Playtika Holding Corp.

Thank you for standing by and welcome to Platea's first quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Tay Lee, Chief Financial Officer. Please go ahead, sir.

Welcome, everyone, and thank you for joining us today for the first quarter 2026 earnings call for Platica Holding Corp. Joining me on the call today is Robert Anticall, co-founder, president, and CEO of Platica. 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. including expected marketing and investment activity and the impact of AI on the company's business and industry. These statements and other comments are not a guarantee of future performance, but rather 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've 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. As a reminder, we will not be taking questions related to the Strategic Alternatives Review. With that, I'll now turn the call over to Robert.

Good morning, and thank you for joining us. This was a great start of the year, and we are seeing momentum across the portfolio. Our largest franchise continues to execute at scale. We are allocated investments toward the highest return opportunities, and DTC continues to grow as a key driver for unit economics. With that context, the headline for me is Disney Solitaire. What we are seeing is outstanding and it's rare at this scale. This insulator has scaled faster than any title in our 15 years history and continues to outperform expectations. Our SuperPlay Studio has taken world-class IP, built a strong game economy around it, and delivered extremely well. We are investing heavily in user acquisition behind Disney Solitaire, and the returns we are seeing support that level of investment. It is some of the best ROI we have seen in the portfolio. This is not a lucky outcome. SuperPlay is now operating at the scale that matters for Playtika, and it is validating the strategy behind the acquisition. investing in the right teams and backing them with the capital and operating discipline to build large, long lasting franchise that compound cash flow over time. This is Solitaire is the latest example of that. And we believe it will not be the last. And it is not only super play. The core business is executing and we are seeing quarter over quarter stability across the organic portfolio. We are investing behind our winners and stepping back where the return profile is not there. That discipline is showing up in the revenue mix. Each year, more of our revenue comes from long-life casual gains with bold and rich. D2C has become a core part of how we run the business. improving unit economics, and supporting more durable cash flow profiles. Casual is now 76% of our business, and that position is largely complete. We are a casual mobile gaming company with a strong social casino business that generates strong cash flow. Our casual franchise are in a leadership position with a bolder, rich, and longer runway. And we compete in the categories where scale and winners take most dynamics are more pronounced. With Super Play serving a growth engine, our portfolio remains echoed in scale franchise with competitive advantage. While we continue to manage our slow title in a fragmented landscape. And the mix shift doesn't mean we have taken our eye of social casino. We are managing it with a clear goal to maximize lifetime value, stay disciplined on returns, and improve stability where we can. On Slotomania, we're encouraged by the start of the year. Last quarter, we told you to expect quarter-over-quarter improvement in Q1, and we delivered it. Slotomania grew 4% quarter-over-quarter in the first quarter. This is a mature competitive category, and we are not making a forward promise of continued growth from here. Flattening the decline and showing early stability is an important milestone, and it matters for the overall durability of the portfolio. On D2C, we have grown close to $1.2 billion annual run rate. Few companies in mobile gaming operate at our scale. And it matters beyond the margin benefit. When you own the transaction, you improve unit economics and gain more direct tools to engage and serve players over time, which support durability. Every quarter, this becomes more central to how we operate. Our results give me confidence. Super play scaling. D2C is compounding, and this portfolio is in better shape and a stronger direction. We're executing with discipline. They will take you through the details. Thank you.

