PLAYSTUDIOS, Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Play Studios Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. And please note that this conference call is being recorded today, November 8, 2022. I will now turn the call over to Samir Jain, Head of Investor Relations and Treasury. Thank you, sir. Please go ahead.

Welcome, everyone, and thank you for joining the Play Studios third quarter 2022 earnings call. Hosting the call today will be Andrew Pascal, Play Studios Chairman and Chief Executive Officer, and Scott Peterson, Chief Financial Officer of the company. Our call today will contain forward-looking statements about future events, expectations, and projections. These statements involve risks and uncertainties that could cause actual future results to differ materially from our current expectations. We refer you to our SEC filings for a more detailed discussion of the risk factors that could impact our future operating results and financial conditions. During the call, management will also discuss certain non-GAAP financial measures. These measures should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is contained in our third quarter 2022 earnings release, which is available on the Play Studios website and in our SEC filings. With that, I'll turn the call over to Andrew.

Thank you, Samir, and good afternoon, everyone. Welcome to the Play Studios third quarter 2022 earnings call. We had a solid quarter, which showed both sequential strength and momentum on some of our key initiatives. Included in this is the performance of our core social casino games, such as Pop Slots, MyVegas Slots, and MyEconomy Slots, as well as notable progress with our newest products, such as MyVegas Bingo and Tetris. Of course, the big news, since we last spoke, is the acquisition of Brainiums, a well-established and successful casual games developer based in Portland, Oregon. We view the acquisition of Brainium as strategically significant in that it fundamentally repositions the company with a more diversified portfolio. I should also add that we were able to add Brainium without materially altering our strong financial position. As of September 30th, we had no borrowings under our revolver and a cash balance of $212 million. Let's start by talking about the quarters. Results were generally stable across the board, and in some cases gained momentum through the quarter. DAU and MAU of 1.5 million and 6.7 million were largely flat the second quarter, showing a stability in users and a reversal from prior year-to-date trends. Against the current industry backdrop, we're pleased with these results and believe they highlight the popularity of our games, the loyalty of our customers, and the efficacy of our Play Awards platform. On the industry front, we continue to grapple with a challenging user acquisition environment that's making it harder to find and retain profitable players. While changes to IDFA and iOS were instituted 18 months ago, the industry is still resetting. Considering this, I'm encouraged that we were able to generally hold our DAU and MAU figures flat sequentially while also increasing our opt-out, a direct reflection of the great work of our talented teams. On the economic front, we continue to operate in a challenging macro environment, Global tensions, quantitative tightening, and a persistently high inflation are raising market volatility and diminishing consumer confidence. We aren't in a position to predict the duration or severity of these challenges, so we'll continue to assume tough operating conditions and a less predictable environment overall. The overall social casino genre continues to be challenged, posting year-over-year declines of 2.2% for the past several quarters. With that said, we believe we're outperforming a number of our peers, posting results that are generally ahead of the market. Overall, we were able to raise sequential revenues in this group versus last quarter, while also lowering our spend on user acquisition. Our doubt for the social casino collection was also up versus last quarter and versus year-ago levels. While the year-over-year results continue to be negatively impacted by the tougher operating conditions, I'm encouraged by the delta of change, which is showing improvements through the year. We continue to focus on driving the innovation in our games in an effort to keep the players engaged and excited. Initiatives include new features, games, and live events, and we're supporting this through our studios across the Americas, EMEA, and Asia regions. As I've discussed in previous calls, we continue to advance our regional operating model, building a critical mass of talent and development capabilities around each of our geographic hubs. I'm excited to share that we continue to expand our teams and capacity in both Vietnam and Serbia, which now account for 282 