What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-26 compared with 2023-02-28 · 304 added, 256 removed, 1048 unchanged (35% of the section changed)

14 unchanged sentences

We have audited the accompanying consolidated balance sheets of Playtika Holding Corp.

(the Company) as of December 31, 2022 and 2021, the related consolidated statements of comprehensive income, stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of comprehensive income, stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the index at item 15 (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

18 unchanged sentences

Description of the Matter As discussed in Note 1 to the consolidated financial statements, identifiable intangible assets that are subject to amortization are assessed for recoverability whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

The Company identified triggering event and performed an impairment assessment with respect to Reworks asset group.

The Company identified a triggering event and performed an impairment assessment with respect to Reworks asset group.

The Company's evaluation of Reworks assets for potential impairment is measured at the asset group level by comparing the undiscounted projected future cash flows to the carrying amount of the asset group.

Auditing the Company’s impairment test for identifiable intangible assets that are subject to amortization was complex and highly judgmental due to the significant estimation in management’s assumptions to calculate the undiscounted projected future cash flows of the assets group.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's impairment assessment for Reworks asset group.

To test the Company’s impairment assessment for Reworks asset group, we performed audit procedures that included, among others, testing the significant assumptions, including the completeness and accuracy of the underlying data used by management in its analyses.

When the carrying amount of the asset group is not recoverable, then a fair value test is performed to quantify the impairment.

The impairment loss is calculated based on the excess of the carrying amount of the asset group over its fair value.

The Company estimated the asset group fair value based on the Discounted Cash Flow ("DCF") method.

Auditing the Company’s valuation of Reworks asset group was complex and highly judgmental due to the significant estimation in management’s assumptions used in determining the fair value of the asset group.

The assumptions included the projected future cash flows of the asset group, revenue growth rates and the weighted average cost of capital.

These assumptions are sensitive and affected by the specific market and industry qualitative factors.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's valuation of Reworks asset group.

To test the Company’s valuation of Reworks asset group, we performed audit procedures that included, among others, testing the significant assumptions, including the completeness and accuracy of the underlying data used by management in its analyses.

We compared the significant assumptions used by management to current industry and economic trends and historical financial results.

We involved our valuation specialists in evaluating the appropriateness of the undiscounted projected future cash flows of the assets group including evaluation of the terminal growth rate and performed sensitivity analyses related to significant assumptions.

We also evaluated the Company’s disclosures included in Note 1 to the consolidated financial statements.

We involved our valuation specialists in evaluating the appropriateness of the projected future cash flows of the assets group including evaluation of the revenue growth rates and the weighted average cost of capital and performed sensitivity analyses related to significant assumptions.

We also evaluated the Company’s disclosures included in Notes 1 and 7 to the consolidated financial statements.

/s/ KOST FORER GABBAY & KASIERER

KOST FORER GABBAY & KASIERER

A Member of EY Global

6 unchanged sentences

Opinion on Internal Control Over Financial Reporting

We have audited Playtika Holding Corp.'s internal control over financial reporting as of December 31, 2022, based on criteria established in the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

We have audited Playtika Holding Corp.'s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Playtika Holding Corp.

18 unchanged sentences

/s/ KOST FORER GABBAY & KASIERER

KOST FORER GABBAY & KASIERER

A Member of EY Global

5 unchanged sentences

Cash and cash equivalents $ 1,029.7 $ 768.7

Short-term bank deposits — 100.1

Restricted cash 2.0 1.7

28 unchanged sentences

370.0 and 363.6 shares issued and outstanding at December 31, 2023 and 2022, respectively

Treasury stock at cost ( 51.8 shares at December 31, 2022)

Treasury stock at cost ( 51.8 shares at December 31, 2023 and 2022)

( 603.5 ) ( 603.5 )

Additional paid-in capital 1,264.9 1,155.8

14 unchanged sentences

General and administrative 303.5 332.4 323.4

Impairment of intangible assets 51.3 — —

Total costs and expenses 2,065.4 2,144.1 2,020.8

14 unchanged sentences

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

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In millions)

9 unchanged sentences

Net income — — — — — 308.5 308.5

Issuance of common stock in the IPO, net of underwriting commission and offering costs 18.5 0.2 — 467.5 — — 467.7

Stock-based compensation — — — 103.1 — — 103.1

Issuance of shares upon vesting of RSUs 1.5 * — (*) — — —

Income tax withholding related to vesting of restricted stock units and other — — — ( 15.7 ) — — ( 15.7 )

Other comprehensive income — — — — ( 13.5 ) — ( 13.5 )

1 unchanged sentence

Net income — — — — — 275.3 275.3

Issuance of common stock in the IPO, net of underwriting commission and offering costs 18.5 0.2 — 467.5 — — 467.7

Repurchase of common stock ( 51.8 ) — ( 603.5 ) — — — ( 603.5 )

Stock-based compensation — — — 125.5 — — 125.5

Issuance of shares upon vesting of RSUs 4.3 * — (*) — — —

Income tax withholding related to vesting of restricted stock units and other — — — ( 2.6 ) — — ( 2.6 )

Other comprehensive loss — — — — 14.4 — 14.4

1 unchanged sentence

Net income — — — — — 235.0 235.0

Repurchase of common stock ( 51.8 ) — ( 603.5 ) — — — ( 603.5 )

Stock-based compensation — — — 113.0 — — 113.0

5 unchanged sentences

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

CONSOLIDATED STATEMENT OF CASH FLOWS

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

6 unchanged sentences

Amortization of intangible assets 112.3 116.1 103.0

Impairment of intangible assets 51.3 — —

Stock-based compensation 110.0 123.5 100.4

4 unchanged sentences

Loss (gain) from foreign currency ( 2.8 ) 8.8 ( 0.2 )

Non-cash lease expenses ( 6.2 ) 0.2 5.1

Non-cash lease expenses (income) 3.5 ( 6.2 ) 0.2

Changes in operating assets and liabilities:

20 unchanged sentences

Payment of debt issuance costs — — ( 12.0 )

Borrowings under revolving credit facility — — 250.0

Repayment of term loan and revolving credit facility — — ( 408.3 )

Payment for tender offer — ( 603.5 ) —

13 unchanged sentences

Non-cash financing and investing activities

Right-of-use assets from operating leases $ 44.9 $ 41.0 $ 30.0

Capitalization of stock-based compensation costs $ 2.0 $ 2.7 $ —

Contingent consideration related to business acquisition $ 65.4 $ 11.4 $ 33.7

Accrued offering costs $ — $ — $ 2.6

Accrued purchases of property and equipment and intangible assets $ 17.0 $ — $ —

Right-of-use assets acquired under operating leases $ 14.6 $ 44.9 $ 41.0

Capitalization of stock-based compensation costs $ 3.0 $ 2.0 $ 2.7

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

7 unchanged sentences

The Company’s games are free-to-play, and the Company seeks to provide novel, curated in-game content and offers to its users, at optimal points in their game journeys to drive user engagement and monetization.

As of December 31, 2022, the Company had operations in Argentina, Australia, Austria, Belarus, Finland, Germany, India, Israel, Poland, Romania, Switzerland, Ukraine, the United Kingdom and the United States.

As of December 31, 2023, the Company had operations in Argentina, Australia, Austria, Belarus, Finland, Georgia, Germany, India, Israel, Netherlands, Poland, Romania, Spain, Switzerland, Ukraine, the United Kingdom and the United States.

Basis of presentation and consolidation

5 unchanged sentences

In the opinion of management, all adjustments considered necessary for a fair presentation have been recorded within the accompanying financial statements, consisting of normal, recurring adjustments, and all intercompany balances and transactions have been eliminated in the consolidation.

Out of period correction

In connection with the Company’s review of its uncertain tax positions, the Company noted that it had improperly netted uncertain tax benefits in certain jurisdictions with uncertain tax liabilities in other jurisdictions.

The improper netting of unrecognized tax liabilities and unrecognized tax assets resulted in the Company not properly evaluating its unrecognized tax assets, particularly in instances where evaluating on a gross-balance basis would have resulted in an increase to the net unrecognized tax assets.

The Company further noted that its uncertain tax benefit calculated for one of its uncertain tax positions in the United States did not properly consider the provisions of the global intangible low-tax income (“GILTI”) rules.

The Company has recorded tax benefit of $ 1.4 million for the year ending December 31, 2022 that, had it been booked properly, would have been recorded in prior periods.

In addition, unrecognized tax assets and tax liabilities are presented on a long-term gross balance basis as of December 31, 2022.

As the balance sheet as of December 31, 2021 continues to present such balances on a current net-balance basis, such amounts are not comparable.

See Note 21, Income Taxes for further disclosures.

Management has determined that these errors were not material to any of its previously issued financial statements, individually or in the aggregate.

Investment in unconsolidated entities

2 unchanged sentences

As permitted within that guidance, the Company has elected to account for these investments at cost less impairment, adjusted for changes in fair value from observable transactions for identical or similar investments of the same issuer as of the respective transaction dates.

No change to the carrying amounts were recorded in the years ended December 31, 2022 or 2021.

No change to the carrying amounts were recorded in the years ended December 31, 2023 and 2022.

Use of estimates

2 unchanged sentences

The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made.

These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

4 unchanged sentences

Playtika and certain subsidiaries' transactions and balances denominated in dollars are presented at their original amounts.

Non-dollar transactions and balances have been remeasured to dollars in accordance with ASC 830, Foreign Currency Matters .

Non-dollar transactions and balances have been remeasured to dollars in accordance with ASC 830, Foreign Currency

All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of comprehensive income as financial income or expenses, as appropriate.

