Playtika Holding Stock

Good day, and thank you for standing by. Welcome to the Second Quarter 2026 Earnings Call for Playtika. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker for today, Elad Amit, Senior Vice President, Corporate Finance and Investor Relations. Please go ahead.

Welcome, everyone, and 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 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 risks and uncertainty, some which are beyond our control. These forward-looking statements apply as of today, and you should not rely on them as representing our view in the future. We undertake no obligation to update these statements 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, and we will also post our prepared remarks immediately following the call. For a more complete discussion of the risks and uncertainties, please see our filings 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, and 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? And 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. And this quarter, we clearly saw it again. Look at Disney Solitaire.

In the first quarter, we increased our investment to grow this game. And you ask a fair question, what happens when you spend less? Do the player 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. And 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 a long-term engagement. The players will stay for years. By this standard, Disney Solitaire has the potential to be one of the best games we have ever built.

Our older game 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 a 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. And 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 to 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 and then doing it. We said the players will invest, will stay and keep spending. And this quarter, they did. We said our margin would rise and they did. We said we would grow D2C to protect margin, and we did. This is a company that does what it says. And 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, and good morning. In the second quarter, we saw the dynamics we described last quarter play out. Our marketing expenditure stepped down materially as the year progressed. Margins increased and Super Play became a positive adjusted EBITDA contributor beginning in the second quarter.

Before I walk through the numbers, I want to give you 3 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. And as that spend came down in the second quarter, the profitability of the business came through. This front-loading was driven largely by our Super Play titles, where the structure of the earnout incentivizes concentrating investment early in the year. The result this quarter is the operating model working as designed, invest to grow and 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 Super Play 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 game is weakening. It is a direct result of a deliberate choice in the timing of our spend made in the context of the Super Play earnout. 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 softened 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 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 3 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, but 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 1 year generate most of the games revenue and remain the foundation of this franchise. DTC continues to support the games economics and Bingo Blitz remains the #1 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? Our user acquisition investment in Disney Solitaire is unusually front-loaded this year, more so than we would run a new title in the normal course. This reflects the structure of the Super Play earnout, where the studio is incentivized to grow revenue year-over-year while increasing EBITDA margins. Having concentrated that investment in the first half, we are reducing Disney Solitaire spend significantly in the back half, and that step down converts into higher EBITDA margins as the year progresses. The direct consequence is that Disney Solitaire revenue is likely to decline on a sequential basis in the second half even as it grows year-over-year. This is a function of the spend timing that I just described, not of the title's health or long-term potential. Disney Solitaire is early in its life, and we believe it will continue to scale. When our investment in the game normalizes, we would expect this trajectory to reflect that. The right way to judge this game is on its full year growth and its lifetime economics, not on the sequential movement that our spending timing creates.

June's Journey revenue for the quarter was $74.7 million, down 1.7% sequentially and up 8.1% year-over-year. We continue to see strong trends in monetization driven by improvement in our events, segmentation and campaign tools. Engagement among our long-tenured players remains at elevated levels. And this past quarter, we launched a successful new IP collaboration with Agatha Christie, which was well received by the June's Journey community. June's Journey remains one of our strongest and most durable casual titles and a top revenue contributor to the portfolio.

Let's turn to specific line items in our P&L. Cost of revenue was $192.9 million, down 1.5% year-over-year. Like the first quarter, the decline was primarily driven by lower platform fees resulting from the continued growth of our DTC business, partially offset by higher royalty expenses. R&D was $96.4 million, down 15.8% year-over-year. The steeper decline this quarter reflects the full quarter benefit of the cost actions we began earlier in the year on lower headcount and reduced outsourcing expenses, now without the severance costs that partially offset the savings in the first quarter. This is a good example of the discipline we brought to our cost structure carrying through the bottom line. Sales and marketing was $252.6 million, down 2% year-over-year and down 30% sequentially, reflecting the significant step down in marketing spend we told you to expect after our front-loaded first quarter, and we expect spend to step down further in the second half. G&A was $54.1 million, up 202.2% year-over-year.

The reported year-over-year increase is not meaningful on its own because the prior year quarter included a onetime benefit from the revaluation of contingent consideration, which reduced G&A in that period. Adjusting for that item, G&A was up 2.3% year-over-year. There were no significant onetime items in the second quarter. Average daily paying users was 367,000, down 5.2% sequentially and down 2.9% year-over-year.

Average daily active users was 8 million, down 7.0% sequentially and down 9.1% year-over-year. ARPDAU was up 7.4% sequentially and 16.1% year-over-year.

Turning to the balance sheet. As of June 30, we had approximately $438.5 million in cash, cash equivalents and short-term investments.

Turning to guidance. We are maintaining our full year revenue and adjusted EBITDA ranges. That said, based on what we see today, we expect to finish the year towards the lower end of both ranges. There are 2 factors driving this. The first is deliberate and within our control. As I described, we front-loaded our marketing investment into the first half, and we're stepping that expenditure down meaningfully in the back half. That reduces revenue in the second half by design, while supporting the margin expansion you saw this quarter. The second factor is the consumer. As I noted earlier, we saw demand soften across the industry mid-quarter, which we believe reflects the pressure that persistent inflation has placed on discretionary spending. We are taking a prudent view of how that carries into the second half. Taken together, our investment cadence decision and our measured read of the consumer are the primary drivers why we expect to land towards the lower end of our ranges for the full year. We'd be happy to take your questions.

[Operator Instructions] Your first question comes from the line of Aaron Lee with Macquarie.

I appreciate all the color on the call about guidance and the games. Maybe just starting with guidance. So I understand why revenue cut up in the lower end of the range just given the factors that you've laid out, the planned marketing spend reduction and consumer softening. But if the marketing spend is coming down, wouldn't that imply a benefit to EBITDA? So it's winding up in the lower end of the range. Is that just cost deleverage? Or can you help me understand that?

Yes, Aaron, thanks for the question. Listen, on the range, we reaffirmed it. Q2 came in ahead of consensus on revenue and adjusted EBITDA. You saw the margin uplift versus the first quarter, and you also saw Super Play turning EBITDA positive as we said it would. What we're doing is guiding you where inside the range we currently expect to land because we want to find alignment in the shape of the remaining second half of the year versus how the street may be modeling the business. Our first half came in above where the street had it, and the full year range hasn't moved since we updated the range in the past call. And we want to close that gap, and we prefer to do it now versus later in the year after the third quarter.

There's a couple of different things driving the second half. The first, as we just mentioned, is sort of the biggest and it's entirely ours. We front-loaded user acquisition into the first half, especially into the first quarter, and that's largely driven by the structure of the earn-out. That spend steps down in the second half. The revenue follows spend with a lag. So second half revenue steps down sequentially from the first half. One thing to note for everyone as you model the back half of the year, that reduction is also weighted towards the third quarter. That's where the largest single step down sits and then you see more sort of even spend in the last quarter versus the third. So the second half sequential pattern, it's not linear. It's timing. It's not trajectory. The titles that we will see the biggest change in marketing spend in the first half versus second half, we expect those titles to still grow year-over-year.

Now coming back to your question around some of the cost leverage, one aspect of it is also within Bingo. The decline that we reported this quarter is concentrated in players we acquired within the last 12 months following some of the mix change in marketing that we made in Q4 of last year. Now that change annualizes through the back half. So the year-over-year comparisons do get a little bit harder in the second half, not easier. And so I'd underline the other side of that, which is that our players who've been with the game for over a year were essentially flat, and they do generate the majority of the gaming revenue today. And that is part of the franchise we're managing to. But again, some of the portfolio mix shift does impact EBITDA. And in addition to that, you kind of heard us say this before, which is we reserve the right to think about how spending -- incremental spend also as the year sort of ends in order for giving us sort of that strong start heading into the year after. So some of it is flexibility, some of it is the portfolio mix shift.

And then the last point that I'll just emphasize, which we spoke about on the call, is around the consumer. And again, this is specifically why we're pointing to the lower end of the ranges. And just to give a little more color, in our own portfolio, we saw that step down from May to June. And we have that level of seasonality every year. It's just that this year, we saw a step down that was greater than what's typical. So it's a seasonal pattern. It was a little bit steeper this year, and that's consistent with also what we're seeing for external data, whether it's consumer sentiment, just the consumer reacting to a lot of volatility as they assess the impact of inflation on what they have with discretionary spending. And so we're not going to over attribute our quarter to it, but we do think it's real and our prudence on the back half is the right posture is our point of view.

Great. That's helpful color. And then, yes, I appreciate all the color you guys also gave on the call about the different game performance. Just want to dig a little deeper into Slotomania. I believe you guys mentioned it's been 3 quarters of stable performance there. Can you just update us on -- I believe in the past, you've said that once you kind of get this in a stabilization area, then you could perhaps start leaning more into marketing. Like is that still in the cards given the planned step down in marketing? And how are trends within your other social casino titles?

So thanks for the question. And for me, and I spoke a few quarters ago, Slotomania was really a big test for Playtika. Slotomania was our first game, and we had a very hard year. But we said -- always said that we believe in the title, believe in the game, and we know how to stabilize it. And actually, this is one of -- when I look at the history of Playtika, this is one of the most important things that happened to us to take a title that got held to fix it, to stabilize 3 quarters in a row. This is not something -- a very easy mission. And you are right about the marketing. We are now starting to finalize new campaigns. We started to look at the future of the game. We still believe in this title, and we believe in the genre. We have 2 more titles, and it looks much better than it looked a year ago. And again, as I said before, I'm very excited about it and very proud about the work that the guys in the studio did.

