What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-27 compared with 2024-02-26 · 394 added, 311 removed, 1041 unchanged (40% of the section changed)

33 unchanged sentences

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment Test of Reworks Asset Group

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 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.

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 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.

Business combinations – accounting for acquisition

Description of the Matter As described in Note 2 to the consolidated financial statements, in November 2024, the Company completed the acquisition of 100% of the issued and outstanding share capital of SuperPlay Ltd.

(“SuperPlay”) for a total consideration of $1,055 million, of which $350 million was recorded as contingent consideration, which is based on certain gross revenue growth and Adjusted EBITDA metrics of SuperPlay during the calendar years 2025, 2026 and 2027.

The transaction was accounted for as a business combination in accordance with ASC 805 "Business Combinations".

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values which primarily consisted of developed games and user base intangible assets of $295 million and $57 million, respectively (collectively the “Intangible Assets”).

In addition, the Company estimated the fair value of the contingent consideration of $350 million as of the date of the acquisition.

Auditing management's estimations of the fair value of the Intangible Assets and contingent consideration were complex due to the significant assumptions and judgment required by management in determining the fair value of the Intangible Assets and contingent consideration.

The Company used the income approach to measure the fair value of the Intangible Assets and the Monte Carlo simulation approach to measure the fair value of the contingent consideration (the "Valuation Model").

The significant assumptions used to estimate the fair value of the Intangible Assets and contingent consideration included, forecasted revenue, revenues growth rates and discount rates.

These significant assumptions are forward looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of management's controls over its estimations of the fair value of the Intangible Assets and contingent consideration, including the Valuation Model and underlying assumptions used to develop such estimates to determine the fair values of the Intangible Assets and contingent consideration.

To test the estimated fair value of the Intangible Assets and contingent consideration, we performed audit procedures that included, evaluating the Company's use of valuation methodologies, evaluating the prospective financial information and testing the completeness and accuracy of the underlying data supporting the significant assumptions and estimates.

In addition, we compared the significant assumptions, including forecasted revenue and revenues growth rates to market and economic trends, historical results of the acquired business and to other relevant factors.

We utilized the assistance of our valuation specialists to evaluate the methods used to determine the fair value of Intangible Assets and contingent consideration, which included, independent comparative calculations to estimate the acquired entity discount rate and calculation of the fair value of the model used to calculate the contingent consideration.

To test the estimated fair value of the contingent consideration, we performed audit procedures that included assessing the terms of the arrangement, including the conditions that must be met for the contingent consideration to become payable.

We have also evaluated the Company’s disclosures regarding the business combinations included in Note 2 to the consolidated financial statements.

/s/ KOST FORER GABBAY & KASIERER

10 unchanged sentences

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of 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 our report dated February 26, 2024 expressed an unqualified opinion thereon.

As indicated in the accompanying Management's Annual Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of SuperPlay Ltd., which is included in the 2024 consolidated financial statements of the Company and constituted 31.3% of total assets as of December 31, 2024 and 1.9% of revenues for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of SuperPlay Ltd.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, 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, 2024, and the related notes financial statement schedule listed in the index at item 15 and our report dated February 27, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on internal control over Financial Reporting.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

8 unchanged sentences

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

30 unchanged sentences

Contingent consideration 354.6 20.8

Other long-term liabilities, including employee related benefits 318.7 252.1

Other long-term liabilities 372.2 318.7

Operating lease liabilities, long-term 71.4 88.2

9 unchanged sentences

Additional paid-in capital 1,362.7 1,264.9

Accumulated other comprehensive income 20.6 17.6

Accumulated other comprehensive income (loss) ( 0.2 ) 20.6

Accumulated deficit ( 894.2 ) ( 907.6 )

12 unchanged sentences

General and administrative 288.7 303.5 332.4

Impairment of intangible assets 51.3 — —

Impairment charges 68.9 51.3 —

Total costs and expenses 2,157.7 2,065.4 2,144.1

26 unchanged sentences

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 income — — — — 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

1 unchanged sentence

Income tax withholding related to vesting of restricted stock units and other — — — ( 3.9 ) — — ( 3.9 )

Other comprehensive loss — — — — 14.4 — 14.4

Other comprehensive income — — — — 3.0 — 3.0

Balance as of December 31, 2023 370.0 4.1 ( 603.5 ) 1,264.9 20.6 ( 907.6 ) ( 221.5 )

Net income — — — — — 162.2 162.2

Cash dividends declared ($ 0.40 per share)

— — — — — ( 148.8 ) ( 148.8 )

Repurchase of common stock ( 0.1 ) * — ( 0.8 ) — — ( 0.8 )

Stock-based compensation — — — 101.2 — — 101.2

1 unchanged sentence

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

Other comprehensive income — — — — 3.0 — 3.0

Other comprehensive loss — — — — ( 20.8 ) — ( 20.8 )

Balance as of December 31, 2024 375.3 $ 4.1 $ ( 603.5 ) $ 1,362.7 $ ( 0.2 ) $ ( 894.2 ) $ ( 131.1 )

10 unchanged sentences

Amortization of intangible assets 119.2 112.3 116.1

Impairment of intangible assets 51.3 — —

Impairment charges 68.9 51.3 —

Stock-based compensation 99.2 110.0 123.5

Change in deferred taxes, net ( 46.5 ) ( 46.6 ) ( 46.0 )

Amortization and write-off of loan discount 7.0 7.4 31.5

Amortization of loan discount 7.5 7.0 7.4

Change in contingent consideration ( 9.8 ) 1.4 ( 13.1 )

Capital gain from sale of investment — — ( 1.2 )

Loss (gain) from foreign currency 1.1 ( 2.8 ) 8.8

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

Non-cash lease expenses (benefit), net ( 1.4 ) 3.5 ( 6.2 )

Changes in operating assets and liabilities:

9 unchanged sentences

Payments for business combination, net of cash acquired ( 686.9 ) ( 159.6 ) ( 29.9 )

Proceeds from short-term bank deposits — 100.1 —

Investment in short-term bank deposits — — ( 100.0 )

Proceeds from short-term investments 256.5 — 100.1

Purchase of short-term investments ( 256.5 ) — —

Investments in unconsolidated entities ( 2.6 ) ( 1.8 ) ( 34.8 )

