Playtika Holding Corp. Reports Fourth Quarter 2021 Results

HERZLIYA, Israel, Feb. 24, 2022 /PRNewswire/ -- Playtika Holding Corp. (NASDAQ: PLTK) today released financial results for its fourth quarter for the period ending December 31, 2021.

Fourth Quarter 2021 Financial Highlights:

• Fourth quarter revenue grew to $649.0 million compared to $573.5 million in the prior year period.
• Net income grew to $102.3 million compared to $76.0 million in the prior year period.
• Adjusted EBITDA, a non-GAAP financial measure defined below, was $212.5 million compared to $210.4 million in the prior year period.
• Cash and cash equivalents and short-term bank deposits totaled $1,117.1 million as of December 31^st, 2021 with $600 million in additional borrowing capacity pursuant to our Revolving Credit Facility, resulting in more than $1.7 billion of available liquidity.

2021 Financial Highlights:

• 2021 revenue grew to $2,583.0 million compared to $2,371.5 million in the prior year.
• Net income grew to $308.5 million compared to $92.1 million in the prior year.
• Adjusted EBITDA grew as well to $982.7 million compared to $941.6 million in the prior year.

Robert Antokol, Chief Executive Officer stated: "Our fourth quarter results demonstrate the ongoing strength of Playtika and the growth potential of the business. In 2021, we extended our leadership in mobile gaming and expanded our vision to reach beyond games into gamifiable apps with the acquisition of Redecor as the world of games, lifestyle and entertainment converge. In addition, we significantly enhanced our proprietary technological edge including our Boost platform, which continues to be a differentiator for the company. We are excited by the opportunities that Playtika can achieve, and I want to thank our employees for their tireless work and dedication in making this possible."

Craig Abrahams, President and Chief Financial Officer, added: "Our results exceeded our latest guidance for both revenue and Adjusted EBITDA for the year and January started the year strong. Fourth quarter revenue growth accelerated to 13% year-over-year, driven by sustained execution across our portfolio with our casual games now comprising over 50% of revenue. This was achieved with year-over-year eCPI growth of only 5.8% which demonstrates the strength of our proprietary user acquisition technology helping to continue to support strong margins."

Fourth Quarter 2021 Operational Highlights

• Casual portfolio grew revenue 31.5% year-over-year, comprising 51.8% of total revenue
• Average Daily Payer Conversion increased to 3.0%, up from 2.6% in Q4'20
• Direct to Consumer platforms grew to 21.7% of overall revenues in Q4'21, compared with 15.5% in Q4'20
• World Series of Poker experienced success in the fourth quarter, growing 7.7% year-over-year, and 7.3% quarter-over-quarter
• Core franchise game Bingo Blitz grew 17.7% year-over-year and Caesars Casino celebrated 10-years since release with 7.1% year-over-year growth
• More recent titles demonstrate growth potential as Solitaire Grand Harvest grew revenue 60.1% year-over-year and June's Journey grew 36% year-over-year

January Operational Highlights Update

• Revenue grew 9.2% year-over-year and 7.2% month-over-month
• Average DPU grew 12.8% year-over-year and 4.0% month-over-month
• Average Daily Payer Conversion increased to 3.2%, up from 2.8% in January 2021

Company To Pursue Strategic Alternatives
Playtika separately announced today that its Board of Directors has initiated a process to evaluate the Company's potential strategic alternatives to maximize value for stockholders. As part of the process, the Board intends to consider a full range of strategic alternatives, which could include a sale of the company or other possible transactions.

Conference Call
Pursuant to the Company's obligations under its credit agreement, Playtika will hold a conference call to discuss fourth quarter and 2021 results on March 1, 2022 at 5:30 a.m. Pacific time, 8:30 a.m. Eastern time, as originally scheduled. Given the circumstances, the Company will not be discussing any matters related to the process of evaluating strategic alternatives nor any forward looking items. The call and presentation associated with these results can be found at Playtika's investor relations website: https://investors.playtika.com at that time.

Summary Operating Results of Playtika Holding Corp.

About Playtika Holding Corp.

Playtika Holding Corp. is a mobile gaming entertainment market leader with 35 million monthly active users across a portfolio of multiple games 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 20 offices worldwide and a talent base of over 4,000 employees.

Forward Looking Information

This press release may contain forward-looking statements within the meaning of federal securities laws. These forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements.  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," "framework," "intend," "may," "might," "potential," "present," "preserve," "project," "pursue," "range," "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;
• changes in tax laws, tax rates or tax rulings, the examination of our tax positions, or our ability to qualify for and enjoy certain tax benefits; 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.

Non-GAAP Financial Measures

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 net income, the closest GAAP financial measure, to Adjusted EBITDA. We define 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, (ix) long-term compensation plan, (x) M&A related retention payments, and (xi) certain other items. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by revenues.

We supplementally present Adjusted EBITDA and Adjusted EBITDA Margin because they are key operating measures used by our management to assess our financial performance. Adjusted EBITDA adjusts for items that we believe do not reflect the ongoing operating performance of our business, such as certain noncash items, unusual or infrequent items or items that change from period to period without any material relevance to our operating performance. Management believes Adjusted EBITDA and Adjusted EBITDA Margin are useful to investors and analysts in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management uses Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against other peer companies using similar measures. We evaluate Adjusted EBITDA and Adjusted EBITDA Margin in conjunction with our results according to GAAP because we believe they provide investors and analysts a more complete understanding of factors and trends affecting our business than GAAP measures alone. Adjusted EBITDA and Adjusted EBITDA Margin should not be considered as alternatives to net income as a measure of financial performance, or any other performance measure derived in accordance with GAAP.

Adjusted EBITDA and 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 Adjusted EBITDA and Adjusted EBITDA Margin should not be construed as an inference that our future results will be unaffected by unusual or unexpected items.

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SOURCE Playtika