Your next question comes from the line of Doug Creutz with TD Cowen.

Presumably, your willingness to invest in user acquisition for a title is determined by what you have to spend to acquire the users and what the LTV of those users winds up being. I know that cost of UA is historically lower in Q1, which is why you've favored that quarter. It does seem that the Q2 results and the retention of the Disney Solitaire users suggests that the LTV is pretty high. And therefore, why wouldn't you want to keep spending on user acquisition regardless of any considerations of earn-out or anything like that?

Thanks for the question, Doug. I think let me cover a couple of different points here. So we made a significant reduction in Disney Solitaire marketing quarter-over-quarter and revenue still grew over 15% sequentially, along with the right KPI metrics that you want to see. Revenue that grows with new installs coming down, that only happens if the players are already in the game are staying and spending more. And so in terms of durability, I think you'd agree that's about as clean a read on durability as you get.

The sequential revenue in a live game is what you earn from the players you bring in the quarter plus the carryover, right, from every cohort you've acquired. And in a mature title, that carryover base is the majority of the revenue, think core titles like Bingo Blitz, Slotomania and June's Journey, it's most of the revenue and it's very stable. That's what a deep cohort base does. And you have basically the advantage of the cohorts you've built over time when you've been running a game for several years.

Disney Solitaire is only 15 months old. It launched last year, global launch was April of last year. It doesn't yet have that base because we're still building it. And so when we take marketing investment down, you don't have enough carryover underneath it to fully offset it. And so that's why we expect total revenue to step down sequentially. And from our point of view, that's not the game weakening. It's a young title behaving like a young title. And to put a little bit more of a finer point on it, we're reducing Super Play -- overall Super Play marketing investment by roughly 70% in the second half versus the first half. But in terms of the revenue decline that we expect, it's nowhere close to that, right? And so that step down also is concentrated in Disney Solitaire, which carries the largest single reduction in user acquisition spend. But coming back to then sort of the crux of your question, as we've previously discussed, the front-loaded spend is due to the earn-out framework. The Super Play earn-out is measured on a full year basis, and it carries 2 conditions: year-over-year revenue growth and margin expansion.

Now the objective is defined that way, is the efficient path is to invest early. So the revenue you build compound across the remaining months of the year and then you step down to the margins come through in the back half. The reason we emphasized the positive adjusted EBITDA contribution of Super Play in the second quarter was when you saw our Q1 print and you saw an adjusted EBITDA number with margins in the 16%, 17%, which is obviously much lower than what you're used to seeing. Again, that's a function of the growing growth of the Super Play game in our portfolio, it's margin dilutive this year, but we're okay with that. We've set up the earn-out framework intentionally in a way where you can't just spend your way to growth. And so there's a different way -- there's different ways to sort of grow a game, and we've spoken in the past about how each game has a natural ceiling. And right now, frankly, we don't know the full potential of Disney Solitaire. We're going to keep on growing this game, but we're going to do it in a way that's profitable. And that's the path that we've taken. That's the path that we chose when we structured the deal in the first place when we acquired Super Play. There's continued investment.

Now just because we're decreasing user acquisition spend in the second half, that doesn't mean we're not investing in the game, right? The product road map is unchanged. We have new gameplay modes and content that will continue to ship in the third quarter and the fourth quarter. So again, I think it's a matter of us building and scaling this game in a profitable way. The point that I would just emphasize and leave you with is that we want to do it in a way where we're focused on retention, we're focused on monetization. The consequence is that because of the framework of the earn-out, some of the quarterly acquisition cohorts will be lumpy. You're seeing some of the quarterly variability. But on an annual basis, this matters much less. And so I just emphasize the point that we had in our prepared remarks, which is that we're asking that you judge these titles on their full year growth and full year margin because we do see potential here.

Your last question comes from the line of Albert Kim with UBS.

Just a quick follow-up on the outlook. Any color on how much of the change and the update relates to Super Play versus performance in the legacy games? And just on the D2C side, the mix has been kind of strong towards the 40% mix you previously talked about reaching a few years. Can you provide any updated thoughts on that longer-term target and what kind of the upper limit on the penetration is in your view?

Thanks for the question, Albert. The 39% number, that's the number in aggregate. So if you look at it on a game-by-game basis, naturally, you're going to have certain games that have DTC penetration that is higher than the overall number. And we also have games where it's lower than that number. And that really becomes a function of how long we've had DTC. So DTC is a multifaceted platform, right? It's not just one channel. There's different ways to generate DTC revenue. And so each game, as it is on at a different place in its life cycle of the game, same thing when it comes to DTC. So it's a function of what initiatives a studio is prioritizing. And so there's going to be continued sort of natural upside as across the games, DTC begins to become sort of a larger part of each game sort of revenue mix.

We're not giving an updated target today. I think the point that we would emphasize is that it continues to be something that defends our margin. We intentionally prioritized this last year. That's why you're seeing the rapid ramp-up you've seen over the last 12 months, and it's a key part of our strategy going forward. In terms of the guide, I think we sort of already addressed that question of the different components. So I won't be breaking out exactly what is driving what. But again, we're reaffirming the range just to emphasize that point, but we are pointing you towards the bottom end of that given what we see in terms of the outlook for the rest of the year.

This concludes the question-and-answer session. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.

Thank you for standing by, and welcome to Playtika's First Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, Tae Lee, Chief Financial Officer. Please go ahead, sir.

Welcome, everyone, and thank you for joining us today for the First Quarter 2026 Earnings Call for Playtika Holding Corp. Joining me on the call today is Robert Antokol, Co-Founder, President and CEO of Playtika.

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 expected marketing and 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 risks and uncertainties, some of which are beyond our control. These forward-looking statements apply as of today, and you should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call.

We've posted an accompanying slide deck to our Investor Relations website, which contains information on forward-looking statements and non-GAAP measures, and we will also post our prepared remarks immediately following the call. For a more complete discussion of the risks and uncertainties, please see our filings with the SEC.

As a reminder, we will not be taking questions related to the strategic alternatives review.

With that, I'll now turn the call over to Robert.

Good morning, and thank you for joining us. This was a great start of the year, and we are seeing momentum across the portfolio. Our largest franchise continue to execute at scale. We have allocated investments toward the highest-return opportunities and DTC continues to grow as a key driver for unit economics.

With that context, the headline for me is this Disney Solitaire. What we are seeing is outstanding and it's rare at this scale. This Disney Solitaire has scaled faster than any title in our 15 years history and continues to outperform expectations. Our SuperPlay studio has taken world-class IP, built a strong game economy around it and delivered extremely well. We are investing heavily in user acquisition behind Disney Solitaire and the returns we are seeing support that level of investment. It is some of the best ROI we have seen in the portfolio.

This is not a lucky outcome. SuperPlay is now operating at a scale that matters for Playtika, and it is validating the strategy behind the acquisition, investing in the right teams and backing them with the capital and operating discipline to build large, long-lasting franchise that compounds cash flow over time. Disney Solitaire is the latest example of that, and we believe it will not be the last.

And it is not only SuperPlay. The core business is executing, and we are seeing quarter-over-quarter stability across the organic portfolio. We are investing behind our winners and stepping back where the return profile is not there. That discipline is showing up in the revenue mix. Each year, more of our revenue comes from long life casual games with broad reach. D2C has become a core part of how we run the business, improving unit economics and supporting more durable cash flow profile.

Casual is now 76% of our business, and that transition is largely complete. We are a casual mobile gaming company with a strong social casino business that generates strong cash flow. Our casual franchise are in a leadership position with broader reach and longer runway. And we compete in the categories where scale and winners-take-most dynamics are more pronounced. With SuperPlay serving a growth engine, our portfolio remains anchored in scaled franchise with competitive advantage, while we continue to manage our slot title in a fragmented landscape.

And the mix shift doesn't mean we have taken our eye off social casino. We are managing it with a clear goal to maximize lifetime value, stay disciplined on returns and improve stability where we can. On Slotomania, we're encouraged by the start of the year. Last quarter, we told you to expect quarter-over-quarter improvement in Q1, and we delivered it. Slotomania grew 4% quarter-over-quarter in the first quarter. This is a mature competitive category, and we are not making a forward promise of continued growth from here. Flattening the decline and showing early stability is an important milestone, and it matters for the overall durability of the portfolio.

On D2C, we have grown close to $1.2 billion annual run rate. Few companies in mobile gaming operate at our scale. And it matters beyond the margin benefit when you own the transaction, you improve unit economics and gain more direct tools to engage and serve players over time, which supports durability.

Every quarter, we become more central to how we operate. Our results give me confidence. SuperPlay is scaling, D2C is compounding, and this portfolio is in better shape and a stronger direction. We are executing with discipline. Tae will take you through the details. Thank you.

Thank you, Robert, and good morning. I'm going to start with the financial highlights for the quarter, and then I'll take a step back and walk through the key themes that matter for how to interpret our performance and the business.

In the first quarter, we delivered total revenue of $744.7 million, up 9.7% sequentially and 5.5% year-over-year. Adjusted EBITDA was $125.2 million, representing a margin of 16.8% Importantly, the core business, excluding SuperPlay, continues to generate meaningful adjusted EBITDA and cash flow, and the consolidated margins reflect the planned investment cadence at SuperPlay. We expect SuperPlay to start driving positive adjusted EBITDA in Q2.

