Playtika Holding Corp. (NASDAQ: PLTK) today released financial
results for its fourth quarter and fiscal year ended December 31,
2022.
Fourth Quarter 2022 Financial
Highlights:
- Fourth quarter revenue of
$631.2 million compared to $649.0 million in the prior
year period.
- DTC platforms revenue of
$150.2 million compared to $140.9 million in the prior
year period.
- Net income of $87.5 million
compared to $102.3 million in the prior year period.
- Credit adjusted EBITDA was
$202.6 million compared to $176.1 million in the prior
year period.
- Retention Plan Adjusted EBITDA1 was
$228.9 million compared to $212.5 million in the prior
year period.
- Cash and cash equivalents and
short-term bank deposits totaled $768.7 million as of December
31st, 2022.
FY2022 Financial
Highlights:
- 2022 revenue of
$2,615.5 million compared to $2,583.0 million in the
prior year.
- DTC platforms revenue of
$606.9 million compared to $529.0 million in the prior
year
- Net income of $275.3 million
compared to $308.5 million in the prior year.
- Credit adjusted EBITDA of
$805.1 million compared to $848.7 million in the prior
year.
- Retention Plan Adjusted EBITDA1 of
$919.0 million compared to $982.7 million in the prior
year.
- Free cash flow of $383.7 million
compared to $452.1 million in the prior year
“I am proud of the way we have executed our
business during a challenging year for the mobile gaming industry,”
said Robert Antokol, Chief Executive Officer of Playtika. “Fueled
by pioneering technological innovation and a tireless ambition to
inspire exploration, connectivity and fun among our loyal player
community, we are delivering immersive personalized entertainment
experiences and advancing our position as the industry’s premier
game operator.”
“We made several strategic decisions in FY22 to
position the company for continued success,” said Craig Abrahams,
President and Chief Financial Officer. “Playtika’s durable business
model, combined with the efficiency measures we have taken over the
last year, puts us in a strong position to continue to generate
value for our shareholders.”
Selected Q4 Operating Metrics and
Business Highlights
- Average Daily Paying Users of 313k
compared to 311k in the prior year period.
- Average Daily Payer Conversion
increased to 3.5%, up from 3.0% in the prior year period.
- Average Daily Active Users of 8.8
million compared to 10.3 million in the prior year period.
- Casual themed games revenue
increased revenue 2.7% year-over-year, comprising 54.7% of total
revenue.
- Social Casino-themed games revenue
declined revenue (8.6)% year-over-year, comprising 45.3% of total
revenue.
- Direct-to-Consumer platforms
revenue increased revenue 6.6%, comprising 23.8% of total
revenue.
Going forward, we will provide business and
operational highlights for our three highest revenue grossing games
from the quarter.
- Bingo Blitz revenue of $155.1
million; 18.4% increase year-over-year.
- Slotomania revenue of $149.2
million; (9.0)% decline year-over-year.
- Solitaire Grand Harvest revenue of
$72.8 million; 18.7% increase year-over-year.
Financial Outlook
- For FY23, revenue expected to be
between $2.570 - $2.620 billion, vs. $2.616 billion of revenue in
FY22, and Credit Adjusted EBITDA expected to be between $805 - $830
million vs. $805.1 million of Credit Adjusted EBITDA in FY22.
Capital expenditures expected to be between $115 - $120 million vs.
$110.0 million in FY22.
Conference Call
Playtika will hold a conference call to discuss
fourth quarter and 2022 results on February 28, 2023 at 5:30 a.m.
Pacific time (8:30 a.m. Eastern time). The conference call can be
accessed via a webcast accessible at investors.playtika.com. A
replay of the call will be available through the website one hour
following the call and will be archived for one year.
