Playtika (PLTK) Q3 2025 Earnings Call Transcript

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Date

Nov. 6, 2025, at 8:30 a.m. ET

Call participants

• Co-Founder and Chief Executive Officer — Robert Antokol
• President and Chief Financial Officer — Craig Abrahams
• Chief Marketing Officer — Neil [last name not provided in call]

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Risks

• Slotomania revenue declined 20.8 percent sequentially in Q3 2025 and 46.7 percent year-over-year, due to a deliberate rebalancing of the game economy, with management stating they "are not assuming a near-term revenue recovery."
• Average daily active users (DAU) decreased 6.8 percent sequentially, both partially reflecting reduced marketing spend and headwinds in the slot business.
• Operating expenses increased 21.6 percent year-over-year in Q3 2025, driven by higher performance marketing investment and increased contingent consideration related to the Super Play acquisition.

Takeaways

• Revenue -- $604.6 million of revenue for Q3 2025, down 3.1 percent sequentially, reflecting broad-based growth but sequential pressure from the slot portfolio.
• GAAP net income -- $39.1 million net income for Q3 2025. Net income was up 17.8 percent sequentially and down 0.5 percent year-over-year, supported by lower marketing expense in the quarter.
• Adjusted EBITDA -- Adjusted EBITDA was $217.5 million for Q3 2025, up 30.2 percent sequentially, driven by margin expansion from D2C revenue and reduced spend for Super Play titles.
• Direct-to-consumer (D2C) revenue -- $209.3 million for Q3 2025, crossing $200 million for the first time with increasing contribution from casual games.
• D2C mix -- Represented 31 percent of total revenue in Q3 2025, with management targeting D2C revenue to reach 40 percent of total revenue on a run-rate basis within two years.
• Super Play: Disney Solitaire -- Annualized run rate above $200 million; management cited it as scaling "faster than any title in our fifteen years history," according to Robert Antokol.
• Bingo Blitz -- Delivered $162.6 million of revenue for Q3 2025, cited as a franchise leader with strong live ops, in-game programs, and D2C channel adoption.
• Slotomania -- Revenue at $68.5 million for Q3 2025, declining sharply both sequentially and year-over-year. The company intentionally reduced marketing to avoid inefficient spend and focus on stabilizing game metrics.
• June’s Journey -- Generated $68.3 million in revenue for Q3 2025, down 2.7 percent year-over-year, with rising D2C adoption and monetization features supporting margins.
• Cost of revenue -- Cost of revenue increased 6.1 percent year-over-year in Q3 2025, mainly from revenue growth and higher Super Play amortization expense.
• Sales and marketing expense -- Executed a step-down in Q3, with management expecting this seasonal trend to continue.
• G&A expenses -- G&A expenses rose 18.8 percent year-over-year in Q3 2025, including a $30.8 million expense from Super Play contingent consideration revaluation in Q3 2025. Excluding this, G&A would have declined 23.7 percent year-over-year.
• Super Play earnout update -- Portfolio tracking toward the 60 percent year-over-year growth threshold, with the contingent consideration multiple stepping up if targets are exceeded.
• Cash and equivalents -- $640.8 million as of Sept. 30, 2025.
• Operating metrics -- Average DPU at 354,000 for Q3 2025, up 17.6 percent year-over-year.
• Strategic clarity -- Focused portfolio transition includes resource reallocation from lower-ROI titles to growth areas, continued D2C expansion, and AI-driven efficiency improvements. A new Disney and Pixar title is under development.
• Jackpot Tour launch -- Remains on track for fourth-quarter release, with management not expecting material 2025 results. The new title will target a distinct audience within the slot segment.

Summary

Playtika (NASDAQ:PLTK) management introduced the fastest-scaling title in company history, Disney Solitaire, which is exceeding expectations and leading Super Play portfolio growth. The business achieved an all-time high in direct-to-consumer revenue in Q3 2025, driven by broader adoption across top titles and favorable policy changes in payments channels. Despite slot portfolio headwinds, including significant declines in Slotomania, company-wide year-over-year growth was underpinned by strength in casual games, disciplined capital deployment, and ongoing cost optimization. Investment in AI-driven operational improvements and the continued rollout of D2C platforms were explicitly presented as key levers for future margin and efficiency gains.

