PLAYSTUDIOS, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Report of Independent Registered Public Accounting Firm (PCAOB ID 34 ) 85 Consolidated Balance Sheets 88 Consolidated Statements of Operations 89 Consolidated Statements of Comprehensive Loss 90 Consolidated Statements of Stockholders' Equity 91 Consolidated Statements of Cash Flows 92 Notes to Consolidated Financial Statements 94 84 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of PLAYSTUDIOS, Inc.: Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of PLAYSTUDIOS, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 16, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Critical Audit Matter Description The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. The Company used the discounted cash flow method and guideline public company method to estimate fair value, which requires management to make significant estimates and assumptions related to discount rates and forecasts of future revenues. Changes in these assumptions could have a significant impact on the fair value of the reporting unit. Goodwill relates to reporting units within the Company’s playGAMES reportable segment. The fair value of the reporting units exceeded their carrying values as of the measurement date and, therefore, no impairment was recognized. Given the significant judgments made by management to estimate the fair value of a certain reporting unit and the difference between its fair value and carrying value, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to selection of the discount rate and forecasts of future revenue, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to management’s assumptions used in estimating the fair value of the reporting unit included the following, among others: 85 • We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the reporting unit, such as controls related to management’s selection of the discount rate and forecasts of future revenue. • We evaluated the reasonableness of management’s revenue forecasts by: ◦ Comparing actual results to management’s historical forecasts. ◦ Comparing the forecasts to Internal communications to management and the Board of Directors. ◦ Considering the impact of changes in the competitive, regulatory, and economic environment on management’s projections. ◦ Evaluating the impact of changes in management’s forecasts from October 1, 2025, annual measurement date to December 31, 2025. • With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate by: ◦ Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation. ◦ Developing a range of independent estimates and comparing those to the discount rate selected by management. /s/ Deloitte & Touche LLP Las Vegas, Nevada March 16, 2026 We have served as the Company’s auditor since 2018. 86 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of PLAYSTUDIOS, Inc: Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of PLAYSTUDIOS, Inc. and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the financial statements as of and for the year ended December 31, 2025, of the Company and our report dated March 16, 2026, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Las Vegas, Nevada March 16, 2026 87 PLAYSTUDIOS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except par value amounts) December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 104,935 $ 109,179 Receivables, net 22,818 30,767 Prepaid expenses and other current assets 7,018 7,156 Total current assets 134,771 147,102 Property and equipment, net 13,426 16,118 Operating lease right-of-use assets 7,533 9,703 Intangibles assets and internal-use software, net 76,430 90,996 Goodwill 52,222 52,222 Other long-term assets 6,236 6,814 Total non-current assets 155,847 175,853 Total assets $ 290,618 $ 322,955 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable 1,493 1,518 Operating lease liabilities, current 3,656 3,405 Contingent consideration, current 5,561 — Accrued and other current liabilities 32,468 44,495 Total current liabilities 43,178 49,418 Minimum guarantee liability 12,000 18,000 Operating lease liabilities, noncurrent 4,070 6,659 Contingent consideration, noncurrent 2,747 3,340 Other long-term liabilities 757 823 Total non-current liabilities 19,574 28,822 Total liabilities $ 62,752 $ 78,240 Commitments and contingencies (Note 17) Stockholders’ equity: Preferred stock, $ 0.0001 par value ( 100,000 shares authorized, 0 shares issued and outstanding as of December 31, 2025 and December 31, 2024) — — Class A common stock, $ 0.0001 par value ( 2,000,000 shares authorized, 131,823 and 127,734 shares issued, and 110,084 and 108,287 shares outstanding as of December 31, 2025 and December 31, 2024, respectively) 11 11 Class B common stock, $ 0.0001 par value ( 25,000 shares authorized, 16,457 and 16,457 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively). 2 2 Additional paid-in capital 340,802 327,951 Accumulated deficit ( 59,963 ) ( 31,324 ) Accumulated other comprehensive income (loss) 1,806 ( 632 ) Treasury stock, at cost, 21,739 and 19,450 shares at December 31, 2025 and December 31, 2024, respectively ( 54,792 ) ( 51,293 ) Total stockholders’ equity 227,866 244,715 Total liabilities and stockholders’ equity $ 290,618 $ 322,955 The accompanying notes are an integral part of these consolidated financial statements. 88 PLAYSTUDIOS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Years Ended December 31, 2025 2024 Net revenue $ 235,097 $ 289,429 Operating expenses: Cost of revenue (1) 57,467 72,716 Selling and marketing 55,475 64,623 Research and development 58,376 67,683 General and administrative 45,859 46,121 Depreciation and amortization 38,360 45,440 Restructuring and related 3,482 25,710 Total operating costs and expenses 259,019 322,293 Loss from operations ( 23,922 ) ( 32,864 ) Other income (expense), net: Change in fair value of warrant liabilities 156 856 Change in fair value of contingent consideration ( 4,968 ) ( 85 ) Interest income, net 2,943 4,902 Other expense, net ( 910 ) ( 97 ) Total other (loss) income, net ( 2,779 ) 5,576 Loss before income taxes ( 26,701 ) ( 27,288 ) Income tax expense ( 1,938 ) ( 1,399 ) Net loss $ ( 28,639 ) $ ( 28,687 ) Net loss attributable to common stockholders per share: Basic $ ( 0.23 ) $ ( 0.22 ) Diluted $ ( 0.23 ) $ ( 0.22 ) Weighted average shares of common stock outstanding: Basic 125,679 129,438 Diluted 125,679 129,438 (1) Amounts exclude depreciation and amortization. The accompanying notes are an integral part of these consolidated financial statements. 89 PLAYSTUDIOS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Years Ended December 31, 2025 2024 Net loss $ ( 28,639 ) $ ( 28,687 ) Other comprehensive income (loss): Change in foreign currency translation adjustment (1) 2,400 ( 432 ) Unrealized gain (loss) from derivative financial instruments (1) 824 ( 760 ) Reclassification of loss (gain) from settlement of derivative financial instruments included in net loss (1) ( 786 ) 436 Total other comprehensive income (loss) 2,438 ( 756 ) Comprehensive loss $ ( 26,201 ) $ ( 29,443 ) (1) These amounts are presented gross of the effect of income taxes. The total change and the corresponding effect of income taxes are immaterial. The accompanying notes are an integral part of these consolidated financial statements. 90 PLAYSTUDIOS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) Class A Common Stock Class B Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Treasury Stock Total Stockholders' Equity Shares Amount Shares Amount Balance as of December 31, 2023 118,200 12 16,457 $ 2 310,944 124 ( 2,637 ) ( 20,094 ) 288,351 Net loss — — — — — — ( 28,687 ) — ( 28,687 ) Exercise of stock options 287 — — — 287 — — — 287 Restricted stock vesting, net of shares withheld 4,527 — — — ( 2,701 ) — — — ( 2,701 ) Stock-based compensation — — — — 19,421 — — — 19,421 Repurchase of common stock ( 14,727 ) ( 1 ) — — — — — ( 31,199 ) ( 31,200 ) Other comprehensive income — — — — — ( 756 ) — — ( 756 ) Balance as of December 31, 2024 108,287 11 16,457 $ 2 327,951 ( 632 ) ( 31,324 ) ( 51,293 ) 244,715 Net loss — — — — — — ( 28,639 ) — ( 28,639 ) Exercise of stock options 172 — — — 122 — — — 122 Restricted stock vesting, net of shares withheld 3,915 — — — ( 1,979 ) — — — ( 1,979 ) Stock-based compensation — — — — 14,708 — — — 14,708 Repurchase of common stock ( 2,290 ) — — — — — — ( 3,499 ) ( 3,499 ) Other comprehensive income — — — — — 2,438 — — 2,438 Balance as of December 31, 2025 110,084 $ 11 16,457 $ 2 $ 340,802 $ 1,806 $ ( 59,963 ) $ ( 54,792 ) $ 227,866 The accompanying notes are an integral part of these consolidated financial statements. 91 PLAYSTUDIOS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 28,639 ) $ ( 28,687 ) Adjustments: Depreciation and amortization 38,360 45,440 Amortization of loan costs 174 164 Stock-based compensation expense 14,143 18,113 Change in fair value of warrant liabilities ( 156 ) ( 856 ) Change in fair value of contingent consideration 4,968 85 Asset impairments and write-downs — 9,228 Deferred income tax benefit ( 710 ) ( 1,593 ) Other 1,332 980 Changes in operating assets and liabilities Receivables, net 4,235 3,687 Prepaid expenses and other current assets ( 822 ) 1,269 Income tax receivable 691 1,283 Accounts payable & accrued liabilities ( 8,149 ) 651 Other 913 ( 4,024 ) Net cash provided by operating activities 26,340 45,740 Cash flows from investing activities: Payment for business combination — ( 3,400 ) Purchase of property and equipment ( 968 ) ( 3,980 ) Additions to internal-use software ( 15,525 ) ( 18,624 ) Other ( 409 ) ( 290 ) Net cash used in investing activities ( 16,902 ) ( 26,294 ) Cash flows from financing activities: Proceeds from stock option exercises 122 287 Repurchases of treasury stock ( 3,499 ) ( 31,200 ) Payments for minimum guarantee obligations ( 9,547 ) ( 8,295 ) Payments for tax withholding of stock-based compensation ( 1,983 ) ( 2,705 ) Net cash used in financing activities ( 14,907 ) ( 41,913 ) Foreign currency translation 1,240 ( 638 ) Net change in cash, cash equivalents, and restricted cash ( 4,229 ) ( 23,105 ) Cash, cash equivalents, and restricted cash at beginning of period 109,784 132,889 Cash, cash equivalents, and restricted cash at end of period $ 105,555 $ 109,784 Supplemental cash flow disclosures: Interest paid $ 791 $ 165 Income taxes paid, net of (refunds) $ 1,554 $ 1,638 92 Years Ended December 31, 2025 2024 Non-cash investing and financing activities: Capitalization of stock-based compensation $ 565 $ 1,308 Additions to intangible assets related to licensing agreements 3,469 7,943 Lease modifications 654 2,769 Right-of-use assets acquired under operating leases — 1,007 Contingent and deferred consideration related to business combination — 3,355 The accompanying notes are an integral part of these consolidated financial statements. 