For those consolidated subsidiaries whose functional currency has been determined to be a non-dollar currency, assets and liabilities are translated at year-end exchange rates and statement of income items are translated at average exchange rates prevailing during the year.

Such translation adjustments are recorded as a separate component of accumulated other comprehensive income in stockholders' equity (deficit).

For those consolidated subsidiaries whose functional currency has been determined to be a non-dollar currency, assets and liabilities are translated at year-end exchange rates and statement of income items are translated using the date of the transaction exchange rate or at the average exchange rates prevailing during the year.

Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in stockholders' equity (deficit).

Concentration of credit risk and significant customers

Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, short-term bank deposits, restricted cash, accounts receivable and derivative contracts.

Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, restricted cash, accounts receivable and derivative contracts.

The Company’s investment policy imposes certain maturity limits on the Company’s portfolio and restricts the permitted investments to the purchase of bank deposits and highly rated fixed income securities.

5 unchanged sentences

Accounts receivable are recorded at their transaction amounts and do not bear interest.

The Company bases its allowance for doubtful accounts on management's best estimate of the amount of probable credit losses in the Company's existing accounts receivable based on historical collection experience and current and expected future economic and market conditions.

Cash and cash equivalents and Short-term bank deposits

The Company classifies its debt securities as available-for-sale (“AFS”).

AFS debt securities are carried at fair value, with unrealized gains and losses, net of tax, reported in accumulated other comprehensive income (loss) in stockholders’ equity.

Realized gains and losses on sale of investments are included in Interest and other, net on the statements of comprehensive income and are derived using the specific identification method for determining the cost of securities sold.

The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity.

Such amortization together with interest on securities is included in Interest and other, net.

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

The Company bases its allowance for credit losses on management's best estimate of the amount of probable credit losses in the Company's existing accounts receivable based on historical collection experience and current and expected future economic and market conditions.

Cash and cash equivalents

Cash and cash equivalents consist of cash and short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less from the date acquired.

Cash equivalents include investments in term deposits, commercial papers and money market funds that can be redeemed immediately at the current net asset value.

Investments with maturities of more than three months but less than one year are included in short-term bank deposits.

Such short-term bank deposits are stated at cost which approximates fair market value.

Restricted cash

10 unchanged sentences

Software development costs

The Company reviews internal use software development cost associated with infrastructure and new games or significant updates to existing games to determine if the costs qualify for capitalizing.

The Company reviews internal use software development costs associated with infrastructure and new games or significant updates to existing games to determine if the costs qualify for capitalizing.

The development costs incurred during the application development stage that are related to infrastructure are capitalized.

12 unchanged sentences

Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable.

When business combinations include an earnout payment or contingent consideration that embodies an unconditional obligation for the Company to transfer assets on a specific agreed-upon date, that liability is measured at fair value as of the acquisition date and as of each reporting date until the obligation is resolved.

Significant estimates in valuing such liabilities include, but are not limited to, future financial models 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 represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired.

2 unchanged sentences

For the purposes of impairment testing, the Company has determined that it has one reporting unit.

When performing the annual goodwill impairment testing, the Company either conducts a qualitative assessment to determine whether it is more likely than not that the asset is impaired, or elects to bypass this qualitative assessment and perform a quantitative test for impairment.

When performing the annual goodwill impairment testing, the Company either conducts a

qualitative assessment to determine whether it is more likely than not that the asset is impaired, or elects to bypass this qualitative assessment and perform a quantitative test for impairment.

Under the qualitative assessment, the Company considers both positive and negative factors, including macroeconomic conditions, industry events, financial performance and other changes, and makes a determination of whether it is more likely than not that the fair value of goodwill is less than its carrying amount.

9 unchanged sentences

Impairment indicators include any significant changes in the manner of the Company’s use of the assets and significant negative industry or economic trends.

The Company recognizes impairment based on the difference between the fair value of the asset and its carrying value.

Fair value is generally measured based on either quoted market prices, if available, or a discounted cash flow analysis.

When impairment indicators exist, the Company evaluate recoverability of an asset group by a comparison of the aggregate undiscounted projection future cash flows to the carrying amounts of the asset group.

If such evaluation indicates that the carrying amount of the asset group is not recoverable, an impairment loss is calculated based on the excess of the carrying amount of the assets group over its fair value.

Fair value is generally measured based on a discounted cash flow analysis.

Upon determination that the carrying value of a long-lived asset may not be recoverable based upon a comparison of aggregate undiscounted projected future cash flows to the carrying amount of the asset, an impairment charge is recorded for the excess of the carrying amount over fair value.

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

The Company accounts for its leases under ASU No.

2016-02, Leases (Topic 842) .

Operating lease 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 reasonably certain.

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.

The Company accounts for its leases under ASC 842, Leases , and determines if a contract contains a lease at inception or modification of a contract.

Operating lease right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments and lease incentives received over the defined lease term.

As the Company’s leases do not generally provide an implicit rate, the Company uses its incremental borrowing rate which 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 Company’s lease terms may include options to extend the lease.

These options are included in the lease terms when it is reasonably certain they will be exercised.

The ROU assets also include any prepaid lease payments and net of lease incentives.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company’s real estate lease agreements and data center leases do not contain any material residual value guarantees, restrictions or covenants.

The Company’s real estate lease agreements and data center leases 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.

18 unchanged sentences

The Company has determined through a review of game play behavior that players generally do not purchase additional virtual currency until their existing virtual currency balances have been substantially consumed.

This review, performed on a game-by-game basis, includes an analysis of game players’ historical play behavior, purchase behavior, and the amount of virtual

currency outstanding.

This review, performed on a game-by-game basis, includes an analysis of game players’ historical play behavior, purchase behavior, and the amount of virtual currency outstanding.

Based upon this analysis, the Company has estimated the rate at which virtual currency is consumed during game play.

2 unchanged sentences

Durable virtual items represent items that are accessible to the player over an extended period of time.

The Company recognizes revenue from the sale of durable virtual items ratably over the estimated average life of the paying player, which is estimated on a individual game basis and generally ranges from eleven to thirteen months .

The Company estimates the average life of the paying player based on historical paying player patterns and playing behaviors within each of the specific games that offer durable virtual items.

3 unchanged sentences

The Company also has relationships with certain advertising service providers for advertisements within its games and revenue from these advertising providers is generated through impressions, clickthroughs, banner ads and offers.

The Company has determined that displaying the advertisements within the mobile games is identified as a single performance obligation.

Company has determined that displaying the advertisements within the mobile games is identified as a single performance obligation.

The transaction price in advertising arrangements is established by our advertising service providers and is generally the product of the number of advertising units delivered (e.g.

13 unchanged sentences

As it does not have a long history of market prices for its common stock because the stock was not publicly traded prior to January 2021, the Company used observable data for a group of peer companies that grant options with substantially similar terms to assist in developing its volatility assumptions.

The expected volatility of the stock was determined using weighted average measures of the implied volatility and the historical volatility for the Company’s peer group of companies for a period equal to the expected life of the options.

The weighted-average risk-free interest rates were based on the interest rates for U.S.

Treasury bonds.

The expected term assumptions were derived using the simplified method, which is based on an average between each vesting date and the expiration date of an option.

This method was chosen because there was no historical option exercise experience due to the Company being privately held.

does not anticipate paying cash dividends on its shares of common stock in the future.

The stock options have a contractual term of 10 years.

Except as otherwise provided in an option 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.

If factors change and the Company employs different assumptions, stock-based compensation cost on future awards may differ significantly from what the Company has recorded in the past.

7 unchanged sentences

The Company’s stock-based compensation expense is recorded in the financial statement line item relevant to each of the award recipients.

See Note 13, Equity Transactions and Stock Incentive Plan, for additional discussion.

Significant factors, assumptions, and methodologies used in estimating fair value of equity prior to the IPO

Prior to its initial public offering of equity in January 2021, the Company, with the assistance of third-party valuation experts, used a combination of the income approach (the discounted cash flow method) and the market approach (a combination of the guideline public company method and the guideline transaction method) to estimate its equity value in connection with its stock-based compensation program discussed in Note 13, Equity Transactions and Stock Incentive Plan .

The income approach involves applying an appropriate risk-adjusted discount rate to projected cash flows based on forecasted revenue and costs.

The guideline transaction method estimates the value of a company by applying valuation multiples paid in actual transactions for comparable public and private companies.

The values derived under the market and income approaches were used to determine an initial estimated fair market value of the Company’s equity.

The initial estimated value was then subjected to a discount for the lack of marketability based on the impediments to liquidity as a result of the Company’s previous status as a private company, including the lack of publicly available information and the lack of a trading market.

Subsequent to the Company’s initial public offering of equity in January 2021, the Company uses the public trading price of its common stock on the Nasdaq stock exchange as the basis for determining the fair market value for its common stock for purposes of its stock based compensation expense.

There is inherent uncertainty in the Company’s forecasts and projections, and if different assumptions and estimates had been made than those described above, the amount of the equity valuation and stock-based compensation expense could have been materially different.

See Note 13, Equity Transactions and Stock Incentive Plan, for additional disclosure.

The Company accounts for income taxes using the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences will reverse.

The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amount that is more likely than not

to be realized.

The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized.

Deferred tax assets and deferred tax liabilities are presented under long-term assets and long-term liabilities, respectively.

We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized.

Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the more likely than not realization threshold.

This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused and tax planning alternatives.

The need to establish valuation allowances for deferred tax assets is assessed periodically based on the more likely than not realization threshold.

This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company’s experience with operating loss and tax credit carryforwards expiring unused and tax planning alternatives.

The Company implements a two-step approach to recognize and measure uncertain tax positions.

3 unchanged sentences

shareholder to tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries.

