What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-14 compared with 2024-03-12 · 413 added, 427 removed, 797 unchanged (51% of the section changed)

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Consolidated Statements of Operations

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Stockholders' Equity

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of PLAYSTUDIOS, Inc.

To the stockholders and the Board of Directors of PLAYSTUDIOS, Inc.:

Opinion on the Financial Statements

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Cash and cash equivalents $ 109,179 $ 132,889

Receivables 30,465 27,016

Prepaid expenses and other current assets

Receivables, net

30,767 30,465

Prepaid expenses and other current assets

Total current assets 147,102 174,883

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Accounts payable 1,518 1,907

Warrant liabilities 1,086 3,682

Operating lease liabilities, current 3,405 4,236

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Minimum guarantee liability 18,000 24,000

Contingent consideration 3,340 —

Deferred income taxes 381 1,198

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Total liabilities $ 78,240 $ 77,970

Commitments and contingencies

Commitments and contingencies (Note 17)

Stockholders’ equity:

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Additional paid-in capital 327,951 310,944

(Accumulated deficit) retained earnings

Accumulated deficit

( 31,324 ) ( 2,637 )

Accumulated other comprehensive income (loss) 124 ( 151 )

Accumulated other comprehensive (loss) income ( 632 ) 124

Treasury stock, at cost, 19,450 and 4,723 shares at December 31, 2024 and December 31, 2023, respectively

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Years Ended December 31,

2023 2022 2021

Net revenue $ 289,429 $ 310,886

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Change in fair value of warrant liabilities 856 2,596

Interest income (loss), net 4,858 1,925 ( 235 )

Other income (expense), net 513 1,491 ( 229 )

Interest income, net 4,902 4,858

Other (expense) income, net ( 182 ) 513

Total other income, net 5,576 7,967

(Loss) income before income taxes ( 2,520 ) ( 23,618 ) 10,479

Income tax (expense) benefit ( 16,873 ) 5,835 258

Net (loss) income $ ( 19,393 ) $ ( 17,783 ) $ 10,737

Net (loss) income attributable to common stockholders per share:

Loss before income taxes ( 27,288 ) ( 2,520 )

Income tax expense ( 1,399 ) ( 16,873 )

Net loss $ ( 28,687 ) $ ( 19,393 )

Net loss attributable to common stockholders per share:

Basic $ ( 0.22 ) $ ( 0.15 )

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PLAYSTUDIOS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

Years Ended December 31,

2023 2022 2021

Net (loss) income $ ( 19,393 ) $ ( 17,783 ) $ 10,737

Other comprehensive income (loss):

Net loss $ ( 28,687 ) $ ( 19,393 )

Other comprehensive (loss) income:

Change in foreign currency translation adjustment (1)

( 432 ) ( 11 )

Unrealized gain from derivative financial instruments (1)

Realized gain from settlement of derivative financial instruments (1)

Total other comprehensive income (loss) 275 ( 544 ) ( 88 )

Comprehensive (loss) income $ ( 19,118 ) $ ( 18,327 ) $ 10,649

Unrealized (loss) gain from derivative financial instruments (1)

Reclassification of loss (gain) from settlement of derivative financial instruments included in net loss (1)

Total other comprehensive (loss) income ( 756 ) 275

Comprehensive loss $ ( 29,443 ) $ ( 19,118 )

(1) These amounts are presented gross of the effect of income taxes.

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(in thousands)

Preferred Stock Common Stock Class A Common Stock Class B Common Stock Additional

Capital Accumulated Other Comprehensive Income Retained

Earnings Total

Stockholders'

Shares Amount Shares Amount Shares Amount Shares Amount

Balance as of December 31, 2020 162,596 $ 8 238,186 $ 12 — $ — — $ — $ 71,776 $ 481 $ 23,802 96,079

Retroactive application of reverse recapitalization ( 162,596 ) ( 8 ) ( 238,186 ) ( 12 ) 74,421 8 18,977 2 10 — — —

December 31, 2020 — $ — — $ — 74,421 $ 8 18,977 $ 2 $ 71,786 $ 481 $ 23,802 96,079

Net income — — — — — — — — — — 10,737 10,737

Acies Merger and PIPE Financing — — — — 32,969 3 ( 2,847 ) — 189,212 — — 189,215

Exercise of stock options — — — — 2,676 — — — 2,412 — — 2,412

Stock-based compensation — — — — — — — — 5,112 — — 5,112

Other comprehensive loss — — — — — — — — — ( 88 ) — ( 88 )

Balance as of December 31, 2021 — $ — — $ — 110,066 $ 11 16,130 $ 2 $ 268,522 $ 393 $ 34,539 $ 303,467

PLAYSTUDIOS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

Class A Common Stock Class B Common Stock Additional

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Exercise of stock options 3,672 1 — — 3,125 — — — 3,126

Issuance of shares upon vesting of restricted stock units 1,884 — — — — — — — —

Restricted stock vesting, net of shares withheld 2,450 — — — ( 3,040 ) — — — ( 3,040 )

Stock-based compensation — — — — 20,522 — — — 20,522

Repurchase of common stock ( 3,557 ) — — — — — — ( 15,452 ) ( 15,452 )

Other comprehensive loss — — — — — ( 544 ) — — ( 544 )

Other comprehensive income — — — — — 275 — — 275

Balance as of December 31, 2023 118,200 $ 12 16,457 $ 2 $ 310,944 $ 124 $ ( 2,637 ) $ ( 20,094 ) $ 288,351

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Repurchase of common stock ( 14,727 ) ( 1 ) — — — — — ( 31,199 ) ( 31,200 )

Other comprehensive income — — — — — 275 — — 275

Other comprehensive loss — — — — — ( 756 ) — — ( 756 )

Balance as of December 31, 2024 108,287 $ 11 16,457 $ 2 $ 327,951 $ ( 632 ) $ ( 31,324 ) $ ( 51,293 ) $ 244,715

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Years Ended December 31,

2023 2022 2021

Cash flows from operating activities:

Net (loss) income $ ( 19,393 ) $ ( 17,783 ) $ 10,737

Net loss $ ( 28,687 ) $ ( 19,393 )

Depreciation and amortization 45,440 45,259

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Asset impairments and write-downs

2,219 8,353 —

Deferred income tax expense (benefit)

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Changes in operating assets and liabilities

Receivables ( 4,930 ) ( 1,486 ) ( 3,985 )

Receivables, net

3,687 ( 4,930 )

Prepaid expenses and other current assets 1,269 ( 1,461 )

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Cash flows from investing activities:

Acquisition of subsidiary, net of cash — ( 70,365 ) —

Payment for business combination ( 3,400 ) —

Purchase of property and equipment ( 3,980 ) ( 6,335 )

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Purchase of intangible assets — ( 4,393 )

Additions to notes receivable and other investments ( 4 ) ( 1,011 ) ( 9,536 )

Advance payment related to license agreements — — ( 8,000 )

168 2,407 1,500

Net cash used in investing activities ( 26,294 ) ( 32,306 )

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Repurchases of treasury stock ( 31,200 ) ( 15,452 )

Payment for tender offer of warrants — ( 1,792 ) —

Payment for minimum guarantee obligations ( 4,817 ) ( 5,000 ) —

Payments for minimum guarantee obligations ( 8,295 ) ( 4,817 )

Payments for tax withholding of stock-based compensation

( 2,705 ) ( 3,040 )

Net proceeds from Acies Merger — — 185,170

Other — — ( 690 )

Net cash provided by (used in) financing activities ( 20,184 ) ( 9,571 ) 186,892

Net cash used in financing activities

( 41,913 ) ( 20,184 )

Foreign currency translation ( 638 ) ( 345 )

Net change in cash and cash equivalents ( 1,111 ) ( 79,502 ) 164,575

Net change in cash, cash equivalents, and restricted cash

( 23,105 ) ( 1,111 )

Cash and cash equivalents at beginning of period 132,889 134,000

Cash and cash equivalents at end of period $ 132,889 $ 134,000 $ 213,502

Cash, cash equivalents, and restricted cash at end of period

$ 109,784 $ 132,889

Supplemental cash flow disclosures:

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Years Ended December 31,

2023 2022 2021

Non-cash investing and financing activities:

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Additions to intangible assets related to licensing agreements 7,943 46,579

Lease modification $ 1,643 $ — $ —

Increase in property and equipment included in accounts payable and other long-term liabilities $ — $ 888 $ —

Lease modifications

Right-of-use assets acquired under operating leases 1,007 —

Exchange of notes receivable as consideration related to the WonderBlocks Acquisition $ — $ 1,055 $ —

Contingent consideration related to the WonderBlocks Acquisition $ — $ 3,361 $ —

Reduction of notes receivable in exchange for internal-use software $ — $ — $ 1,754

Settlement of MGM Profit Share liability through the issuance of shares of Class A common stock $ — $ — $ 20,000

Contingent and deferred consideration related to business combination

The accompanying notes are an integral part of these consolidated financial statements.

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Organization and Description of Business

PLAYSTUDIOS, Inc., formerly known as Acies Acquisition Corp.

(the "Company" or "PLAYSTUDIOS"), was incorporated on August 14, 2020 as a Cayman Islands exempted company, and domesticated into a Delaware corporation on June 21, 2021 (the "Domestication").

The Company's legal name became PLAYSTUDIOS, Inc.

following the closing of the Acies Merger discussed in Note 4— Business Combinations .

The prior period financial information represents the financial results and conditions of Old PLAYSTUDIOS (as defined in Note 4— Business Combinations ).

PLAYSTUDIOS, Inc.

(the "Company" or "PLAYSTUDIOS") is a Delaware corporation that was initially incorporated as a Cayman Islands exempted company and subsequently domesticated into a Delaware corporation.

The Company develops and operates online and mobile social gaming applications (“games” or “game”), many of which incorporate a unique loyalty program offering “real world” rewards provided by a collection of rewards partners.

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The Company generates revenue through the in-game sale of virtual currency and through advertising.

We have two operating segments as discussed in Note 3— Segment Reporting .

We have two reportable segments as discussed in Note 3— Segment Reporting .

Unless the context indicates otherwise, all references herein to “PLAYSTUDIOS,” the “Company,” “we,” “us,” and “our” are used to refer collectively to PLAYSTUDIOS, Inc.

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GAAP applicable to public companies and SEC Regulation S-X.

Pursuant to the Acies Merger as discussed in Note 4— Business Combinations , the Acies Merger was accounted for as a reverse recapitalization in accordance with U.S.

Under this method of accounting, Acies was treated as the “acquired” company for financial reporting purposes and the consolidated financial statements represent the accounts of Old PLAYSTUDIOS “as if” Old PLAYSTUDIOS is the predecessor to the Company.

Use of Estimates

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GAAP requires us to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and notes thereto.

Significant estimates and assumptions reflected in the Company’s consolidated financial statements include the estimated consumption rate of virtual currency that is used in the determination of revenue recognition, useful lives of property and equipment and definite-lived intangible assets, the expensing and capitalization of research and development costs for internal-use software, assumptions used in accounting for income taxes, stock-based compensation, and the evaluation of goodwill and long-lived assets for impairment.

Significant estimates and assumptions reflected in the Company’s consolidated financial statements include the estimated consumption rate of virtual currency that is used in the determination of revenue recognition, useful lives of property and equipment and definite-lived intangible assets, the expensing and capitalization of research and development costs for internal-use software, assumptions used in accounting for income taxes, stock-based compensation, the valuation of contingent consideration, and the evaluation of goodwill and long-lived assets for impairment.

The Company believes the accounting estimates are appropriate and reasonably determined.