93 PLAYSTUDIOS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, unless otherwise noted) NOTE 1—BACKGROUND AND BASIS OF PRESENTATION Organization and Description of Business 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. The Company’s games are free-to-play and available via the Apple App Store, Google Play Store, Amazon Appstore, and Facebook (collectively, “platforms” or “platform operators”). The Company creates games based on its own original content as well as third-party licensed brands. The Company generates revenue through the in-game sale of virtual currency and through advertising. 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. and its subsidiaries. Basis of Presentation and Consolidation The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of PLAYSTUDIOS, Inc. and its consolidated subsidiaries. In the opinion of management, all adjustments considered necessary for a fair presentation have been recorded within the accompanying financial statements, and all intercompany balances and transactions have been eliminated upon consolidation. Certain reclassifications in these consolidated financial statements have been made to comply with U.S. GAAP applicable to public companies and SEC Regulation S-X. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. 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, 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. Due to the inherent uncertainties in making these estimates, actual amounts could differ materially. Smaller Reporting Company As of December 31, 2025, 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 2026, and otherwise as required. NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents 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, net. The Company maintains cash and cash equivalent balances at several banks. Cash accounts located in the U.S. are insured by the Federal Deposit Insurance Corporation (FDIC). Although balances may exceed amounts insured 94 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 $ 0.6 million and $ 1.2 million as of December 31, 2025 and December 31, 2024. 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, 2025 and December 31, 2024. 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, and direct-to-consumer payment processors, including Xsolla. Accounts receivable are typically non-interest bearing and are initially recorded at cost. The Company regularly reviews accounts receivable, considers current economic conditions and the financial positions of the Company’s platform operators. Accounts are written off when the Company deems the account to be uncollectible. Recoveries of accounts previously written off are recorded when received. The Company reserves an estimated amount for receivables that may not be collected to reduce receivables to their net carrying amount, which approximates fair value. Methodologies for estimating the allowance for uncollectible amounts range from specific reserves to various percentages applied to aged receivables. Historical collection rates are considered in determining reserves. The following table summarizes the major receivables of the Company as a percentage of the total trade receivables as of the dates indicated: December 31, 2025 December 31, 2024 Apple, Inc. 41.1 % 46.6 % Google, LLC 17.8 % 19.1 % Xsolla (USA), Inc. 13.6 % 6.2 % As of December 31, 2025 and December 31, 2024, the Company did not have any additional counterparties that exceeded 10% of the Company’s total trade receivables. Property and Equipment, net The Company states property and equipment at cost, net of accumulated depreciation. The Company capitalizes the costs of improvements that extend the life of the asset, while costs of repairs and maintenance are charged to expense as incurred. Gains or losses on the disposition of property and equipment are included in the determination of income or loss. Computer equipment, furniture, and fixtures are depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the related lease term. Estimated Useful Life Land improvements 5 years Building 39 years Building improvements 15 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. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. If the Company reduces the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized or depreciated over the revised estimated useful life. 95 Business Combinations The Company applies the provisions of ASC 805, Business Combination and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from customer relationships, acquired technology and acquired trademarks from a market participant perspective, useful lives and discount rates. 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. Goodwill 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. If a triggering event occurs, qualitative factors are first assessed to determine whether a quantitative impairment test is required. If a quantitative test is required, the fair value of the asset is compared to the asset's carrying amount. The fair value of the reporting unit is estimated using market and discounted cash flow approaches. The discounted cash flow approach requires the use of significant estimates of expected revenues as well as discount rates to determine the estimated fair value. The market approach uses comparable company information to determine revenue and earnings multiples to value our reporting unit. Failure to achieve these expected results or market multiples may cause a future impairment of goodwill at the reporting unit. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. Any impairment would be recognized for the difference between the fair value and the carrying amount limited to the carrying amount of goodwill. Impairment testing for goodwill is performed at the reporting unit level. Intangible Assets Intangible assets are classified into one of the two categories: (1) intangible assets with definite lives subject to amortization and (2) intangible assets with indefinite lives not subject to amortization. For definite-lived intangible assets, amortization is recorded using the straight-line method, which materially approximates the pattern of the assets’ use. The Company continually evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of intangible assets may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in anticipated cash flows. The estimated useful lives of the Company’s intangible assets are as follows: Estimated Useful Life Licenses 2 - 6 years Trade names 5 - 10 years Acquired technology 5 years Customer relationships 5 years Patents and trademarks 10 - 20 years When factors indicate that a definite-lived intangible asset should be evaluated for possible impairment, the Company reviews intangible assets to assess recoverability from future operations using undiscounted cash flows. If future undiscounted cash flows are less than the carrying value, an impairment is recognized in earnings to the extent that the carrying value exceeds fair value. For indefinite-lived intangible assets, the Company conducts impairment tests annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of an indefinite-lived asset is less than its carrying value, or when circumstances no longer continue to support an indefinite useful life. If a triggering event occurs, 96 qualitative factors are first assessed to determine whether a quantitative impairment test is required. If a quantitative test is required, the fair value of the intangible is compared to the asset’s carrying amount. Any impairment would be recognized for the difference between the fair value and the carrying amount. The Company performs its annual impairment testing as of October 1 of each year. 