We can make an accounting policy election to either treat taxes due on the GILTI inclusion as a current period expense or factor such amounts into the measurement of deferred taxes.

We elected to account for the income tax effects of GILTI as a “period cost,” or an income tax expense in the year the tax is incurred.

The Company can make an accounting policy election to either treat taxes due on the GILTI inclusion as a current period expense or factor such amounts into the measurement of deferred taxes.

The Company elected to account for the income tax effects of GILTI as a “period cost,” or an income tax expense in the year the tax is incurred.

The Company classifies interest and penalties on income taxes (which includes uncertain tax positions) as taxes on income.

See Note 21, Income Taxes, for additional discussion.

Employee related benefits

Appreciation and retention plan

In September 2016, the Company adopted the Playtika Holding Corp.

Retention Plan (the “2017-2020 Plan”).

According to the 2017-2020 Plan, appreciation unit awards were granted to selected eligible employees.

These units provided the right to receive cash payments for each of the years 2017 through 2020 as a percentage (between 1.5 % - 2 %) of the Company's estimated appreciation in value in excess of $ 4.4 billion.

The value of each appreciation unit was calculated based on the Company's Retention Plan Adjusted EBITDA (as agreed in the 2017-2020 Plan) multiplied by an agreed multiplier.

In addition, an annual retention bonus for each of the four years in the 2017-2020 Plan, in the amount of $ 25 million was distributed to selected eligible employees of the 2017-2020 Plan.

The value of each unit of the 2017-2020 Plan was amortized into compensation expense using the graded-vesting method, which resulted in the recognition of compensation costs over the requisite service period for each separately vesting tranche of the units as though the units were, in substance, multiple units awards.

In August 2019, the Company adopted the Playtika Holding Corp.

15 unchanged sentences

The Company concluded that certain announced activities, including the above, were triggering events for potential impairment under ASC 360, Property, Plant, and Equipment , and therefore assessed the associated asset groups for impairment.

Based upon this assessment, the Company determined that no impairment was required.

The recoverable amount for the Seriously Holding Corp.

assets was significantly above the carrying value of the associated assets, while the recoverable amount for the Reworks Oy (“Reworks”) assets exceed the book value by a relatively small margin.

Thus, to the extent the financial results at Reworks deteriorate further in the near future, discount rates increase significantly, or the Company does not meet its projected performance, the Company could have impairments to record in the next twelve months, and such impairments could be material.

Based upon this assessment, the Company determined that no impairment was required for the year ended December 31, 2022.

Derivative instruments

1 unchanged sentence

The Company’s interest rate swap agreements are designated as cash flow hedges under ASC 815, Derivatives and Hedging (“ASC 815”), involving the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreement, without the exchange of the underlying notional amount.

These hedges are highly effective in offsetting changes in the Company’s future expected cash flows due to the fluctuation of the USD benchmark rate associated with its variable rate debt.

These hedges are highly effective in offsetting changes in the Company’s future expected cash flows due to the fluctuation of the Company’s variable rate debt.

The Company monitors the effectiveness of its hedges on a quarterly basis, both qualitatively and quantitatively.

The Company performed a regression analysis at inception of the hedging relationship and at period end in which it compared the change in the fair value of the swap transactions and the change in fair value of a hypothetical interest rate swap having terms that identically match the terms of the debt's interest rate payments based on at least 30 observations that are based on historical swap rates.

Based on the regression results, the Company believes that, at inception and at period end, the hedging instrument is expected to be highly effective at offsetting changes in the hedged transactions attributable to the risk being hedged.

The Company believes that the hedging instruments are expected to be highly effective at offsetting changes in the hedged transactions attributable to the risk being hedged.

For each future reporting period, the Company will continue performing retrospective and prospective assessments of hedge effectiveness in a single regression analysis by updating the regression analysis that was prepared at inception of the hedging relationship.

7 unchanged sentences

The inputs used to measure the fair value of the Company’s 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.

Fair value of financial instruments

8 unchanged sentences

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The first two levels in the hierarchy are considered observable inputs and the last is considered unobservable.

The carrying value of accounts receivable and payables and the Company's cash and cash equivalents, short-term bank deposits and restricted cash, approximates fair value due to the short time to expected payment or receipt of cash.

The carrying value of accounts receivable and payables and the Company's cash and cash equivalents and restricted cash, approximates fair value due to the short time to expected payment or receipt of cash.

Net income per share attributable to common stockholders

2 unchanged sentences

Performance Stock Units (“PSUs”) are considered potentially dilutive as of the first day of the reporting period in which the underlying performance metric is achieved.

The performance metrics for the PSUs related to 2022 performance metrics were considered fulfilled as of December 31, 2022.

In the event of a loss, diluted shares are not considered because of their anti-dilutive effect.

1 unchanged sentence

Under this method, it is assumed that the hypothetical proceeds received upon settlement are used to repurchase common shares at the average market price during the period.

Recently issued accounting standards not yet adopted by the Company

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805).

ASU 2021-08 requires that an acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in

accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) and that at the acquisition date, the acquirer accounts for related revenue contracts in accordance with ASC 606 as if it had originated the contracts.

This guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted, including in interim periods.

The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

Accounting standards recently adopted by the Company

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) (“ASU 2021-08)” .

ASU 2021-08 requires that an acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) and that at the acquisition date, the acquirer accounts for related revenue contracts in accordance with ASC 606 as if it had originated the contracts.

The Company adopted this standard on January 1, 2023, and the adoption did not have an impact on the Company’s consolidated financial statements.

In December 2022, the FASB issued ASU No.

3 unchanged sentences

2020-06 apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

The Company will continue to monitor the effects of rate reform, if any, on its contracts.

The Company does not anticipate the amendments in 2022-06 to be material to its consolidated financial statements upon adoption.

The Company adopted this standard on January 1, 2023, and the adoption did not have an impact on the Company’s consolidated financial statements.

Recently issued accounting standards not yet adopted by the Company

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

Improvements to Reportable Segment Disclosures , which requires public entities to

disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

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

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

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

BUSINESS COMBINATIONS

1 unchanged sentence

On August 31, 2021, the Company entered into a Share Sale and Purchase Agreement (“SPA”) pursuant to which the Company (i) acquired 80 % of all issued and registered shares and options (“Share Capital”) of Reworks Oy, a limited liability company incorporated under the laws of Finland (“Reworks”) in exchange for cash consideration of $ 400 million, subject to customary closing adjustments, and (ii) will acquire the remaining 20 % of the Share Capital for additional cash consideration (“Earnout Payment”) in an amount to be determined based on certain performance metrics during the calendar year 2022.

The Earnout Payment will be calculated based on the amount of “Company EBITDA” (as defined in the SPA) in calendar year 2022 in excess of $ 10.3 million multiplied by 6.0 , not to exceed $ 200 million, as further described in the SPA.

In the event “Company EBITDA” (as defined in the SPA) is $ 10.3 million or less, the Earnout Payment will be $ 1 .

The Earnout Payment was contractually based on the amount of “Company EBITDA” (as defined in the SPA) in calendar year 2022 in excess of $ 10.3 million multiplied by 6.0 , not to exceed $ 200 million, as further described in the SPA.

In the event “Company EBITDA” (as defined in the SPA) was $ 10.3 million or less, the Earnout Payment would have been $ 1 .

The acquisition date fair value of the Earnout Payment was estimated by management, with the assistance of third-party valuation specialists, based upon the probability-weighted fair values of multiple discounted cash flow analyses.

In accordance with ASC 480, this liability has been measured at fair value as of the acquisition date and was remeasured to fair value on each subsequent reporting date until the contingency was resolved.

For the year ended December 31, 2021, the Company recorded a favorable fair value adjustment of $ 6.5 million, partially offset by $ 1.5 million of interest expense included within general and administrative expenses and interest expense, respectively, in the accompanying consolidated statement of comprehensive income to adjust the contingent consideration to estimated fair value.

As of December 31, 2021, approximately $ 11 million had been recorded as compensation expense and was classified as an employee-related current liability on the Company’s consolidated balance sheet.

In the first half of 2022, the Company recognized net expense of $ 5 million included within general and administrative expenses in connection with adjusting the Earnout Payment to estimated fair value.

On August 1, 2022, the Company entered into an Omnibus Agreement to acquire the title to the remaining shares and options of Reworks in exchange for a $ 45 million cash payment to the sellers in lieu of the Earnout Payment.

The cash payment was made in the third quarter of 2022.

As a result, the Company has no earnout obligation associated with the Reworks acquisitions subsequent to this payment.

The acquisition was accounted for as a business combination with the Company consolidating Reworks subsequent to the August 31, 2021 closing date.

1 unchanged sentence

The goodwill, which is non-deductible for tax purposes, is generally attributable to synergies between the Company's and Reworks' respective studio operations and apps.

The extent to which the actual EBITDA differs from the probability-weighted analysis will result in adjustments to this liability in future periods.

In accordance with ASC 480, this liability has been measured at fair value as of the acquisition date and will be remeasured to fair value on each subsequent reporting date until the contingency is resolved.

The selling shareholders of Reworks include both third-party investors and certain historical employees of Reworks that will continue as employees of Playtika post-acquisition.

The earnout obligation payable to selling employee shareholders that will remain as employees of Playtika had an acquisition date fair value of $ 54.2 million.

As the SPA includes certain forfeiture provisions for selling employee shareholders, the earnout obligation payable to these employee will be recorded as compensation expense over the period that such payment is earned.

The earnout obligation payable to the third-party sellers had an acquisition date fair value of $ 33.7 million.