Summary Operating Results of Playtika Holding
Corp.
|
Three months ended December 31, |
|
Year ended December 31, |
(in millions of
dollars, except percentages, Average DPUs, and
ARPDAU) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
$ |
631.2 |
|
|
$ |
649.0 |
|
|
$ |
2,615.5 |
|
|
$ |
2,583.0 |
|
Total cost and expenses |
$ |
502.9 |
|
|
$ |
537.0 |
|
|
$ |
2,144.1 |
|
|
$ |
2,020.8 |
|
Operating
income |
$ |
128.3 |
|
|
$ |
112.0 |
|
|
$ |
471.4 |
|
|
$ |
562.2 |
|
Net
income |
$ |
87.5 |
|
|
$ |
102.3 |
|
|
$ |
275.3 |
|
|
$ |
308.5 |
|
Credit Adjusted
EBITDA |
$ |
202.6 |
|
|
$ |
176.1 |
|
|
$ |
805.1 |
|
|
$ |
848.7 |
|
Net income
margin |
|
13.9 |
% |
|
|
15.8 |
% |
|
|
10.5 |
% |
|
|
11.9 |
% |
Credit Adjusted EBITDA
margin |
|
32.1 |
% |
|
|
27.1 |
% |
|
|
30.8 |
% |
|
|
32.9 |
% |
|
|
|
|
|
|
|
|
Non-financial
performance metrics |
|
|
|
|
|
|
|
Average DAUs |
|
8.8 |
|
|
|
10.3 |
|
|
|
9.4 |
|
|
|
10.4 |
|
Average DPUs (in thousands) |
|
313 |
|
|
|
311 |
|
|
|
314 |
|
|
|
300 |
|
Average Daily Payer Conversion |
|
3.5 |
% |
|
|
3.0 |
% |
|
|
3.3 |
% |
|
|
2.9 |
% |
ARPDAU |
$ |
0.78 |
|
|
$ |
0.68 |
|
|
$ |
0.76 |
|
|
$ |
0.68 |
|
Average MAUs |
|
28.3 |
|
|
|
33.0 |
|
|
|
31.4 |
|
|
|
34.0 |
|
About Playtika Holding
Corp.
Playtika (NASDAQ: PLTK) is a mobile gaming
entertainment and technology market leader with a portfolio of
multiple game titles. Founded in 2010, Playtika was among the first
to offer free-to-play social games on social networks and, shortly
after, on mobile platforms. Headquartered in Herzliya, Israel, and
guided by a mission to entertain the world through infinite ways to
play, Playtika has employees across offices worldwide.
Forward Looking Information
In this press release, we make “forward-looking
statements” within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements can be
identified by the fact that they do not relate strictly to
historical or current facts. Further, statements that include words
such as "anticipate," "believe," "continue," "could," "estimate,"
"expect," "intend," "may," "might," "present," "preserve,"
"project," "pursue," "will," or "would," or the negative of these
words or other words or expressions of similar meaning may identify
forward-looking statements.
Important factors that could cause actual
results to differ materially from estimates or projections
contained in the forward-looking statements include without
limitation:
- our reliance on third-party
platforms, such as the iOS App Store, Facebook, and Google Play
Store, to distribute our games and collect revenues, and the risk
that such platforms may adversely change their policies;
- our reliance on a limited number of
games to generate the majority of our revenue;
- our reliance on a small percentage
of total users to generate a majority of our revenue;
- our free-to-play business model,
and the value of virtual items sold in our games, is highly
dependent on how we manage the game revenues and pricing
models;
- our inability to complete
acquisitions and integrate any acquired businesses successfully
could limit our growth or disrupt our plans and operations;
- we may be unable to successfully
develop new games;
- our ability to compete in a highly
competitive industry with low barriers to entry;
- we have significant indebtedness
and are subject to the obligations and restrictive covenants under
our debt instruments;
- the impact of the COVID-19 pandemic
on our business and the economy as a whole;
- our controlled company status;
- legal or regulatory restrictions or
proceedings could adversely impact our business and limit the
growth of our operations;
- risks related to our international
operations and ownership, including our significant operations in
Israel, Ukraine and Belarus and the fact that our controlling
stockholder is a Chinese-owned company;
- our reliance on key personnel;
- security breaches or other
disruptions could compromise our information or our players’
information and expose us to liability; and
- our inability to protect our
intellectual property and proprietary information could adversely
impact our business.