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. Capitalization begins when the preliminary project stage is complete and the Company commits resources to the software project and continues during the application development stage. Capitalization ceases when the software has been tested and is ready for its intended use. Qualified costs incurred during the post-implementation/post-operation stage of the Company’s software applications relating to upgrades and enhancements are capitalized to the extent it is probable that they will result in added functionality. Costs that cannot be separated between maintenance of, and minor upgrades and enhancements to, internal-use software are expensed as incurred. Capitalized internal-use software development costs are amortized on a straight-line basis over a three-year estimated useful life. The Company believes that a straight-line basis for amortization best represents the pattern through which the Company derives value from internal-use software. The Company evaluates the useful lives of these assets and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. License Agreements & Minimum Guarantees The Company enters into long-term license agreements with third parties in which it is obligated to pay a minimum guaranteed amount of royalties, typically annually over the life of the contract. The Company accounts for the minimum guaranteed obligations within “Accrued liabilities” and “Minimum guarantee liability” at the onset of the license arrangement and records a corresponding licensed asset within “Intangibles, net” in the accompanying Consolidated Balance Sheets. The licensed intangible assets related to the minimum guaranteed obligations are amortized over the term of the license agreement with the amortization expense recorded in “Depreciation and amortization” in the accompanying Consolidated Statements of Operations. The Company classifies minimum royalty payment obligations as current liabilities to the extent they are contractually due within the next 12 months. The Company assesses the recoverability of license agreements whenever events arise or circumstances change that indicate the carrying value of the licensed asset may not be recoverable. Recoverability of the licensed asset and the amount of impairment, if any, are determined using the Company’s policy for intangible assets with finite useful lives. Warrant Liabilities 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 reassessed at the end of each reporting period. Fair Value Measurements The carrying amounts of the Company’s financial instruments, including accounts receivable, accounts payable, and accrued liabilities, approximate fair value because of their short-term maturities. According to ASC 820, Fair Value Measurements and Disclosures , fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three tiers, which prioritize the inputs used in measuring fair value as follows: Level 1 —Observable inputs, such as quoted prices in active markets for identical assets or liabilities; Level 2 —Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3 —Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. 97 Entities are permitted to choose to measure certain financial instruments and other items at fair value. 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. Leases The Company is the lessee primarily under non-cancelable office real estate and data center leases. 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. The Company’s lease terms may include options to extend or terminate the lease. The Company assesses these options using a threshold of whether the Company is reasonably certain to exercise the option to extend or terminate the lease. For leases the Company is reasonably certain to renew, those option periods are included within the lease term and, therefore, the measurement of the right-of-use asset and lease liability. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s real estate lease agreements do not contain any material residual value guarantees, restrictions or covenants. The Company’s lease agreements with lease and non-lease components are accounted for separately. As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate is estimated based upon the capital structure of the Company and upon the other information available at the lease commencement date in determining the present value of lease payments. The implicit rate will be used when readily determinable. The operating lease ROU assets also include any prepaid lease payments made and are net of lease incentives. The Company does not record an asset or liability for operating leases with a term of 12 months or less. Revenue Recognition The Company determines revenue recognition in accordance with ASC 606, Revenues from Contracts with Customers , by: • identifying the contract, or contracts, with a customer; • identifying the performance obligations in each contract; • determining the transaction price; • allocating the transaction price to the performance obligations in each contract; and • recognizing revenue when, or as, the Company satisfies performance obligations by transferring the promised goods or services. Virtual Currency The Company develops and operates free-to-play games which are downloaded and played on social and mobile platforms. Players may collect virtual currency free of charge through the passage of time or through targeted marketing promotions. Additionally, players can send free “gifts” of virtual currency to their friends through interactions with certain social platforms. Players may also purchase additional virtual currency through accepted payment methods offered by the respective platform. Once a purchase is completed, the virtual currency is deposited into the player’s account and are not separately identifiable from previously purchased virtual currency or virtual currency obtained by the player for free. Once obtained, virtual currency (either free or purchased) cannot be redeemed for cash nor exchanged for anything other than gameplay. When virtual currency is consumed in our games, the player could “win” and would be awarded additional virtual currency or could “lose” and lose the future use of that virtual currency. As the player does not receive any additional benefit from our games, nor is the player entitled to any additional rights once the player’s virtual currency is substantially consumed, the Company has concluded that the virtual currency represents consumable goods. Players can earn loyalty points through a variety of activities, including but not limited to playing the Company’s games, engaging with in-game advertising, engaging with marketing emails, and logging into the game. The loyalty points 98 can be redeemed for rewards offered by the Company’s rewards partners. There is no obligation for the Company to pay or otherwise compensate the Company’s rewards partners for any player redemptions under the Company’s rewards partner agreements. In addition, both paying and non-paying players can earn loyalty points. Therefore, the loyalty points earned by players are marketing offers and do not provide players with material rights. 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 standalone 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. Tier points can be earned through a variety of player engagement activities, including but not limited to logging into our games, achieving multi-day log-in streaks, collecting hourly bonuses, and purchasing virtual currency bundles. Depending on the tier, players are granted access to special benefits at the Company’s discretion. Similar to loyalty points that are redeemable for real-world rewards, the tier points are not awarded as a result of a contract with a customer since both paying and non-paying players can earn these tier points. As a result, the tier points earned by players do not provide players with material rights and do not require any allocation to the transaction price of virtual currency. The Company has the performance obligation to display and provide access to the virtual currency purchased by the Company’s player within the game whenever the player accesses the game until the virtual currency is consumed. Payment is required at the time of purchase and the transaction price is fixed. The transaction price, which is the amount paid for the virtual currency by the player, is allocated entirely to this single performance obligation. The Company evaluates all consideration payable to a customer and reduces the transaction price if the consideration is not in exchange for a distinct good or service. As virtual currency represents consumable goods, the Company recognizes revenue as the virtual currency is consumed over the estimated consumption period. Since the Company is unable to distinguish between the consumption of purchased or free virtual currency, the Company must estimate the amount of outstanding purchased virtual currency at each reporting date based on player behavior. The Company has determined through a review of player behavior that players who purchase virtual currency generally are not purchasing additional virtual currency if their existing virtual currency balances have not been substantially consumed. As the Company can track the duration between purchases of virtual currency for individual players, the Company is able to reliably estimate the period over which virtual currency is consumed. Based upon an analysis of players’ historical play behavior, the timing difference between when virtual currency is purchased by a player and when such virtual currency is consumed in gameplay is relatively short, currently one to seven days with an average consumption period of approximately one day. The Company recognizes revenue from in-game purchases of virtual currency over this estimated average period between when the virtual currency is purchased and consumed. If applicable, the Company records the unconsumed virtual currency in “Deferred revenue” and records the prepaid payment processing fees associated with this deferred revenue in “Prepaid expenses”. 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. Advertising Revenue The Company has contractual relationships with various advertising service providers for advertisements within the Company’s games. Advertisements can be in the form of an impression, click-throughs, banner ads, or offers. 