As this represents an unconditional obligation of the Company to purchase the remaining Share Capital of Reworks at an agreed upon future date, this portion of the total Earnout Payment has been classified as a liability on the Company’s consolidated balance sheet rather than non-controlling interest.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed (in millions):

16 unchanged sentences

Pro forma results of operations for this acquisition subsequent to the August 31, 2021 acquisition date have not been presented because the incremental results from Reworks are not material to the consolidated statements of comprehensive income presented herein.

For the year ended December 31, 2021, the Company recorded other income of $ 5.0 million with respect to the adjustment of the contingent consideration to estimated fair value.

The net amount is comprised of a favorable fair value adjustment of $ 6.5 million, partially offset by $ 1.5 million of interest expense included within general and administrative expenses and interest expense, respectively, in the accompanying consolidated statement of comprehensive income.

As of December 31, 2021, the fair value of the earnout obligation payable to third-party sellers was $ 28.7 million and was recorded as contingent consideration on the Company’s consolidated balance sheet.

In the first half of 2022, the Company recognized $ 25 million of income and $ 30 of expense in connection with adjusting the Earnout Payment to estimated fair value.

The cash payment was made in the third quarter of 2022.

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

Acquisition of JustPlay.LOL Ltd

1 unchanged sentence

(“JustPlay”) consistent with the Company’s strategy to increase its breadth of entertainment genres and leverage the Company’s Boost platform to enhance game-operations.

Terms of the acquisition agreement include initial cash consideration of $ 30 million plus an earnout based on the performance of the acquired business, with a maximum total consideration of $ 120 million, subject to customary adjustments.

The acquisition was accounted for as a business combination.

payable, based upon management’s financial models for this acquisition, and upon similar allocations from prior acquisitions.

Within the accompanying consolidated financial statements, management has recorded its final estimate of the assets acquired and liabilities assumed in the acquisition, along with an estimate of the fair value for contingent consideration payable, based upon management’s financial models for this acquisition, and upon similar allocations from prior acquisitions.

The Company has engaged a third-party valuation specialist to assist the Company and such valuations were finalized during the third quarter of 2022.

20 unchanged sentences

Subsequent to the acquisition, the Company reduced the amount of contingent consideration expected to be paid.

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

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

Acquisition of Youda Games

On August 28, 2023, the Company completed the acquisition of the Youda Games (the “Youda Games”) portfolio from Azerion Group N.V.

consistent with the Company’s strategy to increase its breadth of entertainment genres and leverage the Company’s technology platforms and live operations.

Terms of the acquisition agreement include initial cash consideration of EUR 81.3 million plus an earnout based on the performance of the acquired business, with a maximum total consideration of EUR 150 million, subject to customary adjustments.

The acquisition was accounted for as a business combination.

Within the accompanying consolidated financial statements, management has recorded the assets acquired and liabilities assumed in the acquisition, along with its estimate of the fair value for contingent consideration payable, based upon management’s financial models for this acquisition, and upon similar allocations from prior acquisitions.

The Company has engaged a third-party valuation specialist to assist the Company with estimating the acquisition-date fair value of the intangible assets acquired and contingent consideration payable.

This valuation was finalized during the fourth quarter 2023 with no material adjustments from the Company’s initial estimates.

The goodwill, which is deductible for tax purposes, is generally attributable to synergies between the Company's and Youda Game's respective studio operations and games.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed (in millions):

Consideration

Total Consideration $ 89.9

Acquisition date fair value of contingent consideration ( 2.4 )

Consideration paid as of August 28, 2023 $ 87.5

Identifiable assets acquired and liabilities assumed

Intangible assets other than goodwill $ 45.3

Goodwill 44.6

Contingent consideration ( 2.4 )

Total identifiable assets acquired and liabilities assumed $ 87.5

The developed game assets acquired and included in the above table are being amortized on a straight-line basis over their estimated useful life of eight years , which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized.

Transaction costs incurred by the Company in connection with the Youda Games acquisition, were approximately $ 1.6 million for the year ended December 31, 2023, and were recorded within general and administrative expenses in the consolidated statements of comprehensive income.

Pro forma results of operations for this acquisition subsequent to the August 28, 2023 acquisition date have not been presented because the incremental results from Youda Games are not material to the consolidated statements of comprehensive income presented herein.

Acquisition of G.S InnPlay Labs Ltd.

On September 14, 2023, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company agreed to acquire all of the issued and outstanding share capital of G.S InnPlay Labs Ltd.

(“InnPlay”) for an aggregate purchase price equal to (i) $ 80 million, subject to customary closing adjustments, and (ii) earnout payments of up to $ 220 million, the amounts of which will be based on certain revenue growth performance metrics of InnPlay during the two years following the closing of the transaction.

The acquisition is consistent with the Company’s strategy to increase its breadth of entertainment genres and leverage the Company’s technology platforms and live operations expertise to enhance game operations.

The acquisition transaction closed on September 28, 2023 and was accounted for as a business combination.

Within the accompanying consolidated financial statements, management has recorded the assets acquired and liabilities assumed in the acquisition, along with an estimate of the fair value for contingent consideration payable, based upon management’s financial models for this acquisition, and upon similar allocations from prior acquisitions.

This valuation was finalized during the fourth quarter 2023.

Based upon the final valuation procedures, the estimated fair value of contingent consideration at the acquisition date was decreased from the Company’s initial estimates by $ 12 million, with a corresponding decrease to goodwill.

The formal valuation also allowed the Company to conclude on and record the value of the intangible assets acquired other than goodwill of $ 14.8 million, with a corresponding decrease to goodwill.

Other than these two measurement period adjustments, there were no other material changes to the initial purchase price allocation resulting from the finalization of the valuation process within the measurement period.

The goodwill, which is non-deductible for tax purposes, is generally attributable to synergies between the Company's and InnPlay's respective studio operations and games.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed (in millions):

Consideration

Total Consideration $ 140.5

Cash acquired ( 0.8 )

Total consideration, net of cash acquired 139.7

Deferred consideration ( 3.7 )

Acquisition date fair value of contingent consideration ( 63.0 )

Consideration paid as of September 28, 2023 $ 73.0

Identifiable assets acquired and liabilities assumed

Accounts receivable $ 3.9

Other current assets 0.3

Property and equipment 0.2

Intangible assets other than goodwill 14.8

Goodwill 127.6

Deferred tax asset 3.4

Deferred consideration ( 3.7 )

Contingent consideration ( 63.0 )

Deferred tax liability ( 3.4 )

Liabilities assumed ( 7.1 )

Total identifiable assets acquired and liabilities assumed $ 73.0

Transaction costs incurred by the Company in connection with the InnPlay acquisition were approximately $ 1.3 million for the year ended December 31, 2023, and were recorded within general and administrative expenses in the consolidated statements of comprehensive income.

Pro forma results of operations for this acquisition subsequent to the September 28, 2023 acquisition date have not been presented because the incremental results from InnPlay, both individually and when aggregated with Youda pro forma results of operations, are not material to the consolidated statements of comprehensive income presented herein.

Other development transactions

In February 2020, the Company acquired an assembled workforce to expand the Company’s game portfolio and in-house expertise for approximately $ 12.1 million.

This acquisition was recorded as expense during the quarter ended March 31, 2020.

During 2021, 2022 and 2023, the Company has made a small number of minority investments in early-stage high-growth potential game developers, all of which are accounted for as investments in unconsolidated affiliates.

CASH EQUIVALENTS AND SHORT-TERM BANK DEPOSITS

Cash equivalents and bank deposits at December 31, 2022 and 2021 are as follow (in millions):

December 31, 2022

Amortized cost Allowance for credit losses Unrealized gains

Unrealized losses

CASH EQUIVALENTS

Cash equivalents at December 31, 2023 and 2022 are as follow (in millions):

Money market funds $ 524.4 $ 294.8

2 unchanged sentences

Total cash equivalents $ 919.5 $ 618.0

December 31, 2021

Amortized cost Allowance for credit losses Unrealized gains

Unrealized losses

Cash equivalents

Money market funds $ 310.2 $ — $ — $ —

Short-term bank deposits $ 100.1 $ — $ — $ —

PREPAID EXPENSES AND OTHER CURRENT ASSETS

1 unchanged sentence

Government authorities $ 86.8 $ 57.0

Derivative instruments - interest rate swaps 25.3 19.5

Prepaid expenses 15.4 16.0

18 unchanged sentences

Balance at end of period $ 987.2 $ 811.2

As of October 1 of each of the years presented, the Company performed a qualitative assessment for its reporting unit and concluded that the qualitative assessment did not result in a more likely than not indication of impairment, and therefore no further impairment testing was required.

As of October 1 of each year, the Company performed a qualitative assessment for its reporting unit and concluded that the qualitative assessment did not result in a more likely than not indication of impairment, and therefore no further impairment testing was required.

Accordingly, during the years ended December 31, 2023, 2022 and 2021, no impairment charge was recognized.

15 unchanged sentences

Intangible assets other than goodwill, net $ 311.2 $ 354.0

Acquisition-related intangible assets included in the above table are finite-lived and are being amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are realized.

The Company has included amortization of acquired intangible assets directly attributable to revenue-generating activities in cost of revenue.

1 unchanged sentence

During the years ended December 31, 2023, 2022 and 2021, the Company recorded amortization expense in the amounts of $ 112.3 million, $ 116.1 million and $ 103.0 million, respectively.

In the second quarter of 2023, the Company recorded an intangible asset impairment of $ 9.7 million related to JustPlay.LOL Ltd’s game title.

In the third quarter of 2023, the Company recorded an impairment charge of $ 41.6 million related to the Redecor game title based upon lower than expected performance of that title.

The Company has recently released certain changes to the game operations and mechanics in an effort to improve the performance of this title.