Net loss was negative $57.5 million and adjusted net income was $13.6 million. Our adjusted net income excludes the GAAP impact of incremental contingent consideration, which increased this quarter as SuperPlay is tracking ahead of the performance assumptions underlying our last reported results.

Our DTC business set another record in the first quarter. We delivered DTC revenue of $291.8 million, up 16.7% sequentially and 62.8% year-over-year. The headline is simple. SuperPlay is scaling and the core is generating meaningful adjusted EBITDA and cash flow. With that context, there are three points that matter for how to think about our results in the business.

First, the core is durable, and we're focused on games at scale. In mobile gaming, the portfolio naturally concentrates around the titles with scale and community, and that shows up in our market position. Across our largest franchises, we hold the #1 or top 3 position in multiple core categories, and that's the backbone of our strategy, focusing capital on games that can be winners in their respective genres.

In tabletop games, we occupy all 3 top positions with Disney Solitaire, Solitaire Grand Harvest and Domino Dreams. Within solitaire specifically, Disney Solitaire and Solitaire Grand Harvest together represent category-leading scale, giving us a leading position in the sub-genre. Across our casual franchises, we hold leadership positions in large, enduring categories. June's Journey is the #1 title in hidden object. Bingo Blitz is the #1 bingo game and Dice Dreams is a top-3 coin looter game. In poker, WSOP is the #1 poker title. Slotomania remains a core legacy title, providing scale and stability as we focus incremental capital on titles with winners-take-most dynamic.

Second, Q1 margins reflect SuperPlay investment cadence, not structural pressure. Our in-app purchase business model is well established and repeatable. We acquire players, convert them to payers and scale live games supported by a durable community. When that community is in place, these titles generate cash over a long period of time. And that's the playbook we've successfully repeated for 15 years. SuperPlay is in a rapidly scaling phase, and our marketing spend is intentionally weighted toward the first half of the year. As a result, the near-term margin and consolidated adjusted EBITDA in Q1 reflects timing, not the long-term earnings and cash flow potential of the studio.

Third, AI is a tailwind for scaled operators. Investors have asked whether AI changes the competitive dynamics in mobile gaming. Our view is that it's a tailwind. Content creation has never been the barrier to entry in our industry. The hard part has always been building and operating a live game at scale. Live ops cadence, retention and monetization system and the communities that keep players engaged over time, AI is helping accelerate how we build and run those systems. If targeting and optimization improve, companies with scale, data and operating discipline should benefit, but it doesn't change the fundamentals. You still need product market fit and you still need to allocate user acquisition dollars. AI will let strong operators do more with the same or fewer resources, and we intend to be one of them.

Now let's turn to the portfolio, starting with performance in our top 3 revenue titles for the quarter, Bingo Blitz, Disney Solitaire and June's Journey. Bingo Blitz delivered $153.7 million of revenue this quarter, down 3% sequentially and 5.4% year-over-year. Importantly, we believe this does not reflect a change in the underlying strength of the franchise. Bingo Blitz remains the #1 Bingo title worldwide across iOS and Google Play and continues to operate as a category leader in a winner-take-most market. While the quarter reflected a slower start to the year, the underlying economics remain resilient due to the strong growth of Bingo Blitz's DTC business. As we've noted before, DTC is a meaningful lever for Bingo's economics, and that mix shift continues to support the financial profile of the franchise.

Disney Solitaire generated $123.3 million in revenue, up 72.1% sequentially. The key takeaway is the speed and consistency of that scale. Disney Solitaire is growing faster than any title in our history. The combination of a proven scaling engine and Disney's brand reach expands the top of the funnel meaningfully. Based on what we're seeing today, we believe the franchise still has room to grow from here.

June's Journey delivered $76.0 million in revenue, up 8.7% sequentially and 10.4% year-over-year. It was the best quarter for the studio since Q2 of 2024. More importantly, this is a clear category winner. The leadership matters because it gives the franchise room to keep monetizing, not just sustaining as we keep tightening live ops and expanding mix levers like DTC where appropriate. And that's why we're excited about the runway. We see June's Journey as a title that can become a $1 million a day game over time, given its leadership position, durability and the monetization potential that still sits in this franchise.

Let's turn to specific line items in our P&L. Cost of revenue was $192.2 million, down 2.6% year-over-year. Lower platform fees from the continued growth of our DTC business provided a benefit, which was partially offset by royalty expenses. R&D was $98 million, down 5.6% year-over-year, driven by lower head count and reduced outsourcing spend as we streamlined our cost structure, partially offset by severance related to workforce reduction.

Sales and marketing was $360.6 million, up 32.7% year-over-year, driven primarily by incremental performance marketing spend for our SuperPlay games. As we move through the year, we expect spending to normalize from the Q1 peak and step down sequentially, consistent with the cadence we discussed in prior periods. G&A was $143.5 million, up 120.1% year-over-year, driven primarily by the GAAP impact of incremental contingent consideration. Excluding that item, G&A would have been $48.5 million, reflecting lower share-based compensation versus the comparable period.

As a reminder, contingent consideration expense from this past quarter is a noncash fair value adjustment that runs through GAAP results. It can fluctuate from quarter-to-quarter and is excluded from adjusted EBITDA and adjusted net income.

Average daily paying users reached 387,000, up 8.4% sequentially and down 0.8% year-over-year. Average daily active users reached 8.6 million, up 8.9% sequentially and down 4.4% year-over-year. Monthly active users totaled 30.1 million, underscoring the scale of our global player community. ARPDAU increased 1.1% sequentially and 8% year-over-year.

Turning to the balance sheet. As of March 31, we had approximately $779.2 million in cash, cash equivalents and short-term investments. Since then, we paid $461 million to the former shareholders of SuperPlay as an earn-out payment. We remain focused on maximizing cash flow and preserving liquidity, and we've taken actions to prioritize balance sheet flexibility, including suspending our quarterly dividend. From here, we are actively evaluating options to further strengthen our capital structure and extend our maturity runway. Addressing our maturity profile and ensuring ample liquidity is a top priority for management, and we're working deliberately towards the best long-term solution.

Finally, guidance. We're raising our revenue outlook for the year from $2.7 billion to $2.8 billion to $2.75 billion to $2.85 billion. SuperPlay is performing ahead of plan, and we're also seeing better-than-expected performance in the core portfolio. On adjusted EBITDA, we're raising our adjusted EBITDA range from $730 million to $770 million to $750 million to $790 million.

At the same time, we want to be clear about how we're managing this. We're not optimizing the business to harvest near-term adjusted EBITDA at the expense of long-term value. We're managing performance carefully and intentionally to preserve the option to reinvest incremental dollars in the business in the second half, whether that's user acquisition or R&D, while still maintaining discipline on margins and cash generation. Said differently, our updated guidance ranges reflect strong execution, but they also reflect a deliberate choice to keep flexibility. If the opportunities are there, we want the ability to press our advantage and invest rather than lock ourselves into a single maximize EBITDA path.

We entered 2026 with momentum in the business, and the first quarter gave us more reasons for conviction. We'd be happy to take your questions.

[Operator Instructions] Our first question for today comes from the line of Chris Schoell from UBS.

Given the front-end loaded investment you flagged for the year, how are you thinking about the ability to retain users and sustain monetization as sales and marketing steps down in the coming quarters?

And congrats, Tae, on the new role. Any updated thoughts you can give around your capital allocation priorities and how you plan to balance investment with lowering leverage, M&A and/or buybacks here in the near term?

Yes. Thanks for the question, Chris. So on sales and marketing, as you know, Q1 is normally our highest UA quarter even without SuperPlay. And this year, that normal seasonality was amplified by the opportunity that we saw in SuperPlay. So going into the year, what the studio planned to spend versus what we ended up spending, we leaned in because the return profile supported it. So when we talk about the return profile, we're talking about there -- with the increase in sales and marketing on a sequential basis, there was little degradation in the returns associated with that spend. And so we leaned into the marketing investment for the quarter.

However, we shouldn't view Q1 as a run rate for the year. I think from here, the expectation is that we do intend to have a meaningful step down in spend as we move through. And again, the important point is that it's not about pulling back because the opportunity is weakening. It's about moving from a concentrated launch and scale phase toward a more normalized cadence while continuing to invest where returns justify it.

Now with that said, as we think about the broader performance of -- again, if you think about where that spend was really concentrated in the quarter, a lot of it went to Disney Solitaire. And it's important to highlight that not only was the revenue outperformance due to the returns and the amplified spend, but the performance of the cohorts from last year. So the cohorts of players in Disney Solitaire that started playing in Q3 and Q4, as they went through the cycle and as we looked at day 180 and day 240 returns, the performance improved over time. And so that gives us confidence in the outlook that we'll be able to sustain the revenue levels even as we pull back on some of that UA spend.

Your question on capital allocation. I mean, capital allocation is certainly top of mind for us and in terms of order of priority, we think about obviously investing in sort of the core business, including the SuperPlay assets. But as you heard from us last quarter, part of the philosophy and the thinking currently is that we want to maintain sort of maximum liquidity. We do recognize that after the year 1 earn-out, you saw in our filings that the contingent consideration value for SuperPlay went up, basically, as we talked about in our prepared remarks, that's due to the fact that the business is outperforming expectations. And so we want to make sure that we're maximizing liquidity to ensure that we're funding of all earn-outs using the cash that we generate.