2 unchanged sentences

Cash flows from financing activities

Proceeds from bank borrowings, net — — 887.7

Dividends paid ( 111.5 ) — —

Repayments on bank borrowings ( 23.8 ) ( 14.3 ) ( 19.0 )

Proceeds from issuance of unsecured notes, net — — 178.9

Proceeds from issuance of common stock, net — — 470.4

Payment of debt issuance costs — — ( 12.0 )

Payment for tender offer — ( 603.5 ) —

Payment of tax withholdings on stock-based payments ( 2.6 ) ( 3.9 ) ( 2.6 )

Payment for share buyback ( 0.8 ) — —

Payment for tender offer — — ( 603.5 )

Net cash out flow for business acquisitions and other ( 28.4 ) — ( 26.9 )

Net cash provided by (used in) financing activities ( 18.2 ) ( 652.0 ) 559.7

Net cash used in financing activities ( 167.1 ) ( 18.2 ) ( 652.0 )

Effect of exchange rate changes on cash and cash equivalents ( 4.9 ) 4.1 ( 15.7 )

10 unchanged sentences

Contingent consideration related to business acquisition $ 350.0 $ 65.4 $ 11.4

Accrued dividend $ 37.3 $ — $ —

Accrued purchases of property and equipment and intangible assets $ 11.0 $ 17.0 $ —

10 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, 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.

As of December 31, 2024, the Company had operations in Austria, Finland, Georgia, Germany, India, Israel, Netherlands, Poland, Romania, Spain, Ukraine, the United Kingdom and the United States.

Basis of presentation and consolidation

9 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, 2023 and 2022.

Due to poor performance of certain of these investments leading to significant uncertainty regarding their future viability, the Company recorded impairments of $ 36.3 million related to these certain investments during the year ended December 31, 2024.

No change to the carrying amounts were recorded in the year ended December 31, 2023.

Use of estimates

9 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

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

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.

7 unchanged sentences

Therefore, the Company's accounts receivable are derived mainly from sales through these three platforms.

The Company performs ongoing credit evaluations of its customers.

The following table summarizes the major accounts receivable of the Company as a percentage of the total accounts receivable as of the dates indicated:

1 unchanged sentence

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 and cash equivalents and Short-term investments

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.

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 from the date of purchase are included in short-term investments.

Such short-term investments include investments in term deposits and commercial papers.

The Company classifies investments in 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.

Restricted cash

10 unchanged sentences

Software development costs

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 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 in accordance with ASC 350-40, Internal-Use Software .

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

1 unchanged sentence

Capitalization of such costs begins when the preliminary project stage is completed and ceases at the point in which the project is substantially complete and is ready for its intended purpose.

With respect to new games or updates to existing games, the preliminary project stage remains ongoing until just prior to worldwide launch.

The development costs of new games or updates to existing games are expensed as incurred to research and development in the consolidated statements of comprehensive income.

For new games or updates to existing games, the development costs are expensed as incurred to research and development in the consolidated statements of comprehensive income, as the preliminary project stage continues until just prior to worldwide launch.

Capitalized internal use software costs were approximately $ 32.9 million, $ 40.4 million and $ 32.1 million during the years ending December 31, 2024, 2023 and 2022, respectively.

1 unchanged sentence

During the years ended December 31, 2024, 2023 and 2022, the amortization of capitalized software costs totaled approximately $ 30.7 million, $ 31.7 million and $ 25.0 million, respectively.

Business combination

The Company applies the provisions of ASC 805, Business Combination and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values.

Business combinations

The Company applies the provisions of ASC 805, Business Combinations and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed or incurred, and intangible assets acquired based on their estimated fair values.

The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets.

When determining the fair values of assets acquired and liabilities assumed or incurred, management makes significant estimates and assumptions, especially with respect to intangible assets.

Significant estimates in valuing certain intangible assets include, but are not limited to future expected cash flows from acquired technology and acquired trademarks and user base from a market participant perspective, useful lives and discount rates.

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

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.

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 estimated 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.

1 unchanged sentence

Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired.

Under ASC 350, Intangible - Goodwill and Other ("ASC 350"), goodwill is not amortized, but rather is subject to an annual impairment test.

Under ASC 350, Intangibles - Goodwill and Other ("ASC 350"), goodwill is not amortized, but rather is subject to an annual impairment test.

The Company tests goodwill for impairment as of October 1st of each year, or more frequently if events or changes in circumstances indicate that this asset may be impaired.

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.

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.

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

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

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

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.

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 implicit rate is 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.

These options are included in the lease terms when management believes 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.

18 unchanged sentences

For the sale of consumable virtual items, the Company recognizes revenue as the items are consumed which is usually over a period of time of up to one month.

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.

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

3 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 eight months to fourteen 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.

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 an individual game basis and generally ranges from six months to twelve 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.

The Company monitors its operational data and player patterns and re-assesses its estimates on a quarterly basis.

Deferred revenues, which represent a contract liability, represent mostly unrecognized fees collected for virtual items which are not consumed at the balance sheets date, or for players that are still active in the games.

Deferred revenues, which represent a contract liability, represent mostly unrecognized fees collected for virtual items which are not consumed at the balance sheet date, or for players that are still active in the games.

Sales and other taxes collected from customers on behalf of governmental authorities are accounted for on a net basis and are not included in revenues or operating expenses.

The Company has elected to apply the practical expedient such that it does not evaluate payment terms of one year or less for the existence of a significant financing component.

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.

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

The 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.

1 unchanged sentence

Revenue from advertisements and offers are recognized at a point-in-time when the advertisements are displayed in the game or the offer has been completed by the user as the customer simultaneously receives and consumes the benefits provided from these services.

The Company has determined that it is generally acting as an agent in its advertising arrangements as the advertising service providers maintain the relationship with the customers, control the pricing of the advertising such that the Company does not know the total price paid by the customer to the service providers, and control the advertising product through the time the advertisements are displayed in our games.

Therefore, the Company recognizes revenue related to these arrangements on a net basis.

7 unchanged sentences

The Company records forfeitures as a reduction of stock-based compensation expense as those forfeitures occur.

The Company used the Black-Scholes option pricing model to estimate the fair value and compensation cost associated with stock options.

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 Company uses the Black-Scholes option pricing model to estimate the grant-date fair value associated with all stock options and for grants of RSUs and certain PSUs subsequent to the commencement of the Company paying dividends.

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 uses observable data for a group of peer companies that grant options with substantially similar terms to assist in developing its volatility assumptions.