Thank you, Robert, and good morning. I'm going to start with the financial highlights for the quarter, and then I'll take a step back and walk through the key themes that matter for how to interpret a performance in the business. In the first quarter, we delivered total revenue of $744.7 million of 9.7% sequentially and 5.5% year over year. Adjusted EBITDA was $125.2 million, representing a margin of 16.8%. Importantly, the core business, excluding Superplay, continues to generate meaningful adjusted EBITDA and cashflow. And the consolidated margin reflects the planned investment cadence of Superplay. We expect Super Play to start driving positive adjusted EBITDA in Q2. Net loss was negative $57.5 million, and adjusted net income was $13.6 million. Our adjusted net income excludes the gap impact of incremental contingent consideration, which increased this quarter as Super Play is tracking ahead of the performance assumptions underlying our last reported results. Our DTC business set another record in the first quarter, We delivered DTC revenue of $291.8 million, up 16.7% sequentially and 62.8% year-over-year. The headline is simple. SuperPlay is scaling, and the core is generating meaningful adjusted EBITDA and cash flow. With that context, there are three points that matter for how to think about our results in the business. First, the core is durable, and we're focused on games with scale. In mobile gaming, the portfolio naturally concentrates around the titles with scale and community, and that shows up in our market positions. Across our largest franchises, we hold the number one or top three positions in multiple core categories, and that's the backbone of our strategy, focusing capital on games that can be winners in their respective genres. In tabletop games, we occupy all three top positions with Disney Solitaire, Solitaire Van Harvest, and Domino Dreams. Within Solitaire specifically, Disney Solitaire and Solitaire Grand Harvest together represent category leading scale, giving us a leading position in the sub-genre. Across our casual franchises, we hold leadership positions in large enduring categories. June's Journey is the number one title in hidden objects. Bingo Blitz is the number one bingo game. And Dice Dreams is a top three coin looter game. In poker, WSOP is the number one poker title. Sodomania remains a core legacy title, providing scale and stability as we focus incremental capital on titles with winner-take-most dynamics. Second, Q1 margins reflect SuperPlay investment cadence, not structural pressure. Our in-app purchase business model is well-established and repeatable. We acquire players, convert them to payers, and scale live games supported by a durable community. When that community is in place, these titles generate cash over a long period of time. And that's the playbook we've successfully repeated for 15 years. SuperPlay is in a rapidly scaling phase, and our marketing spend is intentionally weighted toward the first half of the year. As a result, the near-term margin and consolidated adjusted EBITDA in Q1 reflect timing, not the long-term earnings and cash flow potential of the studio. Third, AI is a tailwind for scaled operators. Investors have asked whether AI changes to competitive dynamics in mobile gaming. Our view is that it's a tailwind. Content creation has never been the barrier to entry in our industry. The hard part has always been building and operating a live game of scale. Live ops cadence, retention, and monetization systems, and the communities that key players engage over time. AI is helping accelerate how we build and run those systems. If targeting and optimization improve, Companies with scale, data, and operating discipline should benefit, but it doesn't change the fundamentals. You still need product market fit, and you still need to allocate user acquisition dollars. AI will let strong operators do more with the same or fewer resources, and we intend to be one of them. Now, let's turn to the portfolio, starting with performance in our top three revenue titles for the quarter, Bingo Blitz, Disney Solitaire, and June's Journey. BingoBlitz delivered $153.7 million of revenue this quarter, down 3% sequentially and 5.4% year-over-year. Importantly, we believe this does not reflect a change in the underlying strength of the franchise. BingoBlitz remains the number one bingo title worldwide across iOS and Google Play and continues to operate as a category leader in a winner-take-most market. While the quarter reflected a slower start to the year, The underlying economics remain resilient due to the strong growth of Bingo Blitz's DTC business. As we've noted before, DTC is a meaningful lever for Bingo's economics, and that mixed shift continues to support the financial profile of the franchise. Disney Solitaire generated $123.3 million in revenue, up 72.1% sequentially. The key takeaway is the speed and consistency of that scale. Disney Solitaire is growing faster than any title in our history. The combination of a proven scaling engine and Disney's brand reach expands the top of the funnel meaningfully. Based on what we're seeing today, we believe the franchise still has room to grow from here. June's Journey delivered $76.0 million in revenue, up 8.7% sequentially and 10.4% year over year. It was the best quarter for the studio since Q2 of 2024. More importantly, this is a clear category winner. The leadership matters because it gives the franchise room to keep monetizing, not just sustaining, as we keep tightening LiveOps and expanding mixed leverage like DTC where appropriate. And that's why we're excited about the runway. We see June's journey as a title that can become a million-dollar-a-day game over time, given its leadership position, durability, and the monetization potential that still sits in this franchise. Let's turn to specific line items in our P&L. Cost of revenue was $192.2 million, down 2.6% year over year. Lower platform fees from the continued growth of our DTC business provided a benefit, which was partially offset by royalty expenses. R&D was $98 million, down 5.6% year over year. driven by lower headcount and reduced outsourcing spend as we streamlined our cost structure, partially offset by severance related to workforce reduction. Sales and marketing was $360.6 million, up 32.7% year-over-year, driven primarily by incremental performance marketing spend for our Super Play game. As we move through the year, we expect spending to normalize from the Q1 peak and step down sequentially. we discussed in prior periods. GNA was $143.5 million, up 120.1% year-over-year, driven primarily by the gap impact of incremental contingent consideration. Excluding that item, GNA would have been $48.5 million, reflecting lower share-based compensation versus the comparable period. As a reminder, contingent consideration expense from this past quarter is a non-cash fair value adjustment that runs through GAAP results. It can fluctuate from quarter to quarter and is excluded from adjusted EBITDA and adjusted net income. Average daily paying users reached 387,000, up 8.4% sequentially and down 0.8% year over year. Average daily active users reached 8.6 million, up 8.9% sequentially and down 4.4% year over year. Monthly active users totaled 30.1 million, underscoring the scale of our global player community. ARPDAU increased 1.1% sequentially and 8% year-over-year. Turning to the balance sheet, as of March 31st, we had approximately $779.2 million in cash, cash equivalents, and short-term investments. Since then, we've paid $461 million to the former shareholders of SuperPlay as an earn-out payment. We remain focused on maximizing cash flow and preserving liquidity, and we've taken actions to prioritize balance sheet flexibility, including suspending our quarterly dividends. From here, we're actively evaluating options to further strengthen our capital structure and extend our maturity runway. Addressing our maturity profile and ensuring ample liquidity is a top priority for management, and we're working deliberately toward the best long-term solution. Finally, guidance. We're raising our revenue outlook for the year from $2.7 to $2.8 billion to $2.75 to $2.85 billion. SuperPlay is performing ahead of plan. We're also seeing better-than-expected performance in the core portfolio. On adjusted EBITDA, we're raising our adjusted EBITDA range from $730 million to $770 million to $750 million to $790 million. At the same time, we want to be clear about how we're managing this. We're not optimizing the business to harvest near-term adjustments at the expense of long-term value. We're managing performance carefully and intentionally to preserve the option to reinvest incremental dollars in the business in the second half, whether that's user acquisition or R&D, while still maintaining discipline on margins and cash generation. Said differently, our updated guidance ranges reflect strong executions. but they also reflect a deliberate choice to keep flexibility. If the opportunities are there, we want the ability to press our advantage and invest rather than lock ourselves into a single, maximized EBITDA path. We entered 2026 with momentum in the business, and the first quarter gave us more reasons for conviction. We'd be happy to take your questions.