And so in terms of capital return, I would say that is not a priority at the moment. In terms of M&A, again, you've heard us now say multiple times, when we acquired SuperPlay, we acquired the crown jewel of independent studios that were out there. And now it's a significant growth driver for the business. We've gone 3 for 3 with Dice, Domino and Disney. And as you know, we have another Disney game in the pipeline. So the focus is on reinvesting in that growth engine.

And if I could just follow up on the SuperPlay earn-outs. Can you just remind us the timing and the amount of the cash payment this year? And along those lines, any color you can just give on the growth across the portfolio for SuperPlay in 1Q? It would just be helpful as we think about modeling the earn-outs beyond '26.

Yes. So we made the payment last month. So you don't see it reflected in our Q1 balance sheet since it's as of month-end March, but the payment went out last month. And so the way the agreement is structured, any incremental earn-outs that the studio earns, the earn-out gets paid in the second quarter of the following year.

And our next question comes from the line of Aaron Lee from Macquarie.

Congrats, Tae, on the new role. I wanted to ask about the social casino business. Nice to see the comments on Slotomania. So with regard to competitive pressure from sweepstakes casinos, we've seen a number of states kind of pass legislation banning the category and more states floating legislation to do the same. Wondering if you can comment on whether there's been any relief in competitive pressure that you can see for the category?

Thanks for the question. Again, when we're looking at the category of social casino, yes, we had last year some toughness of growing the business and our revenues, well, decreased. But our goal was always to stabilize the business. And I think when you look at the result of Slotomania this quarter, and I said it in the last conversation 3 months ago that we're going to grow this quarter. So this quarter, we grew 4%. And when I look in the future of our business, it's going to be stabilized, it's going to be a strong cash flow to the company.

And I cannot react on the competitors or legal or illegal, it's not related to me, but it's related to me that I know I'm still leading the category and I'm growing there and I'm stabilizing the business. Thank you.

Got it. Okay. And then on direct-to-consumer, another record quarter of D2C here, nice job on that. You guys have always been the leader here, and I'm sure the App Store policy shifts are probably helping. But is there something incremental you've learned about the D2C platform that is unlocking this penetration? And how would you characterize the opportunity from here?

So D2C was always one of our growth engine to be a profitable, strong cash flow company. And we were the first one and the leaders in this business. Right now, today, we still believe growing D2C. I think the changes that we see on the platform is giving us some edge. But for us, we are focusing at what we can do in our ability. It's not only cash flow, it's not only better profit. It's giving us a lot of independency to work with the games, to check games, to do Q&A, to do things that we cannot do on other platforms. So for us, D2C was always one of our main benefits. And you see the numbers. We are growing and growing and growing. And we still don't know where it's going to stop.

Yes. And Aaron, just to add to Robert's point, our DTC business is also pretty diversified. And as you noted, the changes in the App Store policies certainly is helping as a tailwind. But I think the way we thought about it as a company, once that opportunity became available, I think it's important to note that we didn't think about it as sort of a single-game opportunity, but made sure that we were tactically taking advantage of the situation across all of our games.

And so it's not -- historically, you've heard us talk about pushing DTC as an opportunity at the right time depending on where that game is in its life cycle. What we've seen in the last couple of quarters is that we have the DTC option available across all the games in our portfolio, including our SuperPlay games. And so you have the overall number of DTC, as Robert talked about, run-rating at $1.2 billion a year. One of the biggest drivers of growth year-over-year comes from Bingo Blitz, which is our #1 game, and it continues to grow the DTC business. And so again, I think it's important to note that we saw the opportunity, and we really took advantage of the situation to grow our business that way.

And our next question comes from the line of Colin Sebastian from Baird.

I have two questions. Maybe first, Robert, can you talk more about the stability or durability you cited across the organic portfolio? Obviously, June's Journey is one that you called out doing really well. But more broadly, do you think the organic portfolio in aggregate can return to growth this year?

And then I have a follow-up maybe for Tae. With the shift away from UA spend for Disney Solitaire, does that give you an opportunity to shift more resources over to the organic titles? Or is it really just more of a shift towards retention over acquisition for the balance of the year?

Thanks for the question. I will take the first one. We always looked at our games. We had last year the issue with Slotomania. And I always said that we had 10 games, 8 games, 9 games, and sometimes we have issues with 1 game. But overall, we are positive.

And I think when you look at this year and we look what we did in the last 6 months, we changed many things in a few of our games. We stabilize. We are working to stabilize all the category of social casino and the organic games that -- last year, June's Journey performed -- their performance wasn't amazing. You see a huge change this year because we decided to take the approach to focus the [indiscernible] games. This is the main game that we are focusing. This is the game that we believe can take the organic portfolio to grow, and we still believe in it.

And we show the market. It was always -- everybody was very [ optimistic ] about us saying, okay, Slotomania is going down, what is going to happen? No, we showed the market that we know how to stop it. We know how to change. We know how to improve and look at our portfolio. We have an amazing, amazing time in Playtika right now in the organic category. Tae?

Yes. Colin, I think just to add to that, too, I think the better way to think about our portfolio is not just SuperPlay and then the rest of the business, right? We've talked about how we approach capital allocation. And so separating the portfolio into areas where we're choosing to prioritize capital and resources versus the parts of the business that we're managing primarily for value, cash generation as well as games that you've heard us say that we're deprioritizing.

You have the numbers for SuperPlay in 2025. And so if you isolate it, you kind of get at the rest of the business year-over-year change in revenue. But again, I think it's important to note that you have to think about the category outside of SuperPlay being modestly better sequentially, although still down year-over-year, with most of that year-over-year pressure tied to Bingo's slower start to the year that we spoke about. But again, offset by the fact that DTC in Bingo really accelerated in Q1, holding sort of the economics stable.

If you look at Poker, Poker was broadly stable. You saw pressure in slots. The year-over-year comps are hard in slots, but it will get easier over time given the trajectory that Slotomania went through last year. But the trajectory in slots was more stable sequentially. And then, of course, the deprioritized part of the portfolio is now relatively small and continues to decline as expected.

So the honest sort of answer is, yes, the business, if you just exclude SuperPlay, is still down year-over-year, but that's not the full story. What matters is we're seeing signs of stabilization in parts of the portfolio where we're allocating capital with intent, particularly in scaled casual and core cash-generating assets. That's why in our prepared remarks, we wanted to sort of remind people of the scale and leadership position that we have across many of these games because this is exactly how we want to manage the business. That's the strategy that we've been implementing the last couple of years. And I think this quarter really shows that the results are coming through in the numbers clearly.

So improved mix over time, healthier base of revenue, more revenue coming from casual assets with broader reach and longer useful life. And again, direct investment toward the highest-return franchises and making sure that we're preserving cash generation from the older sort of legacy social casino games.

On the point about UA away from Disney Solitaire, listen, if we think about the portfolio as a whole. So there's opportunities where, like I mentioned, there was no degradation in the return profile. You see meaningful continued growth coming from the older cohorts in Disney Solitaire that were acquired in the second half of last year, continuing to perform well in Q1 because of, again, our business is road map based, right? So after the upfront UA period, what drives growth is retention, monetization, live ops execution and the ability to keep cohorts productive over time. And that's what we've done consistently well over the last 15 years.

Now in terms of just the pace of the spend, I think you're going to see that the marketing spend outside of the SuperPlay games, that will kind of follow our more typical cadence of how we've tended to spend UA over the course of the year. But sort of on a consolidated basis, you will see that significant step down from Q1 to Q2 and then to the second half of the year.

And our next question comes from the line of Doug Creutz from TD Cowen.

You talked about how good the KPIs are for Disney Solitaire. And clearly, that gave you a lot of confidence to invest in it in Q1. Can you talk about tactically why you think it's advantageous to load so much of your UA spend for the game into Q1 rather than spreading it more evenly across the year? Is there something about the dynamics of the market in Q1 that make it so? Is it about the cadence of content for the game? Can you kind of go into why you feel like it's better to have so much of your marketing spend early in the year?

Yes, Doug, thanks for the question. So for us, because we're in-app purchase based, right, you always have to think about the marketing spend or campaign alongside sort of product innovation and things in the road map. But I want to kind of go back to what I mentioned on one of the prior questions where going into the year, it was always the plan that it would be front-loaded. It was always the plan that it would be in Q1 because we wanted to -- because -- again, because of the payback that we saw in Q4 and payback literally just [ in, ] if you spend it and how quickly you make it back and then the strength of the cohort is after you made it all back, what you continue to gain.

The important thing to note is even with the sequential step-up in marketing that we saw from Q4 to Q1 that there was a little degradation in the return profile. So then with that opportunity, we increased or accelerated the spend further. So that's what you're seeing in sort of the consolidated number and why you have the revenue performance being where it's at and the impact on adjusted EBITDA.

Thank you. This does conclude the question-and-answer session as well as today's program. Thank you, ladies and gentlemen, for your participation. You may now disconnect. Good day.

Good day, and thank you for standing by. Welcome to the Playtika Q4 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Tae Lee, SVP, Corporate Finance and Investor Relations. Please go ahead.

Welcome, everyone, and thank you for joining us today for the fourth quarter 2025 earnings call for Playtika Holding Corp. Joining me on the call today are Robert Antokol, Co-Founder and CEO of Playtika; and Craig Abrahams, Playtika's President and Chief Financial Officer.