of our playmakers, or 40% of our total headcount. Our leadership teams are hard at work onboarding, training, and integrating new team members for the benefit of all of our products. With this additional and more affordable capacity, our expectation is to expand revenues, thrive efficiencies, and yield stronger operating margins in the coming year. Let's shift topics and provide some highlights on Play Awards. The expansion of our loyalty platform is one of our two key strategic pillars, with the diversification of our game portfolio being the other. We believe the success of Play Awards will be a meaningful driver of growth as we demonstrate its capacity to lift the performance of games across a broad variety of genres and categories. Currently, our players have access to nearly 600 unique rewards through Play Awards, which is 15% more than the same period last year. Through the first nine months of the year, rewards purchases were also up 15% year over year and totaled a healthy 553,000 just this quarter. We think this program engagement has contributed to the stability of our player network and the overall performance of our games. Most of our games were designed to seamlessly incorporate our player awards proposition, and we view the inclusion of real-world awards as a key differentiator of our overall business. This is particularly important in times of dislocation, such as today, when holding and converting players is paramount to sustaining profitability. As you may recall, when we last spoke, I mentioned one of the specific goals for player awards was expansion into a broader collection of games. With its upcoming inclusion in Tetris and the newly acquired suite of 10 Brainium games, I'm proud to say we're better positioned to deliver on our plan. We expect Play Awards to be incorporated into most of these products in 2023, creating substantial value for our players and reward partners alike. At the same time, an expanded Play Awards presence has incredible value to our player network. Once incorporated into these new games, we'll have a unified loyalty model with explicit incentives for our players to trial and engage with our other products. By continuing to lead with our MyVIP branding, leverage real-world rewards in our cross-promotion merchandising, and work with our partners to offer aspirational experiences, we believe we can capitalize on our existing player network to drive the broader adoption and growth of our games. Unlike other gaming companies, Play Awards enables us to take this global, player-centered view of our business. Equally important will be the ability to show prospective partners the value of Play Awards for the casual gaming audience. We believe success with Tetris, My Vegas Bingo, and the Braining Suite can be meaningful proof points for our loyalty as a service business model. At the same time, we'll be introducing Play Awards to millions of new customers, which is clearly beneficial to our rewards partners. We expect the exposure to these new users will accelerate the velocity of reward redemptions and speed up the flywheel of our platforms. More players will lead to more redemptions, which will attract more partners and expand the rewards offered, which in turn will attract more players. Similarly, an expanded and more varied user base should make the platform more attractive to new rewards partners. Having said that, we continued to add world-class reward partners in the quarter, including AMC, Cinemark, and Checkers Restaurants. Including these partners, Play Awards represents a collection of 107 real-world brands, that includes iconic businesses such as Intercontinental Hotels, AEG, Royal Caribbean Cruises, and MGM Resorts. Through our Play Awards platform, these brands have delivered hundreds of millions of dollars of awards benefits to millions of gamers. Playblocks, our blockchain solutions business, continues to be a key strategic focus for us and integral to how we think about advancing our Play Awards platforms. As we've discussed in the past, we've made notable progress on this front, including the acquisition of Wonderblocks, our investment in Cryptomon, as well as forging a strategic relationship with Forte. In the quarter, we expanded our team and continued to build out our Web3 capabilities. The principles of blockchain continue to be a natural fit to our rewards platform and give us the ability to enhance our value proposition. Specific efforts we're working on today include tokenizing our Play Awards loyalty program, creating an exchange system for rewards, and establishing a new My VIP Rewards marketplace. We will continue to direct resources towards this effort and aim to show meaningful progress in 2023. Progress on new game initiatives continued this quarter with some exciting developments and milestones. Let's first talk about Tetris Prime, the existing game that