The Company used the associated per-share value at the time of grant to determine the compensation cost to be recognized associated with grants of RSUs and PSUs prior to the commencement of the Company paying dividends.

For PSUs without market conditions, the Company reviews the estimates of performance against the defined criteria to assess the expected payout of each outstanding PSU grant quarterly, or more frequently if events or changes in circumstances indicate there may be a change, and adjusts the stock compensation expense accordingly.

The Company uses the Monte Carlo pricing model to estimate grant-date fair value associated with PSUs measured against a market condition.

Stock compensation expense related to PSUs with market conditions is recognized unless the requisite service period is not fulfilled.

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.

2 unchanged sentences

If there are any modifications or cancellations of the underlying unvested equity awards, the Company may be required to accelerate any remaining unearned stock-based compensation cost or incur incremental cost.

The Company uses the associated per-share value at the time of grant to determine the compensation cost to be recognized associated with RSUs and PSUs granted.

The Company reviews the estimates of performance against the defined criteria to assess the expected payout of each outstanding PSU grant quarterly, or more frequently if events or changes in circumstances indicate there may be a change, and adjusts the stock compensation expense accordingly.

For RSUs, shares are issued on the vesting dates net of the applicable statutory income tax withholding to be paid by the Company on behalf of its employees.

As a result, fewer shares are generally issued than the number of RSUs outstanding, and the income tax withholding is recorded as a reduction to additional paid-in capital.

As a result, fewer shares are generally issued than the number of RSUs vesting, and the income tax withholding is recorded as a reduction to additional paid-in capital.

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

17 unchanged sentences

Retention Plan (the “2021-2024 Retention Plan”) in order to retain key employees and reward them for contributing to the success of the Company.

Under the 2021-2024 Retention Plan, eligible employees may be granted retention units that let them receive their pro rata portion of a retention pool of $ 25 million per year for each of the plan years, and may also be granted appreciation units which allow the employee to receive their pro-rata portion of an appreciation pool calculated as a specified percentage of Retention Plan Adjusted EBITDA for each of the plan years as described further in Note 19, Appreciation and Retention Plans .

Under the 2021-2024 Retention Plan, eligible employees were granted retention units that let them receive their pro rata portion of a retention pool of $ 25

million per year for each of the plan years, and were also granted appreciation units which allow the employee to receive their pro-rata portion of an appreciation pool calculated as a specified percentage of Retention Plan Adjusted EBITDA for each of the plan years as described further in Note 19, Appreciation and Retention Plans .

The value of each unit of the 2021-2024 Retention Plan is being amortized into compensation expense using the straight-line method, which will result in the recognition of compensation costs in the same years as the underlying EBITDA used in the plan measurement is earned.

Severance pay

The liability for the Company’s employees in Israel in respect of severance pay is calculated in accordance with Section 14 of the Severance Pay Law 5723-1963 ("Section 14").

Section 14 states that Company's contributions for severance pay shall be in lieu of severance compensation.

Upon deposit of the related obligation for the employee under Section 14, no additional obligations shall be conducted between the parties regarding the matter of severance pay and no additional payments are required to be made by the Company to the employee.

Expense resulting from contributions in accordance with Section 14 for the years ended December 31, 2023, 2022 and 2021 was $ 7.6 million, $ 8.5 million and $ 7.1 million, respectively.

The Company and its Israeli subsidiaries have elected to include their Israeli employees under Section 14 of the Severance Pay Law 5723-1963 (“Section 14”).

Section 14 entitles these employees to monthly deposits with third-party insurance companies and pension funds, at a rate of 8.33% of their monthly salary.

In two cases, the Company and the employee have agreed to a salary lower than their actual monthly salary for purposes of Section 14.

These payments release the Company from future obligations under the Israeli Severance Pay Law for all employees, other than the aforementioned two employees.

Accordingly, any liability for severance pay due to these employees, and the deposits under Section 14 are not recorded as an asset in the Company’s consolidated balance sheet.

Expense resulting from contributions in accordance with Section 14 for the years ended December 31, 2024, 2023 and 2022 was $ 8.4 million, $ 7.6 million and $ 8.5 million, respectively, and is recorded in the financial statement line item relevant to each of the severed employees.

Exit or disposal activities

1 unchanged sentence

During the second quarter of 2022, the Company announced the closure of its Montreal, Los Angeles, Helsinki and London studios, along with limited other cost reduction activities.

Severance payments associated with these closures are being recorded as liabilities and recognized as expense over the period such payments are earned.

Severance payments associated with these closures were recorded as liabilities and recognized as expense over the period such payments were earned.

During the fourth quarter of 2022, the Company reduced its workforce by approximately ten percent.

Severance liabilities associated with this reduction in force were recorded as the reduction in force was completed.

Total severance expense for the year ended December 31, 2022, for both the site closures and the reduction in force totaled approximately $ 16.4 million, included within operating expenses on the consolidated statements of comprehensive income, of which $ 10.1 million is accrued in accrued expenses and other current liabilities at December 31, 2022.

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 for the year ended December 31, 2022.

There was no severance expense related to the 2022 site closures or reduction in force in 2024 or 2023.

Derivative instruments

3 unchanged sentences

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 historical swap rates.

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.

The Company uses foreign currency derivative contracts to reduce its exposure to fluctuating exchange rates between the United States dollar (as the Company’s functional currency) and certain expense lines denominated in Israeli Shekels (“ILS”), Polish Zloty (“PLN”) and Romanian Leu (“RON”).

Based upon this analysis, the Company concluded 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 the inception of the hedging relationship.

The Company uses foreign currency derivative contracts to reduce its exposure to fluctuating exchange rates between the United States dollar (as the Company’s functional currency) and certain expense lines denominated in Euros (“EUR”), Israeli Shekels (“ILS”), Polish Zloty (“PLN”) and Romanian Leu (“RON”).

The Company’s derivative contracts are designated as cash flow hedges under ASC 815.

3 unchanged sentences

The fair value approximates the amount the Company would pay or receive if these contracts were settled at the respective valuation dates.

The inputs used to measure the fair value of the Company’s interest rate swap agreements are categorized as Level 2 in the fair value hierarchy as established by ASC 820, Fair Value Measurement (“ASC 820”).

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.

The inputs used to measure the fair value of the Company’s interest rate swap agreements and foreign currency derivative contracts are categorized as Level 2 in the fair value hierarchy as established by ASC 820, Fair Value Measurement (“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.