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Emerging Growth Company

At December 31, 2023, the Company qualified as an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and the Company has taken and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of

holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

At December 31, 2024, the Company qualified as an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and the Company has taken and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised standards.

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The Company has opted to take advantage of such extended transition period available to emerging growth companies which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company can adopt the new or revised standard at the time private companies adopt the new or revised standard.

As a result of the Company's qualification as an emerging growth company, the Company does not expect to adopt any accounting pronouncements currently deferred based on private company standards until a year subsequent to 2023.

The Company will reevaluate its eligibility to retain emerging growth company status at the end of its second quarter of 2024, and otherwise as required.

As a result of the

Company's qualification as an emerging growth company, the Company does not expect to adopt any accounting pronouncements currently deferred based on private company standards.

The Company expects to no longer qualify as an emerging growth company on December 31, 2024, the end of the fiscal year following the fifth year of the Company's initial public offering.

Smaller Reporting Company

As of December 31, 2024, the Company qualified as a Smaller Reporting Company ("SRC") as defined under Rule 12b-2 of the Securities Exchange Act of 1934.

As an SRC, we are eligible for and have elected to provide scaled disclosure accommodations in this Annual Report on Form 10-K.

These accommodations allow us to provide reduced executive compensation disclosures, fewer years of audited financial statements, and less extensive narrative disclosures compared to larger reporting companies.

The Company will reevaluate its eligibility to qualify as an SRC at the end of its second quarter of 2025, and otherwise as required.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Cash and cash equivalents consist of cash on hand and highly liquid investments with an original maturity of three months or less from the date of purchase and are stated at the lower of cost or market value.

Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents and receivables.

Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents and receivables, net.

The Company maintains cash and cash equivalent balances at several banks.

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Although balances may exceed amounts insured by the FDIC, the Company believes that it is not exposed to any significant credit risk related to its cash or cash equivalents and has not experienced any losses in such accounts.

Restricted Cash

The Company has restricted cash of $ 1.2 million and zero as of December 31, 2024 and December 31, 2023.

The cash is classified within “Other long-term assets.” Such amounts plus “Cash and cash equivalents” on the Consolidated Balance Sheets equal “Cash, cash equivalents, and restricted cash” on the Consolidated Statements of Cash Flows as of December 31, 2024 and December 31, 2023.

Receivables and Allowance for Uncollectible Amounts

The Company’s receivables consist primarily of amounts due from social and mobile game platform operators, including Apple, Google, Facebook, and Amazon.

The Company’s receivables consist primarily of amounts due from social and mobile game platform operators, including Apple, Google, Facebook, and Amazon, and direct-to-consumer payment processors, including Xsolla.

Accounts receivable are typically non-interest bearing and are initially recorded at cost.

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Estimated Useful Life

Computer equipment 3 years

Purchased software 3 years

Furniture and fixtures 3 - 7 years

Land improvements 5 years

Building 39 years

Building improvements 15 years

Land improvements 5 years

Computer equipment 3 years

Leasehold improvements Lesser of 10 years or remaining lease term

Purchased software 3 years

Furniture and fixtures 3 - 7 years

Property and equipment are reviewed for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable.

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Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

In accordance with Accounting Standards Update (ASU) No.

2014-02, Intangibles—Goodwill and Other (Topic 350):

Accounting for Goodwill , goodwill is recorded as the excess of the purchase price over acquisition-date fair value of identifiable tangible and intangible assets and liabilities.

In accordance with ASC 350 Intangibles—Goodwill and Other , goodwill is recorded as the excess of the purchase price over acquisition-date fair value of identifiable tangible and intangible assets and liabilities.

Goodwill is tested for impairment annually as of October 1st of each year, or when a triggering event occurs.

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Impairment testing for goodwill is performed at the reporting unit level.

The Company has identified a single reporting unit based on the Company’s management structure.

Intangible Assets

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Internal-Use Software

The Company recognizes internal-use software development costs in accordance with Accounting Standards Codification (ASC) 350-40, Internal-Use Software .

The Company recognizes internal-use software development costs in accordance with ASC 350-40, Internal-Use Software .

Capitalized costs include consulting fees, payroll and payroll-related costs, and stock-based compensation for employees who devote time to the Company’s internal-use software projects.

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Warrant Liabilities

The Company evaluates all of its financial instruments, including issued warrants, to determine if such instruments are liability classified, pursuant to ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) or derivatives or

contain features that qualify as embedded derivatives pursuant to ASC Topic 815, Derivatives and Hedging (“ASC 815”).

The Company evaluates all of its financial instruments, including issued warrants, to determine if such instruments are liability classified, pursuant to ASC 480, Distinguishing Liabilities from Equity or derivatives or contain features that

qualify as embedded derivatives pursuant to ASC 815, Derivatives and Hedging .

The classification of instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

Issuance costs incurred with the Acies Merger that are attributable to liability classified warrants are expensed as incurred.

Fair Value Measurements

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The Company has not elected the fair value measurement option for any of the Company’s assets or liabilities that meet the criteria for this election.

Contingent Consideration

In circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under ASC 480, Distinguishing Liabilities from Equity , the Company recognizes a liability equal to the fair value of the contingent payments the Company expects to make as of the acquisition date.

The Company remeasures this liability each reporting period and records changes in the fair value through the Consolidated Statements of Operations.

The Company is the lessee primarily under non-cancelable office real estate and data center leases.

The Company accounts for its leases under ASU No.

2016-02, Leases (Topic 842).

The Company accounts for its leases under ASC 842, Leases ).

Operating lease right-of-use ("ROU") assets and liabilities are recognized at the commencement date and initially measured based on the present value of lease payments and lease incentives received over the defined lease term.

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Therefore, the loyalty points earned by players are marketing offers and do not provide players with material rights.

Accordingly, the loyalty points do not require any allocation to the transaction price of virtual currency.

Accordingly, the earned loyalty points do not require any allocation to the transaction price of virtual currency.

Loyalty points or other virtual currencies may be included in certain bundled purchases through certain platforms.

Loyalty points or other virtual currencies are not available to be purchased separately and there is no stand alone selling price.

If loyalty points or other forms of virtual currencies are included in bundled purchases, the Company will allocate a portion of the transaction price to each of the virtual currencies using the residual approach.

Additionally, certain of the Company’s games participate in an additional program which ranks players into different tiers based on tier points earned during a given time frame.

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The Company continues to gather detailed player behavior and assess this data in relation to its revenue recognition policy.

To the extent the player behavior changes, the Company reassesses its estimates and assumptions used for revenue recognition prospectively on the basis that such changes are caused by new factors indicating a change in player behavior patterns.

To the extent the player behavior changes, the Company reassesses its estimates and assumptions used for revenue

recognition prospectively on the basis that such changes are caused by new factors indicating a change in player behavior patterns.

Advertising Revenue

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Advertisements can be in the form of an impression, click-throughs, banner ads, or offers.

advertisements where the players are rewarded with virtual currency for watching a short video.

Offers are advertisements where the players are rewarded with virtual currency for watching a short video.

The Company has determined the advertising service provider to be its customer and displaying the advertisements within its games is identified as the single performance obligation.

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The Company incurs various direct costs in relation to the development of future social and mobile games along with costs to improve current social and mobile games.

Research and development costs consist primarily of payroll and related personnel costs, stock-based compensation, and consulting fees.

Research and development costs consist primarily of payroll and related personnel costs, stock-based compensation, and third party development fees.

The Company evaluates research and development costs incurred to determine whether the costs relate to the development of software and are, therefore, qualified to be capitalized under ASC 350-40, Internal-Use Software .

All other research and development costs are expensed as incurred.

Advertising expenses for our games was $ 60.7 million, $ 69.1 million and $ 70.3 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Advertising expenses for our games was $ 47.0 million and $ 60.7 million for the years ended December 31, 2024 and 2023, respectively.

Advertising expenses are included in “Selling and marketing” expenses in the Consolidated Statements of Operations.

Share-Based Compensation

The Company measures compensation expense for all share-based awards at fair value on the date of grant and recognizes compensation expense over the service period on a straight-line basis for awards expected to vest.

The Company uses the Black-Scholes-Merton option-pricing model to determine the fair value for option awards.

In valuing our option awards, the Company makes assumptions about risk-free interest rates, dividend yields, volatility, and weighted-average expected lives.

The Company accounts for forfeitures as they occur.

Risk-free interest rates are derived from U.S.

Treasury securities as of the option award grant date.

Expected dividend yield is based on our historical cash dividend payments, which have been zero to date.

The expected volatility for shares of the Company's Class A common stock is estimated using our historical volatility.

The weighted-average expected life of the option awards is estimated based on our historical exercise data.

The Company's dual class structure was created upon the Domestication (as defined in Note 4— Business Combinations ).

The Class B common stock, including Class B common stock underlying stock options, held by Mr.

Andrew Pascal, the Company's Chairman and Chief Executive Officer, or his affiliates (the "Founder Group") carry a super vote

As the Founder Group did not have control of Old PLAYSTUDIOS prior to the Acies Merger, and Mr.

Pascal is an employee of the Company, the incremental value resulting from the super vote premium is accounted for as incremental compensation costs.

The Company utilized the market approach by observing other market participants with (i) dual class structures, (ii) super vote premiums for a single class and (iii) both classes trading on a national exchange.

Based on the observed data, management selected a premium for the Class B common stock and the stock options held by members of the Founder Group.

Stock-Based Compensation

The Company measures compensation expense for all stock-based awards at fair value on the date of grant and recognizes compensation expense over the service period on a straight-line basis for awards expected to vest.

Restricted stock units (RSUs) are typically granted using a three or four year vesting schedule, either vesting pro rata annually or a cliff vest over the requisite service period, subject to continued employment.

Except as provided in an award or severance agreement between the Company and the employee, if an employee is terminated (voluntarily or involuntarily),

any unvested awards as of the date of termination will be forfeited.

In addition, if there is a change in control and qualifying termination of employment (as described in the Company's Severance and Change in Control Plan), certain awards will automatically vest.

RSUs settle for outstanding shares of the Company’s Class A common stock upon vesting, net of shares withheld for taxes.

Performance stock units (PSUs) are typically granted using a one year vesting schedule.

Vesting of the PSUs are based on the Company’s achievement of certain financial performance targets, and the actual number of shares issuable under such awards upon vesting will range from 0 % to 100 % of the number of PSUs granted, based on the Company’s actual financial performance relative to such targets.

Except as provided in an award or severance agreement between the Company and the employee, if an employee is terminated (voluntarily or involuntarily), any unvested awards as of the date of termination will be forfeited.

In addition, if there is a change in control and qualifying termination of employment (as described in the Company's Severance and Change in Control Plan), certain awards will automatically vest.

PSUs settle for outstanding shares of the Company’s Class A common stock upon vesting, net of shares withheld for taxes.

Foreign Currency Derivative Contracts

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Translation gains and losses are included in stockholders’ equity as a component of accumulated other comprehensive income.

Adjustments that arise from foreign currency exchange rate changes on transactions, primarily driven by intercompany transactions, denominated in a currency other than the functional currency are included in “Other income (expense), net” in the Consolidated Statements of Operations.

Adjustments that arise from foreign currency exchange rate changes on transactions, primarily driven by intercompany transactions, denominated in a currency other than the functional currency are included in “Other (expense) income, net” in the Consolidated Statements of Operations.

The Company accounts for income taxes in accordance with ASC 740, Income Taxes , which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in its consolidated financial statements or tax returns.

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The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes.

We have elected to account for the impact of the global intangible low-taxed income (GILTI) inclusion and base erosion anti-avoidance tax (BEAT) based on the period cost method.

Net (Loss) Income Per Share

Net (loss) income per share (“EPS”) is calculated using the two-class method required for participating securities and multiple classes of common stock.