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. Revenue from advertisements and offers are recognized at a point in time when the advertisements are displayed, or when the player has completed the offer as the advertising service provider simultaneously receives and consumes the benefits provided from these services. The price can be determined by the applicable evidence of the arrangement, which may include a master contract or a third-party statement of activity. The transaction price is generally the product of the advertising units delivered (e.g. impressions, videos viewed) and the contractually agreed upon price per advertising unit. Further, the price per advertising unit can also be based on revenue share percentages stated in the contract. The number of advertising units delivered is determined at the end of each 99 month so there is no uncertainty about the transaction price. Payment terms are stipulated as a specific number of days subsequent to end of the month, ranging from 45 to 60 days. Principal Agent Considerations The Company’s games are played on various social and mobile third-party platforms for which such third parties collect monies from players and remit net proceeds after deducting payment processing fees. The Company is primarily responsible for providing access to the virtual currency, has control over the content and functionality of games before they are accessed by players, and has the discretion to establish the pricing for the virtual currency. Therefore, the Company concluded that it is the principal and as a result, revenues are reported gross of payment processing fees. Payment processing fees are recorded as a component of “Cost of revenue” in the accompanying Consolidated Statements of Operations. The Company reports its advertising revenue net of amounts retained by advertising service providers. Cost of Revenue Cost of revenue relates to direct expenses incurred to generate revenue from online and mobile games and are recorded as incurred. The Company’s cost of revenue consists primarily of payment processing fees, hosting and data center costs related to operating its games, and royalties for licensed content. Payment processing fees consist of fees paid to third-party social and mobile platform operators. If applicable, other than the deferral of payment processing fees associated with deferred revenues, payment processing fees are expensed as incurred. Research and Development 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 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 Advertising expenses for our games was $ 37.2 million and $ 47.0 million for the years ended December 31, 2025 and 2024, respectively. Advertising expenses are included in “Selling and marketing” expenses in the Consolidated Statements of Operations. 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. 100 Foreign Currency Derivative Contracts The Company uses foreign currency derivative contracts to reduce our exposure to fluctuating exchange rates between the United States dollar (as our functional currency) and certain expense lines denominated in New Israeli Shekels (“NIS”). Our derivative contracts are designated as cash flow hedges under ASC 815. We monitor the effectiveness of our hedges on a quarterly basis, both qualitatively and quantitatively, and expect these hedges to remain highly effective at offsetting fluctuations in exchange rates through their respective maturity dates. See Note 18— Stockholders’ Equity for additional discussion. The fair value of derivative financial instruments is recognized as an asset or liability at each balance sheet date, with changes in fair value recorded in other comprehensive income on the Consolidated Statements of Comprehensive Income (Loss) until the future underlying transactions occur. The fair value approximates the amount we would pay or receive if these contracts were settled at the respective valuation dates. The inputs used to measure the fair value of our foreign currency derivative contracts are categorized as Level 2 in the fair value hierarchy as established by ASC 820. Cash flows from derivatives, which are designated as accounting hedges, are presented consistently with the cash flow classification of the related hedged items. Foreign Currency Translation and Transactions The functional currency of each of the Company’s wholly owned foreign subsidiaries is the applicable local currency. The translation of foreign currencies into U.S. dollars is performed for assets and liabilities using current foreign currency exchange rates in effect at the consolidated balance sheet date and for revenue and expense accounts using average foreign currency exchange rates during the year. Capital accounts are translated at historical foreign currency exchange rates. Translation gains and losses are included in stockholders’ equity as a component of accumulated other comprehensive income/(loss). 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, net” in the Consolidated Statements of Operations. Income Taxes 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. Under ASC 740, the Company determines deferred tax assets and liabilities based on the temporary difference between the consolidated financial statements and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which it expects the differences to be recovered or settled. The Company establishes valuation allowances when necessary, based on the weight of the available positive and negative evidence, to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company accounts for uncertain tax positions in accordance with ASC 740, which requires companies to adjust their consolidated financial statements to reflect only those tax positions that are more likely than not to be sustained upon examination by taxing authorities based on the technical merits of the issue. ASC 740 prescribes a comprehensive model for the consolidated financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. 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 earnings per share adjusts basic earnings 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. Recent Accounting Pronouncements Recently Adopted Accounting Standards 101 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) . ASU 2023-09 requires that public business entities expand their annual disclosures related to rate reconciliation and income taxes paid, and provide a disaggregated presentation between domestic and foreign income or loss from continuing operations before income tax expense and income tax expense or benefit from continuing operations. This guidance is effective for annual periods beginning after December 15, 2024. The Company adopted the new accounting standard for the year ended December 31, 2025 on a prospective basis. Comparative information for prior periods has not been restated and continues to be presented under the disclosure requirements in effect during those periods. The adoption of this guidance did not have an effect on the Company’s financial position, results of operations, or cash flows. See Note 16— Income Taxes for additional disclosures. Recently Issued Accounting Standards Not Yet Adopted 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. In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40) (“ASU 2025-06”) , which revises the approach to accounting for internal-use software costs by eliminating all references to the stages of software development projects, thereby making the guidance adaptable to a variety of software development methodologies. ASU 2025-06 will be effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods, on a prospective, modified or retrospective basis, with early adoption permitted. The Company is currently assessing the effect the guidance will have on the Company's financial condition, results of operations and cash flows. NOTE 3—SEGMENT REPORTING The Company reports operating results based on two reportable segments: playGAMES and playAWARDS. 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: playGAMES: This segment is a leading developer and publisher of digital games on mobile and web platforms. It operates primarily in the social gaming market, which is characterized by gameplay online or on mobile devices, that is social, competitive, and self-directed in pace and session length. playGAMES also operates in the casual space. playGAMES generates the majority 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. Players may exhaust the virtual currencies that they receive for free and may choose to purchase additional virtual currencies in order to extend their time of game play. Once obtained, virtual currencies (either free or purchased) cannot be redeemed for cash nor exchanged for anything other than game play within our games. playGAMES generates additional revenue in the casual space from the receipt of advertising revenue. Players who install our casual games receive free, unlimited gameplay that requires viewing of periodic in-game advertisements. playAWARDS: 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 standalone 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. 102 The CODM evaluates the performance of each operating segment using revenue and segment Adjusted EBITDA. Expenses include indirect costs that are allocated to operating segments based on a reasonable allocation methodology, which are generally related to sales and marketing activities and general and administrative overhead. Revenue and expenses exclude transactions between the Company's operating segments. The CODM does not evaluate operating segments using asset information. Adjusted EBITDA ("AEBITDA") is the Company’s reportable segment GAAP measure, which management utilizes as the primary profit measure for its reportable segments and underlying operating segments. AEBITDA is a measure defined as net income (loss) before interest, income taxes, depreciation and amortization, restructuring and related costs (consisting primarily of severance and other restructuring related costs), stock-based compensation expense, and other income and expense items (including special infrequent items, foreign currency gains and losses, and other non-cash items). Expenses include indirect costs that are allocated to operating segments based on a reasonable allocation methodology, which are generally related to sales and marketing activities, general and administrative overhead, and costs associated with administering the playAWARDS myVIP program in the playGAMES applications. Revenue excludes transactions between the Company's operating segments. Certain expenses incurred by playAWARDS have been allocated to playGAMES at cost. 103 The following tables present the Company’s segment information: Year Ended December 31, 2025 playGAMES playAWARDS Total Net revenue Virtual currency $ 188,381 $ 986 $ 189,367 Advertising 45,708 — 45,708 Other — 22 22 234,089 1,008 235,097 Segment expenses Cost of sales 57,366 101 57,467 Payroll & related 37,352 6,016 43,368 User acquisition 37,203 — 37,203 Other (1) 43,527 3,591 47,118 175,448 9,708 185,156 Reportable segment AEBITDA 58,641 ( 8,700 ) 49,941 Other operating expense Corporate and other 14,346 Restructuring expenses 3,482 Other reconciling items 8 Stock based compensation 14,143 Special infrequent 3,524 Depreciation and amortization 38,360 73,863 Non-operating income (expense) Change in fair value of warrant liabilities 156 Change in fair value of contingent consideration ( 4,968 ) Interest income (expense), net 2,943 Other (expense) income, net $ ( 910 ) ( 2,779 ) Loss before income taxes ( 26,701 ) Income tax expense $ ( 1,938 ) Net income (loss) $ ( 28,639 ) 104 Year Ended December 31, 2024 playGAMES playAWARDS Total Net revenue 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 Other (1) 34,620 3,731 38,351 204,293 13,772 218,065 Reportable segment AEBITDA 85,074 ( 13,710 ) 71,364 Other operating expense Corporate and other 14,815 Restructuring expenses 25,710 Other reconciling items 150 Stock based compensation $ 18,113 Depreciation and amortization 45,440 104,228 Non-operating income (expense) Change in fair value of warrant liabilities 856 Change in fair value of contingent consideration ( 85 ) Interest income (expense), net 4,902 Other (expense) income, net $ ( 97 ) 5,576 Loss before income taxes ( 27,288 ) Income tax expense $ ( 1,399 ) Net income (loss) $ ( 28,687 ) (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”) 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. 