Certainly. And ladies and gentlemen, if you do have a question at this time, please press star 1-1 on your telephone. Our first question for today comes from the line of Chris Scholl from UBS. Your question, please.

Great. Thank you. Given the front-end loaded investment you flagged for the year, how are you thinking about the ability to retain users and sustain monetization as sales and marketing steps down in the coming quarters? And congrats, Tay, on the new role. Any updated thoughts you can give around your capital allocation priorities and how you plan to balance investment with lowering leverage, M&A, and or buybacks here in the near term? Thank you.

Yeah, thanks for the question, Chris. So on sales and marketing, as you know, Q1 is normally our highest UA quarter, even without super play. And this year, that normal seasonality was amplified by the opportunity that we saw in Superplace. Going into the year, what the studio planned to spend versus what we ended up spending, we leaned in because the return profile supported it. So when we talk about the return profile, we're talking about with the increase in sales and marketing on a sequential basis, there was little degradation in the returns associated with that spend. And so we leaned into the marketing method for the quarter. However, we shouldn't view Q1 as run rate for the year. I think from here the expectation is that we do intend to have a meaningful step down in spend as we move through. And again, the important point is that it's not about pulling back because the opportunity is weakening. It's about moving from a concentrated launch and scale phase toward a more normalized cadence while continuing to invest where returns justify it. Now, with that said, as we think about the broader performance of, again, if you think about where that spend was really concentrated in the quarter, a lot of it went to Disney Solitaire. And it's important to highlight that not only was the revenue outperformance due to the returns and the amplified spend, but the performance of the cohorts from last year So the cohorts of players in Disney Solitaire that started playing in Q3 and Q4, as they went through the cycle and as we looked at day 180 and day 240 returns, the performance improved over time. And so that gives us confidence in the outlook that we'll be able to sustain the revenue levels even as we pull back on some of that UA spend. Your question on capital allocation, I think capital allocation is certainly top of mind for us, and in terms of order of priority, we think about, obviously, investing in sort of the core business, including the super play assets. But as you heard from us last quarter, part of the philosophy and the thinking currently is that we want to maintain sort of maximum liquidity. We do recognize that after the year one earn out. You saw in our in our filings that the contingent consideration value for SuperPlate went up. Basically, as we talked about in our prepared remarks, that's due to the fact that the business is outperforming expectations. And so we want to make sure that we're maximizing liquidity to ensure that we're funding all earn-outs using the cash that we generate. And so in terms of capital return, I would say that is not a priority at the moment. In terms of M&A, Again, you've heard us now say multiple times when we acquired Superplay, we acquired the crown jewel of independent studios that were out there, and now it's a significant growth driver for the business. We've gone three for three with Dice, Domino, and Disney, and as you know, we have another Disney game in the pipeline. So the focus is on reinvesting in that growth engine.