Basic income per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding.

Net income available to common stockholders represents net income attributable to common stockholders reduced by the allocation of earnings to participating securities.

Diluted income per share adjusts basic loss per share for the potentially dilutive impact of stock options, warrants, restricted stock, and contingently issuable earnout shares.

The Company has elected to account for the impact of the global intangible low-taxed income (GILTI) inclusion and base erosion anti-avoidance tax (BEAT) based on the period cost method.

Net Loss Per Share

Net loss per share (“EPS”) is calculated using the two-class method required for participating securities and multiple classes of common stock.

Basic loss per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding.

Net loss available to common stockholders represents net loss attributable to common stockholders reduced by the allocation of earnings to participating securities.

Diluted loss per share adjusts basic loss per share for the potentially dilutive impact of stock options, warrants, restricted stock units, performance share units, and contingently issuable earnout shares.

The dilutive effect of stock options, warrants, restricted stock, and contingently issuable earnout shares is computed using the treasury stock method.

Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

EPS calculations for all periods prior to the Acies Merger have been retrospectively adjusted for the equivalent number of shares outstanding immediately after the Acies Merger to effect the reverse recapitalization.

Subsequent to the Acies Merger, net income per share was calculated based on the weighted average number of common stock then outstanding .

Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) :

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ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2023-07.

The Company adopted the new accounting standard for the year ended December 31, 2024.

The adoption of this guidance did not have an effect on the Company’s financial position, results of operations, or cash flows.

See Note 3— Segment Reporting for additional disclosures.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) .

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The Company is currently evaluating the impact of adopting ASU 2023-09.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) .

Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03.

The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses.

The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses, which includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption.

This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted.

The Company is assessing the guidance, noting the adoption impacts disclosure only.

NOTE 3—SEGMENT REPORTING

During the fourth quarter of 2023, the Company revised the presentation of segment information to align with changes to how the chief operating decision maker ("CODM ") manages the business, allocates resources, and assesses operating performance.

The CODM is the Company's Chief Executive Officer.

Prior to the fourth quarter of 2023, the Company had a single operating and reportable segment.

Beginning in the fourth quarter of 2023, the Company reports operating results based on two reportable segments:

The Company reports operating results based on two reportable segments:

playGAMES and playAWARDS.

Each reportable segment has a different service offering and different customer base.

As of December 31, 2023, the Company's operating segments are the same as the reportable segments, which are as follows:

The Company has aggregated certain operating segments into these reportable segments based on similarities in economic characteristics, customer base, service offerings, and regulatory environments.

Each of the Company's games are aggregated into the playGAMES reportable segment, while the operations of its loyalty program makes up the playAWARDS reportable segment based on engagement in business activities, availability of discrete financial information, and the review of operating results by the Chief Operating Decision Maker ("CODM").

The CODM is the Company's Chairman and Chief Executive Officer.

Management believes that the operating segments within each reportable segment share similar revenue models, operational risks, and long-term profitability trends.

The Company's reportable segments are as follows:

This segment is a leading developer and publisher of digital games on mobile and web platforms.

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playGAMES also operate in the casual space.

playGAMES generates a substantial portion of our revenue from in-app purchases in the form of virtual currencies, which players can use to play social casino games.

playGAMES generates a substantial portion of our revenue from in-app purchases in the form of virtual currencies, which players can use

to play social casino games.

Players who install our social casino games typically receive free virtual currency upon the initial launch of the game and additional virtual currencies at specific time intervals.

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Players who install our casual games receive free, unlimited gameplay that requires viewing of periodic in-game advertisements.

This segment consists of all of our loyalty assets globally in which we are developing an end-to-end loyalty solutions to help clients reward, enrich, motivate and retain customers, including program design, points management and administration, and broad-based fulfillment and redemption across multiple channels.

This segment consists of all of our loyalty program globally in which we are developing an end-to-end loyalty solutions to enrich, motivate and retain customers, including program design, points management and administration, and broad-based fulfillment and redemption across multiple channels.

Loyalty points may be included in certain bundled purchases through certain platforms.

Loyalty points are not available to be purchased separately and there is no stand alone selling price.

If loyalty points are included in bundled purchases, the Company will allocate a portion of the transaction price to loyalty points using the residual approach.

The CODM evaluates the performance of each operating segment using revenue and segment Adjusted EBITDA.

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The following tables present the Company’s segment information:

For the Year Ended December 31,

Year Ended December 31, 2024

playGAMES playAWARDS Total

Virtual currency $ 228,877 $ 54 $ 228,931

Advertising 60,197 — 60,197

Other 293 8 301

289,367 62 289,429

Segment expenses

Cost of sales 72,710 6 72,716

Payroll & related 49,994 10,035 60,029

User acquisition 46,969 — 46,969

34,620 3,731 38,351

204,293 13,772 218,065

Reportable segment net revenue 310,886 290,309 287,419

Corporate and other — — —

Net revenue $ 310,886 $ 290,309 $ 287,419

playGAMES $ 88,676 $ 58,999 $ 57,865

playAWARDS ( 10,379 ) ( 5,189 ) ( 8,990 )

Reportable segment AEBITDA 85,074 ( 13,710 ) 71,364

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Corporate and other 14,815

$ 16,005 $ 15,557 $ 9,329

Restructuring expenses 25,710

8,584 13,020 3,082

Other reconciling items 150

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Depreciation and amortization 45,440

Non-operating income (expense)

Change in fair value of warrant liabilities 856

Interest income (expense), net 4,902

Other (expense) income, net $ ( 182 )

Income (loss) before income taxes ( 27,288 )

Income tax expense $ ( 1,399 )

Net income (loss) $ ( 28,687 )

Year Ended December 31, 2023

playGAMES playAWARDS Total

Virtual currency

$ 247,929 $ — $ 247,929

Advertising 58,236 — 58,236

Other 549 4,172 4,721

306,714 4,172 310,886

Segment expenses

Cost of sales

77,800 — 77,800

Payroll & related

47,787 11,133 58,920

User acquisition

60,693 — 60,693

31,758 3,418 35,176

218,038 14,551 232,589

Reportable segment AEBITDA

88,676 ( 10,379 ) 78,297

Other operating expense

Corporate and other 16,005

Restructuring expenses 8,584

Other reconciling items 214

Stock based compensation $ 18,722

Depreciation and amortization 45,259

Non-operating income (expense)

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Interest income (expense), net 4,858

Other income (expense), net 513 1,491 ( 229 )

Other (expense) income, net $ 513

Income (loss) before income taxes ( 2,520 )

Income tax expense

Net income (loss) $ ( 19,393 )

(1) Consists of legal, rent, information technology, outside services, marketing, and other general and administrative expenses.

Reorganization

On October 29, 2024, the Company initiated an internal reorganization plan (the “2024 Reorganization Plan”) which is intended to enhance efficiency and reduce operating expenses.

The 2024 Reorganization Plan included a reduction of the

Company’s total global workforce by approximately 30 percent, which was substantially completed by the end of the 2024 fiscal year.

The following table presents the c harges for the 2024 Reorganization Plan:

Year Ended December 31, 2024

playGAMES playAWARDS Corporate and Other Total

Severance and employee-related costs

$ 3,956 $ 768 979 $ 5,703

(Loss) income before income taxes $ ( 2,520 ) $ ( 23,618 ) $ 10,479

Income tax (expense) benefit ( 16,873 ) 5,835 258

Net (loss) income $ ( 19,393 ) $ ( 17,783 ) $ 10,737

(1) Includes miscellaneous income and losses on the disposal of assets.

Amounts reported during the year ended December 31, 2021 also include a $ 5.0 million transaction bonus and a $ 2.5 million charitable contribution per the terms of the Merger Agreement.

Asset impairments

7,388 1,840 223 9,451

568 39 468 1,075

$ 11,912 $ 2,647 $ 1,670 $ 16,229

On February 28, 2023, the Company initiated an internal reorganization plan (the "2023 Reorganization Plan") which is intended to enhance efficiency and reduce operating expenses.

The 2023 Reorganization Plan included a reduction of the Company’s total global employee headcount by approximately 14 percent, which was substantially completed by the end of the second quarter of the 2023 fiscal year.

Charges for the 2023 Reorganization Plan consisted of the following:

Year Ended December 31, 2023

playGAMES playAWARDS Corporate and Other Total

Severance and employee-related costs

$ 2,823 $ — — $ 2,823

$ 2,823 $ — $ 247 $ 3,070

The following table summarizes the activity related to the liabilities associated with the Company's reorganization plans for the years ended December 31, 2024 and 2023:

playGAMES playAWARDS Corporate and Other Total

Balance as of December 31, 2022

$ — $ — $ — $ —

Reorganization charges

2,823 — 247 3,070

Non-cash charges

— — ( 223 ) ( 223 )

( 2,823 ) — ( 24 ) ( 2,847 )

Balance as of December 31, 2023

Reorganization charges

11,912 2,647 1,670 16,229

Non-cash charges

( 7,388 ) ( 1,840 ) ( 443 ) ( 9,671 )

( 2,317 ) ( 611 ) ( 862 ) ( 3,790 )

Balance as of December 31, 2024

$ 2,207 $ 196 $ 365 $ 2,768

NOTE 4—BUSINESS COMBINATIONS

WonderBlocks Acquisition

On August 2, 2022, playBLOCKS, Inc., a newly formed wholly-owned subsidiary of the Company ("playBLOCKS") entered into an agreement with WonderBlocks Labs, Inc.

(“WonderBlocks"), which provides tools for the development of a play-to-earn loyalty platform for digital entertainment on the Ethereum blockchain, pursuant to which playBLOCKS acquired substantially all of the assets of WonderBlocks.

playBLOCKS paid WonderBlocks $ 2.0 million less Indebtedness (borrowed money and accrued interest, including debt to the Company) at closing and agreed to pay between zero and $ 3 million subject to the satisfaction of certain product and financial milestones.

We believe this acquisition will allow us to enhance our playAWARDS model with new Web3 features and capabilities.

The Company recorded the excess of the fair value of the consideration transferred in the acquisition over the fair value of net assets acquired as goodwill.

The goodwill reflects our expectations of favorable future growth opportunities and

anticipated synergies through the scale of our operations.

The Company expects that none of the goodwill will be deductible for federal income tax purposes.

The following table summarizes the consideration paid for WonderBlocks and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:

Consideration:

Cash consideration $ 945

Note receivable plus accrued interest conversion 1,055

Contingent consideration 1,564

Total consideration transferred $ 3,564

Identifiable assets acquired and liabilities assumed:

Developed technology (weighted-average useful life of 5 years)

Liabilities assumed $ ( 15 )

Total identifiable net assets $ 2,388

Goodwill $ 1,176

As of December 31, 2023, the fair value of the contingent consideration was zero .

Brainium Studios Acquisition

On October 7, 2022, PLAYSTUDIOS US, LLC, a direct wholly-owned subsidiary of the Company entered into a membership interest purchase agreement to acquire all of the issued and outstanding membership interests in Brainium Studios LLC (“Brainium"), a mobile game publisher.

The closing of the acquisition occurred on October 12, 2022, and Brainium became an indirect wholly-owned subsidiary of the Company.

The purchase price for the membership interests was $ 70.0 million at closing, as adjusted for cash, indebtedness, and working capital, and between zero and $ 27.3 million following the closing subject to the satisfaction of certain financial milestones for the fiscal year ended December 31, 2022.

Pixode Games Limited ("Pixode Acquisition")

On July 1, 2024, PLAYSTUDIOS US, LLC, a direct wholly-owned subsidiary of the Company entered into an asset purchase agreement to acquire certain tangible and intangible assets and assumed certain liabilities from Pixode Games Limited (“Pixode"), a mobile casual games publisher.