13 unchanged sentences

Diluted net income per share reflects the effect of all potentially dilutive common shares outstanding by dividing net income by the weighted-average of all common and potentially dilutive shares outstanding.

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.

PSUs are considered potentially dilutive as of the first day of the reporting period in which the underlying performance metric is achieved.

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

2 unchanged sentences

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.

2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 484 (“ASU 2022-06”) .

The amendments of ASU No.

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 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.

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.

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.

The Company adopted this standard as of January 1, 2024.

The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements or disclosures.

Recently issued accounting standards not yet adopted by the Company

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

2 unchanged sentences

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

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

ASU 2024-03 requires that public business entities disclose more detailed information about types of expenses in commonly presented expense captions.

This guidance is effective for annual reporting periods beginning after December 31, 2026, and for interim reporting periods beginning after December 15, 2027.

The Company is currently evaluating the impact of adopting ASU 2024-03.

BUSINESS COMBINATIONS

Acquisition of Reworks OY

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 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.

The assets acquired and liabilities assumed have been recognized at their estimated fair values at the acquisition date, the determination of which was completed in the fourth quarter of 2021 and there were no material adjustments.

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

Acquisition of SuperPlay Ltd.

On November 20, 2024, Playtika Holding Corp.

(the “Company”) and Playtika Ltd.

(“Playtika Limited”), a wholly owned subsidiary of the Company, completed Playtika Limited’s previously announced acquisition (the “Transaction”) of all of the issued and outstanding share capital of SuperPlay Ltd.

(“SuperPlay”) pursuant to that certain Share Purchase Agreement (the “Purchase Agreement”), dated September 18, 2024 by and among the Company, Playtika Limited, SuperPlay, the shareholders of SuperPlay (the “Sellers”) and Gigi Levy-Weiss, as the shareholder representative, for an aggregate purchase price equal to (i) $ 700.0 million, payable at the closing of the Transaction, subject to certain post-closing adjustments, plus (ii) earnout payments of up to $ 1.250 billion, the amounts of which will be based on certain gross revenue growth and Adjusted EBITDA metrics of SuperPlay during the calendar years 2025, 2026 and 2027, in each case, payable following the end of the applicable measurement period.

In addition, the Company granted approximately $ 50 million to SuperPlay’s employees in accordance with the Transaction terms, which is expected to vest and be expensed over up to four years .

The acquisition was accounted for as a business combination

Within the accompanying consolidated financial statements, management has recorded its preliminary estimates of the assets acquired and liabilities assumed or incurred 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 with this preliminary valuation and such valuations are expected to be finalized during the first quarter of 2025.

Although the Company does not expect material changes to this preliminary valuation, the valuation is not complete, and the review and finalization of this valuation and the associated accounting applied to the acquisition transaction could result in changes to the values assigned to the acquired assets and liabilities based on additional information about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date.

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

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

Consideration

3 unchanged sentences

Acquisition date fair value of contingent consideration ( 350.0 )

Consideration paid as of August 31, 2021 $ 394.1

Identifiable assets acquired and liabilities assumed

Deferred consideration 1.9

Consideration paid as of November 20, 2024 $ 686.9

Identifiable assets acquired and liabilities assumed or incurred

Accounts receivable $ 27.5

Other current assets 22.7

Property and equipment 9.8

Intangible assets other than goodwill 352.0

Goodwill 711.6

Deferred tax liabilities ( 28.6 )

Deferred tax asset 23.2

Deferred consideration 1.9

Deferred tax liability ( 47.6 )

Contingent consideration ( 350.0 )

Liabilities assumed ( 64.2 )

Total identifiable assets acquired and liabilities assumed $ 394.1

The developed game and user base intangible assets acquired and included in the above table are being amortized on a straight-line basis over their estimated useful life of six years and one year , respectively, 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 Reworks acquisition, were approximately $ 1.0 million for the year ended December 31, 2021, 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 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.

Acquisition of JustPlay.LOL Ltd

On March 21, 2022, the Company acquired all of the issued and outstanding shares of JustPlay.LOL Ltd.

(“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.

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.

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

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

Total identifiable assets acquired and liabilities assumed or incurred $ 686.9

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 seven years , which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized.

The Company estimated the fair value of its contingent consideration using a Monte Carlo simulation.

The significant assumptions used in the model include revenue volatility of 20 % and a 20-year-risk free rate of 4.7 %.

Transaction costs incurred by the Company in connection with the SuperPlay acquisition, were approximately $ 13.4 million for the year ended December 31, 2024, and were recorded within general and administrative expenses in the consolidated statements of comprehensive income.

The Company’s statement of comprehensive income for the year ended December 31, 2024, includes $ 47.6 million of revenue and $ 8.8 million of net loss attributed to SuperPlay from the date of acquisition through December 31, 2024.

Pro Forma Financial Information (Unaudited)

The following unaudited pro forma financial information presents the results of operations of the Company as if the SuperPlay acquisition had occurred on January 1, 2023, and includes adjustments primarily related to recognition of transaction and retention costs, amortization of acquired intangible assets, and recognition of stock-based compensation associated with PSU awards that would have been achieved based on 2023 pro forma financial results.

The unaudited pro forma financial information is based on preliminary estimates and assumptions and on the information available at the time of the preparation thereof.

Any of these preliminary estimates and assumptions may change, be revised or prove to be materially different, and the estimates and assumptions may not be representative of facts existing at the time of the SuperPlay acquisition.

The information has been prepared by management for illustrative purposes only and does not purport to represent what the results of operations, financial condition or other financial information of the Company would have been if SuperPlay

acquisition had occurred as of the dates assumed, nor are they necessarily indicative of future consolidated results of operations.

Year ended December 31,

(In millions) 2024 2023

Pro forma revenues $ 2,776.0 $ 2,736.4

Pro forma net income (loss) ( 54.1 ) 87.9

Other development transactions

During 2024, 2023 and 2022, 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.

Acquisition of G.S InnPlay Labs Ltd.

On September 14, 2023, the Company entered into a Share Purchase Agreement (the “InnPlay 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 transaction closed on September 28, 2023 and was accounted for as a business combination.

On June 18, 2024, the Company and InnPlay signed the first amendment to the InnPlay Purchase Agreement which reduces the maximum cap on the total potential earnout consideration from $ 220 million to $ 170 million and adjusted certain of the associated underlying performance metrics.