we acquired along with the broader mobile rights to the brand. Overall, DAU and MAU remain robust as players continue to seek out this iconic game. In the past several months, We've been actively testing some new progression features that add depth and agency to the game experience. The results have been encouraging, and assuming the trends continue, we'll be launching the updated version of the product to all of the active players in the coming weeks. We've also been focused on improving monetization by refining the ad logic as well as introducing altogether new ad units. In addition to these refinements, we began testing our loyalty and rewards programs. We're encouraged by the interest in the program as exhibited in the percentage of daily users visiting the rewards store and are now shifting our attention to optimizing the rewards funnel. We're targeting a full launch of play awards in Tetris in 2023. As I've highlighted in prior calls, it's our belief that the Tetris game format has the potential to evolve into an altogether separate casual game category. Our plan remains to craft a new Tetris game that draws inspiration from and employs the playbook proven by many of the leading casual games. With that goal in mind, we've been advancing a new casual Tetris product. We've made great progress with the design of the core game and have recently started technical validation, making the product available to a very limited audience in a tertiary market. In addition to testing the production worthiness of the game, we're gaining valuable insights about the basic game experience. I look forward to providing more details in our upcoming calls. Our second major initiative, My Vegas Bingo, also made notable progress this quarter. Since assuming control of the app back in late February, we've been spending the time stabilizing the game and enhancing its key performance measures. Overall, the team's efforts have translated to increases in average daily payer conversion, average revenue per paying user, and ARPDAU, which sets the stage for a stepped-up level of UA spend. I should also highlight that, much like Tetris, Play Awards is a key part of the product plan. From the initial launch of the game, player awareness and visitation to the rewards store has been strong. And while conversion rates are still light, they're generally in line with our expectations, given the mix of players with adequate loyalty currency balances. As I've shared on prior calls, we continue to believe in the potential of this game and look forward to more fully realizing it in the coming quarters. Lastly, I'd like to discuss our recent acquisition of Brainium. As I shared at the time of closing, we believe Brainium is an excellent complement to our business and will drive significant value. For those who may be new to the transaction, Brainium is a well-established developer of casual games such as Solitaire, Mahjong, and Suzoku. The company's suite of 10 games has a loyal following of nearly 2 million DAU and 5.5 million MAU, more than doubling our active players. I'll remind you that nearly all of Brainium's revenues are generated from advertising, making the business highly profitable with an expected adjusted EBITDA margin for 2022 of roughly 40%. We're quickly incorporating Brainium into our operating framework and expect to have more to share during our fourth quarter call. On the capital front, we remain well-financed with a strong balance sheet, no borrowings, and a fully available revolving loan facility. While the acquisition of Branium lowered our cash balance post the quarter end, we remain in a strong financial position. As such, our capital plans remain the same. Expand our business, invest in strategic growth opportunities, and drive shareholder value. With a strong balance sheet, we believe we're ideally positioned to pursue any or all of these options. Also helping is a slowly rationalizing market where we're finally seeing a move to more reasonable valuations. Our recent acquisition of Branium is evidence of this as we were able to buy a high quality asset at a comparable EBITDA multiple to our own. We're hopeful that this changing landscape will expand the pool of acquirable assets and are quite encouraged about how the market is shaping up. In addition, Our board of directors reauthorized a $50 million share repurchase plan for another 12 months. We'll continue to monitor all of our opportunities to determine the best uses of our capital. I'll now turn the call over to Scott to provide more specifics on the financials. Thank you, Andrew. We reported $72.1 million of revenue during the quarter, compared to $70.6 million last year and $68.4 million in the second quarter of 2022. Better monetization drove increases in our core social casino game ARPDAU. The strong year-over-year and sequential increases were primarily driven by increased