The Company expects this acquisition to further diversify revenues into the casual genre, and with a successful relaunch of the product with the Tetris brand, the acquisition will deepen the Company's portfolio of Tetris products.

The purchase price for the Pixode assets was $ 3.5 million at closing, and the Company agreed to pay additional consideration, contingent upon the satisfaction of certain product and financial milestones, up to a maximum amount of $ 113.5 million.

Subject to meeting certain financial minimum milestones, the Company will pay the sellers of the Pixode assets a percentage of an adjusted net revenue for a three year period commencing on the re-launch date of the rebranded Pixode assets, payable at the end of each fiscal year.

The Company recorded the excess of the fair value of the consideration transferred in the acquisition over the fair value of net assets acquired as goodwill.

The goodwill reflects our expectations of favorable future growth opportunities and anticipated synergies through the scale of our operations.

The Company expects that substantially all of the goodwill will be deductible for federal income tax purposes.

The following table summarizes the consideration paid for Brainium and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:

The Company expects that substantially all of the goodwill will be

deductible for federal income tax purposes.

The following table summarizes the consideration paid for Pixode and the assets acquired as of the acquisition date:

Consideration:

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Total consideration transferred $ 6,755

Identifiable assets acquired and liabilities assumed:

Cash and cash equivalents $ 3,738

Accounts receivable 3,190

Property and equipment 4,042

Operating lease assets 4,195

Trade names (weighted-average useful life of 10 years)

Identifiable assets acquired:

Developed technology (weighted-average useful life of 5 years)

Customer relationships (weighted-average useful life of 5 years)

Other assets 740

Liabilities assumed ( 7,649 )

Property and equipment, net

Total identifiable net assets $ 1,666

Goodwill $ 5,089

During the year ended December 31, 2022, the Company reduced the amount of contingent consideration to be paid to zero .

As of December 31, 2023 and 2022, the Company has no remaining liability reflected in the financial statements.

Merger with Acies Acquisition Corp.

On June 21, 2021 (the “Closing Date”), Acies Acquisition Corp., a Cayman Islands exempted company (prior to the Closing Date, “Acies”), consummated the previously announced business combination (“Acies Merger”) with PlayStudios, Inc., a Delaware corporation (“Old PLAYSTUDIOS”) pursuant to the Agreement and Plan of Merger, dated as of February 1, 2021 (the “Merger Agreement”), by and among Acies, Catalyst Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Acies (“First Merger Sub”), Catalyst Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Acies (“Second Merger Sub”), and Old PLAYSTUDIOS.

In connection with the closing of the Acies Merger, Acies filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation (the “Certificate of Incorporation”) and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which Acies was domesticated and continues as a Delaware corporation, changing its name to PLAYSTUDIOS, Inc.

As a consequence of filing the Certificate of Incorporation, the Company adopted a dual class structure, comprised of the Company’s Class A common stock, which is entitled to one vote per share, and the Company’s Class B common stock, which is entitled to 20 votes per share.

See Note 19— Stockholders’ Equity for further discussion on the dual class structure.

In connection with the Acies Merger, Acies entered into subscription agreements with certain investors ("PIPE Investors"), whereby it issued 25.0 million shares of Class A common stock at $ 10.00 per share (the "PIPE Shares") for an aggregate purchase price of $ 250.0 million (the "PIPE Financing"), which closed simultaneously with the consummation of the Acies Merger.

$ 20.0 million of the PIPE Financing was used to terminate the profit share provision of an agreement with MGM Resorts International, one of the PIPE Investors.

In connection with the Acies Merger, the Company incurred direct and incremental costs of $ 32.8 million related to the equity issuance, consisting primarily of investment banking and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds.

The Company incurred approximately $ 1.4 million of expenses primarily related to advisory, legal, and accounting fees in conjunction with the Acies Merger.

Of this, $ 0.1 million and $ 1.3 million was recorded in general and administrative expenses on the Consolidated Statements of Operations for the years ended December 31, 2021 and December 31, 2020, respectively.

The aggregate consideration for the Acies Merger was approximately $ 1,041.0 million, payable in the form of the Company's Class A and Class B common stock and cash.

The following table summarizes the merger consideration (in thousands, except per share information):

Consideration

Cash consideration $ 102,020

Shares transferred at closing (1)

Value per share $ 10.00

Share consideration $ 868,380

Total consideration $ 970,400

Shares of common stock underlying vested options 7,060

Value per share $ 10.00

Total consideration for vested options 70,600

Aggregate consideration $ 1,041,000

(1) Excludes shares of common stock underlying stock options that are vested but unexercised as of the closing date of the Acies Merger.

Since the shares do not represent legally outstanding shares of common stock at closing, they are excluded from the total consideration amount.

The following table reconciles the elements of the Acies Merger to the Consolidated Statements of Cash Flows for the year ended December 31, 2021:

Cash - Acies Trust and cash (net of redemptions) $ 101,965

Cash - PIPE 230,000

Cash consideration ( 102,020 )

Transaction costs, net of proceeds received from exercises of Old PLAYSTUDIOS' warrants ( 44,775 )

Net Acies Merger and PIPE Financing

The Acies Merger was accounted for as a reverse recapitalization and Acies was treated as the “acquired” company for accounting purposes.

The Acies Merger was accounted as the equivalent of Old PLAYSTUDIOS issuing stock for the net assets of Acies, accompanied by a recapitalization.

Accordingly, all historical financial information presented in these consolidated financial statements represents the accounts of Old PLAYSTUDIOS “as if” Old PLAYSTUDIOS is the predecessor to the Company.

The common stock and net income per share, prior to the Acies Merger, have been adjusted to share amounts reflecting the recapitalization exchange ratio of approximately 0.233 for Old PLAYSTUDIOS common stock.

As of December 31, 2024, the fair value of the contingent consideration was $ 3.3 million.

NOTE 5—RELATED-PARTY TRANSACTIONS

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Marketing Agreement $ 1,000 $ 1,000 Intangibles, net

The Company did not have material revenues recognized from related parties during the years ended December 31, 2023, 2022, and 2021.

In connection with the Acies Merger and in accordance with the Merger Agreement, during the year ended December 31, 2021, the Company paid $ 2.5 million to PLAYSTUDIOS Impact Fund, formerly myCause Charitable Foundation ("myCause"), a 501(c)(3) foundation established and administered by certain members of management of the Company.

The Company’s remaining expenses recognized from related parties were immaterial during the years ended December 31, 2023, 2022, and 2021.

The Company’s revenues and expenses recognized from related parties were immaterial during the years ended December 31, 2024 and 2023.

MGM Resorts International (“MGM”)

MGM is a stockholder and MGM's Chief Commercial Officer also serves on the Company’s Board of Directors.

MGM is a stockholder and the President of MGM Resorts Operations also serves on the Company’s Board of Directors.

MGM owned approximately 16.6 million shares of the Company's outstanding Class A common stock as of each of December 31, 2024 and December 31, 2023.

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The initial term was for one year from the go-live date of the first such game in July 2012, with an automatic renewal provision for successive two-year terms based on our games meeting certain performance criteria.

If our games do not achieve the specified performance criteria, the term will be automatically renewed for a one-year period and the right to utilize MGM’s licensed marks and copyrights will become non-exclusive.

The non-exclusive term will be automatically renewed for successive one-year periods so long as our games meet certain other performance criteria.

As consideration for the use of MGM’s intellectual property, the Company issued 19.2 million shares of its common stock representing 10 % of its then-outstanding common stock;

and in lieu of royalty payments, the Company agreed to pay MGM a profit share of:

(i) during the exclusive term, a mid- to high-single digit percentage of cumulative net operating income, as defined in the Marketing Agreement, and (ii) during the non-exclusive term, a low- to mid-single digit percentage of cumulative net operating income.

As further described in Note 11— Goodwill , the Marketing Agreement was recorded as an indefinite-lived intangible asset.

On October 30, 2020, the Company and MGM agreed to amend the Marketing Agreement (the “MGM Amendment”), under which the Company and MGM agreed to terminate the profit share provision.

In exchange, the Company agreed to remit to MGM a one-time payment of $ 20.0 million, payable on the earliest to occur of (i) the PIPE Financing, (ii) the date that the Company waives MGM’s commitment to participate in the PIPE Financing, or (iii) two years from the date of the MGM Amendment.

In addition, MGM agreed to reinvest in the Company at a minimum amount of $ 20.0 million by participating in the PIPE Financing or a private placement of equity offering to third party investors for minimum gross proceeds to the Company of $ 50.0 million.

As a result of the termination, the Company is no longer obligated to make profit share payments, but the other rights and obligations under the Marketing Agreement continue in full force and effect.

The Company recorded zero , zero , and $ 0.3 million as profit share expense during the years ended December 31, 2023, 2022, and 2021, respectively.

On June 21, 2021, the Company consummated the Acies Merger and MGM participated in the PIPE Financing.

In connection with the PIPE Financing, the Company recorded an equity contribution from MGM as a settlement of the $ 20.0 million liability.

As of December 31, 2021, the $ 20.0 million liability was settled in full and no amount remained outstanding.

NOTE 6—RECEIVABLES

Receivables consist of the following:

The Marketing Agreement was recorded as an indefinite-lived intangible asset.

Microsoft Corporation ("Microsoft")

On June 7, 2024, and with the approval of the Company's board of directors, the Company repurchased 11.7 million shares of Class A common stock held by Microsoft at a price of $ 2.11 per share.

The total amount paid by the Company for the repurchase of such shares was $ 24.6 million and was funded with available cash.

The repurchase of shares from Microsoft was supplemental to the Company’s previously announced $ 50.0 million stock repurchase program and did not impact the amount of permitted repurchases thereunder.

NOTE 6—RECEIVABLES, NET

Receivables, net consist of the following:

2024 December 31,

Trade receivables $ 26,264 $ 29,952

Insurance receivable

Other receivables 770 690

Allowance for uncollectible amounts

( 17 ) ( 177 )

Total receivables, net

$ 30,767 $ 30,465

Trade receivables represent amounts due to the Company from social and mobile platform operators, including Apple, Google, Amazon, and Facebook.

Trade receivables are recorded when the right to consideration becomes unconditional.

Insurance receivable is related to the legal proceedings discussed in Note 12— Accrued and Other Current Liabilities .

NOTE 7—PREPAID EXPENSES AND OTHER CURRENT ASSETS

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NOTE 8—FAIR VALUE MEASUREMENT

The carrying values of the Company’s cash and cash equivalents, trade receivables, and accounts payable approximate fair value due to their short maturities.

The following tables present the liabilities measured at fair value on a recurring basis, by input level, in the Consolidated Balance Sheet at December 31, 2023 and December 31, 2022:

The carrying values of the Company’s cash and cash equivalents, receivables, net, prepaid expenses and other current assets, and accounts payable approximate fair value due to their short maturities.

The following tables present the liabilities measured at fair value on a recurring basis, by input level, in the Consolidated Balance Sheets at December 31, 2024 and December 31, 2023:

December 31, 2024

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Private Warrants — 96 — 96

Derivative financial instruments — 38 — 38

Contingent consideration — — 3,340 3,340

Total financial liabilities $ 134 $ 134 $ 3,340 $ 3,608

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Total financial liabilities $ 635 $ 451 $ — $ 1,086

The change in fair value of contingent consideration payable was valued using significant unobservable inputs (Level 3).

The change was included in "Other income (expense), net" in the Consolidated Statements of Operations and consisted of the following:

The fair value of our Level 3 contingent consideration liabilities relate to the Pixode Acquisition.

