PLAYSTUDIOS, Inc.

Thank you for your patience and ask that you please continue to hold. Thank you. Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Play Studios second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference is being recorded today, August 11th, 2021. I will now turn the conference over to Mr. Joel Aganaugh, Corporate Secretary and General Counsel. Please go ahead, sir.

Thank you, Operator, and hello, everyone. By now, everyone should have access to our second quarter 2021 earnings release, which is available on the Play Studios website at www.playstudios.com in the investor section. Before we begin our formal remarks, we need to remind everyone that some of management's comments today will be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. including those regarding our future plans, our mergers and acquisitions strategy, our strategic and financial objective, expected performance, and financial outlook. Forward-looking statements are statements about future events and include expectations and projections, not present or historical facts, and can be identified by the use of words such as may, might, will, or expect, should, anticipate, and other similar terms. Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Therefore, you should exercise caution in interpreting and relying on them. We refer you to our SEC filings for a more detailed discussion of the risks that could impact future operating results and financial condition. These forward-looking statements are made only as of the date of this call. We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. During the call, management will discuss non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable gap measure is available in our second quarter 2021 earnings release on the www.playstudios.com website and on our Form 8K filed with the SEC today. Hosting the call today, we have Andrew Paschal, Play Studios' Chief Executive Officer, and Scott Peterson, Chief Financial Officer of the company. They will provide some opening remarks, and then we will open the call to questions. With that, I'll turn the call over to Andrew.

