Social casino operator Playstudios posted a 7% year-on-year drop in revenue to $58.4m in Q1 2026, reflecting continued pressure on the social casino sector.
The dip in revenue contributed to a $10.7m loss for the period, compounding the $2.9m loss recorded in the first quarter of 2025.
Consolidated adjusted EBITDA was also down at $3.6m in Q1, counting towards a margin of 6.1%.
That figure also reflected a significant deterioration compared to the previous year, when adjusted EBITDA came to $12.5m at a margin of 19.9%.
Playstudios CEO and chairman Andrew Pascal commented: “Our first quarter results reflected continued pressure on our legacy portfolio, particularly within social casino, but they also reflected meaningful progress in repositioning Playstudios for the future.”
Where is Playstudios trying to grow?
Amid the disappointing financials, Playstudios has discussed in detail its plans for growth moving forward.
In the report, it identifies its sweepstakes-based initiative ‘playSWEEPS’ as an area of operations that it is seeking to expand.
This includes development of its “The Win Zone” product across web and mobile, as well as the upcoming integration of “POP! Slots” scheduled for launch in late Q2 2026.
Playstudios’ sweepstakes-style offering has been growing at the same time as the sector has been facing growing regulatory headwinds.
Bans are in place in Montana, New Jersey, Montana, California and New York – though Playstudios’ offering remains available across the US in “all currently permissible jurisdictions.”
The company has noted some improvements in early engagement and monetisation indicators despite the uncertain state of the market as a whole.
As a result, Playstudios has opted not to offer a forecast on the magnitude or pace of growth in sweeps.
Indeed, it has decided against publishing any formal financial guidance at this time, citing the early-stage nature of its growth initiatives.
How Playstudios intends to boost profitability
Playstudios is undertaking an ongoing simplification of the business in an effort to find more cost savings.
It calls this process ‘Renewal’, which includes the closure of four of its nine studios, 177 lay-offs, and other attempts to consolidate and reduce the cost of sales.
Investment in AI infrastructure plays a significant role in this, and the company has cited success here as an important part of its renewal plan.
Playstudios anticipates that when this process is complete it will generate an additional $33m to $39m of savings on top of the $29m it claims the programme has already facilitated.
Despite savings in certain areas, user acquisition expenses increased year-on-year in Q1, from around $10m to just under $17m, while overall operating costs and expenses rose nearly 10% from $65m to $72m.
A message to the market
Playstudios has acknowledged the unpredictability of the market and sectors it is operating in, though it has also laid out a clarified directive for improvements in the future.
It said: “Within social casino, our focus remains clear: manage the portfolio with discipline, preserve profitability and cash generation where possible, and continue evolving our products to better serve players and improve long-term economics.”
Internal focus remains very much on the next phase, with Pascal adding: “While it remains early, we are encouraged by the progress we are seeing and believe Playstudios is becoming a simpler, sharper and more growth-oriented company.”
