Digital casino game platform PlayStudios (NASDAQ: MYPS) fell short of the market’s revenue expectations in Q2 CY2025, with sales falling 18.3% year on year to $59.34 million. On the other hand, the company’s full-year revenue guidance of $260 million at the midpoint came in 2.2% above analysts’ estimates. Its GAAP loss of $0.02 per share was in line with analysts’ consensus estimates.

Is now the time to buy PlayStudios? Find out by accessing our full research report, it’s free.

Andrew Pascal, Chairman and Chief Executive Officer of PLAYSTUDIOS, commented, “While our core business continues to navigate meaningful market headwinds, we remain focused and energized by the progress we're making across our strategic priorities. We're seeing growing traction in our direct-to-consumer channel, promising early momentum in our sweepstakes initiative, and continued progress on the development of Tetris Block Party. Together, these efforts validate our direction and reinforce our confidence in the future. As we work to stabilize the business, we're also building the capabilities we believe will fuel the next phase of growth in the quarters ahead.”

Company Overview

Founded by a team of former gaming industry executives, PlayStudios (NASDAQ: MYPS) offers free-to-play digital casino games.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, PlayStudios struggled to consistently increase demand as its $261.1 million of sales for the trailing 12 months was close to its revenue five years ago. This was below our standards and suggests it’s a low quality business.

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. PlayStudios’s recent performance shows its demand remained suppressed as its revenue has declined by 8.1% annually over the last two years.

This quarter, PlayStudios missed Wall Street’s estimates and reported a rather uninspiring 18.3% year-on-year revenue decline, generating $59.34 million of revenue.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection suggests its newer products and services will fuel better top-line performance, it is still below the sector average.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.

Operating Margin

PlayStudios’s operating margin has been trending down over the last 12 months and averaged negative 8.1% over the last two years. Unprofitable consumer discretionary companies with falling margins deserve extra scrutiny because they’re spending loads of money to stay relevant, an unsustainable practice.

In Q2, PlayStudios generated a negative 5.9% operating margin. The company's consistent lack of profits raise a flag.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for PlayStudios, its EPS declined by 25.8% annually over the last five years while its revenue was flat. This tells us the company struggled because its fixed cost base made it difficult to adjust to choppy demand.

In Q2, PlayStudios reported EPS at negative $0.02, in line with the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast PlayStudios’s full-year EPS of negative $0.24 will reach break even.

Key Takeaways from PlayStudios’s Q2 Results

It was great to see PlayStudios’s full-year revenue guidance top analysts’ expectations. We were also glad its full-year EBITDA guidance exceeded Wall Street’s estimates. On the other hand, its EPS missed and its revenue fell short of Wall Street’s estimates. Zooming out, we think this was a mixed quarter. The market seemed to be hoping for more, and the stock traded down 2.7% to $1.07 immediately following the results.

So do we think PlayStudios is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.