PLAYSTUDIOS, Inc.

Good afternoon, everyone, and welcome to the Play Studios third quarter 2025 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. As a reminder, this conference is being recorded. I would now like to turn the call over to Joel Agena, General Counsel. And Mr. Agena, you may begin.

Thank you. Good afternoon, and thanks for joining us for the Play Studios third quarter 2025 earnings call. With me on the call today are our Chairman and CEO, Andrew Paschal, and our CFO, Scott Peterson. During this call, we will make some forward-looking statements that are based on our current expectations, but that are subject to risks and uncertainties that may cause actual results to differ materially from those expectations. Please refer to our SEC filings for a more detailed discussion of those risks. We will also discuss certain non-GAAP financial measures, These should not be considered a substitute for measures prepared in accordance with GAAP. Reconciliations to comparable GAAP measures can be found in our earnings release and SEC filings. With that, I'll turn it over to Andrew.

Thank you, Joel. Good afternoon, everyone. Before I focus on our specific performance for the quarter, I'd like to provide some context and perspective on our current operating environment. The past two years have been extremely challenging. Category headwinds have continued to pressure our core markets, Our valuation today sits only slightly above our cash position, and we know some investors are questioning our direction. As both the CEO and one of the company's largest shareholders, I understand these concerns and I share the urgency to reposition the business. The board and leadership team are fully aligned in this effort. We're focused on reshaping the company with discipline, navigating the headwinds, further tightening our expense structure, and reorienting the business toward durable growth. Nothing is off the table as we work through this transition. As you know, in Q4 of last year, we took meaningful actions to reduce our expenses and improve operating efficiency. These moves reduced our fixed cost base, but also came with trade-offs, particularly in our ability to sustain the same pace of new content, live operations, and product development, which contributed to continued softening across the portfolio. The benefits, however, enabled us to invest in a disciplined manner into our highest conviction growth projects while preserving our profitability. And while our reinvention initiatives created short-term savings, it's important to highlight that they did not solve the structural market-wide headwinds we continue to operate against. That's an important distinction. From a product standpoint, we've been very intentional about reconnecting with the principles that defined our early success. Innovative and beautifully executed games, real-world loyalty benefits, and uncompromising player service. As we expanded the portfolio over time and market conditions shifted, complexity increased and our focus moved more toward monetization and promotional tactics. This often came at the expense of delivering a fun, dynamic, and carefully curated experience for many of our players. Through our reinvention work last year, we reaffirmed our commitment to quality, player value, and execution. Our approach to our growth initiatives reflects this renewed focus on these core principles. Let's briefly touch on some key updates, beginning with our sweepstakes effort. WinZone continues to gain traction, now live in open beta across 15 states and on pace for a broader rollout in all qualified jurisdictions before year-end. As we refine the product, we're seeing steady improvements across retention, engagement, and monetization, resulting in our highest returns on ad spend. With a view toward the upcoming launch, we remain focused on improving the CWA efficiency and long-term player value as well as the keys to driving scale. While the broader sweepstakes market has faced regulatory contraction, reducing the TAM by roughly 25%, growth in the remaining open states remains strong, and with an addressable market of $3.5 to $4 billion, we continue to believe the category represents a meaningful long-term opportunity. Our approach is intentionally phased, We started with a standalone web-based product to build capability, and over time, we'll evolve it into a fully integrated promotional engine supporting chip sales across our social casino portfolio with selective strategic acquisitions as a potential accelerant. Let's now review our second growth opportunity, Tetris Block Party. Tetris Block Party is one of our most promising upcoming launches. Our thesis has always been that Tetris should be a super-scaled mobile franchise. It's one of the most beloved games of all time, yet it hasn't fully realized that potential on mobile platforms. We're hoping to change that by pairing a familiar puzzle mechanic with a deeper social metagame built around competition, progression, and community. The game's been an open beta in select markets, and early performance across UA, retention, engagement, and monetization has been very encouraging. Based on those results, we're about to begin a focused go-to-market test ahead of a broader rollout in Q1. Turning to our play games core business, let's first look at the casino games. As I mentioned, the social casino category remains challenged, reflecting broader market conditions and ongoing shifts towards sweepstakes style offerings. These trends contributed to year-over-year declines in both DAU and ARPDAU across most of our portfolio, with the exception of MyKanami, which continues to show double-digit year-over-year increases in ARPDAU. That said, our direct-to-consumer business continues to show strong growth, benefiting from a full quarter of operations under the relaxed Apple policy changes. Direct-to-consumer revenue was $7.7 million, a 48% quarter-over-quarter increase, representing 16.7% of total in-app purchase revenue, up from 9.1% in Q3 of 2024. BAU for the casino segment remained stable sequentially, signaling a more resilient core player base. On the topic of our casual business, it continues to experience pressure on DAU, which accounted for most of our sequential audience decline. During the quarter, the team focused on enhancing the underlying technology of our ad monetization, improving efficiency and yield. As a result, ARPDAU for both Brainium and Tetris Prime improved meaningfully year over year, offsetting some of the DAU declines and setting the stage for renewed user acquisition in 2026. Our Play Awards loyalty platform continues to be a core differentiator for our business, bridging in-game engagement with real-world entertainment. Over the past year, we streamlined the program to focus on higher quality partners and more aspirational rewards, while also expanding the catalog of digital benefits like vanity items, customizations, and status-based perks that enhance progression inside the games. This resulted in a decrease in the retail value of rewards purchased year over year, but an increase of 16% sequentially for the third quarter. A highlight for the quarter is our MyVIP World Tournament of Slots, which started with in-app activations and social campaigns and culminated in a three-day live event in the Bahamas, where 500 top players competed for a million dollars and the title of World's Best Slot Player. It's a clear proof point that of how we connect play to real world experiences in a way that builds deeper loyalty and longer lasting relationships with our players. Before I turn the call over to Scott, I'd like to spotlight our emphasis on modernizing our development approach, particularly through the adoption of AI. Across our game development pipeline, creative tooling, UA modeling, and player targeting, AI is helping us move faster and operate more efficiently. We're still early in this journey, and we see meaningful long-term opportunities in how AI can reshape gameplay, production, and our live ops execution. With that, I'll hand it off to Scott.