• President and Chief Financial Officer Craig Abrahams detailed that adjusted EBITDA increase was "driven primarily by the planned step-down in sales and marketing" and stronger D2C performance.
• Management stated, "We are not assuming a near-term revenue recovery" for Slotomania, directly addressing investor expectations for that franchise.
• Capital allocation priorities were reiterated as maintaining shareholder returns through buybacks, pursuing selective accretive M&A, and continuing disciplined investment in growth opportunities.
• House of Fun Studio's AI initiatives are replacing manual processes to enhance live operations scalability and efficiency, specifically cited as a current area of targeted investment.
• Super Play's first-year earnout is approaching the threshold that increases contingent consideration multiples, introducing further expense variability depending on continued outperformance.

Industry glossary

• D2C (Direct-to-consumer): In the context of Playtika, this refers to the company's proprietary platform enabling players to transact directly with Playtika, bypassing third-party app stores and optimizing payment processing economics.
• DAU (Daily active users): The average number of distinct users who actively engage with a game each day during a reporting period.
• DPU (Daily paying users): The average number of unique users who make at least one payment in a game per day in the reporting period.
• ARPDAU (Average revenue per daily active user): The ratio of total revenue generated by a game, divided by the cumulative daily active users for the same period.
• Super Play: The Playtika-acquired game studio responsible for games such as Disney Solitaire; a distinct entity within Playtika's portfolio.
• Contingent consideration: Additional purchase price paid to an acquired entity based on achieving specific performance targets defined in the acquisition agreement; in Playtika's case, tied to Super Play's revenue and margin outcomes.

Full Conference Call Transcript

Robert Antokol, Co-Founder and CEO of Playtika, and Craig Abrahams, Playtika's President and Chief Financial Officer. I would 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 Slotomania, or our recently launched Disney Solitaire. These statements and other comments are not a guarantee of future performance but 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 have posted an accompanying slide deck to our Investor Relations website, which contains information on forward-looking statements and non-GAAP measures, and we will 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 will now turn the call over to Robert.

Robert Antokol: Good morning, and thank you, everyone, for joining our call today. As we approach 2025, I want to start with Super Play. Our Super Play portfolio is driving exceptional growth, led by Disney Solitaire, which has scaled faster than any title in our fifteen years history. Disney Solitaire continues to outperform expectations, establishing itself as one of 2025's standout new mobile launches. The title is tracking at an annualized run rate above $200 million, supported by strong engagement and a rising D2C mix. Building on that momentum, I am pleased to announce that we have expanded our collaboration with Disney and Pixar Games and are developing a new title in the Super Play pipeline.

At the appropriate time, we will share additional details.

Turning to the quarter, I'm proud to share that Playtika continues to execute with focus and discipline. This quarter, we delivered another record in direct-to-consumer revenue, reaching an all-time high with broad-based contributions from Bingo Blitz, June's Journey, Solitaire Grand Harvest, and our Super Play portfolio. This performance reinforces the strength of our strategy to deepen player relationships and protect our operating margins, supported by recent policy changes that open new payment channels and expanded our ability to route transactions through direct-to-consumer platforms. As we look at 2026, our portfolio transition will continue. This includes ongoing work to strengthen our slot business.

Slotomania remains strategically important to Playtika, and while it continues to be a significant headwind for the business, we are focused on stabilizing the franchise over time. In parallel, we will continue reallocating resources toward higher-return opportunities and away from titles that no longer meet our ROI thresholds. We believe this strategy will strengthen our portfolio mix and enhance long-term cash generation. With that context, Craig will walk through the details behind our record D2C numbers and provide updates on our top titles and review the quarter's results in greater detail.

Craig Abrahams: Our performance in the third quarter reflects the strength of our operating model and disciplined approach to investment. Our direct-to-consumer mix continues to expand margins, and Super Play's performance underscores the strategic rationale behind our acquisition strategy. We also advanced targeted investments in our new games pipeline and platform capabilities, including AI-driven initiatives in our House of Fun Studio that replace manual processes, improving efficiency and scalability across live operations. We are reassessing our cost structure across the organization to sharpen operating efficiency while protecting capacity to invest behind our highest return opportunities.

On spending, we executed the planned step-down in second-half marketing, and CapEx remains on track to finish below our full-year guidance. With that, let's get into the details of the quarter. We generated $604.6 million of revenue in the quarter, down 3.1% sequentially and up 8.7% year-over-year. GAAP net income was $39.1 million, up 17.8% sequentially and down 0.5% year-over-year. Adjusted EBITDA was $217.5 million, up 30.2% sequentially and up 10.3% year-over-year, driven primarily by the planned step-down in sales and marketing for our Super Play titles and continued margin momentum from our D2C business. D2C revenue crossed the $200 million threshold to $209.3 million, up 19% sequentially and up 20% year-over-year.

