What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-28 compared with 2022-03-02 · 38 added, 34 removed, 227 unchanged (24% of the section changed)

3 unchanged sentences

Our games are free-to-play, and we are experts in providing novel, curated in-game content and offers to our users, at optimal points in their game journeys.

Our players love our games because they are fun, creative, engaging, and kept fresh through a steady release of new features that are customized for different player segments.

As a result, we have steadily increased our user base and paying users, and we have retained users over long periods of time.

Our players love our games because they are fun, creative, engaging, and kept fresh through a release of new features that are customized for different player segments.

As a result, we have retained paying users over long periods of time.

We have primarily grown our game portfolio through acquisitions.

Once we acquire games, we enhance the scale and profitability of those games by applying our live operations services and our technology platform, the Playtika Boost Platform.

Once we acquire games, we seek to enhance the scale and profitability of those games by applying our live operations services and our technology platform, the Playtika Boost Platform.

By leveraging this platform, our game studios can dedicate a greater portion of their time to creating innovative content, features, and experiences for players.

We also develop new games using our internal development teams and infrastructure, applying learnings from our existing games.

We have a powerful combination of scale, growth and operating cash flow.

In the year ended December 31, 2021, we generated $ 2,583.0 million in revenues, net income of $ 308.5 million and $982.7 million in Adjusted EBITDA, representing a net income margin of 11.9% and an Adjusted EBITDA Margin of 38.0%.

In the year ended December 31, 2022, we generated $2,615.5 million in revenues, net income of $275.3 million and $805.1 million in Credit Adjusted EBITDA, representing a net income margin of 10.5%, and a Credit Adjusted EBITDA margin of 30.8%.

We were founded in Israel in 2010, when we released our first game, Slotomania , which remains the largest game in our portfolio based on revenues as of December 31, 2022.

20 unchanged sentences

We maintain a highly disciplined approach to acquisitions, and have a proven history of making acquisitions at attractive prices and achieving meaningful synergies.

Most recently, in August 2021, we acquired 80% of the issued and registered shares and options of Reworks Oy, a Finland based mobile game developer and the studio behind the design entertainment app, Redecor .

Data-driven performance marketing capabilities drive our high-ROI user acquisition

8 unchanged sentences

The Playtika Boost Platform includes:

• Digital Studio, which is being developed to use digital and AI technologies to optimize game operations and monetization

• Meta-games and monetization events, including tournaments, challenges, and missions;

6 unchanged sentences

There are also a number of additional services we provide to studios, based on their game’s needs and strategies, including:

• Digital Studio:

A developing suite of advanced and easy to use tools to maximize efficiency and designed to enhance revenue by personalizing the player experience

• Player Journey:

15 unchanged sentences

Feature Development

We are experts at creating features and player experiences that optimize player engagement, intended to result in increased conversion and monetization.

We strive to create features and player experiences that optimize player engagement, intended to result in increased conversion and monetization.

We are focused on continuing to implement and enhance features that keep games fresh and increase user engagement, including awarding in-game virtual items, providing engaging new game themes, motifs, challenges and in-game missions, as well as in-game chat and messaging capabilities.

We serve these features to our users based on their preferences and the optimal timing during each player’s gameplay.

Depending on the circumstances, this could mean increasing or decreasing the amount of new features for our players.

Our Acquisitions Strategy

We maintain a highly disciplined approach to acquisitions, and have a proven history of acquiring games and game studios at attractive prices and achieving meaningful synergies from those games by leveraging our live operations services, including the Playtika Boost Platform.

Over the past 10 years, we have successfully acquired a number of mobile games and studios, including Reworks (2021), Seriously (2019), Supertreat (2019), Wooga (2018), Jelly Button (2017), House of Fun (2014), World Series of Poker (2013) and Bingo Blitz (2012).

We maintain a highly disciplined approach to acquisitions, and have a proven history of acquiring games and game studios at attractive prices and driving incremental stockholder value from those games by leveraging our live operations services, including the Playtika Boost Platform.

Over the past 10 years, we have successfully acquired a number of mobile games and studios, including JustPlay (2022), Reworks (2021), Seriously (2019), Supertreat (2019), Wooga (2018), Jelly Button (2017), House of Fun (2014), World Series of Poker (2013) and Bingo Blitz (2012).

Generally, our strategy involves identifying potential acquisition targets that fall into one of five categories:

6 unchanged sentences

Our ability to quickly integrate acquisitions and realize synergies enables us to compete effectively against other bidders.

Additionally, our geographic diversity allows us to integrate acquisition targets, especially studios located in Europe near our other studios and

our headquarters in Israel.

Additionally, our geographic diversity allows us to integrate acquisition targets, especially studios located in Europe near our other studios and our headquarters in Israel.

We view acquisitions as an effective strategy to expand the scale and scope of our mobile games and as a complementary strategy to new game development.

Marketing and Player Lifecycle Management

Over our eleven year history, we have gained significant expertise in acquiring new users, converting users to payers, retaining active users, and re-engaging inactive ones.