105 The following table presents the c harges for the 2024 Reorganization Plan: Year Ended December 31, 2025 playGAMES playAWARDS Corporate and Other Total Severance and employee-related costs $ 119 $ 1 18 $ 138 Total $ 119 $ 1 $ 18 $ 138 Year Ended December 31, 2024 playGAMES playAWARDS Corporate and Other Total Severance and employee-related costs $ 3,956 $ 768 979 $ 5,703 Asset impairments 7,388 1,840 223 9,451 Other 568 39 468 1,075 Total $ 11,912 $ 2,647 $ 1,670 $ 16,229 The following table summarizes the activity related to the liabilities associated with the 2024 Reorganization Plan for the years ended December 31, 2025 and 2024: playGAMES playAWARDS Corporate and Other Total 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 ) Payments ( 2,317 ) ( 611 ) ( 862 ) ( 3,790 ) Balance as of December 31, 2024 2,207 196 365 2,768 Reorganization charges 119 1 18 138 Non-cash charges — — — — Payments ( 2,326 ) ( 197 ) ( 383 ) ( 2,906 ) Balance as of December 31, 2025 $ — $ — $ — $ — NOTE 4—BUSINESS COMBINATIONS 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. 106 The following table summarizes the consideration paid for Pixode and the assets acquired as of the acquisition date: Consideration: July 1, 2024 Cash consideration $ 3,500 Contingent consideration 3,255 Total consideration transferred $ 6,755 Identifiable assets acquired: Developed technology (weighted-average useful life of 5 years) $ 1,650 Property and equipment, net 16 Total identifiable net assets $ 1,666 Goodwill $ 5,089 As of December 31, 2025, the fair value of the contingent consideration was $ 8.3 million. NOTE 5—RELATED-PARTY TRANSACTIONS The following table is a summary of balance sheet assets and liabilities from related parties: December 31, 2025 December 31, 2024 Financial Statement Line Item Marketing Agreement $ 1,000 $ 1,000 Intangibles, net The Company’s revenues and expenses recognized from related parties were immaterial during the years ended December 31, 2025 and 2024. MGM Resorts International (“MGM”) MGM is a stockholder and the President and Chief Executive Officer of MGM Resorts Japan 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, 2025 and December 31, 2024. Marketing Agreement In April 2011, the Company entered into a joint marketing agreement with MGM (as amended, the “Marketing Agreement”) in exchange for assistance with marketing campaigns and the exclusive right to utilize MGM’s licensed marks and licensed copyrights for the development of certain of the Company’s social casino games. 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. 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. PLAYSTUDIOS Impact Fund During the year ended December 31, 2025, the Company made charitable contributions of $ 1.5 million to the PLAYSTUDIOS Impact Fund (the “Fund”), a tax-exempt private foundation established by the Company and administered by certain members of the Company’s management team. These individuals serve as officers and directors of the Fund but receive no compensation in such capacities. The Fund supports charitable causes selected based on input from Company employees and customers. The contributions were recorded in "General and administrative" in the accompanying 107 Consolidated Statements of Operations. The Company did not make any charitable contribution during the year ended December 31, 2024. NOTE 6—RECEIVABLES, NET Receivables, net consist of the following: December 31, 2025 December 31, 2024 Trade receivables $ 22,029 $ 26,264 Insurance receivable — 3,750 Other receivables 821 770 Allowance for uncollectible amounts ( 32 ) ( 17 ) Total receivables, net $ 22,818 $ 30,767 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 Prepaid expenses and other current assets consist of the following: December 31, 2025 December 31, 2024 Prepaid expenses $ 5,160 $ 4,513 Income tax receivable 1,632 2,316 Other current assets 226 327 Total prepaid expenses and other current assets $ 7,018 $ 7,156 NOTE 8—FAIR VALUE MEASUREMENT 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, 2025 and December 31, 2024: December 31, 2025 Level 1 Level 2 Level 3 Total Financial liabilities: Public Warrants $ 43 — — $ 43 Private Warrants — 31 — 31 Contingent consideration — — 8,308 8,308 Total financial liabilities $ 43 $ 31 $ 8,308 $ 8,382 December 31, 2024 Level 1 Level 2 Level 3 Total Financial liabilities: Public Warrants $ 134 — — $ 134 Private Warrants — 96 — 96 Derivative financial instruments — 38 — 38 Contingent consideration — — 3,340 3,340 Total financial liabilities $ 134 $ 134 $ 3,340 $ 3,608 108 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. As of December 31, 2025 and December 31, 2024, significant unobservable inputs include a discount rate of approximately 12.1 % and 13.5 %, respectively, 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 consisted of the following: Total Balance as of December 31, 2023 $ — Recorded in connection with business combinations 3,255 Fair value adjustments based upon post-acquisition performance 85 Balance as of December 31, 2024 $ 3,340 Fair value adjustments based upon post-acquisition performance 4,968 Balance as of December 31, 2025 $ 8,308 NOTE 9—PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: December 31, 2025 December 31, 2024 Land and land improvements $ 1,923 $ 1,680 Building and building improvements 5,932 5,890 Computer equipment 9,986 9,288 Leasehold improvements 11,628 10,964 Purchased software 586 704 Furniture and fixtures 3,681 3,812 Total property and equipment 33,736 32,338 Less: accumulated depreciation ( 20,310 ) ( 16,220 ) Total property and equipment, net $ 13,426 $ 16,118 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, 2025 and 2024, depreciation expense was $ 3.9 million and $ 4.9 million, respectively. There were no impairment charges or material write-offs were for the year ended December 31, 2025, and there was $ 0.4 million recorded for the year ended December 31, 2024. Property and equipment, net by region consists of the following: December 31, 2025 December 31, 2024 United States $ 9,246 $ 10,947 Europe, Middle East, and Africa 3,425 4,059 All other regions and countries 755 1,112 Total property and equipment, net $ 13,426 $ 16,118 109 NOTE 10—INTANGIBLE ASSETS AND INTERNAL-USE SOFTWARE, NET Intangible Assets The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset other than goodwill: December 31, 2025 December 31, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Licenses $ 83,820 $ ( 45,670 ) $ 38,150 $ 80,101 $ ( 33,424 ) $ 46,677 Acquired technology 16,653 ( 11,088 ) 5,565 16,653 ( 8,238 ) 8,415 Customer relationships 12,000 ( 7,800 ) 4,200 12,000 ( 5,400 ) 6,600 Trade names 2,741 ( 1,728 ) 1,013 2,740 ( 1,578 ) 1,162 Internal-use software 204,254 ( 178,101 ) 26,153 188,164 ( 161,228 ) 26,936 Other 379 ( 30 ) 349 220 ( 14 ) 206 319,847 ( 244,417 ) 75,430 299,878 ( 209,882 ) 89,996 Nonamortizable intangible assets: Marketing Agreement with a related party 1,000 — 1,000 1,000 — 1,000 Total intangible assets $ 320,847 $ ( 244,417 ) $ 76,430 $ 300,878 $ ( 209,882 ) $ 90,996 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, 2025 and 2024, intangible asset and internal-use software amortization expenses were $ 34.5 million and $ 40.6 million, respectively. The Company did not record a non-cash impairment charge during the year ended December 31, 2025. The Company recorded non-cash impairment charges of $ 9.2 million within "Restructuring and related" in the Consolidated Statement of Operations during the year ended December 31, 2024. As of December 31, 2025, the estimated annual amortization expenses for the years ending December 31, 2026 through 2030 and thereafter is as follows: Year Ending December 31, Projected Amortization Expense 2026 $ 33,160 2027 21,892 2028 13,232 2029 6,471 2030 172 Thereafter 503 Total $ 75,430 110 NOTE 11—GOODWILL The following table provides the changes in the carrying amount of goodwill allocated to the playGAMES segment for the years ended December 31, 2025 and December 31, 2024: Goodwill, Gross Accumulated Impairment Goodwill, Net Balance as of December 31, 2024 52,222 — 52,222 Additions from acquisitions — — — Measurement period adjustments — — — Balance as of December 31, 2025 $ 52,222 $ — $ 52,222 NOTE 12—ACCRUED AND OTHER CURRENT LIABILITIES Accrued liabilities consist of the following: December 31, 2025 December 31, 2024 Accrued payroll and related 9,143 11,824 Accrued user acquisition 3,793 3,609 Income taxes payable 1,476 1,468 Warrant liabilities 74 230 Minimum guarantee liability 9,469 9,610 Accrued litigation 3,245 9,827 Other licensing agreements — 2,431 Other accruals 5,268 5,496 Total accrued liabilities $ 32,468 $ 44,495 Accrued Litigation 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: Christian A. Felipe et. al. v. 