Given the recent nature of the game updates, it is too early to determine if such changes will have a positive impact on the game.

To the extent these recent changes to the game do not boost the performance of the Redecor title, the remaining balance of the Redecor game title of approximately $ 41 million may be impaired in future periods.

There was no impairment of intangible assets in the years ended December 31, 2022 and 2021.

7 unchanged sentences

Deposits 2.7 3.2

Prepaid expenses 0.7 —

Other 0.3 0.7

Total other non-current assets $ 151.6 $ 156.7

5 unchanged sentences

Deferred revenues 46.0 38.6

Contingent consideration 46.0 —

Tax accruals 35.4 24.9

3 unchanged sentences

Long-term tax reserves $ 312.9 $ 248.6

Employee related benefits — 21.3

Unrecognized loss on interest rate swaps 4.4 —

Other 1.4 3.5

24 unchanged sentences

Long-term debt $ 2,399.6 $ 2,428.7 $ 2,411.2

Book value of debt in the table above is reported net of deferred financing costs and original issue discount of $ 43.2 million and $ 50.7 million at December 31, 2022 and 2021, respectively.

Book value of debt in the table above is reported net of deferred issuance costs and original issue discount of $ 36.1 million and $ 43.2 million at December 31, 2023 and 2022, respectively.

Credit Agreement

14 unchanged sentences

Such applicable margin is (x) with respect to the New Term Loan, 2.75 % per annum in the case of any LIBOR loan or 1.75 % per annum in the case of any base rate loan, subject to one 0.25 % step-down based on the Company’s credit ratings and (y) in the case of the Revolving Credit Facility, a range from 2.25 % to 3.00 % per annum in the case of any LIBOR loan and a range from 1.25 % to 2.00 % per annum in the case of any base rate loan, based on the Company’s net senior secured leverage ratio.

Beginning in July 2023, LIBOR will be replaced by SOFR and interest will be calculated based upon term SOFR plus an applicable margin.

On June 19, 2023, the Company amended the Credit Agreement pursuant to a Third Amendment to Credit Agreement (the “Third Amendment”).

The Third Amendment amended the Credit Agreement to bear interest or incur fees and other amounts denominated in Dollars to be based on the Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus an applicable spread adjustment, rather than the previously permitted Adjusted Eurocurrency Rate, starting in the third quarter of 2023.

The amendment did not have an impact on the Company’s consolidated financial statements or the effectiveness of the Company’s interest rate swap agreements.

In addition, on a quarterly basis, the Company is required to pay each lender under the Revolving Credit Facility a commitment fee in respect of any unused commitments under the Revolving Credit Facility in the amount of 0.50 % of the principal amount of the daily unused commitments of such lender, subject to step-downs to 0.375 % and 0.25 % based upon the Company's senior secured leverage ratio.

The Company is also required to pay customary agency fees as well as letter of credit participation fees on outstanding letters of credit.

The Credit Agreement permits voluntary prepayments and requires mandatory prepayments in certain events including among others, 50 % (subject to step-downs to 25 % and 0 % based upon the Company’s net total secured leverage ratio) of the Company’s excess cash flow to the extent such amount exceeds $ 10 million, certain net cash proceeds from non-ordinary asset sale transactions (subject to reinvestment rights), and 100 % of net proceeds of any issuance of debt (except for debt permitted to be incurred by the Credit Agreement).

asset sale transactions (subject to reinvestment rights), and 100 % of net proceeds of any issuance of debt (except for debt permitted to be incurred by the Credit Agreement).

The Company is not required to make an excess cash flow payment based upon its secured leverage ratio for 2023.

69 unchanged sentences

The Plan authorizes the grant of awards to employees, non-employee directors and consultants of the Company.

The maximum number of shares of the Company’s common stock for which grants may be made under the Plan was 56,232,228 shares as of December 31, 2022.

As of December 31, 2022, a total of 15,874,201 shares of the Company’s common stock remained available for grants of awards under the Plan.

As of December 31, 2023, a total of 56,232,228 shares of the Company’s common stock had been allocated to awards granted under the Plan and 5,779,753 shares remained available for future grants.

Equity transactions

5 unchanged sentences

2020 Incentive Award Plan (the “Plan”) increased by 14,335,499 shares of common stock, which represented 3.5 % of the total number of shares outstanding immediately after the consummation of the IPO.

The number of shares available for grant will increase on January 1st of each year through January 2030 by an amount equal to the lesser of (i) 3.5 % of the total shares of the Company’s outstanding common stock or (ii) such number of shares determined by the Board of Directors.

On January 1, 2022, the number of shares of issuance under the Plan increased by 14.0 million.

If, on January 1st of each year through January 2030, the number of shares available for grant is less than 3.5 % of the total shares of the Company’s outstanding common stock, then the number of shares available for grant will increase to an amount equal to the lesser of (i) 3.5 % of the total shares of the Company’s outstanding common stock or (ii) such number of shares determined by the Board of Directors.

On January 1, 2024 and 2022, the number of shares of issuance under the Plan increased by 7.2 million and 14.0 million, respectively.

On January 1, 2023, there was no increase to the number of shares available for issuance under the Plan.

5 unchanged sentences

The Company accounted for the repricing as a modification and is recording incremental compensation expense of approximately $ 8.8 million from the time of the repricing through the remaining vesting period.

There were no awards to any named executive officers or other Section 16 executives included in this repricing.

Shares as are properly tendered and not properly withdrawn, at a price of $ 11.58 per Share (the "Tender Offer").

There were no awards included in this repricing to any named executive officers or other executives defined as insiders according to Section 16 of the Securities Exchange Act of 1934.

On August 29, 2022, the Company announced a tender offer for the purchase of up to 51,813,472 shares of its issued and outstanding common stock, par value $ 0.01 per share (each, a “Share” and collectively, “Shares”) or such lesser number of Shares as are properly tendered and not properly withdrawn, at a price of $ 11.58 per Share (the "Tender Offer").

On October 10, 2022, the Company announced that it accepted for purchase 51,813,472 Shares for an aggregate cost of $ 600 million, excluding fees and expense related to the Tender Offer.

1 unchanged sentence

The Company’s shares outstanding and treasury stock are presented, and both basic and diluted earnings per share have been calculated, as if the entire 51,813,472 shares accepted in the Tender Offer were purchased on the closing date of the Tender Offer.

The actual settlement by the Administrative agent for Shares may be delayed due to administrative requirements, whereby the Shares are repurchased as those requirements are fulfilled.

Option Exchange

12 unchanged sentences

Outstanding at January 1, 2023

3.4 8.2 $ 19.08

Granted 0.1 $ 10.29

Cancelled ( 1.8 ) $ 20.14

( 14.7 ) $ 19.28

Expired — $ —

Outstanding at December 31, 2023

1.7 7.6 $ 17.72 $ —

Exercisable at December 31, 2023

(1) The number of stock options cancelled includes those exchanged in the Option Exchange.

0.9 7.4 $ 19.80 $ —

There were no stock options exercised during the years ended December 31, 2023, 2022 or 2021.

3 unchanged sentences

Any changes in these assumptions may materially affect the estimated fair value of the stock-based award.

– Fair value of common stock - Prior to the Company’s initial public offering of equity in January 2021, as the Company’s common stock was not publicly traded, the fair value of common stock was estimated by valuation

reports prepared by third-party valuation specialists using multiple methods, as more fully discussed in Note 1, O rganization and Summary of Significant Accounting Policies .

Subsequent to the Company’s initial public offering, the Company uses the public trading price of its common stock on the Nasdaq stock market to determine the fair value of its common stock.

– Fair value of common stock - The Company uses the public trading price of its common stock on the Nasdaq stock market to determine the fair value of its common stock.

– Risk-free interest rate - The risk-free interest rate was estimated based on the U.S.

Treasury yield curve in effect at the time of grant and with maturities consistent with the expected term of the respective equity option award.

– Expected dividend yield - The Company does not anticipate paying cash dividends on its shares of common stock;

therefore, the expected dividend yield was assumed to be zero .

– Expected dividend yield - The fair value of options granted prior to February 2024 was determined based upon the assumption that we would not pay cash dividends on shares of our common stock.

– Expected term - The Company estimated the expected term based on the average time between the vesting date and expiration date, ten years after the grant date, of the respective equity option award.

9 unchanged sentences

40.96 % - 52.82 %

The options granted during 2020 vest over four years , with 25 % vesting on each of the four anniversaries of the grant date.

For options granted during 2021 and 2022, 25 % of the options generally vest on the first anniversary of the grant date, and the remaining 75 % of the options vest in equal quarterly installments during the three years following the first anniversary of the grant date.

For options, 25 % of the options generally vest on the first anniversary of the grant date, and the remaining 75 % of the options vest in equal quarterly installments during the three years following the first anniversary of the grant date.

The stock options have a contractual term of ten years .

Except as provided in an option 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.

The majority of RSUs granted on June 26, 2020 vested immediately, while the remaining RSUs granted on June 26, 2020 vested 25 % immediately, and 25 % vest on each of the first three anniversaries of the grant date.

In October 2020, the Company’s board of directors approved the issuance of 5,854,800 RSUs.

The RSUs vest over four years , with 25 % of the RSUs vesting on each of December 31, 2021, 2022, 2023 and 2024, subject to continued service on the applicable vesting date.

For RSUs granted during 2021 and 2022, 25 % of the RSUs generally vest on the first anniversary of the grant date, and the remaining 75 % of the RSUs vest in equal quarterly installments during the three years following the first anniversary of the grant date.

RSUs granted in 2022 as a result of the Option Exchange generally vest in equal quarterly installments over three years .