revenue per payer. As a reminder, we acquired Tetris in November of 21. Therefore, it was not included in last year's third quarter results. Adjusted EBITDA was $9.8 million compared to $9.6 million a year ago and $7.3 million in the second quarter of 2022. As Andrew mentioned, we were pleased with our third quarter KPIs. DAU was 1.5 million and MAU was 6.7 million, up 24.6% and 87.1% respectively over the last year and flat sequentially. Although third quarter ARPDAU was down 20% from last year's levels, those figures are diluted by the inclusion of Tetris to this year's results. Excluding Tetris, year-over-year ARPDAU increased by approximately 10%. On the loyalty side, we saw double-digit gains in partners, outlets, and rewards inventory which now stands at 595 unique rewards. Reward purchases of 553,000 units declined 3% during the quarter, but we saw a healthy increase in reward store views. On October 12th, we completed the purchase of Branium for $70 million in cash. Additionally, the acquisition includes a contingent payment based upon Branium exceeding certain financial milestones during the full 2022 calendar year. The maximum contingent payment is $27.25 million. There's been some confusion around this, so let me clarify how the contingent payment works. If Branium were to generate $1 above the threshold, then we will pay an agreed upon multiple on just that dollar. Effectively, you should view the most likely scenario being a total consideration value of $70 million and a deal multiple at or very close to 7.95 times. As mentioned in our October 13th call, if we were to pay any portion of the contingent payment, it implies that Branium is performing ahead of our expectations and thus should be viewed positively. For the full year 2022, we estimate Branium will generate $22 million in revenue and just under $9 million in adjusted EBITDA. Only two and a half months of this will be included in our results, given the October 12th purchase date. As implied by the full year estimates, Branium's primarily advertising-based revenue model has substantially higher margins than our legacy business, and will have a favorable impact to consolidated results. Including in Branium, we are updating our full year guidance to be between $275 and $285 million in revenue and between $32 and $35 million in adjusted EBITDA. Finally, as Andrew mentioned, our estimates for Branium do not include synergies, though we are optimistic many opportunities will present themselves in 2023 as we integrate our companies. Turning to the balance sheet, we ended the quarter with approximately $212 million in cash and no debt. Please remember that immediately after the end of the quarter, our cash balance decreased due to the acquisition of Branium. We increased our borrowing capacity to $81 million, all of which is available to us. Including the accordion feature, total borrowings available are $156 million. This strong financial position gives us considerable flexibility in terms of M&A, recapitalization opportunities, and development of internal initiatives, including the expansion of our loyalty program. As evidenced by the acquisition of Branium, we will be aggressive when the right opportunity presents itself. As of the close of the quarter, we had 129.9 million total shares of common stock outstanding. We did not repurchase any shares during the quarter and continue to maintain our board-approved $50 million share repurchase authorization. With that, I will pass it back to Andrew for some closing remarks. Thank you, Scott. So before we end our prepared remarks and open the call for questions, I'd like to reinforce some of the key points. First, we had a solid third quarter that included better than industry performance in year-over-year gains in revenue and adjusted EBITDA. Our KPIs were strong with growth in ARPDAU and stability in DAU and MAU despite persistent economic and industry weakness. We made notable progress in Tetris and My Vegas Bingo and believe both games are positioned to contribute meaningfully to our 2023 results. We advanced Play Awards with partners, growing 43% year over year, as reward purchases reached 553,000 and redemption retail value exceeded $31 million. And we made a strategically significant acquisition with Branium. The deal is immediately accreted to margins and alongside Tetris and My Vegas Bingo, provides the perfect portfolio for Play Awards to establish itself as the gaming industry's most distinctive and unique player retention platform. Lastly, I want to thank our dedicated teams around the globe, along with our strategic partners and investors, and to our new colleagues at Branion, welcome to the team. We're thrilled to be partners and are excited about what we can accomplish together. Thank you all for joining us today, and we're now happy to take your questions. Operator, please open the lines.