Additional factors that may cause future events
and actual results, financial or otherwise, to differ, potentially
materially, from those discussed in or implied by the
forward-looking statements include the risks and uncertainties
discussed in our filings with the Securities and Exchange
Commission. Although we believe that the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee
that the future results, levels of activity, performance or events
and circumstances reflected in the forward-looking statements will
be achieved or occur, and reported results should not be considered
as an indication of future performance. Given these risks and
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements.
Except as required by law, we undertake no
obligation to update any forward-looking statements for any reason
to conform these statements to actual results or to changes in our
expectations.
PLAYTIKA HOLDING
CORP.CONSOLIDATED BALANCE
SHEETS(In millions, except for per share
data)
|
December 31, |
|
|
2022 |
|
|
|
2021 |
|
ASSETS |
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
$ |
768.7 |
|
|
$ |
1,017.0 |
|
Short-term bank deposits |
|
— |
|
|
|
100.1 |
|
Restricted cash |
|
1.7 |
|
|
|
2.0 |
|
Accounts receivable |
|
141.1 |
|
|
|
143.7 |
|
Prepaid expenses and other current assets |
|
113.4 |
|
|
|
72.9 |
|
Total current assets |
|
1,024.9 |
|
|
|
1,335.7 |
|
Property and equipment,
net |
|
125.7 |
|
|
|
103.3 |
|
Operating lease right-of-use
assets |
|
104.2 |
|
|
|
89.4 |
|
Intangible assets other than
goodwill, net |
|
354.0 |
|
|
|
417.3 |
|
Goodwill |
|
811.2 |
|
|
|
788.1 |
|
Deferred tax assets, net |
|
68.3 |
|
|
|
38.3 |
|
Investment in unconsolidated
entities |
|
52.6 |
|
|
|
17.8 |
|
Other non-current assets |
|
156.7 |
|
|
|
13.4 |
|
Total assets |
$ |
2,697.6 |
|
|
$ |
2,803.3 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
Current
liabilities |
|
|
|
Current maturities of long-term debt |
$ |
12.4 |
|
|
$ |
12.2 |
|
Accounts payable |
|
50.7 |
|
|
|
45.7 |
|
Operating lease liabilities, current |
|
13.5 |
|
|
|
17.2 |
|
Accrued expenses and other current liabilities |
|
385.2 |
|
|
|
494.6 |
|
Total current liabilities |
|
461.8 |
|
|
|
569.7 |
|
Long-term debt |
|
2,411.2 |
|
|
|
2,422.9 |
|
Contingent consideration |
|
— |
|
|
|
28.7 |
|
Other long-term liabilities,
including employee related benefits |
|
252.1 |
|
|
|
23.7 |
|
Operating lease liabilities,
long-term |
|
94.5 |
|
|
|
82.3 |
|
Deferred tax liabilities |
|
46.6 |
|
|
|
53.7 |
|
Total liabilities |
|
3,266.2 |
|
|
|
3,181.0 |
|
Commitments and
contingencies |
|
|
|
Stockholders' equity
(deficit) |
|
|
|
Common stock of US $0.01 par value: 1,600.0
shares authorized; 363.6 and 411.1 shares issued and outstanding at
December 31, 2022 and 2021, respectively |
|
4.1 |
|
|
|
4.1 |
|
Treasury stock at cost (51.8 shares at December 31, 2022) |
|
(603.5 |
) |
|
|
— |
|
Additional paid-in capital |
|
1,155.8 |
|
|
|
1,032.9 |
|
Accumulated other comprehensive income |
|
17.6 |
|
|
|
3.2 |
|
Accumulated deficit |
|
(1,142.6 |
) |
|
|
(1,417.9 |
) |
Total stockholders' deficit |
|
(568.6 |
) |
|
|
(377.7 |
) |
Total liabilities and
stockholders’ deficit |
$ |
2,697.6 |
|
|
$ |
2,803.3 |
|
PLAYTIKA HOLDING
CORP.CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME(In millions, except for per share