This contingent consideration is primarily based on expected payments arising from a percentage of an adjusted net revenue for a three year period commencing on the re-launch date of the rebranded Pixode assets, payable at the end of each fiscal year.

The value of these payments are subject to various market and operational risks.

Significant unobservable inputs include a discount rate of approximately 13.5 % and the probability of revenue growth over the same three year period.

See Note 4— Business

Combinations for more information on the Pixode Acquisition.

The change in fair value was included in "Other income (expense), net" in the Consolidated Statements of Operations and consisted of the following:

Balance as of December 31, 2023

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The aggregate depreciation expense for property and equipment, net is reflected in “Depreciation and amortization” in the Consolidated Statements of Operations.

During the years ended December 31, 2023, 2022, and 2021, depreciation expense was $ 5.5 million, $ 4.7 million, and $ 2.8 million, respectively.

No impairment charges or material write-offs were recorded for the years ended December 31, 2023, 2022, and 2021.

During the years ended December 31, 2024 and 2023, depreciation expense was $ 4.9 million and $ 5.5 million, respectively.

Impairment charges or material write-offs were $ 0.4 million for the year ended December 31, 2024, and there was none recorded for the year ended December 31, 2023.

Property and equipment, net by region consists of the following:

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The aggregate amortization expenses for amortizable intangible assets are reflected in “Depreciation and amortization” in the Consolidated Statements of Operations.

During the years ended December 31, 2023, 2022, and 2021, intangible asset and internal-use software amortization expenses were $ 39.7 million, $ 30.9 million, and $ 24.6 million, respectively.

The Company recorded a $ 1.1 million non-cash impairment charge within "Restructuring and related" in the Condensed Consolidated Statements of Operations during the year ended December 31, 2023.

The Company recorded an $ 8.4 million non-cash impairment charge within "Restructuring and related" in the Consolidated Statement of Operations during the year ended December 31, 2022.

There were no write-offs or impairment charges recorded for the years ended December 31, 2021.

As of December 31, 2023, the estimated annual amortization expenses for the years ending December 31, 2023 through 2028 is as follows:

During the years ended December 31, 2024 and 2023, intangible asset and internal-use software amortization expenses were $ 40.6 million and $ 39.7 million, respectively.

The Company recorded non-cash impairment charges within "Restructuring and related" in the Consolidated Statements of Operations in the amounts of a $ 9.2 million and $ 1.1 million during the years ended December 31, 2024 and December 31, 2023, respectively.

As of December 31, 2024, the estimated annual amortization expenses for the years ending December 31, 2025 through 2029 and thereafter is as follows:

Year Ending December 31, Projected Amortization

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NOTE 11—GOODWILL

During the fourth quarter of 2023, the Company revised the presentation of its segment information to reflect changes in the way the Company manages and evaluates the business.

As a result, beginning in the fourth quarter of 2023, the Company reports operating results based on two reportable segments, playGAMES and playAWARDS.

This change also resulted in a change in reporting units to coincide with the new operating segments.

Given the change in reporting units, the Company performed a relative fair value calculation to allocate historical goodwill of $ 47.1 million between the two new reporting units, with all of the goodwill allocated to playGAMES.

The Company also performed a qualitative impairment test immediately before and after the change in reporting units and determined that it is not more likely than not that the fair value of the reporting units is less than their carrying amounts, including goodwill.

Accordingly, the Company concluded that the goodwill relating to those reporting units was not impaired.

The following table provides the changes in the carrying amount of goodwill allocated to the playGAMES segment for the years ended December 31, 2024 and December 31, 2023:

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$ 52,222 $ — $ 52,222

Additions from acquisitions — — —

Measurement period adjustments — — —

Balance as of December 31, 2023

$ 47,133 $ — $ 47,133

NOTE 12—WARRANT LIABILITIES

Public Warrants and Private Warrants

NOTE 12—ACCRUED AND OTHER CURRENT LIABILITIES

Accrued liabilities consist of the following:

2024 December 31,

Accrued payroll and vacation 11,824 10,261

Accrued user acquisition 3,609 5,687

Income taxes payable 1,468 1,295

Minimum guarantee liability 9,610 7,760

Accrued litigation 9,827 663

Other licensing agreements

Warrant liabilities 230 1,086

Other accruals 5,496 5,730

Total accrued liabilities $ 44,495 $ 39,882

Accrued Litigation

The Company is a party to a litigation matter brought by TeamSava d.o.o.

Beograd, or TeamSava, and other related parties.

The plaintiffs filed a Statement of Claim in May 2021 in Tel Aviv District Court in Israel, alleging claims, among other things, that we breached the terms of a commercial contract relating to services provided by TeamSava and related parties in connection with the sourcing and administrative management of personnel in Serbia who provided game development services exclusively for us.

The litigation sought damages of 27.3 million New Israeli Shekels (NIS) (or approximately $ 7.4 million based on prevailing exchange rates as of December 31, 2024).

On November 30, 2023, we entered into a settlement agreement to resolve and settle all claims brought by the plaintiffs against the Company, its Israeli subsidiary and its employees and former employees, and all claims brought by the Company's affiliates against the plaintiffs.

The settlement is contingent upon the confirmation by the respective courts in Israel and Serbia that all related lawsuits have been dismissed.

The Company finalized and paid the settlement as of December 31, 2024.

On April 6, 2022, a class action lawsuit was filed in the United States District Court, Northern District of California, by a purported Company shareholder in connection with alleged federal securities law violations:

PLAYSTUDIOS, Inc.

(the “Felipe Complaint”).

On July 15, 2022, the Felipe Complaint was transferred to the United States District Court for the District of Nevada, Southern Division.

On October 4, 2022, the plaintiffs filed an amendment to the Felipe Complaint.

The Felipe Complaint names the Company, several current and former board members of the Company, board members and officers of Acies Acquisition Corp., and Andrew Pascal, the Company’s Chairman and CEO, as defendants.

The Felipe Complaint alleges misrepresentations and omissions regarding the state of the Company’s development of the Kingdom Boss game and its financial projections and future prospects in the S-4 Registration Statement filed by Acies that was declared effective on May 25, 2021, the Proxy Statement filed by Acies on May 25, 2021, and other public statements that touted Old PLAYSTUDIOS’ and the Company’s financial performance and operations, including statements made on earnings calls and the Amended S-1 Registration Statement filed by the Company that was declared effective on July 30, 2021.

The Felipe Complaint alleges that the misrepresentations and omissions resulted in stock price drops of 13 % on August 12, 2021, and 5 % on February 25, 2022, following (i) the Company’s release of financial results for the second quarter of 2021, ended on June 30, 2021, and (ii) the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and issuance of a press release summarizing financial results for the fourth quarter and year ended December 31, 2021, respectively.

The Felipe Complaint seeks an award of damages for an unspecified amount.

On January 20, 2025, the parties reached an agreement in principle to settle the matter.

The settlement is subject to the parties’

negotiation of a formal stipulation of settlement and all related documentation, which is currently in process.

The settlement also will be subject to preliminary and final approval by the federal district court in which the case is pending.

The matter will not be fully resolved until such approvals are issued, the case is dismissed, and judgment is entered by the court.

On March 8, 2023, Angel Deann Pilati, a purported adult resident citizen of Franklin County, Alabama, filed a civil lawsuit against PLAYSTUDIOS US, LLC in the Circuit Court of Franklin County Alabama (the "Pilati Lawsuit"), alleging that PLAYSTUDIOS US, LLC makes available online games and applications across multiple platforms that are games of chance and thus illegal gambling under Alabama law and seeking to recover, under Alabama’s loss recovery act, all sums paid by Alabama residents to PLAYSTUDIOS US, LLC in its online gambling games during the period beginning one year before the filing of the complaint until the case is resolved.

On August 23, 2023, the plaintiff amended the complaint to exclude recovery for Alabama residents who lost $ 75,000 or more during the statute of limitations period.

The plaintiff claims to seek this recovery "to go to the benefit of the families" of players who paid money to play the games.

The Company believes the claims are without merit and intends to vigorously defend against them;

however, there can be no assurance that the Company will be successful in the defense of this litigation.

On November 13, 2023, Sandra Tucker Duckworth, a purported citizen of Tennessee, filed a civil lawsuit against PLAYSTUDIOS US, LLC in the Circuit Court for the 14th Judicial District of Tennessee (the "Duckworth Lawsuit") alleging that PLAYSTUDIOS US, LLC makes available online games of chance that constitute illegal gambling under Tennessee law and seeking to recover, under Tennessee's loss recovery act, all sums paid by Tennessee residents to PLAYSTUDIOS US, LLC in its online gambling games during the period beginning one year before the filing of the lawsuit until the case is resolved, excluding recovery of money lost by a Tennessee resident who lost $ 75,000 or more during the statute of limitations period.

The plaintiff claims to seek this recovery for the benefit of each individual player's spouse, or if not spouse, child or children, and if not child or children, the next of kin.

The Company believes the claims are without merit and intends to vigorously defend against them;

however, there can be no assurance that the Company will be successful in the defense of this litigation.

On August 22, 2024, James Scott Tipmore, a purported citizen of Kentucky, filed a civil lawsuit against PLAYSTUDIOS US, LLC in the United States District Court for the Western District of Kentucky (the "Tipmore Lawsuit"), alleging that PLAYSTUDIOS US, LLC makes available online games of chance that constitute illegal gambling under Kentucky law and seeking to recover, under Kentucky's loss recovery act, treble the sums paid by Kentucky residents to PLAYSTUDIOS US, LLC in its online gambling games during the period beginning five years before the filing of the lawsuit until the case is resolved.

The Company believes the claims are without merit and intends to vigorously defend against them;

however, there can be no assurance that the Company will be successful in the defense of this litigation.

The Company received four demands for arbitration during 2023 claiming that the games operated by PLAYSTUDIOS US, LLC constitute illegal gambling under the laws of various states.

As of December 31, 2024, three of the demands for arbitration remained active (the "State Arbitration Demands").

These demands generally attempt to recover amounts spent by third parties on the Company’s games by relying on state gambling loss recovery statutes and/or by seeking to have the applicable Terms of Service declared invalid.

The Company believes that the claims are without merit and the Company intends to vigorously defend against them;

however, there can be no assurance that the Company will be successful in the arbitration proceedings.

In January 2025, the Company reached an agreement in principle to settle the Pilati Lawsuit, Duckworth Lawsuit, Tipmore Lawsuit, and State Arbitration Demands in the form of a six-state class action.

As of February 17, 2025, the Pilati Lawsuit, Duckworth Lawsuit, Tipmore Lawsuit, and State Arbitration Demands had been stayed.

The parties are currently in the process of drafting settlement documentation and related court filings.

The settlement will be subject to approval by the court in which the class action case is filed.

It is not currently known when the settlement will be finalized.

As of December 31, 2024 the Company accrued $ 9.8 million in connection with the Felipe Complaint, Pilati Lawsuit, Duckworth Lawsuit, Tipmore Lawsuit, and State Arbitration Demands and the Company expects to receive $ 3.8 million in estimated insurance recoveries.

Warrant Liabilities

Upon the closing of the Acies Merger, there were approximately 7.2 million publicly-traded redeemable warrants to purchase shares of Class A common stock (the "Public Warrants") and 3.8 million redeemable warrants to purchase shares of Class A common stock initially issued to the Sponsor in a private placement (the "Private Warrants") by Acies.

Each whole Public Warrant entitles the registered holder to purchase one whole share of the Company’s Class A common stock at a price of $ 11.50 in cash per share, subject to adjustment as discussed below, as of October 27, 2021.