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 named 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 alleged 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 alleged 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 sought an award of damages for an unspecified amount. On January 20, 2025, the parties reached an agreement in principle to settle the matter. On December 7, 2025, the settlement received final approval by the federal district court in which the case was pending, judgment was entered, and the case was dismissed with prejudice. 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. As of 111 December 31, 2025, the Pilati Lawsuit is stayed pending the "Settlement" described below. The Company believes the claims are without merit and if the Settlement is not completed, 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. As of December 31, 2025, the Pilati Lawsuit is stayed pending the "Settlement" described below. The Company believes the claims are without merit and if the Settlement is not completed, 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. As of December 31, 2025, the Pilati Lawsuit is stayed pending the "Settlement" described below. The Company believes the claims are without merit and if the Settlement is not completed, 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, 2025, three of the demands for arbitration have been stayed pending the "Settlement" described below (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 if the Settlement is not completed, 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 (the "Settlement"). 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, 2025 and 2024 the Company accrued $ 3.2 million and $ 9.8 million, respectively, in connection with the Felipe Complaint, Pilati Lawsuit, Duckworth Lawsuit, Tipmore Lawsuit, and State Arbitration Demands. During the year ended December 31, 2025, the Company paid $ 2.75 million in connection with the settlement of the Felipe Complaint and an insurer contributed an additional $ 3.75 million toward the settlement, resulting in a total settlement of $ 6.5 million. The Company does not have any additional accruals related to the Felipe Complaint. 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. The Public Warrants will expire 5 years after the completion of the Acies Merger, or earlier upon redemption or liquidation. The Private Warrants are identical to the Public Warrants, except that the Private Warrants and the shares of Class A common stock issuable upon exercise of the Private Warrants were not transferable until after the completion of the Acies Merger, subject to certain limited exceptions. Additionally, the Private Warrants are non-redeemable so long as they are held by the initial holder or any of its permitted transferees. If the Private Warrants are held by someone other than the initial holder or its permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such 112 holders on the same basis as the Public Warrants. The Private Warrants may be exercised on a cashless basis so long as held by the Sponsor or certain permitted transferees. The Company may redeem the outstanding Public Warrants in whole, but not in part, at a price of $ 0.01 per Public Warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sale price of the Company’s Class A common stock equals or exceeds $ 18.00 per share for any 20 -trading days within a 30 -trading day period ending three business days before the Company sends the notice of redemption to the holders of the Public Warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis. In no event will the Company be required to net cash settle the exercise of Public Warrants. At December 31, 2025, 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—LEASES 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 three years . During the years ended December 31, 2025 and December 31, 2024, operating lease expense was $ 4.2 million and $ 4.6 million, respectively. We do not have any finance leases. Our total variable and short-term lease payments were immaterial for all periods presented. As of December 31, 2025, we did not have material additional operating leases that have not yet commenced. 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, 2025 December 31, 2024 Operating lease right-of-use assets, net $ 7,533 $ 9,703 Operating lease liabilities, current 3,656 3,405 Operating lease liabilities, noncurrent 4,070 6,659 Operating lease liabilities, total $ 7,726 $ 10,064 Weighted average remaining lease term, years 2.1 2.9 Weighted average discount rate 6.3 % 6.1 % Operating lease liability maturities: Year ending December 31, Operating Leases 2026 $ 4,131 2027 3,587 2028 620 Total undiscounted cash flows $ 8,338 Less: imputed interest $ ( 612 ) Lease liabilities, total $ 7,726 NOTE 14—LONG-TERM DEBT Credit Agreement On June 24, 2021, the Company, a subsidiary of the Company, JPMorgan Chase Bank, N.A., as administrative agent and JPMorgan Chase Bank, N.A., Silicon Valley Bank and Wells Fargo Securities, LLC, as joint bookrunners and joint lead arrangers entered into a credit agreement (the “Credit Agreement”) which provides for a five-year revolving credit facility in 113 an aggregate principal amount of $ 75.0 million. Borrowings under the Credit Agreement may be borrowed, repaid and re-borrowed by the Company, and are available for working capital, general corporate purposes, and permitted acquisitions. Commitment fees and interest rates are determined on the basis of either a Eurodollar rate or an Alternate Base Rate plus an applicable margin. The applicable margins are initially 2.50 %, in the case of Eurodollar loans, and 1.50 %, in the case of Alternate Base Rate loans. The applicable margin is subject to adjustment based upon the Company's Total Net Leverage Ratio (as defined in the Credit Agreement). Eurodollar rates and the Alternate Base Rate are subject to floors of 0.00 % and 1.00 %, respectively. The Credit Agreement contains various affirmative and negative financial and operational covenants applicable to the Company and its subsidiaries. The Credit Agreement includes customary reporting requirements, conditions precedent to borrowing and affirmative, negative and financial covenants. Specific financial covenants include the following, commencing with the quarter ended September 30, 2021: • Total Net Leverage Ratio of 3.50 :1.00 (subject to increase to 4.00 :1.00 following consummation of certain material acquisitions) • Fixed Charge Coverage Ratio of not less than 1.25 :1.00. On May 13, 2022, the Company entered into the Amendment No. 1 to the Credit Agreement, which amended the Credit Agreement to, among other things, exclude from the definition of Fixed Charge Coverage Ratio certain funds, up to $ 15.0 million, expended or to be expended by the Company in connection with the Tender Offer. On August 9, 2022, the Company entered into the Amendment No. 2 to the Credit Agreement, which further amended the Credit Agreement (as amended by Amendment No. 1 to the Credit Agreement) to, among other things, (i) increase the total current available line of credit from $ 75.0 million to $ 81.0 million, (ii) change the basis for calculation of interest under the facility from LIBOR to SOFR, and (iii) exclude from the calculation of the Fixed Charge Coverage Ratio (A) up to $ 6.0 million for the acquisition of, and improvements to, the real property located at 10150 Covington Cross Drive, Las Vegas, Nevada 89144 incurred on or prior to the first anniversary of the effective date of Amendment No. 2 to the Credit Agreement, and (B) up to $ 20.0 million for the redemption or repurchase of up to $ 11.0 million warrants to purchase shares of Class A common stock of the Company, and shares of Class A common stock of the Company, on or before December 31, 2023, of which as of the date of Amendment No. 2 to the Credit Agreement the Company had used $ 1.8 million to redeem outstanding warrants to purchase Class A common stock in connection with the Tender Offer. On August 16, 2023, 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. 3 to Credit Agreement (the “Amendment No. 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. As of December 31, 2025, the Company does not have any balances outstanding under the Credit Agreement. 