Thank you. If I can just follow up on the Super Play earnouts, can you just remind us the timing and the amount of the cash payment this year? And along those lines, any color you can just give on the growth across the portfolio for Super Play and 1Q, it would just be helpful as we think about modeling the earnouts beyond 26.

Yeah, so we made the payment last month, so you don't see it reflected in our Q1 balance sheet since it's as of month end March, but the payment went out last month. And so The way the agreement is structured, any incremental earnouts that the studio earns, the earnout gets paid in the second quarter of the following year.

Okay, great. Thank you.

Thank you. And our next question comes from the line of Aaron Lee from Macquarie. Your question, please.

Hey, guys. Good morning. Thanks for taking my question, and congrats, Pei, on the new role. I wanted to ask about... Yeah, the social casino business. Nice to see the comments. So with regard to competitive pressure from sweepstakes casinos, we've seen a number of states kind of pass legislation banning the category and more states floating legislation to do the same. Wondering if you can comment on whether there's been any relief in competitive pressure that you can see for the category?

Thanks for the question. And then when we're looking at the category of social casino, yes, we had last year some toughness of growing the business and our revenues were decreased. But our goal was always to stabilize the business. And I think when you look at the result of Tlatelmania this quarter, and I said it in the last conversation three months ago, that we're going to grow this quarter. So this quarter we grow 4%. And when I look at the future of our business, it's going to be stabilized. It's going to be a strong cash flow to the company. And I cannot react on the competitors or legal or illegal. It's not related to me. But it's related to me that I know I'm still leading the category and I'm growing there and I'm stabilizing the business. Thank you.

Got it. Okay. Thank you. And then on direct-to-consumer, another record quarter of D2C here. Nice job on that. You guys have always been the leader here, and I'm sure the App Store policy shifts are probably helping, but is there something incremental you've learned about the D2C platform that is unlocking this penetration? And how would you characterize the opportunity from here? Thank you.

So D2C was always one of our growth engine projects. to be a profitable, strong cash flow company. And we were the first one and the leaders in this business. Right now, today, we are still believe growing D2C. I think the changes that we see on the platforms is giving us some ads, but for us, we are focusing at what we can do in our ability. It's not only cash flow, it's not only better profit, it's giving us a lot of independence to work with the game, to check game, to do a Q&A, to do things that we cannot do on other platforms. So for us, D2C was always one of our main benefits. And you see the numbers. We are growing and growing and growing, and we still don't know where it's going to stop.

Yeah, and just to add to Robert's point, our DTC business is also pretty diversified. And as you noted, the changes in the app store policies certainly is helping as a tailwind. But I think the way we thought about it as a company Once that opportunity became available, I think it's important to note that we didn't think about it as sort of a single game opportunity, but made sure that we were tactically taking advantage of the situation across all of our games. And so it's not, you know, historically you've heard us talk about, you know, pushing DTC as an opportunity at the right time, depending on where that game is and its life cycle. What you've seen in the last, couple of quarters is that we have the DTC option available across all the games in our portfolio, including our Super Play games. And so you have the overall number of DTC, as Robert talked about, run rating at $1.2 billion a year. One of the biggest drivers of growth year over year comes from Bingo Blitz, which is our number one game, and it continues to grow the DTC business. Again, I think it's important to note that we saw the opportunity and we really took advantage of the situation to grow our business that way.

Got it.

I appreciate all the color, guys. Good luck. Thank you. And our next question comes from the line of Colin Sebastian from Baird. Your question, please.

Yeah, thanks. I have two questions. Maybe first, Robert, can you talk more about the stability or durability cited across the organic portfolio? Obviously June's Journey is one that you called out doing really well. But more broadly, do you think the organic portfolio in aggregate can return to growth this year? And then I have a follow-up maybe for Tay. With the shift away from UA spend for Disney Solitaire, does that give you an opportunity to shift more resources over to the organic titles, or is it really just more of a shift towards retention over acquisition for the balance of the year? Thanks.

Thanks for the question. I will take the first one. We always looked at our games. You know, we had last year the issue with Lithuania. And I always said that we had 10 games, 8 games, 9 games. And sometimes we have issues with one game. But overall, we are positive. And I think when you look at this year and we look what we did in the last six months, we changed many things in a few of our games. We stabilize. We are working to stabilize all the categories of social casinos. And the organic games that last year, June Journey, their performance wasn't amazing. You see a huge change this year because we decided to take the approach to focus on four or five games. This is the main game that we are focusing. This is the game that we believe can take the organic portfolio to growth. And we still believe in it. And we show the market. It was always, everybody was very optimistic about us, saying, okay, Sotomayor is going down, what is going to happen? No, we show the market that we know how to stop it. We know how to change. We know how to improve. And look at our portfolio. We have an amazing, amazing timing right now in the organic category. Thank you.