Except as provided in an award agreement between the Company and the employee, if an employee is terminated

(voluntarily or involuntarily), any unvested awards as of the date of termination will be forfeited.

RSUs generally vest 25 % on the first anniversary of the grant date, and the remaining 75 % of the RSUs vest in equal quarterly installments during the three years following the first anniversary of the grant date.

RSUs granted to the Board of Directors of the Company vest immediately.

Certain RSUs granted in December 2023 vest 12.5 % eighteen months after the grant date and then in equally quarterly installments over the following 3.5 years, and RSUs granted in 2022 as a result of the Option Exchange generally vest in equal quarterly installments over three years .

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

RSUs settle for outstanding shares of the Company’s common stock upon vesting.

9 unchanged sentences

Outstanding at December 31, 2021

Granted 7.5 $ 28.23

Vested ( 4.5 ) $ 24.92 $ 55.1

1 unchanged sentence

Outstanding at December 31, 2022

Granted 13.8 $ 8.81

Vested ( 6.4 ) $ 19.00 $ 61.6

16 unchanged sentences

Outstanding at December 31, 2022

Granted — $ —

Vested ( 0.4 ) $ 9.72 $ 4.2

Cancelled ( 0.6 ) $ 9.72

Outstanding at December 31, 2023 2.2 $ 9.72

(1) The number of shares for the PSUs listed as granted represent the total number of PSUs granted to each recipient eligible to vest if the Company meets its highest specified performance goals for the applicable period.

On November 10, 2022, the Compensation Committee of the Board of Directors of the Company approved an amendment to the performance stock unit agreement resulting in a modification of the PSU awards and stock-based compensation expense.

As of December 31, 2022, the Company believed it probable that the 2022 and 2023 performance targets, as outlined in the amended award agreements, would achieve 50 % revenue growth achievement, as defined.

Therefore, fifty percent of the potential expense associated with these tranches was recognized or will be recognized over the remaining performance period of the respective tranche.

As of December 31, 2023, the Company believed it probable that the 2024 and 2025 performance targets, as outlined in the amended award agreements, would achieve 75 % and 50 % revenue growth achievement, respectively, as defined.

Therefore, seventy five percent and fifty percent of the potential expense associated with the 2024 and 2025 tranches, respectively, was recognized or will be recognized over the applicable performance period of the respective tranche.

On February 9, 2023, the Board of Directors of the Company ratified the Company’s annual revenue growth rate during 2022 and approved the vesting of 50.9 % of the PSU awards eligible to vest for the 2022 performance period.

On February 7, 2024, the Board of Directors of the Company ratified the Company’s annual revenue growth rate during 2023.

None of the PSU awards eligible to vest for the 2023 performance metric were approved to vest.

Stock-based compensation

4 unchanged sentences

RSUs 106.7 96.1 67.9

PSUs 2.9 5.2 —

Total stock-based compensation costs $ 113.0 $ 125.5 $ 103.1

6 unchanged sentences

Total stock-based compensation costs, net of amounts capitalized $ 110.0 $ 123.5 $ 100.4

During the years ended December 31, 2022 and 2021, the Company capitalized $ 2.0 million and $ 2.7 million of stock-based compensation cost, respectively.

There was no stock-based compensation cost capitalized in the 2020.

During the years ended December 31, 2023, 2022 and 2021, the Company capitalized $ 3.0 million, $ 2.0 million and $ 2.7 million of stock-based compensation cost, respectively.

As of December 31, 2023, the Company’s unrecognized stock-based compensation expenses related to stock options, RSUs and PSUs was approximately $ 5.8 million, $ 247.0 million and $ 4.7 million, respectively.

5 unchanged sentences

Each swap requires the Company to pay a fixed interest rate of 0.9275 % in exchange for receiving one-month LIBOR.

Upon the update of the index to SOFR, we expect that the fixed rate will change from this current rate.The interest rate swap agreements settle monthly commencing in April 2021 through their termination dates on April 30, 2026.

The interest rate swap agreements settle monthly commencing in April 2021 through their termination dates on April 30, 2026.

The estimated fair value of the Company’s interest rate swap agreements is derived from a discounted cash flow analysis.

The aggregate fair value of the Company’s interest rate swap agreements was an asset of $ 48.8 million as of December 31, 2022 and was recorded between prepaid expenses and other current assets and other non-current assets in the accompanying consolidated balance sheets based upon the timing of the underlying expected cash flows.

The aggregate fair value of the

Company’s interest rate swap agreements was an asset of $ 5.5 million as of December 31, 2021 and was recorded between accrued expenses and other current liabilities and other non-current assets in the accompanying consolidated balance sheets based upon the timing of the underlying expected cash flows.

In June 2023 these two interest rate swap agreements were amended so that effective July 31, 2023, the

Company will pay a fixed interest rate of 0.85 % in exchange for receiving on-month Term SOFR.

The amendment did not impact the hedge effectiveness.

In January 2023, the Company entered into two interest rate swap agreements, each with a notional value of $ 250 million.

Each of these swap agreements is with a different financial institution, and each swap requires the Company to pay a fixed interest rate of 3.435 % in exchange for receiving one-month LIBOR for six months and one-month Term SOFR afterwards.

The interest rate swap agreements settle monthly commencing in February 2023 through their termination dates on February 28, 2028.

The estimated fair value of the Company’s interest rate swap agreements is derived from a discounted cash flow analysis.

The aggregate fair value of the Company’s interest rate swap agreements was an asset of $ 36.1 million as of December 31, 2023 and was recorded between prepaid expenses and other current assets, other non-current assets, and other long-term liabilities in the accompanying consolidated balance sheets based upon the timing of the underlying expected cash flows.

Foreign currency hedge agreements

1 unchanged sentence

The amount of future salary expenses the Company had hedged was approximately $ 208.6 million, and all contracts are expected to mature during the upcoming 12 months.

The aggregate fair value of the Company’s derivative contracts was a net asset of $ 3.4 million as of December 31, 2023 and was recorded in prepaid expenses and other current assets and accrued expenses and other current liabilities in the accompanying consolidated balance sheets.

The aggregate fair value of the Company’s derivative contracts was a net liability of $ 5.3 million as of December 31, 2022 and was recorded in prepaid expenses and other current assets and accrued expenses and other current liabilities in the accompanying consolidated balance sheets.

The aggregate fair value of the Company’s derivative contracts was an asset of $ 1.3 million as of December 31, 2021 and was recorded in prepaid expenses and other current assets in the accompanying consolidated balance sheets.

In the second quarter of 2022, in conjunction with the announced closing of its Canadian operations, the Company terminated its derivative contract to purchase Canadian dollars resulting in an immaterial gain.

FAIR VALUE MEASUREMENTS

Our assessment of goodwill and other intangible assets for impairment includes an assessment using various Level 2 (discount rate) and Level 3 (forecasted cash flows) inputs.

See Note 1, Organization and Summary of Significant Accounting Policies, for more information on the assessment for impairment of goodwill and of intangible assets other than goodwill, respectively.

The following table summarizes the fair value measurement of the Company’s long-term debt at December 31, 2022 (in millions):

The Company’s assessment of goodwill and other intangible assets for impairment includes an assessment using various Level 2 (discount rate) and Level 3 (forecasted cash flows) inputs.

The following table summarizes the fair value measurement of the Company’s long-term debt (in millions):

December 31, 2023

9 unchanged sentences

The estimated fair value of the Company’s term loan is based upon the prices at which the Company’s debt traded in the days immediately preceding the balance sheet date.

As the trading volume of the Company’s debt is low relative to the overall debt balance, the Company does not believe that the associated transactions represent an active market, and therefore this indication of value represents a level 2 fair value input.

As the trading volume of the Company’s debt is low relative to the overall debt

balance, the Company does not believe that the associated transactions represent an active market, and therefore this indication of value represents a level 2 fair value input.

The following table sets forth the assets and liabilities measured at fair value on a recurring basis in the Company’s consolidated balance sheet (in millions):

5 unchanged sentences

Commercial papers Level 2 104.8 79.9

Short-term bank deposits Level 1 $ — $ 100.1

Prepaid expenses and other current assets

5 unchanged sentences

Derivative instruments - foreign currency derivative contracts Level 2 $ 0.9 $ 7.5

Other long-term liabilities, including employee related benefits

Derivative instruments - interest rate swaps Level 2 $ 4.4 $ —

The carrying values of the Company’s cash equivalents and short-term bank deposits approximate fair value because of the short duration of these financial instruments.

The carrying values of the Company’s cash equivalents approximate fair value because of the short duration of these financial instruments.

The Company estimates the fair value of interest rate swap contracts by discounting the future cash flows of both the fixed rate and variable rate interest payments based on market yield curves.

5 unchanged sentences

Recorded in connection with acquisition transactions 11.4

Adjustment based on subsequent settlement agreement (1)

Fair value adjustments based upon post-acquisition performance ( 11.4 )

Balance as of December 31, 2022

Recorded in connection with acquisition transaction 11.4

Adjustment based on subsequent settlement agreement (1)

Recorded in connection with acquisition transactions (2)

Fair value adjustments based upon post-acquisition performance 1.4

Balance as of December 31, 2023 (3)

(1) See Note 2, Business Combinations, for additional discussion.

In April 2020, the Company reached an agreement with the former stockholders of Seriously on the early determination of value and settlement of the contingent consideration payable following the Company’s acquisition of Seriously in July 2019.

The impact of this agreement has been recorded within the fair value adjustments for the year ended December 31, 2020.

(1) See Note 2, Business Combinations, Acquisition of Reworks OY, for additional discussion.

(2) Amount comprised of $ 63.0 million and $ 2.4 million for InnPlay and Youda acquisitions, respectively.