Growth was broad-based across the portfolio, with the majority of D2C revenue coming from our casual games, consistent with the portfolio transition underway to position the company for long-term success.

We develop and operate our own D2C platforms, which enable us to achieve outstanding approval rates, reduce reliance on third-party providers, and optimize processing methodologies for even stronger results. As Google Play policies evolve in the US, following recent court rulings, we see a potential tailwind for further D2C adoption in economics, subject to final implementation and our own testing. D2C represented 31% of total revenue this quarter, and we are working to achieve 40% on a run-rate basis in the next two years. Now let's review the performance of our top three titles.

Bingo Blitz delivered another record quarter with revenue of $162.6 million, up 1.5% sequentially and 1.7% year-over-year, underscoring the franchise's resilience and ongoing leadership in this category. The studio drove results through seasonal programming, personalized promotions, and VIP engagement, supported by pacing enhancements and optimized offer packaging to sustain payer mix and time in game. These initiatives reflect our continued investment in live ops cadence, personalized merchandising, and routing more transactions through D2C channels—strategies that not only drove strong engagement but also positioned Bingo Blitz for incremental margin and mix benefits as adoption scales.

Slotomania revenue was $68.5 million, down 20.8% sequentially and 46.7% year-over-year. This performance reflects the deliberate rebalancing of the game economy we initiated earlier this year—work we anticipated would create revenue pressure as we recalibrate progression rewards and pricing to support healthier long-term cohort returns. While we work through these changes, we intentionally reduced performance marketing to avoid inefficient spending, which contributed to lower Slotomania DAU in the quarter. Once the pace of decline moderates, we plan to selectively reaccelerate performance marketing to rebuild scale. We are not assuming a near-term revenue recovery, and our focus remains on improving game experience, payer retention, and ROI disciplined marketing with the goal of stabilizing the franchise.

Looking ahead, we remain on track to launch our new slot title, Jackpot Tour, this quarter, but we do not expect material contributions to 2025 results. June's Journey revenue was $68.3 million, down 1.2% sequentially and down 2.7% year-over-year. The franchise remained resilient, supported by a strong live ops cadence and personalized in-game offers, and we aligned our content theming and updated live ops and monetization strategy. During the quarter, we deepened monetization through economy updates and new features which lifted ARPDAU. D2C adoption continues to rise in the quarter with adoption tracking ahead of plan. These initiatives reinforce June's Journey's position as a durable, high-quality franchise and provide a foundation for incremental margin benefits as we scale these levers.

Turning now to specific line items in our P&L. Cost of revenue increased 6.1% year-over-year, reflecting both our revenue growth and higher amortization expense associated with the Super Play acquisition. Operating expenses were up 21.6% year-over-year, driven primarily by higher performance marketing investment and the GAAP impact of increased contingent consideration. Both related to the Super Play acquisition. R&D decreased by 0.4% year-over-year, primarily driven by the termination of our long-term cash compensation program, offset by increases in employee compensation related to increased headcount. Sales and marketing increased by 37.6% year-over-year, primarily driven by incremental performance marketing spend for the Super Play portfolio.

As planned, we saw meaningful sequential decline in performance marketing during Q3, which contributed to the improvement in adjusted EBITDA. We expect this seasonal pattern of heavier spend in the first half and a step down in the second half to continue next year, reflecting the cadence of our marketing strategy and earn-out timing rather than a structural change to long-term margin levels.

G&A expenses increased by 18.8% year-over-year, including a $30.8 million GAAP expense related to the revaluation of contingent consideration from the Super Play acquisition. Given Super Play's momentum, we remind investors that the acquisition-related contingent consideration may fluctuate, and any fair value remeasurement would flow through GAAP G&A, but is excluded from adjusted EBITDA. Our adjusted EPS also excludes this impact. Excluding adjustments related to contingent consideration, G&A would have declined year-over-year by 23.7%, largely driven by the termination of our long-term cash compensation program.

As previously disclosed, Super Play's first-year earnout is tied to year-over-year portfolio revenue growth of the Super Play games versus a $342 million baseline. When revenue growth exceeds 60%, the multiple applied to incremental gross revenue steps up to two times from 1.25 times, subject to the portfolio achieving adjusted EBITDA above negative $10 million. I am pleased to say the business is currently tracking toward that 60% growth threshold, subject to the same conditions. As of September 30, we had approximately $640.8 million in cash, cash equivalents, and short-term investments. Looking at our operating metrics, average DPU declined by 6.3% sequentially and increased 17.6% year-over-year to 354,000. Our average DAU decreased 6.8% sequentially and increased 7.9% year-over-year.