Over our twelve year history, we have gained significant expertise in acquiring new users, converting users to payers, retaining active users, and re-engaging inactive ones.

Our success stems from a deep and nuanced understanding of the key aspects of data-based marketing strategies applicable to our industry, including how to measure successful user acquisition as it relates to mobile games, where to allocate marketing spend, how to optimize media buying budgets, and how to design ads that attract users who are likely to install and play our games.

31 unchanged sentences

Our research and design team has extensive expertise in creating new content and gameplay features as well as proprietary tools and systems to enable the efficient design, development and implementation of new content and features.

For example, we have recently automated certain quality assurance procedures for many of our games, which significantly increased the frequency with which we are able to deploy new content and features for those games, allowing us to create and deploy more content quicker to enhance monetization.

We invest heavily in research and development, and approximately 40% of our employees are employed in research and development, which enables us to consistently introduce updates and enhancements to our games on a daily, sometimes hourly, basis.

We have a diverse pool of talent located in game development hubs, including in Israel, Germany, Finland, the United Kingdom, and Canada.

We invest heavily in research and development, and approximately 75% of our employees are employed in research and development, which enables us to consistently introduce updates and enhancements to our games, which we strive to do on an effective basis.

We have a diverse pool of talent located in game development hubs, including in Israel and Germany.

This provides us with both a funnel of new, internally developed game concepts, ideas for improvements to our systems, and close relationships with those local game-development communities.

11 unchanged sentences

We consider our intellectual property rights, including our trademarks, copyrights, and trade secrets, in the aggregate, material to our business.

We endeavor to protect our investment in our intellectual property by seeking protection in the

jurisdictions where we do business, as appropriate.

We endeavor to protect our investment in our intellectual property by seeking protection in the jurisdictions where we do business, as appropriate.

We generally obtain trademark protection and often seek to register trademarks for the names and designs under which we market and license our games.

As of February 1, 2022, we owned approximately 857 registered trademarks in the United States, and approximately 869 registered trademarks in jurisdictions outside of the United States.

As of January 1, 2023, we owned approximately 877 registered trademarks in the United States, and approximately 814 registered trademarks in jurisdictions outside of the United States.

Additionally, many of the feature elements of our games, including game characters, are subject to copyright protection.

23 unchanged sentences

However, there is significant opposition in some jurisdictions to social gaming, including social casino gaming, and some jurisdictions have expressed concern that social casino games, in particular, present significant risks of encouraging gambling behavior especially with respect to children and people who already have gambling problems.

Anti-gaming groups in several states and countries have specifically targeted social casino games, which could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern social gaming or social casino gaming specifically.

gaming groups in several states and countries have specifically targeted social casino games, which could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern social gaming or social casino gaming specifically.

For example, a bill introduced in Australia in 2020 would amend that country’s Interactive Gambling Act of 2001 to ban online social casino games.

These opposition efforts could lead to a prohibition on social gaming or social casino

gaming altogether, restrict our ability to advertise our games or substantially increase our costs to comply with regulations, all of which could have an adverse effect on our results of operations, cash flows and financial condition.

These opposition efforts could lead to a prohibition on social gaming or social casino gaming altogether, restrict our ability to advertise our games or substantially increase our costs to comply with regulations, all of which could have an adverse effect on our results of operations, cash flows and financial condition.

We cannot predict the likelihood, timing, scope or terms of any such legislation or regulation or the extent to which they may affect our business.

6 unchanged sentences

In August 2020, we entered into a settlement agreement to settle this matter, which was approved by the court in February 2021.

Additional legal proceedings targeting our games and claiming violations of state, federal or foreign laws, including gambling laws, could occur, based on the unique and particular laws of each jurisdiction, particularly as litigation and regulations continue to evolve.

On May 17, 2022, Guy David Ben Yosef filed a motion for approval of a class action lawsuit in district court in Tel Aviv-Jaffa Israel against Playtika Group Israel Ltd.

(“PGI”), on behalf of all of PGI’s customers who made game token purchases in Israel as part of games marketed by PGI during the seven years preceding the filing of the motion and for all subsequent customers of such games who purchase tokens until the resolution of the claim.

The motion alleges that certain of the Company’s slot, poker and solitaire-themed games, including Slotomania, Caesars Slots, Solitaire Grand Harvest, House of Fun and Poker Heat, constitute illegal gambling and are prohibited under Israeli law and are misleading under Israeli consumer protection laws and alleges unjust enrichment.

The motion asserts damages of NIS 50 million.

Additional legal proceedings, including demands for arbitration, targeting our games and claiming violations of state, federal or foreign laws, including gambling laws, have occurred and could occur, based on the unique and particular laws of each jurisdiction, particularly as litigation and regulations continue to evolve.

See “Legal Proceedings” and “Risk Factors—Legal proceedings may materially adversely affect our business and our results of operations, cash flows and financial condition” for more information.

The widespread implementation of in-game purchases of virtual items and virtual currency in our industry has resulted in the expanded application of existing laws or regulations and has prompted calls for new laws and regulations to address the perceived problems with these virtual items and currency.