Pursuant to the Warrant Agreement, a holder of Public Warrants may exercise the Public Warrants only for a whole number of shares of Class A common stock.

Pursuant to the Warrant Agreement, a holder of Public Warrants may exercise the Public Warrants only for a whole number of shares of Class A

common stock.

The Public Warrants will expire 5 years after the completion of the Acies Merger, or earlier upon redemption or liquidation.

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In no event will the Company be required to net cash settle the exercise of Public Warrants.

On April 1, 2022, the Company commenced (i) an offer to each holder of its outstanding Public Warrants and Private Warrants (collectively, the “Warrants”) the opportunity to receive $ 1.00 in cash, without interest, for each outstanding Warrant tendered by the holder pursuant to the offer (the “Offer to Purchase”), and (ii) the solicitation of consents (the “Consent Solicitation”) from holders of the outstanding Warrants to amend the Warrant Agreement, dated as of October 22, 2020, by and between the Company (formerly Acies Acquisition Corp.) and Continental Stock Transfer & Trust Company, which governs all of the Warrants (the “Warrant Amendment”) (collectively the "Tender Offer").

The Tender Offer expired midnight, Eastern Time, at the end of the day on May 13, 2022 (the “Expiration Date”), in accordance with its terms.

Broadridge Corporate Issuer Solutions, Inc., the depositary for the Tender Offer, indicated that as of the Expiration Date, (i) 1,792,463 outstanding Public Warrants, or approximately 25 % of the outstanding Public Warrants were validly tendered in and not withdrawn from the Offer to Purchase, and (ii) none of the outstanding Private Warrants were validly tendered in and not withdrawn from the Offer to Purchase.

The Warrant Amendment was not approved.

The Company paid $ 1.8 million for all Public Warrants tendered by the holders pursuant to the Offer to Purchase and $ 1.1 million of fees, expenses, and other related amounts incurred in connection with the Tender Offer.

At December 31, 2024, there were approximately 5.4 million Public Warrants and 3.8 million Private Warrants outstanding.

See Note 8— Fair Value Measurement for further information.

NOTE 13—ACCRUED AND OTHER LIABILITIES

Accrued liabilities consist of the following:

2023 December 31,

Accrued payroll and vacation 10,261 9,666

Accrued user acquisition 5,687 4,183

Income taxes payable 1,295 702

Minimum guarantee liability 7,760 1,500

Other licensing agreements (1)

Other accruals 6,393 5,422

Total accrued liabilities $ 38,796 $ 21,473

(1) See Note 18—Commitments and Contingencies for more information.

NOTE 13—LEASES

Our operating leases primarily consist of real estate leases such as offices.

Our leases have remaining terms of approximately one year to five years .

During the year ended December 31, 2023 and December 31, 2022, operating lease expense was $ 4.8 million and $ 4.2 million, respectively.

The Company's operating leases primarily consist of real estate leases such as offices.

Our leases have remaining terms of approximately less than one year to four years .

During the years ended December 31, 2024 and December 31, 2023, operating lease expense was $ 4.6 million and $ 4.8 million, respectively.

We do not have any finance leases.

Our total variable and short-term lease payments were immaterial for all periods presented.

On June 30, 2024, the Company renewed its lease of office space located in Tel Aviv, Israel.

The original lease term was set to expire on December 31, 2024.

The renewed lease term extends for an additional three years through December 31, 2027.

As a result of the lease renewal, the Company recognized an additional right-of-use asset and lease liability of $ 3.4 million.

Supplemental balance sheet information related to operating leases are as follows:

December 31, 2023

December 31, 2024 December 31, 2023

Operating lease right-of-use assets, net $ 9,703 $ 9,369

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Year ending December 31, Operating Leases

2028 and thereafter 382

Total undiscounted cash flows $ 10,968

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3 to Credit Agreement (the “Amendment No.

among other things, exclude from the Restricted Payments covenant certain repurchases of Equity Interests of the Company deemed to occur upon the exercise, settlement or vesting of stock options, warrants or other equity-based awards if and to the extent such Equity Interests represent a portion of the exercise price of, or satisfy any tax withholding obligations with respect to, such options, warrants or other equity-based awards.

3”), to, among other things, exclude from the Restricted Payments covenant certain repurchases of Equity Interests of the Company deemed to occur upon the exercise, settlement or vesting of stock options, warrants or other equity-based awards if and to the extent such Equity Interests represent a portion of the exercise price of, or satisfy any tax withholding obligations with respect to, such options, warrants or other equity-based awards.

On June 7, 2024, the Company, a subsidiary of the Company, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, entered into an Amendment No.

4 to Credit Agreement (the “Amendment No.

4”) to, among other things, (i) modify the definition of “Fixed Charge Coverage Ratio” to exclude from the calculation of Restricted Payments amounts paid for the repurchase, prior to June 30, 2024, of approximately 11.7 million shares of Class A common stock of the Company, and (ii) modify the definition of “Consolidated Fixed Charges” to take into account any tax refunds received in the applicable measurement period.

On July 1, 2024, the Company, a subsidiary of the Company, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, entered into the Amendment No.

5 to Credit Agreement (the “Amendment No.

5”) to, among other things, exclude from the covenant set forth in Section 6.01 of the Credit Agreement regarding the incurrence of Indebtedness (as defined therein) the contingent consideration obligations payable pursuant to the Pixode acquisition.

The Company capitalized a total of $ 0.8 million in debt issuance costs related to the Credit Agreement and subsequent amendments.

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Years Ended December 31,

2023 2022 2021

Virtual currency (over time)

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Total net revenue $ 289,429 $ 310,886

The following table summarizes the Company’s revenue disaggregated by geography:

The following table summarizes the Company’s virtual currency revenue disaggregated by platform:

Years Ended December 31,

Third-party platforms

213,466 236,616

Direct-to-consumer platforms

15,464 11,313

Total virtual currency

$ 228,930 $ 247,929

The following table summarizes the Company’s revenue disaggregated by geography:

Years Ended December 31,

United States $ 244,184 $ 265,660

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Contract assets represent the Company’s ability to bill customers for performance obligations completed under a contract.

As of December 31, 2023 and December 31, 2022, there were no contract assets recorded in the Company’s consolidated balance sheets.

The deferred revenue balance related to the purchase of virtual currency was immaterial as of December 31, 2023 and December 31, 2022.

The opening and closing balance of trade receivables is further described in Note 6— Receivables .

As of December 31, 2024 and December 31, 2023, contract assets recorded in the Company’s Consolidated Balance Sheets were immaterial .

The deferred revenue balance related to the purchase of virtual currency was $ 0.1 million as of December 31, 2024 and immaterial as of December 31, 2023.

The opening and closing balance of trade receivables is further described in Note 6— Receivables, net .

NOTE 16—INCOME TAXES

As of December 31, 2023, unremitted earnings in foreign subsidiaries are indefinitely reinvested.

Should these earnings be distributed in the future in the form of dividends or otherwise, the Company would be subject to withholding taxes payable to various jurisdictions.

Due to the 2017 Tax Act, there is no U.S.

federal tax on cash repatriation from foreign subsidiaries, but it could be subject to foreign withholding tax and U.S.

state income taxes.

As of December 31, 2024, current and future earnings in the Company's foreign subsidiaries are not permanently reinvested.

Earnings from these subsidiaries are subject to tax in their local jurisdiction, and withholding taxes in these jurisdictions are considered as distributions are made.

Income (loss) before income taxes by tax jurisdiction consists of the following for the periods shown below (in thousands):

Years Ended December 31,

2023 2022 2021

United States $ ( 31,268 ) $ ( 7,749 )

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Years Ended December 31,

2023 2022 2021

Current tax expense:

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Total deferred tax expense $ ( 1,371 ) $ 12,398

Income tax expense (benefit) $ 16,873 $ ( 5,835 ) $ ( 258 )

Income tax expense $ 1,399 $ 16,873

The difference between the actual rate and the federal statutory rate is as follows:

Years Ended December 31,

2023 2022 2021

Statutory rate 21.0 % 21.0 %

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Return to provision

( 15.3 ) 0.8 1.5

Other foreign branch impacts

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Intangibles 638 —

Property and equipment — 748

Prepaid expenses 1,100 1,159

Operating lease assets 2,140 2,282

Other 271 457

Total deferred tax liabilities $ 3,878 $ 3,712

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The Company had approximately $ 5.1 million of accumulated federal net operating loss as of December 31, 2024, which may be carried forward indefinitely to offset taxable income.

The Company did not have a material federal research credit carryforward as of December 31, 2023.

The Company had approximately $ 0.9 million of

accumulated federal research credit carryforward as of December 31, 2024.

The federal research credits are limited to a 20-year carryforward period and will expire starting in 2041.

The Company also had a charitable contribution carryforward of approximately $ 2.1 million as of December 31, 2023.

The charitable contribution is limited to a 5-year carryforward period and will expire in 2026.

The Company had tax effected state net operating loss carryforwards of approximately $ 1.8 million as of December 31, 2024, of which $ 0.1 million will carryforward indefinitely and $ 1.3 million will begin to expire between 2036 and 2044.

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Years Ended December 31,

2023 2022 2021

Balance at beginning of period $ 347 $ 533

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The Company has analyzed filing positions in all of the federal, state, and foreign jurisdictions where it is required to file income tax returns and for all open tax years.

As of December 31, 2023, the Company recorded approximately $ 0.3 million of unrecognized tax benefits, all of which would impact the effective tax rate, if recognized.

As of December 31, 2024, the Company recorded approximately $ 0.5 million of unrecognized tax benefits, of which $ 0.1 million would impact the effective tax rate, if recognized.

The Company does not anticipate that its unrecognized tax benefits will materially change within the next 12 months.

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federal and state tax returns for the years 2021 to present.

In late 2019, the Company was notified by the Israel Tax Authority that the Company’s Israel tax returns for the tax years ended December 31, 2016 through 2018 were under examination.

In 2023, the company settled this examination with the Israel Tax Authority closing tax years 2016 through 2021.

Therefore, only tax years starting from 2022 remain open to examination under the statute of limitations by the Israel Tax Authority for Israel.

The tax years starting from 2019 remain open to examination by the Israeli taxing authority.

The tax years starting from 2019 remain open to examination by the Hong Kong Inland Revenue Department for Asia.

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Minimum Guarantee Liability

The following are the Company’s total minimum guaranteed obligations:

The following are the Company’s total minimum guarantee obligations:

Years Ended December 31,

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Year Ending December 31, Minimum Guarantee

2028 and thereafter 6,000

Total $ 27,610

N3TWORK, Inc.

On November 22, 2021, the Company entered into agreements with N3TWORK Inc.

and The Tetris Company, LLC pursuant to which the Company acquired the rights to develop and operate Tetris®-branded mobile games for an initial term through August 2024.

The Company paid N3TWORK Inc.

$ 13.0 million at closing and agreed to pay up to an additional $ 34.0 million subject to satisfaction of certain conditions (the "Contingent Payments").

Certain conditions of the Contingent Payments have been satisfied as of December 31, 2023.

The Company's best estimate of $ 17.0 million of the Contingent Payments is an expected payment of $ 7.4 million.

The Company recorded an increase in "Intangible assets and internal-use software, net" within the Consolidated Balance Sheets related to the partial settlement of Contingent Payments.

As of December 31, 2023, the Company advanced $ 8.0 million of the Contingent Payments (the "Advance Payment").

$ 6.1 million of the Advance Payment was considered earned as of December 31, 2023, which is included within "Other current assets" within the Consolidated Balance Sheets.

The remaining amount of Contingent Payments as of December 31, 2023 was approximately $ 10.9 million, of which $ 1.9 million was considered the unearned portion of the Advance Payment.