ARPDAU increased 2.3% sequentially and was flat year-over-year. Finally, we expect to finish the year within our guidance range for both revenue and adjusted EBITDA. With that, we'd be happy to answer your questions.

Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you would need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please stand by while I compile the Q&A roster. Our first question comes from Colin Sebastian from Baird. Please go ahead.

Colin Alan Sebastian: Thanks, and good morning and good afternoon, guys. I guess, first off, could you expand a bit maybe on the comment around reallocating resources? And then the AI initiatives at the studio level, maybe which games could be impacted and where you're seeing the most productive uses of AI?

Craig Abrahams: Hey, Colin. Thanks for the question. So we continue to look at our acquired titles, investing in growth there, in our biggest franchises as well. I think we've had, obviously, a lot of benefit from D2C expansion this quarter and looking at rolling that out across all titles as well as our Super Play titles. In terms of capital allocation, we continue to look to return capital to shareholders through dividends and buybacks as well as pursuing selective accretive M&A. So I think nothing has changed there.

In terms of AI, we are constantly looking at ways that we can enhance our player experience and do it in a way that allows our studios to be more efficient, and move more quickly as they release features for our customers to improve our products. Personalizing products is probably where we see a lot of the upside in terms of our live ops capabilities, as well as providing player support.

Colin Alan Sebastian: Thanks for that, Craig. And maybe just as a follow-up. On your commentary on marketing, the conversion and monetization metrics look pretty solid here even with the step down in marketing. So I guess, is the need to lean back into spending on paid acquisition more about supporting new games or some of the other factors that you mentioned, including D2C?

Craig Abrahams: Sure. If we look at our growth titles with the structure of the Super Play earnout, a lot of the marketing was heavy in the first half and pared down in the second half. So we expect that to ramp up again at the start of next year. As it relates to our biggest franchises and our other growth titles, marketing is a key to continue to drive growth where we have strong return on investment. So we apply that return on investment criteria as we analyze all of our investment opportunities.

And where we see opportunities to invest, we're going to deploy capital, and where we see opportunities where the UA costs are higher or make sense, we'll pull back.

Colin Alan Sebastian: Okay. Thanks, and nice job, guys.

Operator: Thank you. Our next question comes from Omar Dessouky from Bank of America. Please go ahead.

Omar Dessouky: Hi. Thanks, Craig, good to hear that Super Play is working well. As we get to the end of 2025, I was wondering if you could share any thoughts about the dividend in 2026 and you're thinking about capital allocation in 2026, if it's any different than 2025.

Craig Abrahams: Thanks for the question. Yeah, we can't share anything now on the future. What we can say is we're constantly evaluating our capital allocation framework, making sure it makes sense in light of what's going on in the business and the market more broadly. Super Play has had tremendous performance. We gave a slide in the presentation that we uploaded to the IR site this morning that shows that Super Play is on track to grow at the 60% threshold, which is growth over the $342 million baseline. So it's tremendous performance from a studio that is continuing to focus on scaling their margins and becoming more profitable as they look into next year.

And so, with that, it's really impressive growth.

Omar Dessouky: Thank you.

Operator: Thank you. Our next question comes from Aaron Lee from Macquarie. Please go ahead.

Aaron Lee: Hey, good morning, guys. Thanks for taking my question. Nice results this quarter. There was also recent news that Google is barring sweepstakes from advertising under the social casino category. I'm just curious, do you see this as being a meaningful tailwind for your business at all?

Craig Abrahams: We don't comment on speculation, but obviously, the situation will continue to be monitored, and wherever we see opportunities, we'll deploy capital.

Aaron Lee: Okay. Fair enough. And then on Jackpot Tour, nice to see that's still on track for a fourth-quarter launch. In the past, you've said that the game will be differentiated from your other slot titles. Do you expect any cannibalization of your current slot portfolio once that launches?

Robert Antokol: Thanks for the question. No, as I said in the past, Jackpot Tour is going to be a little bit different, and they will target a different audience. Today, when we look at our portfolio with the social casino, we see some segments we didn't target in the past, so we are very excited about it, and we think it will help us to support the issues we had with Slotomania in the past. This is a very good direction for us for next year. For growth, of course.

Aaron Lee: Sounds good. Congrats on the quarter.