Calls for legislation have been fueled by complaints from parents whose children have incurred sizeable charges online purchasing virtual currency, “lives” or “power-ups” in order to continue to play or further advance in games advertised as being “free to play.” This may result in legislation affecting how we advertise, operate, and earn revenues in games with these features.

Federal Trade Commission, or the FTC, announced a settlement, in which, among other things, Epic Games agreed to pay a $245 million to the FTC relating to in-game purchases in Epic Game’s popular Fortnite game.

This may result in legislation affecting how we advertise, operate, and earn revenues in games with these features.

There has been considerable focus on in-game offers to purchase virtual goods or premiums with real world currency (or with virtual in-game currency that can be purchased with real world currency) for which the player doesn’t know prior to purchase the specific digital goods or premiums they will be receiving (sometimes referred to as loot boxes, crates, or mystery prizes).

Some commentators have noted that these features are similar to gambling because users are providing something of value for the chance to win a prize, with a large number of prizes having relatively modest value or utility and fewer having significant value or utility.

Federal Trade Commission, or the FTC, held a public workshop on loot boxes in August 2019, and at least one bill has been introduced in the U.S.

The FTC held a public workshop on loot boxes in August 2019, and at least one bill has been introduced in the U.S.

Senate that would regulate loot boxes in games marketed to minors.

2 unchanged sentences

Japan has been advancing a self-regulatory approach to loot boxes.

The outcome of many of these initiatives is not yet known, but we anticipate there may be legislation forthcoming in at least some of these jurisdictions that could affect how we offer these features which could negatively affect our revenues.

outcome of many of these initiatives is not yet known, but we anticipate there may be legislation forthcoming in at least some of these jurisdictions that could affect how we offer these features which could negatively affect our revenues.

Data Privacy and Security

4 unchanged sentences

Such laws and regulations may be inconsistent across jurisdictions or conflict with other rules.

applicability of these laws and regulations to us, and their scope and interpretation, are often uncertain, particularly with respect to laws and regulations outside the United States.

The applicability of these laws and regulations to us, and their scope and interpretation, are often uncertain, particularly with respect to laws and regulations outside the United States.

For example, the European Union has adopted strict data privacy and security regulations.

15 unchanged sentences

Further, in November 2020, California voters passed the California Privacy Rights Act, or CPRA.

The CPRA significantly expands the CCPA, including by introducing additional obligations such as data minimization and storage limitations, granting additional rights to consumers, such as correction of personal information and additional opt-out rights, and creates a new entity, the California Privacy Protection Agency, to implement and enforce the law.

rights, and creates a new entity, the California Privacy Protection Agency, to implement and enforce the law.

The CCPA and CPRA could subject us to additional compliance costs as well as potential fines, individual claims and commercial liabilities.

2 unchanged sentences

In addition, the Protection of Privacy Regulations (Data Security), 5777-2017, that entered into force in May 2018, impose comprehensive data security requirements on the processing of personal data.

The Protection of Privacy Regulations (Transfer of Data to Overseas Databases), 5761-2001, further impose certain conditions on cross-border transfers of personal

data from databases in Israel.

The Protection of Privacy Regulations (Transfer of Data to Overseas Databases), 5761-2001, further impose certain conditions on cross-border transfers of personal data from databases in Israel.

Moreover, the European Commission is currently reevaluating its adequacy decision with respect to the flow of personal data into Israel.

21 unchanged sentences

We believe we are able to attract and retain top talent by creating a culture that challenges and engages our employees, offering them opportunities to learn, grow and achieve their career goals.

We offer an array of career development services to our employees including access to professional trainings through our Playtika Academy program or external resources, access to leadership and manager trainings, including our annual leadership workshop and mentoring opportunities.

workshop and mentoring opportunities.

Further, we believe that our commitment to a culture of inclusion is integral to our goal of attracting and retaining the best talent and ultimately driving our business performance.

5 unchanged sentences

See Note 13, Equity Transactions and Stock Incentive Plan, to our audited consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Stock-based compensation” for further discussion of our benefit plans and stock-based compensation.

We lease facilities in approximately 30 locations throughout the world, including locations in Israel, the United States, Australia, Austria, Belarus, Canada, Finland, Germany, Poland, Romania, Switzerland, Ukraine, and the United Kingdom.

We believe our existing facilities are sufficient for our current needs.

We may add new facilities and expand our existing facilities as we add employees and expand into new locations.

We believe suitable additional space will be available as needed to accommodate our needs.

Website and Available Information

1 unchanged sentence

Our website address is www.playtika.com .

Through a link on the Investors section of our website, we make the following filings available free of charge and as soon as reasonably practicable after they are electronically filed or furnished with the SEC:

our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, and the rules and regulations promulgated thereunder.

The information contained on, or that can be accessed through, our website is not incorporated by reference into, and is not a part of, this filing.

These filings are also available free of charge on the SEC’s website at www.sec.gov.

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

What changed 10-K

Item 1. Business