I'd 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. These statements and other comments are not a guarantee of future performance, but rather are subject to risks and uncertainties, some of which are beyond our control. These forward-looking statements apply as of today, and you should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call.

We've posted an accompanying slide deck to our Investor Relations website, which contains information on forward-looking statements and non-GAAP measures, and we will also post our prepared remarks immediately following the call. For a more complete discussion of the risks and uncertainties, please see our filings with the SEC.

With that, I'll now turn the call over to Robert.

Good morning, and thank you for joining us. We finished 2025 with a strong fourth quarter that shows our plan is working and the business continues to show bright spots. In Q4, we delivered $678.8 million of revenue and $201.4 million of adjusted EBITDA, driven by D2C growth, our pivot to casual and super player results. Here is the main point. We are building a balanced set of assets.

Every year, more revenues comes from long-life casual games with broad reach. And D2C is now core to how we run the business. At the same time, our legacy game still matter. There are still meaningful sources of cash flow, and we are managing them with a focus and care a part of our portfolio, not as one game company. This mix is more balanced, less dependent on any single category and better positioned to deliver durable free cash flow.

First, D2C. D2C keeps growing and adds more value for Playtika. In Q4, D2C was 36.8% of our revenues, and we ended the year at about $1 billion in annualized D2C revenue. This marks a clear shift in how we engage with players and process transaction. We are building a multichannel D2C strategy, and we are consistently optimizing those channels to improve unit economics and strength our business over time.

Second, our casual games. In Q4, casual revenues was about 74% of total revenue. We have evolved our portfolio over the last 5 years. This broader the business and support a steadier path. Third, SuperPlay. SuperPlay delivered record revenues in Q4 with Disney Solitaire up 21.4% quarter-over-quarter and now our second largest game in the portfolio. We see improvements in Dice Dreams and continuous growth in Domino's Dreams. SuperPlay's growth this year is nothing short of amazing. It makes them one of the fastest-growing studios in the mobile gaming industry at their scale. We acquired SuperPlay to add top casual games, bring a new growth engine and widen our base with long-life assets. The performance support this decision and raises our confidence in SuperPlay. This acquisition highlights a core strength at Playtika, recognizing amazing teams and backing them with a capital and operating discipline.

With SuperPlay, we invested behind a talent team with a great potential and provide the financial flexibility to scale games. This reflects our disciplined approach to allocating capital when talent, product and returns align and the same playbook guide how we run the entire company. We act from position of strength. We focus on returns, relocating spend and generating cash.

With that, I will turn the call over to Craig to review our financial outlook and capital allocation framework.

Thank you, Robert, and good morning. Q4 reflects the strength of our model and a mix shift that is now clear in the results. We came in ahead of our revenue and adjusted EBITDA guidance, set another D2C record and saw outstanding momentum from SuperPlay. This is now the third straight year we have met or exceeded our adjusted EBITDA guidance, reflecting the strength and consistency of our operating model. I also want to reinforce how we run the company.

We manage Playtika as a portfolio. We protect and strengthen leadership positions in our key casual franchises. We scale capabilities like D2C that improve our unit economics across the business, and we maximize the lifetime value of our social casino theme titles while staying disciplined on returns and costs. On social casino theme games specifically, these games operate in a tough crowded market, and the mobile industry has evolved since our IPO. It's not a reason to be defensive. It's a reason to be decisive. Our goal is clear, slow the decline and get full value from these assets. We fund where returns make sense, extend the life of older titles and step back where the bar is not met. We were pleased to see early signs of stabilization in Slotomania in the quarter.

To be clear, we remain focused on stability and value where we build the next phase. And to keep resources concentrated on our more attractive opportunities, we streamlined parts of the organization and plan to redeploy investment behind the areas with the strongest returns. The mix is improving, our growth engines are working, and we are building a more resilient Playtika.

Turning to the financial results for the year. Revenue was $2.755 billion, up 8.1% year-over-year. We generated net loss of $206.4 million, adjusted net income of $197.5 million and adjusted EBITDA of $753.2 million, down 0.6% year-over-year. Our net loss margin was minus 7.5%. Our adjusted net income margin was 7.2%, and our adjusted EBITDA margin was 27.3%. We generated record free cash flow of $481.6 million, an increase of 21.4% year-over-year. We are managing CapEx and working capital tightly, and we remain focused on delivering strong free cash flow generation over time.

Now to the quarter. Revenue was $678.8 million, up 0.6% sequentially and up 4.4% year-over-year. Net loss was $309.3 million compared to net income of $39.1 million in Q3 and a $16.7 million loss in Q4 of 2024. The net loss was primarily driven by the noncash impact of remeasuring contingent consideration related to the Super Play earn-out, which flows through GAAP results but is excluded from our adjusted net income and adjusted EBITDA. Adjusted net income was $89 million compared to adjusted net income of $65.8 million in Q3 and $27 million in Q4 of 2024. Adjusted EBITDA was $201.4 million, down 7.4% sequentially and up 9.5% year-over-year.

Our adjusted EBITDA margin was 29.7% compared to 32.2% in Q3 and 28.3% in Q4 of 2024. Direct-to-consumer was a key driver of both performance and mix. DTC revenue reached $250.1 million, growing 19.5% sequentially and 43.2% year-over-year, reflecting broad-based contributions across our games. Turning now to our business results for the quarter for our top 3 revenue games. Bingo Blitz revenue was $158.5 million, down 2.5% sequentially and essentially flat year-over-year. We drove engagement with focused in-game and out-of-game campaign around Bingo Blitz and Garfield collaboration, including a new theme bingo room featuring a cooperative mini game where players work together to progress through Garfield content.

We also introduced a new gameplay mechanic that has players find Garfield within bingo cards, and we closed the quarter with an innovative experience that offers 8 bingo cards per session instead of the usual 4. Disney Solitaire revenue was $71.6 million, up 21.4% sequentially. By Q4, the title has scaled rapidly and was approaching a $300 million annualized run rate, reflecting its strong momentum since its global launch in April 2025. Results have been driven by product execution and steady tuning, including new feature launches, game economy updates and continued improvement in unit economics through direct-to-consumer. We've also seen traction internationally, including Japan, which further validates the global appeal of the franchise.

For the full year, SuperPlay generated about $573 million of revenue, a 67.5% increase from the $342 million baseline tied to the earnout. The studio is doing this while staying focused on long-term fundamentals, engagement, retention and live operations. As we shared previously, we have expanded our collaboration with Disney and Pixar Games and are developing a new title in the SuperPlay pipeline. June's Journey revenue was $70 million, up 2.5% sequentially and down 2% year-over-year. June's Journey continues to maintain its position as the highest grossing hidden object game worldwide. In Q4, engagement benefited from a strong content cadence and seasonal programming, including the [ Wicked IP ] collaboration. Direct-to-consumer is relatively new for June's Journey, we have scaled it quickly across both iOS and Android, and we continue to see it as a durable lever to deepen player relationships and improve unit economics over time.

Turning now to specific line items in our P&L for the fourth quarter. Cost of revenue increased 4.5% year-over-year, driven by revenue growth, offset by platform mix. Operating expenses increased 100.3% year-over-year, driven primarily by the GAAP impact of contingent consideration related to the SuperPlay earn-out. Excluding the change in contingent considerations as well as expenses associated with our long-term cash compensation program that expired in 2024, operating expenses increased by 5.4%. R&D expenses increased 13.8% year-over-year, driven primarily by higher headcount following the SuperPlay acquisition and continued investment to support the growth of the SuperPlay Studio.

Sales and marketing increased 9.6% year-over-year, reflecting higher user acquisition spend due to the full quarter impact of SuperPlay as well as the sequential step-up in marketing investments that we previewed on last quarter's earnings call. G&A increased 383.5% year-over-year, driven primarily by the $394.1 million contingent consideration expense recorded in the quarter related to the SuperPlay earn-out. Excluding the impact of contingent consideration and expenses associated with our long-term cash compensation program, G&A would have declined by 22% year-over-year. To provide more clarity, a brief word on the earn-out mechanics.

The SuperPlay earnout this year is tied to revenue growth versus a $342 million revenue baseline with a step-up in multiple above certain thresholds. Changes in fair value of the contingent consideration run through GAAP G&A, but they are excluded from adjusted net income and adjusted EBITDA and do not change the underlying cash terms of the earn-out. We ended the year with $820.2 million in cash, cash equivalents and short-term bank deposits, and we expect to fund the SuperPlay earn-out from cash on hand. Looking at our operational metrics. Average DPU increased 0.8% sequentially and 5.3% year-over-year to $357,000. Average DAU decreased 3.7% sequentially and 1.3% year-over-year to $7.9 million. ARPDAU was $0.93 in the quarter, up 4.5%, both sequentially and year-over-year.

On to our outlook for 2026, our guidance reflects a business that has been undergoing a strategic shift. Growth titles led by SuperPlay are driving material revenue. Our industry-leading casual franchises, Bingo Blitz, June's Journey and Solitaire Grand Harvest continue to benefit from live ops and rising direct-to-consumer contribution. In Caesars Casino, revenue is declining and our focus is on protecting the economics of those franchises and maximizing cash flow through disciplined management and operating efficiency. We also want to be clear that direct-to-consumer is a core and growing part of our business, and we are executing to expand it. At the same time, we are taking a measured view of any incremental benefit tied to the evolving platform policy landscape, and our guidance does not assume any single policy outcome.

