PLAYSTUDIOS, Inc. (NASDAQ:MYPS) Q2 2023 Earnings Call Transcript

And so we believe that there’s an opportunity for us to both convert more players to payers and drive up the ARPDAU in the case of my Vegas. In our economy products, we think that there’s also an opportunity to convert more of our audience. Even though we have fairly healthy ARPDAU with that product when compared to the other games, social games that are based upon existing real world casino content. We believe we like the market. So we think the methods that we employ in order to encourage or motivate our players that are paying to actually spend a bit more. We think there’s headroom there. And again, it comes down to how the features are all integrated and balanced and the adjustments you’re making your economy and then the sophistication and your segmentation and the way that you leverage it.

They’re both dialing the difficulty of the game and all the different types of offers that they’re going to extend in order to drive and promote more spending. So those are things that both teams are pretty intensely focused on.

David Pang: Great, thanks.

Andrew Pascal: Yes, thank you, David.

Operator: Thank you. Our next question is from Greg Gibas with Northland Securities. Please proceed with your question.

Greg Gibas: Hey, good afternoon. Thanks for taking the questions. Regarding your intention to increase user acquisition spend in the coming quarters, what’s kind of the reasoning there? Like expecting maybe to see improved payback on that spend going forward or is it specifically to target like certain games like Tetris? Just wanted to dive in a little bit deeper on the strategy there.

Andrew Pascal: Yes, it really has more to do with the portfolio of growth and new development products that we have. We have right now, four or five different new products that are in development that are in the markets and varying stages where we’re qualifying them. And so as they, as the core metrics get to a place where they start to want and justify our spending a bit more or ultimately getting into a more general launch of those products and we’ll build the launch, where they’ll require a lot more resource and UA allocation. And then within our growth portfolio, the same is true. The growth products all tend to be earlier in their life cycle. We feel that they have the capacity to grow in terms of audience revenue and profit contribution.

And so we’ll lean into those as they continue to mature and evolve. And of course, in both cases, we’re holding all of our products, both categories, but all the games within those categories. We hold to very specific and tight, performance metrics and around, payback horizons and returns on ad spend. And so I would say, across our portfolio, we — the performance of our current UA investments is really solid. And so, as again, some of these growth products and the development stage products mature and want to justify, investing more in them and scaling and growing them, we will. And so, we’re certainly hoping and anticipating that that would be true as we kind of advance and move into the fourth quarter of this year.

Greg Gibas: Great. That’s helpful, Andrew. I wanted to follow up on the restructuring, maybe regarding the cost savings that you’re seeing as a result of that. How much was reflected in Q2? I know it was like a couple quarter long process. Should we see additional improvement maybe in margins as a result of that in Q3? Or would you say, most of the cost savings are kind of fully reflected at this point?

Andrew Pascal: There’s still some benefits to be realized in Q3. I’ll let Scott kind of speak to it. But we instituted the changes really in Q2 and we had all kinds of kind of transition plans and programs and retention plans where we carried some of the expense, into and through the second quarter. But Scott, you want to shed some light on that topic?