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.

Within the accompanying consolidated financial statements, management has recorded the assets acquired and liabilities assumed or incurred 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 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.

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 or incurred (in millions):

Consideration

2 unchanged sentences

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 March 23, 2022 $ 29.9

Identifiable assets acquired and liabilities assumed

Consideration paid as of September 28, 2023 $ 73.0

Identifiable assets acquired and liabilities assumed or incurred

Accounts receivable $ 3.9

Other current assets 0.3

Property and equipment 0.2

1 unchanged sentence

Goodwill 127.6

Deferred tax asset 3.4

Deferred consideration ( 3.7 )

Contingent consideration ( 63.0 )

1 unchanged sentence

Liabilities assumed ( 7.1 )

Total identifiable assets acquired and liabilities assumed $ 29.9

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 six 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 JustPlay acquisition, were approximately $ 0.5 million for the year ended December 31, 2022, 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 March 23, 2022 acquisition date have not been presented because the incremental results from JustPlay are not material to the consolidated statements of comprehensive income presented herein.

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

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

Total identifiable assets acquired and liabilities assumed or incurred $ 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.

Acquisition of Youda Games

3 unchanged sentences

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.

Within the accompanying consolidated financial statements, management has recorded the assets acquired and liabilities assumed or incurred 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.

1 unchanged sentence

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):

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

Consideration

2 unchanged sentences

Consideration paid as of August 28, 2023 $ 87.5

Identifiable assets acquired and liabilities assumed

Identifiable assets acquired and liabilities assumed or incurred

Intangible assets other than goodwill $ 45.3

1 unchanged sentence

Contingent consideration ( 2.4 )

Total identifiable assets acquired and liabilities assumed $ 87.5

Total identifiable assets acquired and liabilities assumed or incurred $ 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.

1 unchanged sentence

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.

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.

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.

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):

Acquisition of JustPlay.LOL Ltd

On March 21, 2022, the Company acquired all of the issued and outstanding shares of JustPlay.LOL Ltd.

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

The acquisition was accounted for as a business combination.

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

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

Consideration

2 unchanged sentences

Total consideration, net of cash acquired 41.3

Deferred consideration ( 3.7 )

Acquisition date fair value of contingent consideration ( 11.4 )

Consideration paid as of September 28, 2023 $ 73.0

Identifiable assets acquired and liabilities assumed

Consideration paid as of March 23, 2022 $ 29.9

Identifiable assets acquired and liabilities assumed or incurred

Accounts receivable $ 1.0

Other current assets 0.3

Property and equipment 0.1

1 unchanged sentence

Goodwill 29.7

Deferred tax asset 3.4

Deferred consideration ( 3.7 )

Contingent consideration ( 11.4 )

1 unchanged sentence

Liabilities assumed ( 0.3 )

Total identifiable assets acquired and liabilities assumed $ 73.0

Other development transactions

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.

Total identifiable assets acquired and liabilities assumed or incurred $ 29.9

Pro forma results of operations for this acquisition subsequent to the March 21, 2022 acquisition date have not been presented because the incremental results from JustPlay are not material to the consolidated statements of comprehensive income presented herein.

As of December 31, 2024, all contingent consideration related to the JustPlay acquisition has been paid.

CASH EQUIVALENTS

4 unchanged sentences

Total cash equivalents $ 434.5 $ 919.5

As of December 31, 2024, the unrealized losses related to marketable securities were determined to be not due to credit related losses.

Therefore, the Company did not recognize an allowance for credit losses.

PREPAID EXPENSES AND OTHER CURRENT ASSETS

1 unchanged sentence

Government authorities $ 55.3 $ 86.8

Derivative instruments - interest rate swaps 25.3 19.5

Prepaid expenses 28.2 15.4

Derivative instruments - interest rate swaps 19.4 25.3

Deferred charges 9.4 12.5

17 unchanged sentences

Balance at end of period $ 1,692.3 $ 987.2

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.

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 goodwill impairment, and therefore no further impairment testing was required.

Accordingly, during the years ended December 31, 2024, 2023 and 2022, no impairment charge was recognized.

9 unchanged sentences

Internal use software 2.3 199.6 166.7

1,242.4 865.2

Accumulated amortization

7 unchanged sentences

During the years ended December 31, 2024, 2023 and 2022, the Company recorded amortization expense in the amounts of $ 119.2 million, $ 112.3 million and $ 116.1 million, respectively.

In the fourth quarter of 2024, the Company recorded an impairment charge of $ 29.9 million related to the Redecor game title based upon continued lower than expected performance of that title.

The Company had previously recorded an impairment of $ 41.6 million on this title in the third quarter of 2023.

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.

There was no impairment of intangible assets in the year ended December 31, 2022.

As of December 31, 2024, the total expected future amortization related to intangible assets was as follows (in millions):

6 unchanged sentences

Deposits 4.1 2.7

Other 0.3 0.7

Total other non-current assets $ 167.0 $ 151.6

3 unchanged sentences

Accrued expenses 113.3 93.9

Tax accruals 49.4 35.4

Media buy 47.9 54.5

Dividend payable 37.3 —

Deferred revenues 36.4 46.0

Contingent consideration 25.0 46.0

Tax accruals 35.4 24.9

Total accrued expenses and other current liabilities $ 463.0 $ 438.3

OTHER LONG-TERM LIABILITIES, INCLUDING EMPLOYEE RELATED BENEFITS

Other long-term liabilities, including employee related benefits at December 31, 2023 and 2022 are as follows (in millions):

OTHER LONG-TERM LIABILITIES

Other long-term liabilities at December 31, 2024 and 2023 are as follows (in millions):

Long-term tax reserves $ 369.9 $ 312.9

1 unchanged sentence

Other 2.3 1.4

Total other long-term liabilities, including employee related benefits $ 318.7 $ 252.1

Total other long-term liabilities $ 372.2 $ 318.7

The Company's leases include office real estate and data center leases for its facilities worldwide, which are all classified as operating leases, and which expire on various dates, the latest of which is December 2035.

1 unchanged sentence

The Company’s ROU assets and lease liabilities were calculated using the initial CPI and will not be subsequently adjusted.

Certain leases include renewal options that are reasonably certain to be exercised.

Certain leases include renewal options that management believes are reasonably certain to be exercised.