With that context, our guidance for full year 2026 is as follows. Revenue of $2.7 billion to $2.8 billion, adjusted EBITDA of $730 million to $770 million, capital expenditures of $80 million and an effective tax rate of 30%. We also expect our marketing spend to be weighted toward the first half of the year, particularly the first quarter, which we expect to result in lower adjusted EBITDA in the first quarter and higher adjusted EBITDA in subsequent quarters. Finally, capital allocation. When we initiated our dividend, the intent was to provide an attractive return to shareholders while we executed on our strategic priorities, including restarting M&A and repositioning the portfolio. We've made real progress against those priorities. We have scaled D2C to record levels, we have successfully ramped up SuperPlay, and it is performing in line with and in certain areas ahead of the expectations we had at the time of the acquisition. We have also sharpened our operating model and reset our cost basis.

At this stage, our capital allocation framework needs to reflect both the opportunities in front of us and the performance-based nature and potential size of the SuperPlay earn-out. To preserve flexibility and direct capital to the highest return uses, we are suspending our quarterly dividend. With respect to share repurchases, we intend to keep buybacks available within our capital allocation framework. We will continue to evaluate our capital structure over time, including opportunities to reduce debt where it makes sense while maintaining balance sheet capacity to fund potential obligations and invest behind growth. As we take these steps to focus capital on the highest return opportunities, we remain fully committed to enhancing long-term shareholder value.

With that, we'd be happy to take your questions.

[Operator Instructions]

Our first question comes from Aaron Lee from Macquarie.

I just wanted to talk on a general level about AI. I know you guys mentioned this in the letter around workforce reduction. Just curious if you could expand on how you view the role of AI within your business. How are you using it today? And what have been the early learnings? And looking forward, where do you see the greatest opportunities?

Thanks for the question. So as we spoke in the last few years, we started investing in AI, I think, 6, 7 years ago. We opened a few labs in Playtika, and we always understood that this will be part of the future growth. Right now, what we see, we see a revolution happening. And we are -- for us, this is an amazing opportunity because when you look at Playtika today, our asset is the community and the content. This is our asset. We see the AI opportunity as a new platform. We see something that can grow our business. We are very excited. We are following every trend that's happening in the market. And I'm sure that for us, it's going to be one of our growth engine in the future.

Got you. And then on capital allocation, I appreciate all the comments there. How should we be thinking about your appetite for M&A at this point? Does that fall into the category of investing behind high-return growth?

Thanks for the question, Aaron. M&A has always been a core part of our growth strategy. SuperPlay has been a tremendous transaction for us. And given the growth and strong growth that we've seen through the year, we plan to continue to invest aggressively in growing that within the constraints of the earn-out. As we look at overall kind of capital allocation, we want to continue to invest in the best ROI opportunities possible and investing in the SuperPlay earn-out and the SuperPlay platform is definitely the highest priority capital use for us. As we look at other M&A opportunities, obviously, we're always going to try and be opportunistic, but obviously cognizant of the fact that we want to maximize liquidity and balance sheet flexibility as we move forward.

Our next question comes from Eric Handler from ROTH Capital.

I'm curious, as you look to transition more people to the DTC platform, what type of incentives are you giving people to move off of iOS or the Google or Android platform in terms of, I assume, some percentage higher of incremental virtual currency or items. So I'm just trying to get a sense of how that's working.

Thanks for the question. So first, to say again, the D2C become one of our biggest part of growth, cash flow growth in the last few years. We are on a run rate of $1 billion. I think we are leading the industry. I don't think even somebody is close to us. In the end of the day, we're giving a better experience to the users. We are closer to him. We can provide more support to him. I think the advantage of having such a huge DTC platform is the connection, the right connection to the players. It will help with retention. It will help with long-time play game.

So for us, this is one of the most important stuff. And as we started the D2C, we always knew that it's going to be one of Playtika's strength, one of Playtika engine growth for cash, and this is what we're doing.

Our next question comes from Chris Schoell from UBS.

Great. Just a follow-up on the 2026 guidance. Can you help frame or quantify what this assumes for Slotomania and the social casino performance as you seek to ramp newer IP in that category? And as you think about performance coming in at the higher or lower end of those ranges, what are some of the biggest variables in your mind?

Sure. Thanks for the question. So as you've seen, we've been undergoing a mix shift. I'm proud to say that our business is now 74% casual, and that continues to be the fastest growth part of the business driven by SuperPlay. As we look and give forward guidance, obviously, continued overperformance from the SuperPlay titles is definitely there on the upside case.

And on the downside case, you'd see probably continued declines on the social casino portfolio. And so that's -- that mix shift obviously impacts margins. But I think as we look at the guidance and our consistency over the past 3 years, either meeting or beating expectations on the EBITDA side, we have confidence in our ability to execute there and continue to focus on that transition towards a more casual, healthier mix going forward.

Okay. Great. And then if I can fit in one more. The D2C mix was clearly well ahead at 37% versus the 40% mix. I think you've previously talked about reaching in 2 years. Any updated thoughts on that longer-term target? And where is the natural limit as we try to gauge how high this could ultimately reach?

Sure. Good question. Our previous long-term target was 40% of revenue. We'll continue to keep that just given all of the various policy changes in the background. Our target does not assume one outcome or the other as it relates to things outside of our control. It's really focused on what we can control and our own execution.

Our next question comes from Matt Cost from Morgan Stanley.

Just first on Disney Solitaire. Obviously, that game is on a really great trajectory. Just looking at some of the third-party data out there, it looks like it's kind of shifted upward again year-to-date in 2026. I guess is that a function of live services in the game? Is it because you've kind of hit a seasonal bump in marketing, which you typically see in the first quarter and you're kind of allocating a lot of it towards that game? I guess how should we think about the trajectory as we move through '26 from here? That's question one.

Question two, for Craig. Obviously, a lot of shift towards DTC in the quarter. It seemed to impact gross margins a little bit less than I would have expected, just given the magnitude of impact to revenue mix on DTC. So I guess, are there any cross currents in gross margins that we should be cognizant of that prevent like a sudden increase in gross margin as you see the dollars flowing through DTC?

Thanks, Matt. I'll take the first one on Disney Solitaire and Tae will take the second piece on gross margins. So Disney Solitaire is off to a great start to 2026. As we referenced in the prepared materials, there's a meaningful investment in marketing dollars in the first quarter. And so anticipate EBITDA will be impacted in Q1, but then moderate throughout the year. And so I think you're going to see that larger investment drive real growth. It's one of the best ROIs we have within the portfolio in terms of deploying marketing dollars.

And Matt, on the gross margin point, you're right to call out some of the cross current you're seeing. You're seeing the benefit in lower platform fees in revenue from an increased DTC mix, but that is offset by increased amortization coming from past acquisition that's flowing through our P&L.

Our next question comes from Jason Bazinet from Citi.

I was just wondering, Craig, if you could just unpack that $400 million roughly change in the contingent consideration. Is that composed of like $225 million on the '25 payout that hasn't gone out the door plus $180 million or so on the 2026 payout? And if that's true, what, if anything, can you share about the EBITDA margins at SuperPlay to sort of trigger that $180 million on the '26 payout?

So if you look at the contingent consideration that we have payable due at the start of Q2, you'll see in short-term payables, you'll see an estimate of the earn-out amount. We have the year 1 earn-out payable at the start of Q2. And then obviously, each year thereafter, years 2 and 3, we'll have earn-out payable before. Given the strength and the performance there, you see a higher earn-out payment and therefore, higher contingent consideration. The EBITDA is in line with -- in order to pay the earn-out in year 1 was less than $10 million. And so while we can't say the specific amount, they obviously are eligible for the earnout and had an EBITDA loss better than minus $10 million.

But there's nothing prospective in those earn-outs for 2026, like you're not positing what the earn-out will be in '26. These are all just earnouts. Backward looking, if that makes sense?

No. So the contingent consideration amount in total takes into consideration future earn-out payments as part of the Monte Carlo simulation coming up with the present value of that payment. But in terms of what's actually payable, it's in our payables in the balance.

Is the trigger -- am I right that the trigger is greater than 5% EBITDA margins? Is that...

Year 2, which is 2026, it's greater than 5% margin, and there's a 0.25x multiple premium on revenue if they get to a 10% margin.

And so is it fair to assume based on the $400 million that you're between that 5% and 10% margin on SuperPlay? Or is that the wrong implication?

No, that's for 2026. For 2025, which is the first year of the performance earn-out, it's just doing better than minus 10% in EBITDA. So you can assume that.

Our next question comes from Clark Lampen from BTIG.

Craig, I have 2 on DTC, if I may. You mentioned that you're relatively earlier on with the transition for June's Journey. Could you just remind us if there are titles across the portfolio that don't have a meaningful DTC presence or similar to June's, maybe a more nascent one at this stage? And then maybe a naive question on DTC. When we think about that sort of revenue stream for you guys right now, is that spend that's solely captured from your players in a browser environment? Or have you also set up link outs for the App Store version or app version of your games for players that might prefer to engage with the titles in that format?