In connection with the Pixode Acquisition, in addition to the $ 3.5 million paid at closing, and the Company agreed to pay a percentage of an adjusted net revenue for a three year period commencing on the re-launch date of the rebranded Pixode assets, payable at the end of each fiscal year, contingent upon the satisfaction of certain product and financial milestones, up to a maximum amount of $ 113.5 million.

The fair value of the contingent consideration is reassessed at each reporting date, with changes recognized in earnings.

The fair value of the contingent consideration as of December 31, 2024 was $ 3.3 million.

Refer to Note 8—Fair Value Measurement for more information.

Legal Proceedings

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The Company does not expect the outcome of any pending litigation to have a material effect on the Company’s Consolidated Balance Sheets, Consolidated Statements of Operations, or Consolidated Statements of Cash Flows.

On March 2, 2021, a lawsuit was filed in the Superior Court of California, Los Angeles County, by a purported Acies shareholder in connection with the Acies Merger:

Acies Acquisition Corp., et al.

County) (the “McCart Complaint”).

The McCart Complaint names Acies and members of Acies’ board of directors as defendants.

The McCart Complaint alleges breaches of fiduciary duties against members of Acies’ board of directors and aiding and abetting the board of directors’ alleged breaches of fiduciary duties against Acies.

The McCart Complaint also alleges that the registration statement for the Acies Merger was materially deficient and omitted and/or misrepresented material information including, among other things, certain financial information, certain details regarding Acies’ financial advisors, and other information relating to the background of the Acies Merger.

The McCart Complaint generally sought to recover damages related to the Acies Merger.

The lawsuit was voluntarily dismissed by the plaintiff on August 6, 2021.

Another purported Acies shareholder sent a demand letter on February 19, 2021, making similar allegations as those made in the McCart Complaint and demanding additional disclosure regarding the Acies Merger.

We have not received any further correspondence from such shareholder.

We are a party to a pending litigation matter brought by TeamSava d.o.o.

Beograd, or TeamSava, and other related parties.

The pending litigation seeks damages of 27.3 million New Israeli Shekels (NIS) (or

approximately $ 7.5 million based on prevailing exchange rates as of December 31, 2023).

The settlement is contingent upon the confirmation by the respective courts in Israel and Serbia that all related lawsuits have been dismissed.

The Company expects to finalize the settlement before June 30, 2024, but cannot make any assurances that it will be completed by the date, or that one or more of the parties withdraw from the settlement.

PLAYSTUDIOS, Inc.

(the “Felipe Complaint”).

On July 15, 2022, the Felipe Complaint was transferred to the United States District Court for the District of Nevada, Southern Division.

On October 4, 2022, the plaintiffs filed an amendment to the Felipe Complaint.

The Felipe Complaint seeks an award of damages for an unspecified amount.

The Company believes that the claims are without merit and the Company intends to vigorously defend against them;

however, there can be no assurance that the Company will be successful in the defense of this litigation.

The Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals.

On March 8, 2023, Angel Deann Pilati, a purported adult resident citizen of Franklin County, Alabama, filed a civil lawsuit against PLAYSTUDIOS US, LLC in the Circuit Court of Franklin County Alabama, alleging that PLAYSTUDIOS US, LLC makes available online games and applications across multiple platforms that are games of chance and thus illegal gambling under Alabama law and seeking to recover, under Alabama’s loss recovery act, all sums paid by Alabama residents to PLAYSTUDIOS US, LLC in its online gambling games during the period beginning one year before the filing of the complaint until the case is resolved.

On August 23, 2023, the plaintiff amended the complaint to exclude recovery for Alabama residents who lost $ 75,000 or more during the statute of limitations period.

The plaintiff claims to seek this recovery "to go to the benefit of the families" of players who paid money to play the games.

The Company believes the claims are without merit and intends to vigorously defend against them;

however, there can be no assurance that the Company will be successful in the defense of this litigation.

The Company is not able to reasonably estimate the probability or amount of loss relating to this litigation and therefore has not made any accruals.

On November 13, 2023, Sandra Tucker Duckworth, a purported citizen of Tennessee, filed a civil lawsuit against PLAYSTUDIOS US, LLC in the Circuit Court for the 14th Judicial District of Tennessee alleging that PLAYSTUDIOS US, LLC makes available online games of chance that constitute illegal gambling under Tennessee law and seeking to recover, under Tennessee's loss recovery act, all sums paid by Tennessee residents to PLAYSTUDIOS US, LLC in its online gambling games during the period beginning one year before the filing of the lawsuit until the case is resolved, excluding recovery of money lost by a Tennessee resident who lost $ 75,000 or more during the statute of limitations period.

The plaintiff claims to seek this recovery for the benefit of each individual player's spouse, or if not spouse, child or children, and if not child or children, the next of kin.

Th e Company believes the claims are without merit and intends to vigorously defend against them;

however, there can be no assurance that the Company will be successful in the defense of this litigation.

The Company is not able to reasonably estimate the probability or amount of loss relating to this litigation and therefore has not made any accruals.

On February 20, 2024, Tyler Kuhk, a purported citizen of Washington, filed a class action lawsuit against PLAYSTUDIOS US, LLC in the Superior Court of the State of Washington for the County of King, alleging that PLAYSTUDIOS US, LLC makes available online games of chance that constitute illegal gambling under Washington law, that PLAYSTUDIOS US, LLC engaged in unfair and deceptive practices by advertising to and soliciting the general public in Washington state to play its unlawful online casino games of chance, and that PLAYSTUDIOS US, LLC was unjustly enriched by this conduct.

The plaintiff seeks to recover all sums paid by Washington residents to PLAYSTUDIOS US, LLC in its online gambling games during an unspecified period of time under Washington’s “Recovery of money lost gambling” statute, for treble damages under Washington’s Consumer Protection Act, and for disgorgement and restitution of any money

PLAYSTUDIOS US, LLC has retained through unlawful and/or wrongful conduct alleged in the lawsuit.

The Company believes the claims are without merit and intends to vigorously defend against them;

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The Company is not able to reasonably estimate the probability or amount of loss relating to this litigation and therefore has not made any accruals.

The Company received four demands for arbitration during 2023 claiming that the games operated by PLAYSTUDIOS US, LLC constitute illegal gambling under the laws of various states.

On May 24, 2024, the Company received multiple substantively identical pre-arbitration notices from a single law firm purporting to represent 5,264 players, alleging the games operated by the Company violate state gambling statutes, along with various other claims.

The Company believes that the claims are without merit and the Company intends to vigorously defend against them;

however, there can be no assurance that the Company will be successful in the defense of this litigation.

however, there can be no assurance that the Company will be successful in the defense of these demands.

The Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals.

On September 27, 2024, the Company received multiple substantively identical pre-arbitration notices from a single law firm purporting to represent 2,697 players, alleging the games operated by the Company violate state gambling statutes, along with various other claims.

The Company believes that the claims are without merit and the Company intends to vigorously defend against them;

however, there can be no assurance that the Company will be successful in the defense of these demands.

The Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals.

On February 10, 2025, Britt Englund and Brett Chapin, purported citizens of California and two of the named claimants in the May 24, 2024 pre-arbitration notices referenced above, filed a civil lawsuit against PLAYSTUDIOS US,

LLC in the Superior Court of the State of California for the County of Los Angeles, alleging that PLAYSTUDIOS US, LLC breached an agreement to arbitrate a dispute arising out of plaintiffs’ engagement with games operated by the Company, and seeking an order to compel the Company to arbitrate.

The Company believes the claims are without merit and intends to vigorously defend against them;

however, there can be no assurance that the Company will be successful in the defense of this litigation.

The Company is not able to reasonably estimate the probability or amount of loss relating to this litigation and therefore has not made any accruals.

NOTE 18—STOCKHOLDERS’ EQUITY

The Consolidated Statements of Stockholders’ Equity reflect the reverse recapitalization as discussed in Note 4— Business Combinations as of June 21, 2021.

As Old PLAYSTUDIOS was deemed the accounting acquirer in the reverse recapitalization with Acies, all periods prior to the consummation date reflect the balances and activity of Old PLAYSTUDIOS.

The consolidated balances and the audited consolidated financial statements of Old PLAYSTUDIOS, as of December 31, 2020, and the share activity and per share amounts in these Consolidated Statements of Stockholders' Equity were retroactively adjusted, where applicable, using the recapitalization exchange ratio of 0.233 for Old PLAYSTUDIOS common stock.

Old PLAYSTUDIOS Series A Preferred Stock, Old PLAYSTUDIOS Series B Preferred Stock, Old PLAYSTUDIOS Series C-1 Preferred Stock, and Old PLAYSTUDIOS Series C Preferred Stock were deemed converted into shares of Old PLAYSTUDIOS common stock at a share conversion factor of 1.0 as a result of the reverse recapitalization.

Old PLAYSTUDIOS warrants to purchase preferred stock were deemed exercised and the underlying shares converted based on the respective preferred stock conversion ratio.

See Note 4— Business Combinations for further discussion.

Subject to the prior rights of the holders of any preferred stock, the holders of common stock are entitled to receive dividends out of the funds legally available at the times and in the amounts determined by the Company's Board of Directors.

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Foreign Currency Derivative Contracts

Adjustment Total Accumulated Other Comprehensive (Loss) Income

Adjustment Total Accumulated Other Comprehensive Income (Loss)

Balance as of December 31, 2023 $ 286 $ ( 162 ) $ 124

Net gains recognized in other comprehensive income before reclassifications

Net losses recognized in other comprehensive income before reclassifications

( 324 ) — ( 324 )

Foreign currency translation — ( 432 ) ( 432 )

Balance as of December 31, 2024 $ ( 38 ) $ ( 594 ) $ ( 632 )

Adjustment Total Accumulated Other Comprehensive Income (Loss)

Foreign Currency Derivative Contracts

Adjustment Total Accumulated Other Comprehensive (Loss) Income

Balance as of December 31, 2022 $ — $ ( 151 ) $ ( 151 )

Net gains recognized in other comprehensive income before reclassifications

Foreign currency translation — ( 11 ) ( 11 )

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At December 31, 2024, the Company had outstanding foreign currency derivative contracts to purchase certain foreign currencies at future dates.

The amount of future operating expenses the Company had hedged was approximately $ 2.5 million, and all contracts are expected to mature during the upcoming 12 months.

The aggregate fair value of the Company’s derivative contracts was a net asset of $ 0.3 million as of December 31, 2023 and was recorded in "Prepaid expenses and other current assets" in the accompanying Consolidated Balance Sheets.

The Company did not have any derivative contracts as of December 31, 2022.

Subsequent to December 31, 2023, the Company entered into additional foreign currency derivative contracts of $ 30.4 million related to hedged future operating expenses.

The amount of future operating expenses the Company had hedged was approximately $ 2.5 million, and all contracts are expected to mature during the next 12 months.

The aggregate fair value of the Company’s derivative contracts was a net liability of less than $ 0.1 million as of December 31, 2024 and was recorded in " Accrued and other liabilities " in the accompanying Consolidated Balance Sheet.

At December 31, 2023, the Company had outstanding foreign currency derivative contracts to purchase certain foreign currencies at future dates.

The amount of future operating expenses the Company had hedged was approximately $ 2.5 million, and all contracts were completed during the year ended December 31, 2024.

The aggregate fair value of the Company’s derivative contracts was a net asset of $ 0.3 million as of December 31, 2023.

and was recorded in " Prepaid expenses and other current assets " in the accompanying Consolidated Balance Sheet.