Yeah, Colin, I think just to add to that, too, I think the better way to think about our portfolio is not just Super Play and then the rest of the business, right? We've talked about how we approach capital allocation. And so separating the portfolio into areas where we're choosing to prioritize capital and resources versus the parts of the business that we're managing primarily for value, cash generation, as well as games that you've heard us say that we're deprioritizing. You have the numbers for Super Play in 2025, and so if you isolate it, you kind of get at a rest of the business year-over-year change in revenue. But again, I think it's important to note that you have to think about the category outside of Super Play being modestly better sequentially, although still down year-over-year, with most of that year-over-year pressure tied to bingo's slower start to the year that we spoke about. But again, offset by the fact that DTC and Bingo really accelerated in Q1, holding sort of the economic stable. If you look at poker, you know, poker was broadly stable. You saw pressure in slots. The year-over-year comps are hard in slots, but it will get easier over time, given the trajectory that Slotomania went through last year. But the trajectory in slots was more stable sequentially. And then, of course, the deprioritized part of the portfolio is now relatively small and continues to decline as expected. So the honest sort of answer is yes, the business, if you just include super play, slows down year over year, but that's not the full story. What matters is we're seeing signs of stabilization in parts of the portfolio where we're allocating capital with intent, particularly in scaled casual and core cash generating assets. That's why within our prepared remarks, we wanted to sort of remind people of the scale and leadership position that we have across many of these games, because this is exactly how we want to manage the business. That's the strategy that we've been implementing the last couple years, and I think this quarter really showed that the results are coming through in the numbers clearly. So improved mix over time, healthier base of revenue, more revenue coming from casual assets with broader reach and longer useful life. And again, direct investment toward the highest return franchises and making sure that we're preserving cash generation from the older sort of legacy social casino games. On the point about UA away from Disney Solitaire, it listens. if we think about the portfolio as a whole. So there's opportunities where, like I mentioned, there was no degradation in the return profile. You see meaningful continued growth coming from the older cohorts and Disney Solitaire that were acquired in the second half of last year, continuing to perform well in Q1 because of Again, our business is roadmap-based, right? So after the upfront UA period, what drives growth? It's retention, monetization, live ops execution, and the ability to keep cohorts productive over time. And that's what we've done consistently well over the last 15 years. Now, in terms of just the pace of the spend, I think you're going to see that for marketing spend outside of the Super Play game, that will kind of follow our more typical cadence of how we've tended to spend UA over the course of the year. But on a consolidated basis, you will see that significant step down from Q1 to Q2 and then to the second half of the year. Okay. Very helpful. Thank you, guys.

Thank you. And our next question comes from the line of Doug Kreutz from TD Cowan. Your question, please.

Hey, thank you. You talked about how good the KPIs are for Disney Solitaire, and clearly that gave you a lot of confidence to invest in it in Q1. Can you talk about tactically why you think it's advantageous to load so much of your UA spend for the game into Q1 rather than spreading it more evenly across the year? Is there something about the dynamics of the market in Q1 that make it so? Is it about the cadence of content for the game? Can you kind of go into why you feel like it's better to have so much of your marketing spend early in the year? Thanks.

Yeah, Doug, thanks for the question. So for us, because we're in-app purchase space, right, you always have to think about the marketing spender campaign alongside sort of product innovation and things in the roadmap. But I want to kind of go back to what I mentioned on one of the prior questions where going into the year, it was always the plan that it would be front-loaded. It was always the plan that it would be in Q1 because we wanted to, again, because of the paybacks that we saw in Q4, and payback literally just is if you spend it and how quickly you make it back, and then the strength of the cohort is after you've made it all back, what do you continue to gain? The important thing to note is even with the sequential step-up in marketing that we saw from Q4 to Q1, that there was little degradation in the return profile. So then with that opportunity, we increased or accelerated the spend further. So that's what you're seeing in sort of the consolidated number and why you have the revenue performance being where it's at and the impact on adjusted EBITDA.

Okay, thank you.

Thank you. This does conclude the question and answer session as well as today's program. Thank you, ladies and gentlemen, for your participation. You may now disconnect. Good day.