Thank you, sir. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing any star keys. One moment, please, while we poll for questions. And our first question comes from the line of Ryan Segal with Craig Hallam Capital Group. Please proceed with your question.

Good afternoon, Andrew, Scott. Appreciate the detailed firms on Branium or update there. I want to start. We've seen some diverging industry trends between casual and social casino. Do you think these are structural or permanent changes? And then maybe if you can talk a little bit about the bifurcation between your business now that you have a little bit bigger casual business.

Yeah, thanks, Ryan. I don't know that we yet have a point of view on whether there are structural conditions here between our casual portfolio and the casino genre. And I say that only because our foray into casual is somewhat recent. So with our acquisition of Tetris and now Branium, we have a pretty healthy suite of products that are in casual and we're happy and we see kind of the general momentum that we're experiencing across that portfolio. And certainly it's stronger when you're looking at its performance kind of sequentially quarter over quarter as compared to the casino suite. But as far as whether there's a clear indication as to some structural shift or change in the market that's going to be sustained over time. I don't yet have a point of view.

Fair enough. Moving along, I mean, moving over to the direct-to-consumer platform. So can you provide an update there? We've seen some challenges, kind of ongoing challenges in the traditional app store. So I'm curious on the progress you have on your D2C platform.

Yeah, thanks. It's a great question. So As we've talked about in the past, I mean, we've obviously spent some time and energy creating a direct relationship with a number of our consumers and tried to enable them to purchase with us more directly to avoid the platform tax. There are challenges to the whole experience as far as getting players that are actively playing on a mobile device to then purchase through the web and then ultimately return to and enjoy their mobile experience. you know, clearly our peers that have had success with this keep everybody within the same experience by offering the game and the capacity to purchase all completely and directly on the web. And so, you know, we too have invested in and have two products that we offer on the web direct and we'll continue to advance those efforts. And then, as we've mentioned, we have an invitation-only program for the moment through our Play Awards program, where for premium players, we allow them to have their own bespoke portal where they can actually look at and see what types of purchases they can make directly with us, and there's incentives for them to do that. And then we also offer up all kinds of really unique rewards as part of the loyalty program that are only accessible through that portal. I would say that our efforts are still early. We're actively advancing them. I think we've learned a lot. We're going to continue to see if we can't step up and start to book ever more of our revenues directly with our consumers.

One more for me. Solid margin in the quarter just sequentially from the first half into Q3. Q4 guidance implies relatively similar in Q4. Get a little help from Branium. But how should we think about margins? Is there another heavy lift on the spend side next year to launch new games and transition and cross sell? Or do you think we're at a point in the model where we can start to see modest kind of operating leverage from here?

Yeah, I think we'll slowly start to see the operating leverage. You know, we've talked about how we've been layering in. We've been expanding our teams and talent in locations like Belgrade and in Vietnam, which allows us to service our products more affordably with also comparable and really great talent. So we should expect, and we've already started to see the benefits of that. We'll continue to see the benefits of that as we move forward, which should improve margins. We do have some early stage efforts that we're pretty pleased with the traction that we're getting, and we expect that we're going to be investing in scaling up those products. So you know, as we advance through the balance of the current quarter and get into the new year, we'll form a clear view on just how aggressively we're going to be investing in those. So, you know, obviously bingo is a product that we've been working on for the better part of the last six or seven months. And we're feeling like it's, at a place now where it's investable. We're also feeling really good about the Tetris product. We have a new Tetris product that's in development that we'll be looking to launch and scale next year. So I think what we'll, we'll need to do is probably try to provide a bit more visibility into, you know, across our portfolio, the margins that we're achieving with our more mature products relative to the margin profile of those that are, in an operating stage, but early and scaling and growing as a result, operating the loss versus those that are still in a development stage so that we can give more clarity around the current margin profile for business and ultimately where we think it's going. But we expect to see margin improvement as we advance through next year.

Thanks, Andrew. Good luck, guys.

All right. Thanks, Ryan.

And our next question comes from the line of Omar Dasuki with Bank of America. Please proceed with your question.

Hey, Andrew. Thanks for taking my question. So I wanted to just dig into the implied fourth quarter guide. It looks like you upped the range for the full year guide and I would assume that that includes roughly two and a half months of the acquisition that you made of Branium. Is that correct?

That's correct. That's correct.

Great. So then if I do the math, I'm kind of getting around about $63 million. So it would look as if your guide is actually $270 to $280 if we were to take Branium out for the full year, and that would imply – you know, a pretty steep decline year over year in the fourth quarter. And I was just wondering if my math is right and, you know, what would be kind of driving, you know, that kind of guidance in the fourth quarter.

Hey, Scott, do you want to speak to that? Yes. Sorry, hold on. Sorry, I was on mute. So I guess the general way we looked at it is we've sort of given our annual guidance And we didn't really look at, you know, provide quarterly guidance previously. So we were still sort of targeting, you know, that end of year number. And although we did raise it as a result of brainium, you know, given the current, you know, environment and everything else, we just didn't feel like it was prudent to adjust it for any other reason at this time.