The following is a summary of weighted average remaining lease terms and discount rates for all of the Company's operating leases:

4 unchanged sentences

Cash paid for amounts included in the measurement of operating lease liabilities was $ 24.6 million, $ 18.4 million and $ 24.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company recognized $ 0.6 million and $ 0.1 million of income in December 31, 2024 and 2023, respectively, related to the subleases for office space with a weighted average remaining lease term of 4.0 years.

There was no sublease income in 2022.

Maturities of lease liabilities are as follows (in millions):

3 unchanged sentences

Present value of lease liabilities $ 97.1

As of December 31, 2024, the Company has entered one lease agreement for office space that has not yet commenced.

This lease is expected to result in an additional right-of-use asset and lease liability of approximately $ 28.7 million when it commences in 2025.

The lease term is 10 years and include options to extend for up to an additional 10 years.

December 31, 2024 December 31, 2023

10 unchanged sentences

On December 10, 2019, the Company entered into $ 2,750 million of senior secured credit facilities (the "Credit Facilities"), consisting of a $ 250 million revolving credit facility (the "Revolving Credit Facility"), and a $ 2,500 million first lien term loan (the "Old Term Loan").

The Credit Facilities were provided pursuant to a Credit Agreement, dated as of December 10, 2019 (the "Credit Agreement"), by and among Playtika, the lenders party thereto, and Credit Suisse, AG, Cayman Islands Branch, as administrative agent (in such capacity, the "Administrative Agent") and collateral agent (in such capacity, the "Collateral Agent").

The Credit Facilities were provided pursuant to a Credit Agreement, dated as of December 10, 2019 (the "Credit Agreement"), by and among Playtika, the lenders party thereto, and UBS AG, Stamford Branch (as successor in interest to Credit Suisse, AG, Cayman Islands Branch), as administrative agent (in such capacity, the "Administrative Agent") and collateral agent (in such capacity, the "Collateral Agent").

Proceeds borrowed under the Credit Facilities on the closing date were used to pay off the outstanding balance on the Company’s prior debt facility.

On June 15, 2020, the Company increased the capacity of the Revolving Credit

Facility to $ 350 million.

On June 15, 2020, the Company increased the capacity of the Revolving Credit Facility to $ 350 million.

On January 15, 2021, the Company increased the borrowing capacity of the Revolving Credit Facility from $ 350 million to $ 550 million.

10 unchanged sentences

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.

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.

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 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).

The Company is not required to make an excess cash flow payment based upon its secured leverage ratio for 2024.

20 unchanged sentences

(xi) change the fiscal year and (xii) modify subordinated debt documents.

Under the Credit Agreement, the Company may be required to meet specified leverage ratios or fixed charge coverage ratios in order to take certain actions, such as incurring certain debt or liens or making certain investments.

Under the Credit Agreement, the Company may be required to meet specified leverage ratios

or fixed charge coverage ratios in order to take certain actions, such as incurring certain debt or liens or making certain investments.

The Company was in compliance with its financial and other covenants under the Credit Agreement as of December 31, 2024.

Expenses Related to Modification of Debt

The Company accounts for the restructuring of its debt agreements in accordance with the accounting standards applicable to troubled debt restructuring, debt modification and debt extinguishment.

Under the applicable accounting standards, the Company determined that the March 2021 financing transactions qualified for modification accounting.

As a result, the Company expensed $ 14.5 million related to the debt modification, wrote off $ 22.9 million of previously deferred financing costs related to the modification of debt related to the Company’s Old Term Loan and carried over $ 34.9 million of deferred financing costs to the New Term Loan.

Offering of 4.250 % Senior Notes due 2029

3 unchanged sentences

Interest on the Notes will accrue at a rate of 4.250 % per annum.

Interest on the Notes payable semi-annually in cash in arrears on March 15 and September 15 of each year, commenced on September 15, 2021.

Interest on the Notes is payable semi-annually in cash in arrears on March 15 and September 15 of each year.

The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Company’s existing and future restricted subsidiaries that guarantee the obligations under the Credit Agreement (the “subsidiary guarantors”).

2 unchanged sentences

In addition, the Notes and the note guarantees are structurally subordinated to the existing and future liabilities of the Company’s non-guarantor subsidiaries.

The Company may redeem the Notes at any time prior to March 15, 2024, in whole or in part, at a redemption price equal to 100 % of the accrued principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the redemption date, plus a make-whole premium.

The Company may redeem the Notes at any time on or after March 15, 2024, in whole or in part, at a redemption price equal to (i) 102.125 % of the principal amount thereof, should such redemption occur before March 15, 2025, (ii) 101.063 % of the principal amount thereof, should such redemption occur before March 15, 2026, and (iii) 100.000 % of the principal amount thereof, should such redemption occur on or after March 15, 2026, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

In addition, at any time prior to March 15, 2024, the Company may redeem up to 40 % of the original aggregate principal amount of all Notes issued with the net cash proceeds from certain equity offerings at a redemption price of 104.250 % of the principal amount redeemed plus accrued and unpaid interest, if any, to, but excluding, the redemption date, so long as at least 50 % of the aggregate principal amount of the Notes remains outstanding immediately after the occurrence of such redemption, and the redemption date is within 90 days of the consummation of any such equity offering.

The Indenture contains customary covenants that limit the Company’s ability and, in certain instances, the ability of the Company’s subsidiaries, to borrow money, create liens on assets, make distributions and pay dividends on or redeem or repurchase stock, make certain types of investments, sell stock in certain subsidiaries, enter into agreements that restrict dividends or other payments from subsidiaries, enter into transactions with affiliates, issue guarantees of indebtedness, and

sell assets or merge with other companies.

These limitations are subject to a number of important exceptions and qualifications set forth in the Indenture.

13 unchanged sentences

The scheduled principal payments due on long-term debt are as follows (in millions):

2028 and thereafter 2,371.7

Total $ 2,428.8

8 unchanged sentences

2020 Incentive Award Plan (the “Plan”).

The Plan authorizes the issuance of stock options, restricted stock, RSUs, dividend equivalents, stock appreciation rights, performance bonus awards and other incentive awards.

The Plan authorizes the issuance of stock options, restricted stock, RSUs, PSUs, dividend equivalents, stock

appreciation rights, performance bonus awards and other incentive awards.

