PlayStudios faced a challenging first quarter as its digital casino and casual game business continued to navigate industry-wide headwinds. Management attributed the revenue shortfall to the ongoing shift in player preferences toward sweepstakes-based offerings, which PlayStudios does not yet offer. CEO Andrew Pascal described the environment as "a period of transition and recalibration," noting that rising competition and slower user acquisition weighed on player activity. Monetization improvements in core titles such as myVEGAS were offset by declines in daily active users, particularly across the Tetris and Brainium franchises. The company also highlighted early benefits from its cost savings program, which contributed to a modest improvement in adjusted EBITDA margin despite the revenue decline.
Is now the time to buy MYPS? Find out in our full research report (it’s free).
PlayStudios (MYPS) Q1 CY2025 Highlights:
- Revenue: $62.71 million vs analyst estimates of $63.63 million (19.4% year-on-year decline, 1.4% miss)
- Adjusted EPS: $0.02 vs analyst estimates of $0.03 (in line)
- Adjusted EBITDA: $12.49 million vs analyst estimates of $10.9 million (19.9% margin, 14.5% beat)
- The company reconfirmed its revenue guidance for the full year of $260 million at the midpoint
- EBITDA guidance for the full year is $50 million at the midpoint, above analyst estimates of $48.84 million
- Operating Margin: -4.4%, down from -2.2% in the same quarter last year
- Daily Active Users: 2.63 million, down 863,000 year on year
- Market Capitalization: $173.7 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions PlayStudios’s Q1 Earnings Call
- Michael Hickey (Benchmark): Asked about the confidence in executing the Q2 timeline for the sweepstakes launch and geographic rollout plans. CEO Andrew Pascal described a "measured introduction" across several jurisdictions and emphasized ongoing technical validation and product refinement, with plans to expand as confidence grows.
- Michael Hickey (Benchmark): Inquired about sustained DTC channel momentum and the effects of recent app store legal rulings. Chief Strategy Officer Jason Hahn highlighted incentives, loyalty integrations, and expected tailwinds from the Epic-Apple legal case, projecting further DTC growth but not specifying long-term targets.
- Will Yager (Craig-Hallum): Sought insight into learnings from the sweepstakes alpha phase. Pascal said the focus was on technical validation and integration with existing content, with broader user feedback to come once the product is live in select markets.
- Aaron Lee (Macquarie): Asked about the relationship between sweepstakes initiatives and the playAWARDS loyalty program. Pascal described the two as complementary, with playAWARDS expected to amplify sweepstakes engagement and loyalty currency accumulation.
- Martin Yang (Oppenheimer & Company): Queried whether sweepstakes and Tetris Block Party investments are included in EBITDA guidance. Hahn clarified that operating expenses for these initiatives are included in guidance, but potential revenue from new launches is not.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace and effectiveness of the sweepstakes platform rollout and resulting user engagement trends, (2) the impact of direct-to-consumer channel improvements following regulatory changes, and (3) the launch and early performance of Tetris Block Party. Progress on cost efficiency and stabilization in daily active users will also serve as key indicators of turnaround momentum.
PlayStudios currently trades at $1.35, down from $1.38 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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