Okay. So does that mean that What do you expect in the fourth quarter versus the fourth quarter of last year or the third quarter of this year? The implication of your guide minus the results of the first three quarters is that it's down. Is that not what you guys are actually expecting?

I'm trying to think of how to best answer that other than No. I mean, I would say that, you know, we've provided a range, and we think that we're comfortable with that range.

Okay.

Hey, Omar, it's Samir. If I could just help you sort of, like, think about this. So if you kind of look at our guidance before, right, it was a relatively wide range, and it was annual guidance. And now if you layer... brainium on top and how we sort of discussed it and like how you rightly categorized it as sort of impacting a result for two and a half months. And I think what Scott had said at the time when we made the brainium acquisition was to sort of think about those numbers on a revenue basis and an EBITDA basis and sort of straight line them. So if you did that and like you implied on those numbers, we basically took those numbers and just added them to the bottom end of the range. You're not wrong when you look at what you know, an implied figure for the fourth quarter is, but I think what Scott is saying is that we guided towards a full year number and we are basically just layering and bringing them on top of that. And we didn't really die on a quarter by quarter basis. That's, you know, you guys are sort of breaking out our annual guidance. I'm looking at it on a quarter by quarter basis.

Okay. Got it. Thank you, Samir. And I'm just, you know, for the followup, you know, I wanted to dig into, what Andrew said about the social casino market contracting for a couple of quarters now. I think you'd mentioned that for two quarters now it contracted about 2%. I was wondering what were some of the drivers of that? Was it just simply what you referred to in terms of user acquisition or are there other vectors that have influenced that such as You know, supply side, less games coming out, spend per user, you know, potentially going down, you know, retention. It's not a huge change, but obviously everybody likes to see kind of consistent growth.

Yeah, I mean, so I think what I shared was that, you know, sequentially, we actually saw some improvement. But when you look at it as compared to the prior year, you know, obviously it's off and off more substantially. And I think it's just generally across the board. I don't know that it's concentrated within any one of the key metrics, whether it's we don't see any meaningful reductions yet in the average revenue per paying user. There's some erosion there. on the number of paying users year over year. For us, actually, we saw some strength and an increase in the actual revenue per paying player. So I think it's just generally across the board, just some softness in the category, but not concentrated in any one metric.

Okay, got it. Those are my questions. Appreciate the time and looking forward to chatting more in the future.

Great, thank you all. Sounds great. Thanks, Omar.

And as a reminder, if you would like to ask a question, please press star 1. Our next question comes from the line of Martin Yang with Oppenheimer. Please proceed with your question.

Hi. Good afternoon. Thank you for taking that question. I follow up to Omar's question on 4Q. Another way to look at it is, Have you observed any deterioration for UA monetization or advertising from 3Q into 4Q? Just broadly speaking on the industry environment.

I'm sorry, Martin, can you re-ask the question? I don't know that I... Sure.

So... Because the implied 4Q revenue excluding premium is showing a deterioration of growth trends into the fourth quarter. Have you observed any deterioration in user acquisition, ad monetization, or any other trends for yourself or for the broad industry

We're not speaking to the performance that we're experiencing in the current quarter. I can tell you that when we look at the overall performance of our user acquisition investments, I don't think that there's anything particularly noteworthy to highlight other than it continues to be a difficult environment. We've all talked a lot about the challenges that IDFA brought about and just how difficult it is as a result and with subsequent changes to go find, to really target and find quality users and modifiers. With that said, I think our team's done an amazing job and nearly all of our products are at a place where the returns that we would expect to see that really warrant our continuing to spend and invest in scaling and growing them, we're realizing are staying across our portfolio. So I don't see anything meaningful through the third quarter in and around user acquisition. It's probably worth highlighting. And as far as ad monetization is concerned, We've never had a really meaningful component of our business be ad-driven up until we acquired Tetris. From that point, it represented maybe 3.5% or 4% of our total revenues. maybe closer to 5% of total revenue. Obviously, with the acquisition of Branium, that's now increased. And we're just weeks into having acquired and integrated that team and that portfolio of products. And so I don't know that we yet have a ton of clarity or experience where we can speak to any trends on the ad monetization front. But, you know, for the one product that we do have and that we manage, that being our Tetris Prime product, you know, the team's doing a great job in terms of how they're optimizing its performance. And, you know, we generally are pleased with the trends that we're seeing there.