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

As of December 31, 2024, a total of 63,401,657 shares of the Company’s common stock had been allocated to awards granted under the Plan and 957,970 shares remained available for future grants.

Equity transactions

On May 26, 2020, the Board of Directors of the Company approved an amendment to the Certificate of Incorporation of the Company (the ”Stock Split”) to increase the authorized number of shares of the Company’s common stock from ten ( 10 ) shares to one million ( 1,000,000 ) shares, to decrease the par value of each share of common stock of the Company from $ 1.00 per share to $ 0.01 per share, and to reclassify each share of common stock issued and outstanding immediately prior to the Stock Split into 94,500 shares of common stock.

On January 5, 2021, the Company’s Board of Directors approved an amended and restated certificate of incorporation of the Company effecting a 400 -for-1 stock split of the Company’s issued and outstanding shares of common stock and an increase to the authorized shares of our common stock and preferred stock to 1,600 million shares and 100 million shares, respectively.

The split and the increase in authorized shares of the Company’s common stock was effected on January 6, 2021 and without any change in the par values per share.

All information herein related to the Company’s common stock and stock awards has been retroactively adjusted to give effect to both the May 26, 2020 stock split and the January 5, 2021 stock split.

In January 2021, promptly following the pricing of the Company’s IPO, the number of shares available for issuance under the Playtika Holding Corp.

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.

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.

1 unchanged sentence

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

In connection with its January 15, 2021 IPO, the Company granted 7,985,297 stock options and 4,299,077 RSUs to certain of its employees.

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

Option Repricing

9 unchanged sentences

On November 14, 2022, the Company commenced a voluntary, one-time stock option exchange program (the “Option Exchange”) pursuant to which eligible service providers (including eligible employees) were able to exchange outstanding stock options for a lesser amount of new RSUs to be issued under the Plan.

No members of the Board held outstanding stock options and therefore did not participate in the Option Exchange.

No members of the Board held outstanding stock options and therefore the members of the Board did not participate in the Option Exchange.

Service providers who elected to participate in the Option Exchange received one RSU for every 2.5 shares of Playtika common stock underlying the eligible options surrendered.

2 unchanged sentences

The Company accounted for the Option Exchange as a modification and is recording incremental compensation expense of approximately $ 10.1 million from the time of the Option Exchange through the remaining vesting period.

Cash Dividend

On April 5, July 5 and October 4, 2024, in accordance with approval by the Board of Directors of the Company (“the Board”), the Company paid cash dividends of $ 0.10 per shares of the Company’s outstanding common stock.

Additionally, the Board declared a cash dividend of $ 0.10 per share of the Company’s outstanding common stock, that was paid on January 3, 2025 to stockholders of record as of the close of business on December 20, 2024.

The dividend payable amount of $ 37.3 million is recorded in accrued expenses and other current liabilities at December 31, 2024.

Stock Repurchase Program

On May 9, 2024, the Company announced that its Board of Directors authorized a stock repurchase program for up to $ 150 million of the Company’s common stock.

Under the repurchase program, repurchases can be made using a variety of methods, which may include open market purchases, privately negotiated transactions or otherwise, all in accordance with the rules of the Securities and Exchange Commission and other applicable legal requirements.

The specific timing, price and size of purchases will depend on prevailing stock prices, general economic and market conditions, and other considerations.

The repurchase program does not obligate the Company to acquire any particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion.

During the year ended December 31, 2024, the Company repurchased approximately 0.1 million shares of its common stock at an average cost of $ 7.03 per share.

As of December 31, 2024, $ 149.2 million remains available under the Company’s stock repurchase program.

Stock options

14 unchanged sentences

There were no stock options exercised during the years ended December 31, 2024, 2023 or 2022.

The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2023 and 2022 was $ 10.29 per share and $ 6.43 per share, respectively.

The weighted-average grant-date fair value of stock options granted during the year ended December 31, 2023 was $ 10.29 per share.

There were no stock options granted during the year ended December 31, 2024.

The Company will issue new shares of common stock upon exercise of stock options.

The Company uses the Black-Scholes option pricing model to estimate the fair value and compensation cost associated with employee stock options, which is affected by the following assumptions regarding complex and subjective variables.

The Company uses the Black-Scholes option pricing model to estimate the grant-date fair value associated with all employee stock options and for grants of RSUs and certain PSUs subsequent to the commencement of the Company paying dividends, which is affected by the following assumptions regarding complex and subjective variables.

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

– 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 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.

– Risk-free interest rate - The risk-free interest rate is 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 award.

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

Subsequent to this date, the Company estimates the dividend yield based on the expected annual dividend per share divided by the closing stock price on the grant date.

– Expected term - For options, 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.

For RSUs, the Company estimated the expected term based on the average time between the grant date and the final vesting date of the respective RSU award, typically two to four years .

– Expected volatility – Prior to the Company’s initial public offering of equity in January 2021, as the Company was a private company at the time of valuation, the Company estimated volatility based on the volatilities exhibited by comparable public companies and the Company’s capital structure and utilized the observable data for a group of peer companies that grant options with substantially similar terms to assist in developing its volatility assumption.

Subsequent to the Company’s initial public offering, the Company continues to estimate volatility in the same manner as it has not yet established sufficient history to estimate volatility of its own.

The table below summarizes the assumptions used for the options granted in each respective period, as well as for options repriced during the first quarter of 2022:

Year ended December 31,

The table below summarizes the assumptions used for the options granted in the year ended December 31, 2023:

Risk-free interest rate 3.34 % - 3.79 %

0.67 % - 3.88 %

Expected dividend yield —

1 unchanged sentence

Expected volatility 52.13 % - 52.79 %

40.96 % - 52.82 %

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.

1 unchanged sentence

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.

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.

The following table summarizes the Company’s RSU activity:

4 unchanged sentences

Outstanding at January 1, 2022

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

6 unchanged sentences

(1) The number of RSUs granted includes those resulting from the Option Exchange.

On February 7, 2022, the Compensation Committee of the Board of Directors of the Company approved the grant of PSUs to certain employees pursuant to the Plan.

The table below summarizes the assumptions used for the RSUs granted in the year ended December 31, 2024:

Risk-free interest rate 3.67 % - 4.57 %

Expected dividend yield 4.87 % - 5.67 %

Expected term in years 2.3 - 3.6

Expected volatility 46.32 % - 50.56 %

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

RSUs granted in December 2024 vest quarterly over three years , 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 .