Thanks, Clark. So at this point, we have broad penetration of DTC across the portfolio. So those casual titles that we had flagged previously years ago are now well penetrated in terms of their D2C base and growing. We had pretty good broad growth across the portfolio. Based on platform changes, we've seen increases across the platforms with -- on mobile with linkouts and as a new means of growing D2C. And so there's a variety of channels there that we deploy and each game has its own road map and is out there executing.

Okay. If I may, very quickly, just sort of a quick follow-up on marketing. Relative to the sort of $761 million that we saw called out in the K, can you give us -- is it possible to give us a sense of sort of what's budgeted for 2026 or maybe even a more directional indicator? I guess sort of within this question, I'm curious if you see in Q1 that the returns are really healthy for Disney Solitaire, do you have the flexibility over the balance of the year to invest behind that title or new ones if you believe that the returns justify it?

Yes. Unfortunately, we don't break out the guidance on marketing dollars for next year. What I can say is that there are constraints around super play in that they're under an earn-out. And so given the previous question, they're targeting between 5% or greater margin. So while the foots on the gas from a marketing perspective there and driving growth, at some point, that will have to moderate to ensure that they're able to drive margins into that 5% or 10% or greater from an EBITDA perspective. And so that's really the only commentary there.

Our next question comes from Doug Creutz from TD Cowen.

Just wondering if you could give an update on the status with Jackpot Tour. Is that a game you intend to be putting significant marketing dollars behind in Q1 and the first half? And how does that game factor into your guidance?

Thanks for the question. So as we said, we launched the game. We are still checking the KPIs. I can say that we are not sure 100%. We're going to open it strongly in the coming few weeks. We need still to see the numbers that we are used to. So it's in progress. And it's part of our strategy around the slots game. And we see -- I want to take this opportunity to say that Slotomania, after many, many quarters going to grow Q-over-Q this quarter. This is big news for us. This is big news for the industry of the social casino. And as I said in the beginning, the Jackpot Tour is part of our strategy there. Thanks.

I am showing no further questions at this time. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Playtika Q3 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Tae Lee, SVP, Corporate Finance and Investor Relations. Please go ahead.

Welcome, everyone, and thank you for joining us today for the Third Quarter 2025 Earnings Call for Playtika Holding Corp. Joining me on the call today are Robert Antokol, Co-Founder and CEO of Playtika; and Craig Abrahams, Playtika's President and 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 and more specifically, the future performance of our individual titles, such as Slotomania or our recently launched Disney Solitaire. These statements and other comments are not a guarantee of future performance, but rather are subject to risks and uncertainties, some of which are beyond our control.

These forward-looking statements apply as of today, and you should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call. We have posted an accompanying slide deck to our Investor Relations website, which contains information on forward-looking statements and non-GAAP measures, and we will also post our prepared remarks immediately following the call.

For a more complete discussion of the risks and uncertainties, please see our filings with the SEC. With that, I will now turn the call over to Robert.

Good morning, and thank you, everyone, for joining our call today. As we approach the end of 2025, I want to start with SuperPlay. Our SuperPlay portfolio is driving exceptional growth led by Disney Solitaire, which has scaled faster than any title in our 15-year history. Disney Solitaire continues to outperform expectations, establishing itself as one of 2025 standout new mobile launches.

The title is tracking at annualized run rate above $200 million, supported by strong engagement and rising D2C mix. Building on that momentum, I am pleased to announce that we have expanded our collaboration with Disney and Pixel Games and they're developing a new title in the SuperPlay pipeline. We will share additional details at the appropriate time.

Turning to the quarter. I'm proud to share that Playtika continues to execute with a focus and discipline. This quarter, we delivered another record in direct-to-consumer revenue, reaching an all-time high with a broad-based contribution from Bingo Blitz, June Journey, Solitaire Grand Harvest and our SuperPlay portfolio. This performance reinforced the strength of our strategy to deepen player relationship and protect our operating margins supported by recent policy changes that opened new payments channels and expanded our ability to route transactions through direct-to-consumer platforms.

As we look at 2026, our portfolio transition will continue. This includes ongoing work to strengthen our slot business. Slotomania remains strategically important to Playtika. And while it continues to be significant headwind for the business, we are focused on stabilizing the franchise over time. In parallel, we will continue relocating resource towards higher return opportunities and away from titles that no longer meet our ROI thresholds.

We believe this strategy will strengthen our portfolio mix and enhance long-term cash generation. With that context, Craig will walk through the details behind our record D2C numbers, provide updates on our top titles and review the quarter's results in greater detail.

Thank you, Robert. Our performance in the third quarter reflects the strength of our operating model and disciplined approach to investment. Our direct-to-consumer mix continued to expand margins and SuperPlay's performance underscores the strategic rationale behind our acquisition strategy. We also advanced targeted investments in our new games pipeline and platform capabilities, including AI-driven initiatives in our House of Fun Studio that replace manual processes, improving efficiency and scalability across live operations.

We are reassessing our cost structure across the organization to sharpen operating efficiency while protecting capacity to invest behind our highest return opportunities. On spending, we executed the planned step down in second half marketing and CapEx remains on track to finish below our full year guidance. With that, let's get into the details of the quarter.

We generated $674.6 million of revenue in the quarter, down 3.1% sequentially and up 8.7% year-over-year. GAAP net income was $39.1 million, up 17.8% sequentially and down 0.5% year-over-year. Adjusted EBITDA was $217.5 million, up 30.2% sequentially and up 10.3% year-over-year, driven primarily by the planned step down in sales and marketing for our SuperPlay titles and continued margin momentum from our D2C business.

D2C revenue crossed the $200 million threshold to $209.3 million, up 19% sequentially and up 20% year-over-year. Growth was broad-based across the portfolio with the majority of D2C revenue coming from our casual games, consistent with the portfolio transition underway to position the company for long-term success. We develop and operate our own D2C platforms, which enable us to achieve outstanding approval rates, reduce reliance on third-party providers and optimize processing methodologies for even stronger results.

As Google Play policies evolve in the U.S. following recent court rulings, we see a potential tailwind for further D2C adoption and economics subject to final implementation and our own testing. D2C represented 31% of total revenue this quarter, and we are working to achieve 40% on a run rate basis in the next 2 years. Now let's review the performance of our top 3 titles. Bingo Blitz delivered another record quarter with revenue of $162.6 million, up 1.5% sequentially and 1.7% year-over-year, underscoring the franchise's resilience and ongoing leadership in this category.

The studio drove results through seasonal programming, personalized promotions and VIP engagement, supported by pacing enhancements and optimized offer packaging to sustain payer mix and time and game. These initiatives reflect our continued investment in live ops cadence, personalized merchandising and routing more transactions through DTC channels, strategies that not only drove strong engagement but position Bingo Blitz for incremental margin and mix benefits as adoption scales.

Slotomania revenue was $68.5 million, down 20.8% sequentially and 46.7% year-over-year. This performance reflects the deliberate rebalancing of the game economy we initiated earlier this year, work we anticipated would create revenue pressure as we recalibrate progression, rewards and pricing to support healthier long-term cohort returns. While we work through these changes, we intentionally reduced performance marketing to avoid inefficient spending, which contributed to lower Slotomania DAU in the quarter.

Once the pace of decline moderates, we plan to selectively reaccelerate performance marketing to rebuild scale. We are not assuming a near-term revenue recovery, and our focus remains on improving game experience, payer retention and ROI disciplined marketing with the goal of stabilizing the franchise. Looking ahead, we remain on track to launch our new slot title, Jackpot Tour this quarter, but we do not expect material contributions to 2025 results. June's Journey revenue was $68.3 million, down 1.2% sequentially and down 2.7% year-over-year. The franchise remained resilient, supported by a strong live ops cadence and personalized in-game offers, and we aligned our content theming with an updated live ops and monetization strategy.

During the quarter, we deepened monetization through economy updates and new features, which lifted ARPDAU. D2C adoption continued to rise in the quarter, where adoption is tracking ahead of plan. These initiatives reinforce June's Journey's position as a durable, high-quality franchise and provide a foundation for incremental margin benefits as we scale these levers.

Turning now to specific line items in our P&L. Cost of revenue increased 6.1% year-over-year, reflecting both our revenue growth and higher amortization expense associated with the SuperPlay acquisition. Operating expenses were up 21.6% year-over-year, driven primarily by higher performance marketing investment and the GAAP impact of increased contingent consideration, both related to the SuperPlay acquisition. R&D decreased by 0.4% year-over-year, primarily driven by the termination of our long-term cash compensation program, offset by increases in employee compensation related to increased headcount. Sales and marketing increased by 37.6% year-over-year, primarily driven by incremental performance marketing spend for the SuperPlay portfolio. As planned, we saw a meaningful sequential decline in performance marketing during Q3, which contributed to the improvement in adjusted EBITDA.

We expect the seasonal pattern of heavier spend in the first half and a step down in the second half to continue next year, reflecting the cadence of our marketing strategy and earn-out timing rather than a structural change to long-term margin levels. G&A expenses increased by 18.8% year-over-year, including a $30.8 million GAAP expense related to the revaluation of contingent consideration from the SuperPlay acquisition.

Given SuperPlay's momentum, we remind investors that the acquisition-related contingent consideration may fluctuate and any fair value remeasurement would flow through GAAP G&A, but is excluded from adjusted EBITDA. Our adjusted EPS also excludes this impact. Excluding adjustments related to contingent consideration, G&A would have declined year-over-year by 23.7%, largely driven by the termination of our long-term cash compensation program.