(3) Amount comprised of $ 64.4 million and $ 2.4 million for InnPlay and Youda acquisitions, respectively.

The Company estimated the fair value of its contingent consideration liabilities using probability-weighted discounted cash flow analyses.

1 unchanged sentence

The extent to which the actual results differ from assumptions made within the probability-weighted analyses will result in adjustments to this liability in future periods.

The Company had no financial assets or liabilities measured at fair value as of December 31, 2022 and 2020.

The Company had no financial assets or liabilities measured at fair value as of December 31, 2022.

The Company has not elected the fair value measurement option available under U.S.

1 unchanged sentence

COMMITMENTS AND CONTINGENCIES

In December 2016, a copywriter lawsuit was filed against Wooga GmbH (a subsidiary of the Company) in the regional court of Berlin, Germany.

The Plaintiff is suing for additional remuneration to his contributions for a storyline provided for one of Wooga's games and alleged reuse of parts of that storyline in one of Wooga’s other games.

As of December 31, 2022, the Company has recorded in its financial statements a reserve based upon its best estimate outcome.

It is possible that any final amounts payable in connection with this lawsuit could exceed the Company’s currently reserved best estimate.

The Company has defended this case vigorously and will continue to do so.

In November 2013, the Company’s subsidiary, Playtika, Ltd., sent an initial demand letter to Enigmatus s.r.o., a game developer in the Czech Republic, which owns various U.S.

1 unchanged sentence

In response, Enigmatus s.r.o.

asserted that it was the owner of the Sloto-formative trademarks and denied that its game title infringed the Company’s trademarks.

asserted that it was the owner of the Sloto-formative trademarks and denied that its game title infringed upon the Company’s trademarks.

Enigmatus s.r.o.

4 unchanged sentences

The plaintiff sought injunctive relief and monetary damages.

Pleadings have been exchanged and the lawsuit is in the discovery stage.

A hearing date for summary trial has been scheduled for June 27-29, 2023.

Pleadings have been exchanged and documentary discovery completed.

A hearing for summary trial was conducted between June 27-29, 2023.

The Company has defended this case vigorously and will continue to do so.

6 unchanged sentences

The amended complaint also added the companies that served as underwriters for the Company’s IPO as defendants in the lawsuit.

On September 15, 2022, in accordance with local rules of the Court, the Company and other defendants in the case filed a letter notifying the Court of defendants’ service upon plaintiffs of, among other things, a notice of motion to dismiss plaintiffs’ amended complaint and memorandum of law in support of the defendants’ motion to dismiss plaintiffs’ amended complaint, and on November 30, 2022, the Company filed with the Court the motion to dismiss.

As the case is in

preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows.

On September 15, 2022, in accordance with local rules of the Court, the Company and other defendants in the case filed a letter notifying the Court of defendants’ service upon plaintiffs of, among other things, a notice of motion to dismiss plaintiffs’ amended complaint and a memorandum of law in support of the defendants’ motion to dismiss plaintiffs’ amended complaint.

On November 30, 2022, the Company filed with the Court a motion to dismiss.

As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows.

The Company has defended this case vigorously and will continue to do so.

On November 4, 2022, the Company and certain of its directors were named in a derivative action lawsuit filed in the United States District Court for the Eastern District of New York (Bushansky v.

Antokol., et al.).

The complaint was brought on behalf of the Company by a putative stockholder alleging that the named directors were negligent in their oversight of the preparation of the Company’s Proxy Statement in alleged violation of federal securities laws and that those directors breached their fiduciary duties upon related allegations.

The complaint also asserts claims for contribution and indemnification, and aiding and abetting.

The complaint seeks, among other things, damages, disgorgement and restitution by the director defendants, and attorneys’ fees and costs.

Based upon an agreement of plaintiff, the Company, and the other defendants, on February 13, 2023, the Court stayed this action until the resolution of the motion to dismiss in the class action

case of Bar-Asher v.

Playtika Holding Corp.

As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows.

The Company intends to vigorously defend this case.

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.

2 unchanged sentences

The Motion asserts damages of NIS 50 million.

In January 2023, PGI filed its response to the plantiff’s motion, and a pre-trial hearing is set for March 19, 2023.

On January 12, 2023, PGI filed its response to the Motion for Approval.

On March 5, 2023, the applicant submitted his reply to PGI’s response.

A pre-trial hearing was held on May 4, 2023.

The parties agreed to appoint a mediator to try and resolve the dispute.

The first mediation meeting was held on August 16, 2023 and the second mediation meeting was held on January 7, 2024.

The parties are actively working towards a settlement agreement with response to this matter and the expected range of loss is not material to the Company’s financial statements as a whole.

If a mediated resolution is not reached the Company will continue defending this case vigorously.

On April 10, 2023, Playtika Holding UK II Limited, the Company’s controlling shareholder, and certain officers of the Company were sued (Kormos v Playtika Holding UK II Limited, et al.) in the Delaware Chancery Court.

The lawsuit alleges generally that the defendants breached fiduciary duties owed to the Company and its stockholders with respect to the controlling shareholder’s indication of an interest in selling some or all of its shares, and the resulting strategic review process and self-tender offer.

On August 18, 2023, defendants filed with the Court motions to dismiss the claims.

A hearing on the motions to dismiss was held on November 21, 2023.

On January 18, 2024, the court denied Playtika Holding UK II Limited’s motion to dismiss in an oral ruling but reserved decision on the motion to dismiss the claims against the Company’s officers for a written opinion.

As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows.

The Company will defend this case vigorously.

The Company has received a number of demand letters pursuant to Section 220 of the Delaware General Corporation Law (“DGCL”), seeking disclosure of certain of the Company’s books and records.

The Company has responded to those demands, stating its belief that the demand letters fail to fully comply with the requirements of Section 220 of the DGCL.

However, in the interest of resolution and while preserving all rights, the Company has engaged in negotiations with certain of the shareholders and has produced materials in relation to the demands.

On November 13, 2023, plaintiff Gina v.

Burt filed a lawsuit against the Company and its subsidiary, Playtika Ltd., in the Circuit Court of Coffee County, Tennessee, alleging that the Company’s social casino-themed games are unlawful gambling under Tennessee law.

The lawsuit seeks to recover all amounts paid by Tennessee residents to the Company in connection with its games during the period beginning one year before the filing of the lawsuit until the case is resolved but excluding any residents who spent $ 75,000 or more during such time period.

After the Company removed the case to the U.S.

District Court for the Eastern District of Tennessee, plaintiff filed a motion to remand the case back to the Coffee County Circuit Court.

The Company filed a motion to dismiss and a motion to compel arbitration and intends to oppose the plaintiff’s motion to remand.

As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows.

The Company intends to defend this case vigorously.

On March 8, 2023, plaintiff Gayla Hamilton Mills filed a lawsuit against the Company and its subsidiary, Playtika Ltd., in the Circuit Court of Franklin County, Alabama, alleging that the Company’s social casino-themed games are unlawful gambling under Alabama law.

The lawsuit seeks to recover all amounts paid by Alabama residents to the Company in connection with its games during the period beginning one year before the filing of the lawsuit until the case is resolved.

After the Company removed the case to the U.S.

District Court for the Northern District of Alabama, plaintiff dismissed the complaint and filed a very similar new complaint in the Circuit Court of Franklin County, Alabama on August 25, 2023.

The new complaint asserted the same cause of action and bases for relief, but limited the requested recovery to the amounts paid to the Company in connection with its games only by those Alabama residents who spent less than $ 75,000 during the one year before the filing of the lawsuit until the case is resolved.

The Company timely removed the new complaint to the same U.S.

district court on September 28, 2023.

On October 20, 2023, the plaintiff filed a motion to remand the case back to the Franklin County Circuit Court and pleadings have been exchanged on the motion to remand.

As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows.

The Company intends to defend this case vigorously.

On February 27, 2023, the company received a deficit notice from the Ben Gurion Airport Customs House concerning the purchase of a private aircraft.

The deficit notice claims that the company's acquisition of the aircraft is an import into Israel,

and, as a result, it was obliged to pay purchase tax and VAT for the acquisition.

The company disputes that any tax or VAT is owed.

On July 26, 2023, the Customs House's definitive response was received, with the deficit notice still intact.

The current claimed amount of the deficit notice is approximately $ 3.6 million.

The Company paid the deficit notice under protest and filed a claim with the district court on December 12, 2023.

The Company intends to pursue this case vigorously.

The Company received seven demands for arbitration in late 2022 and early 2023 alleging that its games constitute illegal gambling under applicable state law.

As the arbitrations are in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows.

The Company will defend this case vigorously.

These demands generally attempted to recover amounts spent by third parties on the Company’s games by relying on state gambling loss recovery statutes.

All of these demands have either been dismissed or resolved, on an individual basis, at an immaterial value.

REVENUE FROM CONTRACTS WITH CUSTOMERS

8 unchanged sentences

Total $ 2,567.0 $ 2,615.5 $ 2,583.0

Platform type

Mobile $ 2,096.8 $ 2,069.1 $ 1,907.6

Web 518.7 513.9 463.9

Total $ 2,615.5 $ 2,583.0 $ 2,371.5

Revenues through third-party platforms and through the Company’s own Direct-to-Consumer platforms were as follows (in millions):

33 unchanged sentences

Initial awards were granted under the 2021-2024 Retention Plan in August 2019, with subsequent awards to employees or consultants hired or retained after such date granted at the discretion of the administrator.

Complete disclosure surrounding this plan and executive compensation can be found in the Company’s proxy statement.

Additional disclosure surrounding this plan and executive compensation can be found in the Company’s proxy statement.