114 NOTE 15—REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of Revenue The following table summarizes the Company’s revenue disaggregated by type, and by over time or point in time recognition: Years Ended December 31, 2025 2024 Virtual currency (over time) $ 189,367 $ 228,930 Advertising (point in time) 45,708 60,197 Other revenue (point in time) 22 302 Total net revenue $ 235,097 $ 289,429 The following table summarizes the Company’s virtual currency revenue disaggregated by platform: Years Ended December 31, 2025 2024 Third-party platforms $ 161,737 $ 213,466 Direct-to-consumer platforms 27,630 15,464 Total virtual currency $ 189,367 $ 228,930 The following table summarizes the Company’s revenue disaggregated by geography: Years Ended December 31, 2025 2024 United States $ 196,381 $ 244,184 All other countries 38,716 45,245 Total net revenue $ 235,097 $ 289,429 Contract Balances Contract assets represent the Company’s ability to bill customers for performance obligations completed under a contract. As of December 31, 2025 and December 31, 2024, contract assets recorded in the Company’s Consolidated Balance Sheets were immaterial. The deferred revenue balance related to the purchase of virtual currency was $ 0.4 million as of December 31, 2025 and $ 0.1 million as of December 31, 2024. The opening and closing balance of trade receivables is further described in Note 6— Receivables, net . NOTE 16—INCOME TAXES The components of income (loss) before income taxes were as follows: Years Ended December 31, (in thousands) 2025 2024 United States $ ( 29,928 ) $ ( 31,268 ) Foreign 3,227 3,980 Total loss $ ( 26,701 ) $ ( 27,288 ) 115 The provision for income taxes consisted of the following: Years Ended December 31, ( in thousands) 2025 2024 Current tax expense: Federal $ 360 $ ( 11 ) State 304 710 Foreign 1,513 2,071 Total current tax expense $ 2,177 $ 2,770 Deferred tax expense: Federal $ 42 $ ( 634 ) State ( 526 ) 364 Foreign 245 ( 1,101 ) Total deferred tax expense $ ( 239 ) $ ( 1,371 ) Provision for Income Taxes $ 1,938 $ 1,399 The following is a reconciliation between the U.S. federal statutory tax rate and our effective tax rate for the current year, expressed in thousands and as a percentage of pre-tax income: December 31, 2025 ( in thousands) Amount Percent Tax expense (benefit) computed at U.S. federal statutory rate $ ( 5,607 ) 21.0 % State and Local Income Taxes, Net of Federal Income Tax Effect (1) ( 78 ) 0.3 Foreign tax effects Israel: Stock-based compensation (2) 611 ( 2.3 ) Other 235 ( 0.9 ) Other foreign jurisdictions 558 ( 2.1 ) Effects of cross-border tax laws Foreign branch income 582 ( 2.2 ) Deduction for foreign taxes ( 281 ) 1.1 Other effects 122 ( 0.5 ) Tax credits: R&D tax credits ( 160 ) 0.6 Changes in valuation allowance 3,974 ( 14.9 ) Nontaxable or nondeductible items: Stock-based compensation (2) 1,683 ( 6.3 ) Section 162(m) - executive compensation 284 ( 1.1 ) Other nontaxable or nondeductible items 277 ( 1.0 ) Changes in unrecognized tax benefits 7 — Other adjustments ( 269 ) 1.0 Effective income tax rate $ 1,938 ( 7.3 ) % (1) States that make up the majority (>50%) of state and local taxes are California, Texas, and Illinois. 116 (2) Stock-based compensation includes non-deductible equity compensation and tax effects of shortfalls and windfalls. December 31, 2024 Statutory rate 21.0 % Foreign provision ( 0.2 ) State/province income tax 2.7 Stock compensation ( 9.6 ) Unrecognized tax benefits ( 0.1 ) Research credit 2.5 Return to provision 5.8 Other foreign branch impacts ( 4.6 ) Valuation allowance ( 17.5 ) Foreign-derived intangible income deduction (FDII) 0.2 Global intangible low taxed income (GILTI) ( 0.5 ) Non-deductible expenses-other ( 4.0 ) Foreign branch income ( 3.1 ) Foreign tax deduction 1.8 Fair value adjustment on warrants 0.8 Foreign tax settlement — Other ( 0.3 ) Effective tax rate ( 5.1 ) % The Company made income tax payments (net of refunds received) during the year ended December 31, 2025, as follows: ( in thousands) Year Ended December 31, 2025 Federal $ — State 132 Foreign: Israel 920 Serbia 363 Singapore 152 Other foreign jurisdictions ( 13 ) Total cash paid for income taxes (net of refunds received) $ 1,554 Deferred tax assets and liabilities consist of the following (in thousands): 117 December 31, 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 3,300 $ 2,941 Tax credit carryforwards 1,884 2,545 Accrued liabilities 2,990 3,782 Stock compensation 5,113 5,954 Charitable contribution 399 1 Intangibles 4,327 — Section 174 amortization (1) 14,663 15,671 Operating lease liabilities 2,495 2,231 Other 182 84 Total gross deferred tax assets $ 35,353 $ 33,209 Less: Valuation allowance ( 27,911 ) ( 23,827 ) Total deferred tax assets $ 7,442 $ 9,382 Deferred tax liabilities: Intangibles — 638 Property and equipment 917 2,486 Prepaid expenses 1,148 1,100 Operating lease assets 1,816 2,140 Other 37 — Total deferred tax liabilities $ 3,918 $ 6,364 Deferred tax assets (liability), net $ 3,524 $ 3,018 (1) Section 174 amortization for the year ended December 31, 2024 has been reclassified to conform to the current year presentation. As of December 31, 2025, the Company had gross U.S. federal net operating losses of $ 6.1 million and tax credit carryforwards of $ 1.1 million. As of December 31, 2024, the Company had gross U.S. federal net operating losses of $ 5.1 million and tax credit carryforwards of $ 0.9 million. The Company’s federal net operating losses can be carried forward indefinitely. The federal research credits are limited to a 20-year carryforward period and will expire starting in 2041. As of December 31, 2025, the Company had tax effected state net operating loss carryforwards of approximately $ 1.6 million, of which $ 0.1 million will carryforward indefinitely and $ 1.5 million will begin to expire between 2036 and 2044. The Company also had $ 4.6 million of state research credits, of which $ 0.5 million begin to expire in 2038 while the remaining are carried forward indefinitely. After consideration of all positive and negative evidence, including scheduled reversals of deferred tax assets and liabilities, projected future taxable income, tax planning strategies, and results of recent operations, management determined that it is more likely than not that a portion of our deferred tax assets will not be realized. As a result, we recorded a valuation allowance of $ 27.9 million and $ 23.8 million as of December 31, 2025 and 2024, respectively. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth. 118 In July 2025, U.S. Congress enacted the One Big Beautiful Bill Act (“OBBBA”), which included a range of tax reform measures, including the extension and modification of certain provisions originally enacted under the Tax Cuts and Jobs Act. The OBBBA does not materially impact the Company’s effective tax rate or cash flows in the current fiscal year. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits: Years Ended December 31, 2025 2024 Balance at beginning of period $ 525 $ 347 Increases for tax positions of prior years — 170 Increases for tax positions of current year 98 170 Decreases for tax positions of prior years ( 68 ) ( 14 ) Decreases for lapses in statute of limitations ( 77 ) $ ( 148 ) Balance at end of period $ 478 $ 525 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, 2025, the Company recorded approximately $ 0.5 million of unrecognized tax benefits, of which zero would impact the effective tax rate, if recognized. The Company’s policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax expense. As of December 31, 2025, there are no interest or penalties associated with the uncertain tax benefit as the entire balance relates to a reduction of a deferred tax asset not yet realized. As of December 31, 2025, 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. The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. With few exceptions, the Company is subject to examination for both U.S. federal and state tax returns for the years 2022 to present. The tax years starting from 2022 remain open to examination by the Israeli Tax Authority. The tax years starting from 2020 remain open to examination by the Hong Kong Inland Revenue Department for Asia. For the remaining jurisdictions, the Company is subject to examination by tax authorities from the date the Company started operations in the respective foreign jurisdiction to present. NOTE 17—COMMITMENTS AND CONTINGENCIES Minimum Guarantee Liability The following are the Company’s total minimum guarantee obligations: Years Ended December 31, 2025 2024 Minimum guarantee liability-current $ 9,469 $ 9,610 Minimum guarantee liability-noncurrent 12,000 18,000 Total minimum guarantee obligations $ 21,469 $ 27,610 Weighted-average remaining term (in years) 1.6 2.0 119 The following are the Company’s remaining expected future payments of minimum guarantee obligations as of December 31, 2025: Year Ending December 31, Minimum Guarantee Obligations 2026 $ 9,469 2027 6,000 2028 6,000 Total $ 21,469 Pixode 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, 2025 was $ 8.3 million. Refer to Note 8— Fair Value Measurement for more information. Legal Proceedings The Company is party to ordinary and routine litigation incidental to its business. On a case-by-case basis, the Company engages inside and outside counsel to assess the probability of potential liability resulting from such litigation. After making such assessments, the Company makes an accrual for the estimated loss only when the loss is reasonably probable and an amount can be reasonably estimated. 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 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; 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 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 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 120 seeking an order to compel the Company to arbitrate. The complaint was dismissed by the plaintiffs on April 25, 2025 as part of an agreement to arbitrate the matter. The claimants filed arbitration proceedings in August of 2025. 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 July 7, 2025 and August 15, 2025, a law firm representing two individuals filed arbitration proceedings against the Company alleging violations of the California Invasion of Privacy Act and California common law intrusion upon seclusion and invasion of privacy arising out the individuals' viewing of webpages and the Company's alleged use of a tracking code known as the Meta Pixel. 