Got it. Thank you. Another question is maybe look further into 2023. Is there any fundamental drivers that makes you believe that overall UI environment or overall macro could improve and benefit you?

No, I don't see anything that's probably worth highlighting at this point. I think the things that we focus on that may benefit us are obviously the increased importance on just retaining your existing audience. So if you look at the acquisitions that we've done, whether it's the rights to Tetris and that product and the enormous amount of organic traffic that it generates, or you look at the Branium suite of products and the scale of its audience, a majority of which is organically driven, those really, the dynamics of their user acquisition factored into our decisions. These are a suite of products that are just naturally and organically generating a ton of interest. So our strategy is to leverage that traffic and that audience for the benefit of the entire portfolio. And we'll do that by incorporating our Play Awards proposition and providing all kinds of cross promotion and incentives in order to really drive the adoption across our own network. So, you know, a tough external environment means that we all, every publisher has to get a lot more focused on how they go about retaining and holding on to their existing audience, and that's where we think we have some unique advantages.

Got it. Thank you very much.

Thank you.

And our next question is a follow-up from Omar Adesuki with Bank of America. Please proceed with your question.

Hey, Andrew. Thanks for giving us your time. You know, since we were on the phone, I thought I'd ask this question. you know, you guys, you do still have a lot of cash on the balance sheet. And we know that, you know, in the private market, there are kind of numerous assets to be had. Some of those assets, you know, have been funded with equity, some of them with debt. You know, are there kind of any interesting ways that you could acquire assets other than just, you know, buying the companies? You know, for example, you know, would it ever be possible to, actually acquire assets through ownership of debt, for example, because I realize there are a lot of privates out there with debt floating around. Just trying to think a little bit out of the box and see what other degrees of freedom you guys have in terms of expanding your portfolio and your assets and your use of cash.

Yeah, sure. Thanks for that question. Jason, do you want to take that one? Yeah, look, I'd say that, you know, we're obviously always out there on the market, you know, and we're creatively oriented in the way that we kind of like to do deal making. And so if we find the right opportunity and the right asset that's strategically compelling, but the structure by which we could acquire that asset might be different than a straight kind of cash purchase, you know, we'll evaluate that. It's not something we've spent a lot of time thinking about in terms of an active and proactive approach and going out and acquiring debt of companies. So it's not something that we've been, you know, deliberate about in our approach to date, but I'd say that we are, you know, we'd like to think of ourselves as creative deal makers and we'll strike the right balance in order to, in order to action upon opportunities that are strategically compelling.

Okay. So thank you. And, and I guess, you know, have you guys looked at that debt market and you know, what, how, how, sort of if you have, like how attractive is it compared to, like do you think the debt market has adjusted, you know, as well as kind of, you know, just the equity market in the private space? Or is it still lofty? Or, you know, does debt and equity kind of, you know, trade at the same, you know, kind of yield and risk premium? I know these aren't liquid markets, but, you know, just wanted to pick your brain about that since we're on the phone.

Yeah, I'd say I don't really have a view on that today. We haven't spent a lot of time looking at the debt market and the dynamics that are happening there to provide an informed point of view on this call.

Okay. Yeah, no problem. Yeah, just wanted to think out of the box. Thanks for entertaining my question.

Thank you. Thank you.

Thank you. At this time, we are seeing no further questions, and I would like to pass the call back over to Andrew for any closing remarks on the call.

Again, really appreciate everybody's interest, and thank you for the thoughtful questions. I look forward to, again, updating you on our progress once we close out the fourth quarter of the year. Thank you, everybody.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.