For certain participants, in the event of the participant’s termination without cause or resignation for good reason, or termination by reason of death or disability, he or she will be eligible to receive a lump sum cash payment equal to his or her proportionate share (based on the number of retention units outstanding and eligible for payment as of such date) of the unpaid portion of the total retention pool for the remaining term of the 2021-2024 Retention Plan as of the date of termination, which amount shall be paid in cash within 60 days following the date of termination.

7 unchanged sentences

Retention Plan Adjusted EBITDA represents Credit Adjusted EBITDA further adjusted to reflect certain elements of cash-based compensation including retention unit awards and appreciation unit awards under the 2021-2024 Plan and retention awards to key individuals with acquired companies.

The Company recognized compensation expenses in respect of retention bonus and appreciation unit awards under the 2021-2024 Plan of $ 106.2 million and $ 112.7 million during the years ended December 31, 2022 and 2021, respectively, and under the 2017-2020 Plan of $ 67.6 million during the year ended December 31, 2020.

The Company recognized compensation expenses in respect of retention bonus and appreciation unit awards under the 2021-2024 Plan of $ 111.9 million, $ 106.2 million and $ 112.7 million during the years ended December 31, 2023, 2022 and 2021 respectively.

The Company has also granted retention awards to key individuals associated with acquired companies as an incentive to retain those individuals on a long-term basis.

26 unchanged sentences

Intangible assets ( 36.4 ) ( 54.6 )

Undistributed foreign earnings ( 11.0 ) —

Debt issuance costs ( 5.1 ) ( 6.1 )

15 unchanged sentences

The Company regularly reviews the deferred tax assets for recoverability based on all of the available positive and negative evidence, with a focus on historical taxable income, projected future taxable income, the expected timing of the reversals of existing taxable temporary differences and tax planning strategies by jurisdiction.

Prior to the second quarter of 2019, the Company considered the earnings in all its non-U.S.

subsidiaries to be indefinitely reinvested and accordingly, recorded no deferred income taxes associated with such earnings.

During the second quarter of 2019, the Company reevaluated its historic assertion and no longer considered the earnings of certain of its non-U.S.

subsidiaries to be indefinitely reinvested since the cash generated from some of the foreign subsidiaries will be used to

service debt in the United States.

As a result of the change in assertion, the impact of a repatriation of the undistributed earnings resulted in recording a deferred tax liability consisting of potential withholding and distribution taxes of $ 41.7 million as of December 31, 2019.

For the year ended December 31, 2020, the Company accrued an additional $ 4.5 million of deferred tax liability.

Such deferred taxes were recognized as tax expense.

As a result of the amendment to the Credit Agreement in 2021, primarily a reduction in the interest rate, in addition to other considerations, the Company had reevaluated its assertion and considered the earnings of all its non-U.S.

subsidiaries to be indefinitely reinvested.

For the year ended December 31, 2021, the Company reversed the previously accrued deferred tax liability and recognized $ 46.2 million of tax benefit.

As of December 31, 2022, the Company continues to assert that the undistributed earnings of its non-U.S.

subsidiaries will be indefinitely reinvested.

For the year ended December 31, 2021, the Company reversed the previously accrued deferred tax liability for undistributed foreign earnings and recognized $ 46.2 million of tax benefit.

As of December 31, 2023, the Company has reevaluated its assertion and considered that some of the undistributed earnings of its non-U.S.

subsidiaries may be repatriated in the near future.

As a result, the Company accrued $ 11.0 million of estimated withholding tax liability.

The Company considers all remaining undistributed earnings of its non-U.S.

subsidiaries to be indefinitely reinvested, with the exception of certain subsidiaries that can repatriate tax-free.

The determination of the amount of any deferred income or withholding tax liability on these earnings is not practicable because of the complexities of the hypothetical calculation.

28 unchanged sentences

GILTI and Foreign adjustments 4.3 % 4.3 % 6.3 %

Permanent items 0.9 % 0.3 % 2.4 %

Change in valuation allowance 1.1 % ( 4.0 ) % 0.9 %

13 unchanged sentences

Applying this same assertion to all open tax years 2017 through 2023, the assessment results in an aggregate exposure of approximately $ 133.3 million more income tax than what the Company has included on its prior tax returns for 2017 through 2022, or expects to include on its upcoming 2023 tax return.

The Company intends to appeal this assessment and believes that its associated reserves are adequate.

During the first quarter of 2023, the Company filed an appeal of the 2017 assessment and believes that its associated reserves are adequate based on available information.

However, it is possible that any final amounts payable in connection with this tax assessment could exceed the Company’s current reserves.

25 unchanged sentences

Increases in respect of tax positions related to prior years 0.9 87.0

Increases in respect to exchange rate fluctuations — 3.9

Reductions in respect of settlements with authorities ( 4.3 ) ( 1.2 )

Reductions in respect of expirations of statute of limitations — ( 0.9 )

Reductions in respect of tax positions related to prior years ( 0.2 ) ( 9.4 )

4 unchanged sentences

The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits could change significantly within 12 months of the reporting date as a result of the open examination in Israel for the tax years ended 2017 through 2021.

The nature of this uncertainty primarily relates to the qualification of certain income under the Preferred Technology Enterprise tax regime in Israel.

The nature of this uncertainty primarily relates to the applicability of beneficial tax rates on certain income streams.

However, a reasonable estimate of the range of possible changes cannot be made at this time.

As of December 31, 2022, the Company has a gross unrecognized tax benefit liability in Israel of $ 140.2 million associated with potential transfer pricing adjustments.

The Company estimates this liability will be reduced by $ 123.5 million from offsetting unrecognized tax benefits in the U.S., the United Kingdom, and Austria associated with correlative effects of potential transfer pricing adjustments.

The Company netted these amounts in previous financial statements as discussed in Note 1, Organization and Summary of Significant Accounting Policies .

The applicable guidance prohibits offsetting with regards to the unrecognized tax benefit reconciliation above.

As of December 31, 2023, the Company has a net unrecognized tax benefit liability of $ 47.6 million associated with potential transfer pricing adjustments.

The applicable guidance prohibits offsetting the unrecognized tax benefit liability and the unrecognized tax benefit asset amounts and accordingly, the Company presents such amounts on the balance sheet on a gross basis.

In October 2021, the Organization for Economic Cooperation and Development finalized key components of the Base Erosion and Profits Shifting Project, a two-pillar plan on global tax reform.

Pillar Two requires multinational enterprises with an annual global turnover exceeding €750 million to pay a global minimum tax of 15%.

Pillar Two legislation has been enacted or substantively enacted in the UK and certain jurisdictions in the EU where the Company operates, effective beginning 2024.

Additionally, the Company expects legislation to be enacted in Israel in the foreseeable future.

Company has performed a preliminary assessment of the potential exposure to Pillar Two income taxes based on available information and does not currently expect a material impact on its financial statements.

ACCUMULATED OTHER COMPREHENSIVE INCOME

8 unchanged sentences

Balance as of December 31, 2023 $ ( 10.0 ) $ 27.8 $ 2.8 $ 20.6

For the year ended December 31, 2022, interest rate swaps and foreign currency derivative contracts were net of $ 10.0 million of tax expense and $ 1.0 million of tax benefit, respectively.

For the year ended December 31, 2021, interest rate swaps were net of $ 1.3 million of tax expense.

The amounts in the summary of changes in accumulated other comprehensive income (loss) tables, above, are net of tax expense/(benefits) as follows (in millions):

Year ended December 31,

2023 2022 2021

Interest rate swaps $ ( 3.0 ) $ 10.0 $ 1.3

Foreign currency derivative contracts 1.4 ( 1.0 ) —

Amounts reclassified from accumulated other comprehensive income for interest rate swaps and foreign currency derivative contracts were reclassified to interest expense and operating expenses, respectively, in the Company’s consolidated statements of comprehensive income during the years ended December 31, 2023 and 2022.

NET INCOME ATTRIBUTABLE TO ORDINARY STOCKHOLDERS

7 unchanged sentences

Net income per share, diluted $ 0.64 $ 0.69 $ 0.75

The Company uses the treasury stock method on a grant-by-grant basis as the method for determining the dilutive effect of options, RSUs and PSUs.

Under this method, it is assumed that the hypothetical proceeds received upon settlement are used to repurchase common shares at the average market price during the period.

The following outstanding employee equity awards were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive for the periods presented (in millions):

5 unchanged sentences

Option awards that were deemed to be anti-dilutive and were modified in the Option Exchange are included in table above for the period they were outstanding in 2022 prior to the Option Exchange.

In addition, 2.4 million PSUs were excluded from the

calculation of diluted net income per share for the year ended December 31, 2022 because the minimum performance measures have not yet been met.

In addition, 2.2 million PSUs were excluded from the calculation of diluted net income per share for the year ended December 31, 2023 because the minimum performance measures have not yet been met.

SUBSEQUENT EVENTS

On February 25, 2024, Board of Directors of the Company declared a cash dividend of $ 0.10 per share of the Company’s outstanding common stock, payable on April 5, 2024 to stockholders of record as of the close of business on March 22, 2024, with future dividends subject to market conditions and Board approval.

The Company’s management evaluates subsequent events through the date of issuance of the consolidated financial statements.

There have been no subsequent events that occurred during such period that would require adjustment to or disclosure in the consolidated financial statements as of and for the year ended December 31, 2022.

Other than the dividend declaration and equity-related items disclosed in Note 13, Equity Transactions and Stock Incentive Plan, there have been no other subsequent events that occurred during such period that would require adjustment to or disclosure in the consolidated financial statements as of and for the year ended December 31, 2023.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

1 unchanged sentence

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data