data)
|
Three months ended December 31, |
|
Year ended December 31, |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
$ |
631.2 |
|
$ |
649.0 |
|
|
$ |
2,615.5 |
|
|
$ |
2,583.0 |
|
Costs and
expenses |
|
|
|
|
|
|
|
Cost of revenue |
|
180.9 |
|
|
182.9 |
|
|
|
735.7 |
|
|
|
729.0 |
|
Research and development |
|
119.3 |
|
|
118.2 |
|
|
|
472.3 |
|
|
|
386.7 |
|
Sales and marketing |
|
126.8 |
|
|
154.0 |
|
|
|
603.7 |
|
|
|
581.7 |
|
General and administrative |
|
75.9 |
|
|
81.9 |
|
|
|
332.4 |
|
|
|
323.4 |
|
Total costs and expenses |
|
502.9 |
|
|
537.0 |
|
|
|
2,144.1 |
|
|
|
2,020.8 |
|
Income from
operations |
|
128.3 |
|
|
112.0 |
|
|
|
471.4 |
|
|
|
562.2 |
|
Interest and other, net |
|
36.4 |
|
|
29.2 |
|
|
|
110.6 |
|
|
|
153.8 |
|
Income before income
taxes |
|
91.9 |
|
|
82.8 |
|
|
|
360.8 |
|
|
|
408.4 |
|
Provision (benefit) for income taxes |
|
4.4 |
|
|
(19.5 |
) |
|
|
85.5 |
|
|
|
99.9 |
|
Net
income |
|
87.5 |
|
|
102.3 |
|
|
|
275.3 |
|
|
|
308.5 |
|
Other comprehensive
income (loss) |
|
|
|
|
|
|
|
Foreign currency translation |
|
14.1 |
|
|
(5.9 |
) |
|
|
(13.7 |
) |
|
|
(18.6 |
) |
Change in fair value of derivatives |
|
4.8 |
|
|
6.0 |
|
|
|
28.1 |
|
|
|
5.1 |
|
Total other comprehensive income (loss) |
|
18.9 |
|
|
0.1 |
|
|
|
14.4 |
|
|
|
(13.5 |
) |
Comprehensive
income |
$ |
106.4 |
|
$ |
102.4 |
|
|
$ |
289.7 |
|
|
$ |
295.0 |
|
|
|
|
|
|
|
|
|
Net income per share
attributable to common stockholders, basic |
$ |
0.24 |
|
$ |
0.25 |
|
|
$ |
0.69 |
|
|
$ |
0.75 |
|
Net income per share
attributable to common stockholders, diluted |
$ |
0.24 |
|
$ |
0.25 |
|
|
$ |
0.69 |
|
|
$ |
0.75 |
|
Weighted-average shares used in computing net income
per share attributable to common stockholders, basic |
|
367.2 |
|
|
409.6 |
|
|
|
401.0 |
|
|
|
408.9 |
|
Weighted-average shares used in computing net income
per share attributable to common stockholders,
diluted |
|
367.8 |
|
|
411.6 |
|
|
|
401.6 |
|
|
|
411.0 |
|
PLAYTIKA HOLDING
CORP.CONSOLIDATED STATEMENT OF CASH
FLOWS(In millions)
|
Year ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
Cash flows from
operating activities |
$ |
493.7 |
|
|
$ |
551.7 |
|
Cash flows from
investing activities |
|
|
|
Purchase of property and equipment |
|
(68.3 |
) |
|
|
(47.4 |
) |
Capitalization of internal use software costs |
|
(30.1 |
) |
|
|
(33.1 |
) |
Purchase of intangible assets |
|
(11.6 |
) |
|
|
(19.1 |
) |
Payments for business combinations, net of cash acquired |
|
(29.9 |
) |
|
|
(394.1 |
) |
Proceeds from short-term bank deposits |
|
100.1 |
|
|
|
— |
|
Investment in short-term bank deposits |
|
— |
|
|
|
(100.0 |
) |
Investments in unconsolidated entities |
|
(34.8 |
) |
|
|
(17.8 |
) |
Other investing activities |
|
— |
|
|
|
2.1 |
|
Net cash used in investing activities |
|
(74.6 |
) |
|
|
(609.4 |
) |
Cash flows from
financing activities |
|
|
|
Proceeds from bank borrowings, net |
|
— |
|
|
|
887.7 |
|
Repayments on bank borrowings |
|
(19.0 |
) |
|
|
(965.3 |
) |
Proceeds from issuance of unsecured notes, net |
|
— |
|
|
|
178.9 |
|
Proceeds from issuance of common stock, net |
|
— |
|
|
|
470.4 |
|
Payment of debt issuance costs |
|
— |
|
|
|
(12.0 |
) |
Payment for tender offer |
|
(603.5 |
) |
|
|
— |
|
