Playtika Holding Corp. Common Stock 2026 Q2 Earnings Call

Please go ahead. Welcome everyone.

Thank you for joining us today for the second quarter 2026 earnings call for Playtika Holding Corp. Joining me on the call today is Robert Antokol, Co-founder, President and CEO, and Tae Lee, Chief Financial Officer. 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 the expected marketing 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 risk and uncertainty, some which are beyond our control. These forward-looking statements apply as of today. You should not rely on them as representing our view in the future. We undertake no obligation to update this statement after this call.

We have posted an accompanying slide deck to our investor relations website, which contain information on forward-looking statements and non-GAAP measures. We will also post our prepared remarks immediately following the call. For a more complete discussion of the risk and uncertainty, please see our filing with the SEC. As a reminder, we will not be taking questions related to the strategic alternatives review. With that, I will now turn the call over to Robert.

Good morning. Thank you for joining us. I want to speak directly today. There are a few questions we know are on your mind about Playtika. Can we grow? Can we launch a new hit? When we invest to grow, does it last? These are the right questions to ask, and today I want to answer them with results, no words. Let's start with what matters most. Our business model works. When we bring players into our games, the goal is to have them stay, not for a quarter, but for years. They keep playing, they keep spending long after we first bring them in. This is the heart of Playtika. It is what we have built since I have started this company 16 years ago. This quarter, we clearly saw it again. Look at Disney Solitaire. In the first quarter, we increased our investment to grow this game.

You ask a fair question. What happens when you spend less? Do the players leave? How sustainable is the growth? This quarter, we have a clear answer. We brought our marketing spending down and the game still grew. This only happens when the players you have added continue to stay with you, when they keep playing and they keep spending. This is how we ask you to judge this business. This is the right way to judge a live game. It's over its full life. How long the players stay, and how much they are worth over that lifetime. What matters is the long-term engagement, the players who stay for you. By this standard, Disney Solitaire has the potential to be one of the best games we have ever built.

Our older games make the same point. Slotomania started this company 16 years ago, and it is still one of the most important games we have in our portfolio, not because of its size today, but because of what it proves. 16 years on, it is still here, stable performance for 3 quarters and still supported by community of players who have stayed within 4 years. When a game holds its players for that long, that is not luck. That is the model working. We told you the last quarter that our marketing spending would come down as the year went on. It did. As it came down, our margin moved up. Our adjusted EBITDA margin this quarter was 28.2%, up from 16.8% in the first quarter. D2C is another area where we did what we said.

We told you we would grow this channel and use it to protect our margins. That is exactly what we did. This quarter, D2C reached 39.3% of revenue. This channel is the key part of our future. Let me close with this. Trust is earned. It is earned by saying what we will do, then doing it. We said the players will invest, will stay, and keep spending, this quarter they did. We said our margin would rise. They did. We said we would grow D2C to protect margins, we did. This is a company that does what it says, that is how we will keep earning your trust. With that, let me hand it over to Tae to take you through the numbers.

Thank you. Thank you, Robert, good morning.

In the second quarter, we saw the dynamics we described last quarter play out. Our marketing expenditures stepped down materially as the year progressed. Margins increased, SuperPlay became a positive adjusted EBITDA contributor beginning in the second quarter. Before I walk through the numbers, I want to give you three points to keep in mind as you interpret our results and think about the rest of the year. First, the margin recovery this quarter was not an accident. It was the plan. We front-loaded user acquisition spend into the first half, and especially the first quarter. As that spend came down in the second quarter, the profitability of the business came through. This front-loading was driven largely by our SuperPlay titles, where the structure of the earn-out incentivized this concentrating investment early in the year.

The result this quarter is the operating model working as designed: invest to grow, then let the profitability follow. Second, and closely related, the cadence of our marketing spend will shape the revenue trajectory for the rest of the year. Because so much of our user acquisition spend was concentrated in the first half, we expect revenue in our SuperPlay studio to decline on a sequential basis in the second half versus the first half, even as these titles grow year-over-year. I want to be clear about what this is. It is not a loss of momentum, and it is not the games weakening. It is a direct result of a deliberate choice in the timing of our spend made in the context of the SuperPlay earn-out.

We would encourage you to judge these titles on their full-year growth and their lifetime economics, not on the movement from one quarter to the next. Third, we saw the consumer sentiment soften as the quarter went on in Q2, and we are watching it closely. We started to observe a slowdown in the industry mid-quarter, which we attribute to weakening consumer confidence. Inflation has been a persistent pressure on the consumer this year, and we believe it weighed on discretionary spending, including in our category. We think this impacted our second quarter results, and it is a key reason we're taking a measured view of the second half, which I will come back to when we discuss guidance. With that framing, let us go through the financial results. In the second quarter, we delivered total revenue of $731.1 million, down 1.8% sequentially and up 5.0% year-over-year.

Adjusted EBITDA was $206.1 million, representing a margin of 28.2%. Net income was $48 million, and adjusted net income was $53.6 million. We delivered DTC revenue of $286.9 million, down 1.7% sequentially and up 63.1% year-over-year. Now let's turn to the portfolio, starting with the performance in our top three revenue titles for the quarter: Bingo Blitz, Disney Solitaire, and June's Journey. Bingo Blitz delivered $145.1 million of revenue this quarter, down 5.6% sequentially and 9.5% year-over-year. The revenue decline looks steeper than last quarter, so let me explain what's driving it because the composition here matters. The majority of the year-over-year decline is concentrated in players acquired within the last 12 months, as we moved away from acquisition channels that brought in high volumes of short-lived incentive-driven users and toward investing in our existing long-term players, the community that's always been the foundation of this franchise.

Our long-tenured players who have been with Bingo Blitz for more than one year generate most of the game's revenue and remain the foundation of this franchise. DTC continues to support the game's economics, and Bingo Blitz remains the number one Bingo title worldwide. Disney Solitaire generated $142.4 million of revenue this quarter, up 15.5% sequentially and 288.6% year-over-year. I want to spend a moment on Disney Solitaire, both on what the results tell you about the business and how you should model it for the rest of the year. The key point is this: we grew Disney Solitaire revenue this quarter while bringing our marketing spend on the title down meaningfully from the first quarter. Growing revenue on lower acquisition spend is only possible when the players you've already brought in stay and continue to engage. Now, how to model it from here.