categories that we operate in. Those games, whether it was in the coin looter, but dice, Domino theme, Solitaire theme, these are games that have been around in the real world for the last thirty years and will continue to be around in the gaming world for the next thirty years. And so I think that just the stability and consistency there with our portfolio is pretty unique.

Nathan Feather, Analyst, Morgan Stanley: Okay, great. Craig, on behalf of Matt, myself and the whole team of Morgan Stanley, thanks so much for being here.

Craig Abrams, CFO and President, Playtika: Thank you.

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