Payment of tax withholdings on stock-based payments |
|
(2.6 |
) |
|
|
— |
|
Net cash out flow for business acquisitions and other |
|
(26.9 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
(652.0 |
) |
|
|
559.7 |
|
Effect of exchange
rate changes on cash and cash equivalents |
|
(15.7 |
) |
|
|
(6.6 |
) |
Net change in cash,
cash equivalents and restricted cash |
|
(248.6 |
) |
|
|
495.4 |
|
Cash, cash equivalents
and restricted cash at the beginning of the period |
|
1,019.0 |
|
|
|
523.6 |
|
Cash, cash equivalents
and restricted cash at the end of the period |
$ |
770.4 |
|
|
$ |
1,019.0 |
|
Non-GAAP Financial Measures
Credit Adjusted EBITDA is a non-GAAP financial
measure and should not be construed as an alternative to net income
as an indicator of operating performance, nor as an alternative to
cash flow provided by operating activities as a measure of
liquidity, or any other performance measure in each case as
determined in accordance with GAAP.
Below is a reconciliation of Credit Adjusted
EBITDA to net income, the closest GAAP financial measure. Our
Credit Agreement defines Adjusted EBITDA (which we call “Credit
Adjusted EBITDA”) as net income before (i) interest expense, (ii)
interest income, (iii) provision for income taxes, (iv)
depreciation and amortization expense, (v) stock-based
compensation, (vi) legal settlements, (vii) contingent
consideration, (viii) acquisition and related expenses, and (ix)
certain other items. We calculate Credit Adjusted EBITDA Margin as
Credit Adjusted EBITDA divided by revenues.
Credit Adjusted EBITDA and Credit Adjusted
EBITDA Margin as calculated herein may not be comparable to
similarly titled measures reported by other companies within the
industry and are not determined in accordance with GAAP. Our
presentation of Credit Adjusted EBITDA and Credit Adjusted EBITDA
Margin should not be construed as an inference that our future
results will be unaffected by unusual or unexpected items.
RECONCILIATION OF NET INCOME TO CREDIT
ADJUSTED EBITDA(In millions)
|
Three months ended December 31, |
|
Year ended December 31, |
(In millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net
income |
$ |
87.5 |
|
|
$ |
102.3 |
|
|
$ |
275.3 |
|
|
$ |
308.5 |
|
Provision for income taxes |
|
4.4 |
|
|
|
(19.5 |
) |
|
|
85.5 |
|
|
|
99.9 |
|
Interest expense and other, net |
|
36.4 |
|
|
|
29.2 |
|
|
|
110.6 |
|
|
|
153.8 |
|
Depreciation and amortization |
|
40.3 |
|
|
|
42.5 |
|
|
|
162.0 |
|
|
|
145.5 |
|
EBITDA |
|
168.6 |
|
|
|
154.5 |
|
|
|
633.4 |
|
|
|
707.7 |
|
Stock-based compensation(1) |
|
16.7 |
|
|
|
27.6 |
|
|
|
123.5 |
|
|
|
100.4 |
|
Contingent consideration |
|
(0.2 |
) |
|
|
(6.6 |
) |
|
|
(14.3 |
) |
|
|
(6.6 |
) |
Acquisition and related expenses(2) |
|
5.0 |
|
|
|
0.1 |
|
|
|
24.7 |
|
|
|
43.3 |
|
Other items(3) |
|
12.5 |
|
|
|
0.5 |
|
|
|
37.8 |
|
|
|
3.9 |
|
Credit Adjusted
EBITDA(4) |
$ |
202.6 |
|
|
$ |
176.1 |
|
|
$ |
805.1 |
|
|
$ |
848.7 |
|
Net income
margin |
|
13.9 |
% |
|
|
15.8 |
% |
|
|
10.5 |
% |
|
|
11.9 |
% |
Credit Adjusted EBITDA
margin |
|
32.1 |
% |
|
|
27.1 |
% |
|
|
30.8 |
% |
|
|
32.9 |
% |
_________
(1) Reflects,
for the three months and years ended December 31, 2022 and
2021, stock-based compensation expense related to the issuance of
equity awards to certain of our employees.