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. Other On March 10, 2026, the Company initiated an internal reorganization plan (the “2026 Reorganization Plan”) which is intended to enhance efficiency and reduce operating expenses. The 2026 Reorganization Plan includes a reduction of the Company’s current total global workforce by approximately 27 percent. The Company expects to substantially complete the personnel reduction by the end of the second quarter of fiscal year 2026, but the timing of certain reductions will vary based on job function and location, including local legal requirements. The Company currently estimates that it will incur approximately $ 4.5 million to $ 7.0 million in charges in connection with the 2026 Reorganization Plan, which will be substantially incurred in the first quarter of fiscal year 2026. These charges primarily relate to employee transition, severance payments, employee benefits, stock-based compensation, and lease termination and other facility-related costs. The estimates of the charges and expenditures that the Company expects to incur in connection with the 2026 Reorganization Plan, and the timing thereof, are subject to a number of assumptions, including local legal requirements in various jurisdictions, and actual amounts may differ materially from estimates. In addition, the Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur in connection with the implementation of the Plan. NOTE 18—STOCKHOLDERS’ EQUITY Common Stock 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. Each holder of Class A common stock is entitled to one vote for each share of Class A common stock held and each holder of Class B common stock is entitled to twenty votes for each share of Class B common stock held. After the full preferential amounts due to preferred stockholders have been paid or set aside, the remaining assets of the Company available for distribution to its stockholders, if any, are distributed to the holders of common stock ratably in proportion to the number of shares of common stock then held by each such holder. None of the Company’s common stock is entitled to preemptive rights or subject to redemption. With the exception of the conversion of the Class B common stock into Class A common stock as described below, the Company’s common stock is not convertible into any other shares of the Company’s capital stock. The shares of Class B common stock are subject to a “sunset” provision that would be triggered if any member of the Founder Group transfers shares of Class B common stock outside the Founder Group (except for certain permitted transfers). In the event of such non-permitted transfers, any share transferred will automatically convert into shares of Class A common stock. In addition, the outstanding shares of Class B common stock will be subject to a “sunset” provision by which all outstanding shares of Class B common stock will automatically convert into shares of Class A common stock (i) if holders representing a majority of the Class B common stock vote to convert the Class B common stock into Class A common stock, (ii) if the Founder Group and its permitted transferees collectively no longer beneficially own at least 20 % of the number of shares of Class B common stock collectively held by the Founder Group as of the closing of the Acies Merger, or (iii) on the nine-month anniversary of the Founder’s death or disability, unless such date is extended by a majority of independent directors of the Company. 121 Accumulated Other Comprehensive Income (Loss) The following tables show a summary of changes in accumulated other comprehensive income (loss): Foreign Currency Derivative Contracts Currency Translation Adjustment Total Accumulated Other Comprehensive (Loss) Income Balance as of December 31, 2024 $ ( 38 ) $ ( 594 ) $ ( 632 ) Net losses recognized in other comprehensive income before reclassifications 38 — 38 Foreign currency translation — 2,400 2,400 Balance as of December 31, 2025 $ — $ 1,806 $ 1,806 Foreign Currency Derivative Contracts Currency Translation 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 ( 324 ) — ( 324 ) Foreign currency translation — ( 432 ) ( 432 ) Balance as of December 31, 2024 $ ( 38 ) $ ( 594 ) $ ( 632 ) Foreign Currency Derivative Contracts 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 were completed during the year ended December 31, 2025. There were no outstanding derivative contracts at December 31, 2025. 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 Sheets. Treasury Stock The following table summarizes changes in treasury stock: Treasury shares Treasury stock, at cost Balance as of December 31, 2024 19,450 $ 51,293 Class A common stock repurchased through the Stock Repurchase Program 2,289 3,499 Balance as of December 31, 2025 21,739 $ 54,792 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. Each year since inception, the stock repurchase program has been extended 12 months by the Board of Directors with the most recent extension being approved on October 31, 2025. On November 1, 2023, the Company's Board of Directors increased the remaining amount authorized to $ 50.0 million. 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. The remaining availability under the stock repurchase program was $ 40.0 million as of December 31, 2025 and $ 43.5 million as of December 31, 2024. NOTE 19—STOCK-BASED COMPENSATION 2011 and 2021 Equity Incentive Plans The Company has two equity incentive plans: Old PLAYSTUDIOS' 2011 Omnibus Stock and Incentive Plan (the “2011 Plan”) and the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the grant of non-qualified 122 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 replaced the 2011 Plan in June 2021. No additional awards will be available for future issuance under the 2011 Plan. 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. If any award (or any award under the 2011 Plan) is forfeited, cancelled, expires, terminates or otherwise lapses or is settled in cash, in whole or in part, without the delivery of Class A common stock or Class B common stock, then the shares (including both the Class A common stock and Class B common stock) covered by such forfeited, expired, terminated or lapsed award shall again be available as shares for grant under the 2021 Plan. As of December 31, 2025, a total of 37.2 million shares of the Company’s Class A common stock had been allocated to awards granted under the 2021 Plan and 13.1 million of those shares remained available for future grants. Stock-Based Compensation The following table summarizes stock-based compensation expense that the Company recorded in loss from operations for the periods shown: Years Ended December 31, 2025 2024 Selling and marketing $ 387 $ 1,268 General and administrative 9,857 10,187 Research and development 3,899 6,658 Stock-based compensation expense $ 14,143 $ 18,113 Capitalized stock-based compensation $ 565 $ 1,308 Stock Options 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, 2025 (in thousands, except weighted-average exercise price and weighted average remaining contractual term). No. of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Outstanding - December 31, 2023 5,395 $ 1.27 4.1 Granted — — Exercised ( 287 ) 1.00 $ 280 Forfeited ( 2 ) 6.18 Expired ( 36 ) 2.77 Outstanding - December 31, 2024 5,070 $ 1.28 2.9 Granted — — Exercised ( 172 ) 0.71 132 Forfeited — — Expired ( 333 ) 2.04 Outstanding - December 31, 2025 4,565 $ 1.24 1.8 $ 15 Unvested - December 31, 2025 — — — — Exercisable - December 31, 2025 4,565 $ 1.24 1.8 $ 15 123 As of December 31, 2025, there were 4.6 million options outstanding, of which 2.7 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, 2025, there was no unrecognized compensation expense related to stock options granted to employees. Restricted Stock Units ("RSUs") The following is a summary of RSU activity for the year ended December 31, 2025 (in thousands, except weighted-average grant date fair value): No. of RSUs Weighted-Average Grant Date Fair Value Total Fair Value of Shares Vested Outstanding - December 31, 2023 11,702 $ 4.15 Granted 8,639 1.99 Vested ( 5,832 ) 3.88 $ 22,639 Forfeited ( 1,789 ) 3.56 Outstanding - December 31, 2024 12,720 $ 2.87 Granted 7,156 1.55 Vested ( 5,309 ) 2.94 $ 15,634 Forfeited ( 2,319 ) 2.80 Outstanding - December 31, 2025 12,248 $ 2.09 As of December 31, 2025, there was approximately $ 16.3 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 1.8 years. The total intrinsic value of RSUs vested during the years ended December 31, 2025 and 2024, was $ 7.6 million and $ 12.4 million, respectively. Performance Stock Units ("PSUs") The following is a summary of PSU activity for the year ended December 31, 2025 (in thousands, except weighted-average grant date fair value): No. of PSUs Weighted-Average Grant Date Fair Value Total Fair Value of Shares Vested Outstanding - December 31, 2023 — $ — Outstanding - Granted 342 2.20 Outstanding - Vested — — $ — Outstanding - Forfeited — — Outstanding - December 31, 2024 342 $ 2.20 Granted 2,741 1.67 Vested — — $ — Forfeited ( 233 ) 1.82 Expired ( 342 ) 2.20 Outstanding - December 31, 2025 2,508 $ 1.65 The PSUs outstanding at December 31, 2025 and 2024 did not vest so there was no stock compensation recognized during the years ended December 31, 2025 and 2024. There was no unrecognized compensation expense as of the year ended December 31, 2025. 124 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 loss 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, 2025 2024 Class A Class B Class A Class B Numerator Net loss attributable to common stockholders – basic $ ( 24,890 ) $ ( 3,749 ) $ ( 25,039 ) $ ( 3,648 ) Potential dilutive effect of derivative instruments — — — — Net loss attributable to common stockholders – diluted $ ( 24,890 ) $ ( 3,749 ) $ ( 25,039 ) $ ( 3,648 ) Denominator Weighted average shares of common stock outstanding - basic 109,222 16,457 112,980 16,458 Potential dilutive effect of stock options — — — — Potential dilutive effect of restricted stock units — — — — Weighted average shares of common stock outstanding - dilutive 109,222 16,457 112,980 16,458 Net loss attributable to common stockholders per share Basic $ ( 0.23 ) $ ( 0.23 ) $ ( 0.22 ) $ ( 0.22 ) Diluted $ ( 0.23 ) $ ( 0.23 ) $ ( 0.22 ) $ ( 0.22 ) 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 125 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, 2025 December 31, 2024 Stock options 4,565 5,070 Restricted stock units 12,248 13,063 Performance stock units 2,508 342 Public Warrants 5,383 5,383 Private Warrants 3,822 3,822 Earnout Shares 15,000 15,000 43,526 42,680 Vesting of the PSUs was based on the Company’s achievement of certain financial performance targets for the fiscal year ended December 31, 2025. Applicable performance targets were not achieved and, therefore, such PSUs did not vest. 126 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL DISCLOSURE None.