As previously disclosed, SuperPlay's first year earn-out is tied to year-over-year portfolio revenue growth of the SuperPlay games versus a $342 million baseline. When revenue growth exceeds 60%, the multiple applied to incremental gross revenue steps up to 2x from 1.25x, subject to the portfolio achieving adjusted EBITDA above negative $10 million. I am pleased to say the business is currently tracking towards that 60% growth threshold, subject to the same conditions.

As of September 30, we had approximately $640.8 million in cash, cash equivalents and short-term investments. Looking at our operating metrics, average DPU declined by 6.3% sequentially and increased 17.6% year-over-year to $354,000. Our average DAU decreased 6.8% sequentially and increased 7.9% year-over-year. ARPDAU increased 2.3% sequentially and was flat year-over-year. Finally, we expect to finish the year within our guidance range for both revenue and adjusted EBITDA. With that, we would be happy to answer your questions.

[Operator Instructions] Our first question comes from Colin Sebastian from Baird.

I guess, first off, could you expand a bit maybe on the commentary around reallocating resources and then the AI initiatives at the studio level, maybe which games could be impacted and where you're seeing the most productive uses of AI?

Colin, thanks for the question. So we continue to look at our acquired titles, investing in growth there in our biggest franchises as well. I think we've had, obviously, a lot of benefit from DTC expansion this quarter and looking at rolling that out across all titles as well as our SuperPlay titles. In terms of capital allocation, we continue to look to return capital shareholders through dividends and buybacks as well as pursuing selective accretive M&A. So I think nothing has changed there. In terms of your question as it relates to AI, constantly looking at ways that we can enhance our player experience and do it in a way that allows our studios to be more efficient and move more quickly as they release features for our customers to improve our products. Personalizing products is probably where we see a lot of the upside in terms of our live ops capabilities as well as providing player support.

And maybe just as a follow-up on your commentary on marketing, the conversion and monetization metrics look pretty solid here even with the step down in marketing. So I guess, is the need to lean back into spending on paid acquisition? Is that more about supporting new games or some of the other factors that you mentioned, including D2C?

Sure. If we look at our growth titles, with the structure of the SuperPlay earn-out, a lot of the marketing was heavy in the first half and pared down in the second half. So we expect that to ramp up again starting next year. As it relates to our biggest franchises and our other growth titles, marketing is a key to continue to drive growth where we have strong return on investment.

So we apply that return on investment criteria as we analyze all of our investment opportunities. And where we see opportunities to invest, we're going to deploy capital and where we see opportunities where the UA costs are high or doesn't make sense, we'll pull back.

Our next question comes from Omar Dessouky from Bank of America.

Craig, good to hear that SuperPlay is working well. As we get to the end of 2025, I was wondering if you could share any thoughts about the dividend in 2026 and you're thinking about capital allocation in 2026, if it's any different than 2025.

Thanks for the question. We can't share anything now on the future. What we can say is we're constantly evaluating our capital allocation framework, making sure it makes sense in light of what's going on in the business and the market more broadly. And SuperPlay has had tremendous performance. We gave a slide in the presentation that we uploaded to the IR site this morning that shows that SuperPlay is on track to grow at the 60% threshold, so 60% growth over the $342 million baseline.

And so it's tremendous performance from a studio that is continuing to focus on scaling their margins and becoming more profitable as they look into next year. And so with that, it's really impressive growth.

Our next question comes from Aaron Lee from Macquarie.

Nice results this quarter. There was also recent news that Google is borrowing Sweepstakes from advertising under the social casino category. Just curious, do you see this as being a meaningful tailwind for your business at all?

We don't comment on speculation, but obviously, it's a situation we'll continue to monitor. And wherever we see opportunities, we'll deploy capital.

Okay. Fair enough. And then on Jackpot Tour, nice to see that still on track for a fourth quarter launch. In the past, you've said that the game will be differentiated from your other slot titles. Do you expect any cannibalization of your current slot portfolio once that launches?

Thanks for the question. No, as I said in the past, Jackpot Tour is going to be a little bit different and will approach different audience. And today, when we look at our portfolio, the social casino, we see some places that we didn't been in the past. So we are very excited about it, and we think it will help us to support the issues that we had in Slotomania in the past. And this is a very good direction for us for next year for growth, of course. Thank you.

Our next question comes from Doug Creutz from TD Cowen.

I just wanted to ask about the big acceleration in D2C growth you had. I think you mentioned that SuperPlay was a contributor. When did you move their titles on to your DTC platform or all their titles on it? And was there anything else that you call out that you did specifically in the quarter that drove that big step-up in DTC growth?

So as we spoke in the past, one of our biggest advantage is our D2C platform. And by the way, this is our own platform that we are developing, we are supporting. We are not working with any third parties. This is always for me, very important to say. We are not speaking about each game differently, but most of our games already is on our platform, on the D2C platform.

We are very focused on this. We are very -- as Craig said in the past, we are very disciplined with the expense, and we are very focusing of the cash flow, the revenues. And for us, this is one of the biggest channels to grow our EBITDA for next year. As I said, this is one of our biggest advantage, and there will be more surprises in the future.

Doug, specifically in the third quarter, U.S. iOS was the major catalyst driving growth.

Our next question comes from Eric Sheridan from Goldman Sachs.

Two, if I could. On Slotomania, how should we be thinking about what's going into stabilizing that title broadly on the operational side and how to think about the duration path to stabilizing that? That would be number one.

And then number two, when you think about allocating marketing dollars and incremental investments into the user base, how would you characterize the different return profiles you're seeing right now from user acquisition versus user retention and driving more frequent behavior among existing users?

So I will speak a little bit on Slotomania and then Nir our CMO, will speak about your second question. So regarding Slotomania, as we said in the beginning of the year, we know what is our focus. We are working very hard, and we believe we can stabilize the game. We believe we can make the game better. We are working on the economy of the game.

We did many, many different approaches this year. And by the way, when you look at our history and you look at WSOP game that had been decreasing in the last few years, and this year is doing very well. We know how to fix game. And we are very positive in our ability to do it for Slotomania. Regarding marketing Nir can answer.

Regarding the marketing, so it's basically really depends on the game and the different KPIs that we are looking. But theoretically, for each game, we have some games that are 15 years old. So obviously, we are always bringing back players the churn, and we believe that the environment and the excitement that we provide to them is something that will keep them playing. So for each game, we have different allocation for retargeting and for user acquisition. In some places, the retargeting can be heavily shift the marketing budget.

Our next question comes from Eric Handler from ROTH Capital.

Given the success that you've had in scaling Disney Solitaire thus far this year, I'm curious if that's having -- making you change any of your thoughts or desires with other internally produced games.

Well, I think you -- thanks for the question, Eric. I think you can see this quarter that we announced on this call, the new fourth game from SuperPlay is a Disney title. And so obviously, the success of Disney Solitaire has given us and our partner confidence in launching a fourth title. SuperPlay is 3 for 3 in terms of launching successful games at scale. I'm not sure of any other studio in the West I can think of that's had that recent success.

And so further investing with them in a fourth title and a branded one at that is something we're really excited about. So I think there, it definitely has had an influence on our thinking. We have Jackpot Tour coming out later this year, and we're constantly looking at other pipeline opportunities to grow as we look forward.

Our next question comes from Albert Kim from UBS.

We can't hear you.

Our next question comes from Matthew Cost from MS.

So EBITDA for the quarter came in very strong, really strong margins, well ahead of expectations. Help us think through the moving pieces to hold the EBITDA guide steady for the year? What are kind of the puts and takes there? And then in terms of users and payers, I think we're down just a bit quarter-on-quarter in the third quarter. Is that just a function primarily of Slotomania and Casino?

Sure. So on the first question, we had guided previously that marketing would come down in the second half. I think, obviously, that we never kind of laid out the split quarter-to-quarter. So marketing came down this quarter. We're expecting to invest more in marketing. as we look into the fourth quarter, as we see opportunities for investment, I think the enhancement on D2C and the nice jump that we had there in terms of penetration to 31% helped drive some margin tailwind as well.

And as we look at the portfolio as a whole, we continue to selectively look for opportunities for investment on the marketing side. So we've decided to keep guidance stable. In terms of the KPIs, we don't break out the mix. What I can say is we did pull back on Slotomania as we saw the underperformance there, and we'll continue to invest more as we add product enhancements and see stabilization there and invest behind growth opportunities.

Our next question comes from Albert Kim from UBS.

Hopefully, you can hear me now. But I just wanted to follow up on Slotomania and the wider social casino category. Are there any shifts in the competitive dynamic that you call out since last quarter? And you mentioned that there was some strength in the U.S. and iOS business. Where does the international opportunity stand in your point of view? And which regions could you drive the most upside in the coming years?

A clarification on U.S. iOS. What we were saying was that we saw a strong D2C performance in that channel. It wasn't a comment on broader performance for that market. As we look at international markets, I think as we've seen through the SuperPlay acquisition, we've seen very strong performance in markets like Japan and other markets opening up for us. And so with the success of Disney Solitaire. So I think that we always look at continued international growth.

But U.S. iOS and U.S. Android opportunities continue to be probably the biggest market for us. As regards to the competition for Slotomania, I don't think the market has changed quarter-to-quarter. The dynamics there have been pretty consistent.

All right. I am showing no further questions at this time. Thank you for your participation in today's conference. This concludes the program. You may now disconnect.