Treasury Stock

The following table summarizes changes in treasury stock:

Treasury shares

Treasury stock, at cost

Balance as of December 31, 2023 4,723 $ 20,094

Class A common stock repurchased through the Stock Repurchase Program

Class A common stock repurchased outside of the Stock Repurchase Program

11,677 24,639

Balance as of December 31, 2024 19,450 $ 51,293

Stock Repurchase Program

On November 10, 2021, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to purchase up to $ 50.0 million of the Company’s Class A common stock over a period of 12 months.

On November 2, 2022, the Company’s Board of Directors approved an extension of the time period for repurchases under the stock repurchase program for an additional 12 months from November 10, 2022 to November 10, 2023.

On November 2, 2022, the Company’s Board of Directors extended such period for an additional 12 months from November 10, 2022 to November 10, 2023.

On November 1, 2023, the Company's Board of Directors extended the stock repurchase program through November 10, 2024 and increased the remaining amount authorized to $ 50.0 million.

On November 1, 2024, the Company's Board of Directors extended the repurchase program through November 1, 2025.

Subject to applicable rules and regulations, the shares may be purchased from time to time in the open market or in privately negotiated transactions.

Such purchases will be at times and in amounts as the Company deems appropriate, based on factors such as market conditions, legal requirements, and other business considerations.

As of December 31, 2023, the Company has acquired 4.7 million shares of its Class A common stock under this program at an aggregate value of $ 20.0 million and an average of $ 4.23 per share.

Subsequent to December 31, 2024, the Company acquired 0.7 million additional shares of its Class A common stock under this program at an aggregate value of $ 1.3 million and an average price of $ 1.72 per share.

Repurchased shares were held in treasury.

The remaining availability under the stock repurchase program was $ 50.0 million as of December 31, 2023.

The remaining availability under the stock repurchase program was $ 42.2 million after the subsequent purchases.

NOTE 19—STOCK-BASED COMPENSATION

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The 2021 Plan provides for the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units and other stock awards, and performance awards to employees, officers, non-employee directors and independent service providers of the Company.

The 2021 Plan became effective immediately upon the closing of the Acies Merger and replaced the 2011 Plan.

The 2021 Plan replaced the 2011 Plan in June 2021.

No additional awards will be available for future issuance under the 2011 Plan.

Each Old PLAYSTUDIOS stock option from the 2011 Plan that was outstanding immediately prior to the Acies Merger and held by current employees or service providers, whether vested or unvested, was converted into an option to purchase 0.233 shares of Class A common stock (each such option, an “Exchanged Option”).

Except as specifically provided in the Merger Agreement, following the Acies Merger, each Exchanged Option continues to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former Old PLAYSTUDIOS option immediately prior to the consummation of the Acies Merger.

All equity awards activity was retroactively restated to reflect the Exchanged Options.

The number of shares of Class A common stock available under the 2021 Plan will increase annually on the first day of each calendar year, beginning with the calendar year ended December 31, 2022, with such annual increase equal to the lesser of (i) 5 % of the number of shares of common stock issued and outstanding on the last business day of the immediately preceding fiscal year and (ii) an amount determined by the Company's Board of Directors.

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Stock-Based Compensation

In connection with the Domestication and the closing of the Acies Merger, the Founder Group beneficially owned 16.1 million shares of Class B common stock, resulting in 74.6 % of voting power of the Company.

In addition, on the Closing Date of the Acies Merger, the Founder Group was the beneficial owner of 2.2 million fully vested options underlying shares of Class B common stock, which accounted for all of Mr.

Pascal's outstanding options on the Closing Date of the Acies Merger.

As a result of the Acies Merger, the Founder Group has a controlling interest in the Company.

As the Founder Group did not have control of Old PLAYSTUDIOS immediately prior to the Acies Merger, and as Mr.

Pascal is an employee of the Company, the incremental value resulting from the super vote premium is accounted for as incremental compensation costs.

During the year ended December 31, 2021, the Company incurred $ 1.1 million of additional compensation expense related to the Founder Group's beneficial ownership interest in Class B common stock and the underlying vested options as of the Closing Date.

The following table summarizes stock-based compensation expense that the Company recorded in (loss) income from operations for the periods shown:

The following table summarizes stock-based compensation expense that the Company recorded in loss from operations for the periods shown:

Years Ended December 31,

2023 2022 2021

Selling and marketing $ 1,268 $ 621

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All of the options granted under the 2011 Plan have time-based vesting periods vesting over a period of three to four years and a maximum term of 10 years from the grant date.

The following is a summary of stock option activity for time-based options for the year ended December 31, 2023 (in thousands, except weighted-average exercise price and remaining term):

The following is a summary of stock option activity for time-based options for the year ended December 31, 2024 (in thousands, except weighted-average exercise price and weighted average remaining contractual term).

Options Weighted-Average

Exercise Price Weighted-Average

Remaining Term (in Years) Aggregate

Exercise Price Weighted-Average Remaining Contractual Term (in Years)

Intrinsic Value

Outstanding - December 31, 2022 9,222 $ 1.11

( 3,672 ) $ 0.85 12,257

( 79 ) $ 1.89

( 76 ) $ 1.63

Outstanding - December 31, 2023 5,395 $ 1.27 4.1

Exercised ( 287 ) 1.00 280

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As of December 31, 2024, there were 5.1 million options outstanding, of which 3.2 million options are issuable into Class A common stock and 1.9 million options are issuable into Class B common stock.

As of December 31, 2023, there was approximately $ 0.4 million of total unrecognized compensation expense related to stock options to employees.

As of December 31, 2023, this cost is expected to be recognized over a remaining average period of 0.7 years.

The total intrinsic value of stock options exercised under the provisions of the 2011 Plan during the years ended December 31, 2023, 2022, and 2021, was $ 12.3 million, $ 20.0 million, and $ 17.6 million, respectively.

As of December 31, 2024, there was an immaterial amount of unrecognized compensation expense related to stock options granted to employees.

Restricted Stock Units ("RSUs")

RSUs are typically granted using a three or four year vesting schedule, either vesting pro rata annually or a cliff vest over the requisite service period, subject to continued employment.

Except as provided in an award agreement between the Company and the employee, if an employee is terminated (voluntarily or involuntarily), any unvested awards as of the date of termination will be forfeited.

RSUs settle for outstanding shares of the Company’s Class A common stock upon vesting, net of shares withheld for taxes.

The following is a summary of RSU activity for the year ended December 31, 2024 (in thousands, except weighted-average grant date fair value):

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Outstanding - December 31, 2022 11,521 $ 4.28

( 3,239 ) 4.26 $ 13,788

( 1,284 ) 4.12

Outstanding - December 31, 2023 11,702 $ 4.15

Granted 8,639 1.99

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As of December 31, 2024, there was approximately $ 26.4 million of total unrecognized compensation expense related to RSUs granted to employees and other service providers and this cost is expected to be recognized over a remaining average period of 2.1 years.

The total intrinsic value of RSUs vested during the years ended December 31, 2023, 2022, and 2021, was $ 12.4 million, $ 9.0 million, and $ 0.0 million , respectively.

NOTE 21—NET (LOSS) INCOME PER SHARE

Basic net (loss) income per share is computed by dividing net (loss) income attributable to Class A and Class B common stockholders by the weighted-average number of shares of each respective class of common stock outstanding during the period.

Diluted net (loss) income per share is computed by dividing net (loss) income attributable to Class A and Class B common stockholders by the weighted-average number of each respective class of common stock outstanding, including the potential dilutive securities.

For the calculation of diluted net (loss) income per share, net income attributable to Class A and Class B common stockholders is adjusted to reflect the potential effect of dilutive securities.

As result of the reverse recapitalization, the Company has retroactively adjusted the weighted average shares outstanding prior to the Acies Merger to give effect to the Exchange Ratio used to determine the number of shares of common stock into which they were converted.

The following table sets forth the computation of basic and diluted net (loss) income attributable to Class A and Class B common stockholders per share (in thousands except per share data):

The total intrinsic value of RSUs vested during the years ended December 31, 2024 and 2023, was $ 12.4 million and $ 12.4 million, respectively.

Performance Stock Units ("PSUs")

The following is a summary of PSU activity for the year ended December 31, 2024 (in thousands, except weighted-average grant date fair value):

Weighted-Average Grant Date Fair Value Total Fair Value of Shares Vested

Outstanding - December 31, 2023 — $ —

Granted 342 2.20

Vested — — $ —

Forfeited — —

Outstanding - December 31, 2024 342 $ 2.20

The PSUs are not expected to vest so no stock compensation was recognized during the year ended December 31, 2024.

There was no unrecognized compensation expense as of the year ended December 31, 2024.

NOTE 20—NET LOSS PER SHARE

Basic net loss per share is computed by dividing net loss attributable to Class A and Class B common stockholders by the weighted-average number of shares of each respective class of common stock outstanding during the period.

Diluted net loss per share is computed by dividing net loss attributable to Class A and Class B common stockholders by the weighted-average number of each respective class of common stock outstanding, including the potential dilutive securities.

For the calculation of diluted net loss per share, net income attributable to Class A and Class B common stockholders is adjusted to reflect the potential effect of dilutive securities.

The following table sets forth the computation of basic and diluted net loss attributable to Class A and Class B common stockholders per share (in thousands except per share data):

Years Ended December 31,

2023 2022 2021

Class A Class B Class A Class B Class A Class B

Net (loss) income attributable to common stockholders – basic $ ( 16,992 ) $ ( 2,401 ) $ ( 15,535 ) $ ( 2,248 ) $ 9,182 $ 1,555

Class A Class B Class A Class B

Net loss attributable to common stockholders – basic $ ( 25,039 ) $ ( 3,648 ) $ ( 16,992 ) $ ( 2,401 )

Potential dilutive effect of derivative instruments

— — — — 4 ( 4 )

Net (loss) income attributable to common stockholders – diluted $ ( 16,992 ) $ ( 2,401 ) $ ( 15,535 ) $ ( 2,248 ) $ 9,186 $ 1,551

Net loss attributable to common stockholders – diluted $ ( 25,039 ) $ ( 3,648 ) $ ( 16,992 ) $ ( 2,401 )

Weighted average shares of common stock outstanding - basic 112,980 16,458 116,520 16,458

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Weighted average shares of common stock outstanding - dilutive 112,980 16,458 116,520 16,458

Net (loss) income attributable to common stockholders per share

Net loss attributable to common stockholders per share

Basic $ ( 0.22 ) $ ( 0.22 ) $ ( 0.15 ) $ ( 0.15 )

Diluted $ ( 0.22 ) $ ( 0.22 ) $ ( 0.15 ) $ ( 0.15 )

For the periods presented above, the net (loss) income per share amounts are the same for Class A and Class B common stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with the Certificate of Incorporation.

The undistributed (losses) earnings for each period

are allocated based on the contractual participation rights of the Class A and Class B common stock as if the (losses) earnings for the period had been distributed.

As the liquidation and dividend rights are identical, the undistributed (losses) earnings are allocated on a proportionate basis.

The following equity awards outstanding at the end of each period presented have been excluded from the computation of diluted net (loss) income per share of common stock for the periods presented due to their anti-dilutive effect:

December 31, 2023 December 31, 2022 December 31, 2021

For the periods presented above, the net loss per share amounts are the same for Class A and Class B common stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with the Certificate of Incorporation.

The undistributed losses for each period are allocated based on

the contractual participation rights of the Class A and Class B common stock as if the losses for the period had been distributed.

As the liquidation and dividend rights are identical, the undistributed losses are allocated on a proportionate basis.

The following equity awards outstanding at the end of each period presented have been excluded from the computation of diluted net loss per share of common stock for the periods presented due to their anti-dilutive effect:

December 31, 2024 December 31, 2023

Stock options 5,070 5,394

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data