Overview

• US mobile games developer's Q1 revenue fell 7% yr/yr amid legacy portfolio pressure

• Net loss widened as company increased user acquisition investments for growth initiatives

Outlook

• PLAYSTUDIOS is not providing formal financial guidance at this time

• Company expects Renewal program to generate $33 mln to $39 mln in annualized savings

• Company says consumer gaming market remains challenging and less predictable

Result Drivers

• LEGACY PORTFOLIO PRESSURE - Co said revenue from legacy social casino games remained under pressure due to broader category softness and user acquisition challenges

• DIRECT-TO-CONSUMER GROWTH - Direct-to-consumer revenue grew 150% yr/yr and made up a larger share of total in-app purchase revenue, supporting improved platform economics

• INCREASED USER ACQUISITION SPEND - User acquisition expense rose $6.5 mln yr/yr as co invested in growth initiatives, partially offsetting cost savings in the core business

Company press release: ID:nBw4d0NfPa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Revenue		$58.4 mln
Q1 Net Income		-$10.7 mln
Q1 Adjusted EBITDA Margin		6.10%

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy."

• Wall Street's median 12-month price target for PLAYSTUDIOS Inc is $1.00, about 115.5% above its May 8 closing price of $0.46

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