(2) Amounts for the year ended
December 31, 2022 primarily relate to expenses incurred by the
Company in connection with the evaluation of strategic alternatives
for the Company. Amounts for the year ended December 31, 2021
primarily relate to bonus expenses paid as a result of the
successful initial public offering of the Company’s stock in
January 2021.(3) Amounts for the
three months ended December 31, 2022 consists of $1.0 million
incurred by the Company for severance, $0.1 million incurred by the
Company for relocation and support provided to employees due to the
war in Ukraine and $10.3 million incurred related to the announced
restructuring activities. Amounts for the year ended
December 31, 2022 consists of $13.2 million incurred by
the Company for severance, $4.1 million incurred by the
Company for relocation and support provided to employees due to the
war in Ukraine and $16.4 million incurred related to the
announced restructuring activities. Amounts for the year ended
December 31, 2021 includes business optimization
expenses.(4) Executive
management is compensated, in part, based upon achieving certain
Adjusted EBITDA targets as more completely described in our proxy
statement. Adjusted EBITDA for these purposes represents Credit
Adjusted EBITDA shown above, further adjusted to reflect certain
elements of cash-based compensation and other items as shown
below.
|
Three months endedDecember
31, |
|
Year endedDecember 31, |
(in
millions) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Credit Adjusted
EBITDA |
$ |
202.6 |
|
|
$ |
176.1 |
|
|
$ |
805.1 |
|
|
$ |
848.7 |
|
Long-term cash compensation(a) |
|
26.3 |
|
|
|
24.2 |
|
|
|
106.2 |
|
|
|
112.7 |
|
M&A related retention payments(b) |
|
— |
|
|
|
12.2 |
|
|
|
7.7 |
|
|
|
21.3 |
|
Retention Plan
Adjusted EBITDA |
$ |
228.9 |
|
|
$ |
212.5 |
|
|
$ |
919.0 |
|
|
$ |
982.7 |
|
Retention Plan
Adjusted EBITDA margin |
|
36.3 |
% |
|
|
32.7 |
% |
|
|
35.1 |
% |
|
|
38.0 |
% |
Retention Plan Adjusted EBITDA and Retention
Plan Adjusted EBITDA Margin are operating measures that have been
used by our management to assess our financial performance and
provide guidance. Going forward, we will refer only to Credit
Adjusted EBITDA when discussing historical performance and in
giving guidance.
(a) Includes
expenses recognized for grants of annual cash awards to employees
pursuant to our Retention Plans, which awards are incremental to
salary and bonus payments. For more information, see notes to our
consolidated financial
statements.(b) Includes
retention awards to key individuals associated with acquired
companies as an incentive to retain those individuals on a
long-term basis. The income amount for the year ended December 31,
2022, primarily relates to the reduction of contingent
consideration payable to employees of the Company that were also
selling Shareholders of Reworks. This portion of the contingent
consideration is being accounted for as an M&A retention
payment to these employees, with changes in the amounts recognized
as compensation expense.
Contacts
Investor
Relations |
|
Press
Contact |
Tae Lee |
|
Darlan Monterisi |
Tael@playtika.com |
|
Darlanm@playtika.com |
1 This will be the last quarter where we discuss
Retention Plan Adjusted EBITDA, previously referred to as Adjusted
EBITDA. Going forward, we will refer only to our Credit Adjusted
EBITDA when discussing historical performance and in giving
guidance.
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