Operator: Thank you. Our next question comes from Doug Creutz from TD Cowen. Please go ahead.

Doug Creutz: Hey. Thank you. I just wanted to ask about the acceleration in DTC growth you had. I think you mentioned that Super Play was a contributor. When did you move their titles onto your DTC platform? Are all their titles on it? And was there anything else that you would call out that you did specifically in the quarter that drove that big step up in D2C growth?

Robert Antokol: So, as we've spoken about in the past, one of our biggest advantages is our DTC platform. This is our own platform that we developed and support, and we are not working with any third parties. This is always very important to me to say. We're not speaking about each game differently, but most of our games are already on our platform, on the D2C platform. We are very focused on this. We are very focused on the cash flow, the revenues, and as Craig said in the past, we are very disciplined with expenses. For us, this is one of the biggest channels to grow our EBITDA for next year.

This is one of our biggest advantages, and there will be more surprises in the future.

Craig Abrahams: Doug, specifically on the third quarter, US iOS was the major catalyst driving growth.

Doug Creutz: Okay. Thank you.

Operator: Thank you. Next question comes from Eric Sheridan from Goldman Sachs. Please go ahead.

Eric Sheridan: Thanks so much for taking the question. Two, if I could. On Slotomania, how should we be thinking about what's going into stabilizing that title broadly on the operational side, and how to think about the duration path to stabilizing that? That'd be number one. And then number two, when you think about allocating marketing dollars and incremental investments into the user base, how would you characterize the different return profiles you're seeing right now from user acquisition versus user retention and driving more frequent behavior among existing users?

Robert Antokol: So, I will speak a little bit about Slotomania, and then Neil, our CMO, will speak about your second question. Regarding Slotomania, as we said earlier this year, we know our focus. We are working very hard, and we believe we can stabilize the game. We believe we can make the game better. We are working on the economy of the game. We've implemented many different approaches this year. By the way, when you look at our history and you look at WSOP, the game has seen good performance in the last few years, and this year is doing very well. We know how to fix games, and we are very positive in our ability to do it for Slotomania.

Neil: Hi. Regarding the marketing, so it's really dependent on each game and the different KPIs that we are looking at. But theoretically, for each game, we have some that are fifteen years old. So we are always bringing back players that churn, and we believe that the environment and the excitement that we provide to them is something that keeps them playing. So for each game, we have different allocations for retargeting and user acquisition. In some places, retargeting can heavily shift the marketing budget.

Eric Sheridan: Thank you.

Operator: Thank you. Our next question comes from Eric Handler from Roth Capital. Please go ahead.

Eric Handler: Good morning. Thanks for the question. Given the success that you've had in scaling Disney Solitaire this year, I'm curious if that's making you change any of your thoughts or desires with other internally produced games?

Craig Abrahams: Thanks for the question, Eric. I think you could see this quarter that we announced a new fourth game from Super Play, which is a Disney title. Obviously, the success of Disney Solitaire has given us and our partners the confidence to launch a fourth title. Super Play is three for three in terms of launching successful games at scale. I'm not sure of any other studio in the West I can think of that's had that recent success. And so, further investing with them in a fourth title, and a branded one at that, is something we're really excited about. So there, it definitely has had an influence on our thinking.

We have Jackpot Tour coming out later this year and are constantly looking at other pipeline opportunities to grow as we look forward.

Eric Handler: Thanks, Greg.

Operator: Our next question comes from Albert Joong Kim from UBS. Please go ahead.

Albert Joong Kim: Hi. Thanks for taking the question. Hopefully, you can hear me now. But, yeah, just wanted to follow up on Slotomania and the wider social casino category. Are there any shifts in the competitive dynamic that you would call out since last quarter? And you mentioned that there was some strength in US iOS business. Where does the international opportunity stand in your point of view? And which regions could you drive the most upside in the coming years?

Craig Abrahams: Sure. So clarification on US iOS. What we were saying was that we saw strong D2C performance in that channel. It wasn't a comment on broader performance for that market. As we look at international markets, I think as we've seen through the Super Play acquisition, we've seen very strong performance in markets like Japan and other markets opening up for us. So, with the success of Disney Solitaire, I think that continued international growth is always on our radar. But US iOS and US Android opportunities continue to be probably the biggest market for us.

Robert Antokol: As for competition for Slotomania, I don't think the market has changed quarter to quarter. The dynamics there have been pretty consistent.

Operator: Alright. I am showing no further questions at this time. Thank you for your participation in today's conference. This concludes the program. You may now disconnect.

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