Core Highlights: - Net loss of $541.4 million, down 4.9% year-over-year - Revenue of $1.36 billion, down 14.1% year-over-year - Gross margin of 72.8%, down 3.5 percentage points
Revenue Breakdown: Create Solutions revenue in Q3 2024 was $461.8 million, down 21.9% year-over-year, driven by lower sales to small/medium customers and increased competition. Grow Solutions revenue in Q3 2024 was $894.3 million, down 11.4% year-over-year, due to increased advertising competition, restrictions in China's gaming industry, and unfavorable forex impacts.
Management Outlook: Management highlighted focusing the portfolio on strategic Create/Grow offerings to improve profitability. Geopolitical instability in Israel, where Grow operations are located, impacted growth. Competition, macro headwinds, and China gaming restrictions negatively impacted revenue.
Operating Data: - Cash/equivalents of $1.42 billion as of 9/30/2024 - Operating cash flow of $203.4 million in the first nine months of 2024 - Incurred $205 million in employee severance costs related to 25% workforce reduction - Current cash could support operations for ~31 months at the current burn rate
Operational Risks: - Negative macro conditions like inflation reduced customer demand - Increased competition, especially in advertising and Grow segment - Geopolitical instability and conflicts disrupted Israel operations - Recent executive departures pose leadership transition risks

Original Filing