SciPlay Corporation

Good day and thank you for standing by. Welcome to the SidePlay fourth quarter and full year 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you need further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Jim Bombasi, Senior Vice President, Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. During today's call, we will discuss our fourth quarter and full year 2021 results and operating performance, followed by a question and answer period. With me today are CEO Josh Wilson and Interim CFO Daniel O'Quint. Our call today will contain statements that include forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed during the call. For more information regarding these risks and uncertainties, please refer to our earnings release issued yesterday, the materials relating to this call posted on our website, and our filings with the SEC. We will also discuss certain non-GAAP financial measures. A description of each non-GAAP measure and a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure can be found in our earnings release as well as on the investor section on our website. As a reminder, this conference call is being recorded. A replay of this webcast and accompanying materials will be archived in the investor section of our website at sideplay.com. Also, supplemental reference slides will be posted to our investor relations website. These slides are meant to facilitate your review of our company's results and be used as a reference document following the call. Now, let me turn the call over to Josh.

Thanks, Jim. Good morning, everyone, and thanks for joining today. We are making great progress strategically, operationally, and financially firmly executing on our strategy to become a diversified global game developer. as we grow our core business and lay the foundation to the further acceleration of our expansion in the casual market. We had a number of successes in the quarter and for the full year that I want to quickly highlight. Our core business is firing on all cylinders. We posted a record full year revenue and a second highest quarter revenue ever, fueled by strong monetization and engagement. We achieved an all-time high full-year revenue of $606 million, up 4% year-over-year. Our fourth quarter revenue grew 5% year-over-year and 5% sequentially outperforming the social casino market. Our key strategic initiatives, like Project All-Star, resulted in record engagement and monetization metrics. including record payer conversion and average monthly revenue per paying user in the quarter. Our portfolio of games is performing extremely well. Fourth quarter was the fifth consecutive record quarter for Goldfish, and on a sequential basis, Quick Hit was up 14%, and Jackpot Party grew 7%, making it its second highest revenue quarter ever. Importantly, we continue to focus on the bottom line, generating strong net operating cash flow of $164 million in 2021. Our strategic initiatives like Project All-Star are meaningfully contributing to the strong performance in our core social casino business, further improving the player experience and our ability to monetize players. We are rapidly expanding in casual with yesterday's announcement of our acquisition of Elictus and the worldwide launch of Solitaire Pet Adventure in the fourth quarter. We are advancing our strategy to be a diversified global game company with strong core business, growing studio capability, building a pipeline of new games, and our entry into the mobile ad market. Now, let's go into the great progress we are making operationally and what is driving that success. We have continued to benefit from the strategic investments we have made in our core social casino business as we refine our live service capabilities, including our live ops, data science, and user acquisition. One of our key initiatives, Project All-Star, has been the catalyst for driving our performance. With Project All-Star, we strategically add resources to the game once a game reaches critical scale, and we are seeing strong returns on our investment. By adding these resources, we further refine the content and features in the game, better segmenting the player base on their preferences and delivering a tailored experience that drives increased engagement. We are adding new meta features in the game like Unreal collectibles, task managers, and long-term albums, increasing the player engagement and getting our players to spend more time in our games. Our exceptional data and analytics capabilities analyzes the player behavior, helping us anticipate and deliver what they want to play next. Project All-Star has been a catalyst for the growth of our largest games. we have been able to continue to increase player engagement leading to record monetization levels. We have been able to successfully grow Jackpot Party, which was released in 2012, increasing its fourth quarter revenue 7% sequentially, record revenue for the year, and taking key payer metrics to record levels. Goldfish and Quicket are also benefiting from Project All-Star generating record revenue in 2021. We have the opportunity to further advance our capability as we expand in casual and enhance player engagement and monetization across both casual and social casino. Across the different sub-genres of casual, whether it's solitaire games, match, three games, puzzle games, or social casino, the common thread is the player. This is where we leverage our SidePlay engine to better understand each of our players' behavior. We learn more about each player's preferences with each game they play. We can then use this information to build features and events that fit the player's preferences. Over time, as the player continues to engage in our game, we use predictive analytics to anticipate what the player wants to play next and seamlessly deliver those features and events. allowing for deeper engagement, increasing long-term retention, and enhanced player lifetime value. With our latest initiative, which began earlier this year, we are advancing our side play engine by productizing our core capabilities, including live ops, ad tech and user acquisition, data science, and predictive analytics, enabling us to scale these capabilities across our portfolio of games whether it's social or casual. This is a centralized platform that will house the best features, tools, and capabilities that will be implemented across the portfolio of games, whether it's social or casual, to optimize engagement and monetization. Casual is a natural adjacency with similar player demographics and behaviors. Driven by a simple core game, which is enhanced through live services and meta, the same core capabilities that we use to drive engagement and retention in our social games. We are rapidly expanding in Casual with our acquisition of Allictus, which further scales us in Casual, enhancing our growth, and diversifying our revenue streams. Allictus is a proven and profitable developer of chart-topping games. The team has developed and published six games that have achieved number one top free game in the iOS US App Store. This acquisition significantly scales our users, growing DAO by 1.8 million and monthly active users by 28 million, expanding our first-party data and creating attractive cross-promotional opportunities. This acquisition broadens our global player base throughout Elictus' extensive international player network. Ellictus also provides us entry into the fast-growing 13 billion global mobile and game advertising network, diversifying our revenue streams. We are excited about the opportunity to leverage the SidePlay and Ellictus player universes and capture a larger share of the casual market. This is a smart, targeted acquisition that minimizes the upfront payment and incentivizes the talented management to grow the business profitably to enhance shareholder value. We also made progress with the launch of our Solitaire Pet Adventure in December. It is off to a great start with very high user engagement. Players are nearly using two pets per day on average, and they play about 10 rounds per day, which increases with every new improvement we make to the game's features. We are also making great progress with Project X, our new first party casual game on track to launch in the second half of 2022. The Sideplay Finland team has tremendous experience in developing casual games and is spearheading our Project X initiative. And with this initiative, we are setting up the game studio that will focus on delivering fresh casual content for the future. Our goal is simple but ambitious. We want to deliver one-of-a-kind player experiences through building amazing games. As we expand in casual and advance our capabilities, we will enhance our growth and profitability and drive value for our shareholders. With that, I'll turn it over to Daniel to go over the financial results. Daniel?