Thank you, Joel, and good afternoon, everyone. Welcome to the Play Studios Q2 earnings call. Our first update as a publicly traded company. I'd like to start by taking a moment to welcome our newest shareholders and to thank the Acquies team for their partnership and support. Becoming a public company is an important milestone as it provides us with the standing and resources we need to realize our full potential. So please know that we're grateful to our extended group of stakeholders, partners, and advisors for embracing our vision and supporting our plans. It's been just over 10 years since a small collection of us founded Play Studios. We had a simple and novel idea to engage people with captivating games and reward their loyalty with real-world benefits. And today, over 110 million people have downloaded a Play Studios game and enjoyed over $500 million of real-world rewards. As we now look forward with an expanded view of our opportunities, I feel it's important for investors to understand our story started over 10 years ago and stretches into the future well beyond the first few months of our being a public company. And so, I'd like to start our first earnings call by taking a few minutes to provide some context and reaffirm our vision and plans for the future. Our vision is surprisingly simple, leverage compelling games to attract and engage players and use our unique loyalty program to enrich their experience and convert them into real-world consumers. This focus on play for free, earn for real has resulted in a collection of franchise games, millions of players, and an expansive portfolio of over 500 unique rewards. I should note that we've accomplished this through our own organic efforts, having assembled every team, produced every game, attracted every player, and secured every partner. The result is a gaming ecosystem that is totally unique among the thousands of companies serving our $175 billion industry. The first proof point of our model was our MyVegasLots product, which we launched on Facebook back in August of 2012. It was a mashup of the popular resource management games of the day and game mechanics from the casino industry. It also leveraged most of the iconic Las Vegas brands in our industry-first loyalty program. Players were invited to play social casino games, build their own virtual version of Las Vegas, and earn enough loyalty points to visit the real one. Within months, we had amassed hundreds of thousands of players, spawned self-organized fan groups, and delivered new consumers to our rewards partners. It was clear we were onto something. Having validated the strength of our model on the web, we turned our attention to mobile and executed a growth plan that called for a suite of games, each focused on a specific subcategory within the casino genre. In the span of just four years, we updated MyVegas slots, launched MyKanami, and introduced POP slots, each of which quickly scaled and became franchises with evergreen characteristics. We also expanded our loyalty benefits, adding partners in Canada, Western Europe, Australia, New Zealand, and select regions in Asia. It was clear our model was working. With a string of successes, a history of profitability, and an early decade of experience supporting the power of our paradigm, we set out to exploit it more fully. In recent years, we've abstracted the loyalty program's technologies, tools, features, and functions and constituted Play Awards, a platform tailored to optimizing the long-term value of players. And now we're beginning to leverage it more fully by applying it across a broader collection of games and genres. Our most recent implementation of our Play Awards model is with My Vegas Bingo, an innovative take on one of the most widely known and popular casual game formats. The bingo category is among the fastest-growing in mobile gaming, posting a year-over-year growth rate of nearly 40% and topping $800 million. We entered the market back in late March with a game that embodies who we are as a company. Standard-setting creative execution, innovative game mechanics, proprietary IP, and our play-for-free, earn-for-real value proposition. In our first few months, we scaled our audience to over 100,000 players and are seeing retention, engagement, and conversion metrics that rival the longstanding leaders in the category. We're also seeing some of the highest participation rates in our loyalty program. While it's still early in the cycle of establishing this product, we believe it's on a path to becoming another franchise in our portfolio, contributing the expected $45 million of annualized revenue at maturity. Next up is Kingdom Boss, an innovative and beautifully executed RPG game that brings the dynamism of rewards to this $6 billion vertical. For the first time, players will be able to go to battle in an immersive fantasy world while accumulating benefits in the real one. Our development partners at Boss Fight Entertainment have spent nearly two years crafting this game, which is now in its beta test. Assuming the launch criteria are satisfied, we plan to introduce the product globally later this year. In addition to these new products, we continue to qualify and onboard new rewards partners. During the quarter, we welcomed Intercontinental Hotel Group, Innovative Music, City Winery, Saquon Casino Resort, Singing Hills Golf Resort, Peppermill Resorts, and additional MGM Resort properties. We also recently secured relationships with Bolero Bowling and Attractions and the Anschutz Entertainment Group, or AEG. This collection of new partners further illustrates our capacity to both broaden and deepen our benefits, enabling us to keep our promise of delivering games players love with rewards they want. Which brings us to the principal reason for our going public. We firmly believe that loyalty will play an important role in the future of gaming, and we've built the products, tools, teams, and capabilities to solidify our standing as the loyalty leaders. But to fully exploit this position, we need to demonstrate the value of our model across genres. With that said, we plan to accelerate our expansion by acquiring companies, teams, games, and players that we can integrate into our platform. In doing so, we'll compress our growth cycle, minimize creative risk, and lift the results that will drive shareholder value. Executing on this M&A strategy calls for significant resources, and having completed our recent merger and public listing, we now have roughly $380 million of liquidity, including over $230 million of cash on our balance sheet. Allocating that capital to our M&A strategy is a priority for management and the board. To that end, I'm thrilled that Jason Hahn has joined us as our head of corporate and business development. Jason brings to our leadership team is 15 plus years of strategic corporate development and banking experience from companies like NBC Universal, Activision Blizzard, and JP Morgan. Now before we turn our attention to our second quarter results, I'd like to reinforce a few key points. First, our vision and strategy have always been focused on creating value over the long term. If you look at our history, you'll find moments when we focused on preparing for future opportunities, followed by periods when we've surged forward 2021 was always intended to be one of these formative periods. Whether it be the investments in new products like Bingo and Kingdom Boss, the expansion of our Play Awards initiatives, going public or executing an M&A plan, 21 is and was always about advancing our strategy and seeding the growth for 22 and beyond. I also want to highlight that creating a great game is an organic and at times less predictable exercise. While the production and execution can be tightly managed, getting the core experience and play value right is less deterministic. This was the case with some of our other products and is proving to be the case with Kingdom Boss as well. As a result, the timeline for its launch and resulting revenue contributions have shifted out, impacting our expectations for the balance of this year. Given the strategic significance of this product, it's critical that we take the time needed to optimize the experience. It's our view that the short-term impact will be more than offset by its long-term contributions. With that said, we currently expect 2021 revenues to now be between $290 million and $300 million. Additionally, we currently expect 2021 adjusted EBITDA to be between $35 and $40 million. I'll now turn the call over to Scott to provide more specifics on the financials.