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

On February 7, 2022, the Compensation Committee of the Board of Directors of the Company approved the grant of PSUs to certain employees pursuant to the Plan (the “2022 PSUs”).

For each annual performance period consisting of calendar years 2022 through 2025, up to 25 % of the 2022 PSUs will be eligible to vest based on the Company’s annual revenue growth rate during the applicable performance period relative to threshold, target and maximum achievement levels.

1 unchanged sentence

Notwithstanding the foregoing, in no event shall less than 25 PSUs vest during each performance period for Israeli participants.

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

On December 18, 2024, the Compensation Committee of the Board of Directors of the Company approved PSU grants to certain employees pursuant to the Plan (collectively, the “2024 PSUs”).

For each annual performance period consisting of calendar years 2025 through 2027, up to one-third of the 2024 PSUs will be eligible to vest based on certain performance criteria:

– Adjusted EBITDA PSUs - The Company’s Adjusted EBITDA target during the applicable performance periods relative to three defined targets.

If the Company’s Adjusted EBITDA for a performance period does not equal or exceed the target set forth, no Adjusted EBITDA PSUs shall vest.

– AGR PSUs - The Company’s annual revenue growth rate (“AGR”) during the applicable performance periods relative to three defined achievement levels.

– TSR PSUs - The Company’s total shareholder return (“TSR”) during the applicable performance periods relative to the three defined achievement levels.

If the Company’s AGR and TSR results for a performance period are between two achievement levels, the achievement percentage of the AGR PSUs and TSR PSUs will be determined by linear interpolation between the applicable achievement levels.

The table below summarizes the grant date valuation assumptions used for the Adjusted EBITDA and AGR PSUs granted in the year ended December 31, 2024:

Risk-free interest rate 4.25 % - 4.30 %

Expected dividend yield 5.62 %

Expected term in years 1.0 - 3.0

Expected volatility 43.96 % - 50.70 %

The Company uses the Monte Carlo pricing model to estimate the grant-date fair value associated with the TSR PSUs, which is affected by assumptions regarding complex and subjective variables.

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

Fair value of common stock, risk-free interest rate, expected dividend yield and expected term are defined consistent with descriptions above.

Expected volatility is calculated using the Company’s historical data.

The table below summarizes the grant date valuation assumptions used for the TSR PSUs granted in the year ended December 31, 2024:

Risk-free interest rate 4.31 %

Expected dividend yield 5.62 %

Expected term in years 1.0 - 3.0

Expected volatility 49.56 %

The following table summarizes the Company’s PSU activity:

12 unchanged sentences

Outstanding at December 31, 2023

Granted 9.8 $ 4.86

Vested * $ 9.72 *

Cancelled ( 1.1 ) $ 9.72

Outstanding at December 31, 2024

(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, 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.

* Represents an amount less than 0.1 or $ 0.1

As of December 31, 2024, the Company believed it probable that the 2025 performance target of the 2022 PSUs, as outlined in the amended award agreements, and all tranches of the 2024 PSUs would achieve 100 % achievement of their respective performance criteria, as defined.

Therefore, all of the potential expense associated with these awards was recognized or will be recognized over the applicable performance period of the respective tranche.

On February 17, 2025, and February 7, 2024, the Board of Directors of the Company ratified the Company’s annual revenue growth rate during 2024 and 2023, respectively.

None of the PSU awards eligible to vest for the 2024 or 2023 performance periods were approved to vest.

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

20 unchanged sentences

Each of these swap agreements is with a different financial institution as the counterparty to reduce the Company’s counterparty risk.

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

The initial terms of each swap required the Company to pay a fixed interest rate of 0.9275 % in exchange for receiving one-month LIBOR.

In June 2023 these two interest rate swap agreements were amended so that effective July 31, 2023, the Company pays a fixed interest rate of 0.85 % in exchange for receiving on-month Term SOFR.

The amendment did not impact the hedge effectiveness.

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.

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.

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

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 $ 29.2 million as of December 31, 2024 and was recorded between prepaid expenses and other current asset 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 $ 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.

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.

Foreign currency hedge agreements

At December 31, 2023, the Company had outstanding derivative contracts to purchase certain foreign currencies, including ILS, RON, and PLN at future dates.

At December 31, 2024, the Company had outstanding derivative contracts to purchase certain foreign currencies, including EUR, ILS, RON, and PLN at future dates.

The amount of future salary expenses the Company had hedged was approximately $ 194.5 million, and all contracts are expected to mature during the upcoming 12 months.

The aggregate fair value of the Company’s derivative contracts was a net asset of $ 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 $ 2.2 million as of December 31, 2024 and was recorded in prepaid expenses and other current assets and accrued expenses and other current liabilities 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.

The following table summarizes the volume of derivative instrument activity (in millions):

Year ended December 31,

2024 2023 2022

Derivative instruments - foreign currency derivative contracts $ 198.4 $ 302.3 $ 311.9

Derivative instruments - interest rate swaps — 500.0 —

Derivative instruments - others (non-hedging) — 1.6 50.5

FAIR VALUE MEASUREMENTS

12 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):

12 unchanged sentences

Derivative instruments - foreign currency derivative contracts Level 2 $ 3.3 $ 0.9

Other long-term liabilities, including employee related benefits

Other long-term liabilities

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

7 unchanged sentences

Recorded in connection with acquisition transactions (1)

Adjustment based on subsequent settlement agreement (1)

Fair value adjustments based upon post-acquisition performance 1.4

Balance as of December 31, 2023

Recorded in connection with acquisition transactions (2)

Recorded in connection with SuperPlay acquisition 350.0

Payment of contingent consideration earned ( 26.7 )

Fair value adjustments based upon post-acquisition performance ( 9.8 )

Reclassification of contingent consideration to accrued expenses and other current liabilities (2)

Balance as of December 31, 2024 (3)

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

(1) 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.

(2) Represents amount deemed fixed and payable, no longer contingent consideration.

(3) Amount comprised of $ 354.6 million and $ 25.0 million for SuperPlay and InnPlay acquisitions, respectively.

The Company estimated the fair value of its contingent consideration liabilities using a Monte Carlo simulation to model components of cash flow analyses.

These fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements as defined in ASC 820.

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.

The extent to which the actual results differ from assumptions made within the Monte Carlo simulation cash flow analysis will result in adjustments to this liability in future periods.

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

1 unchanged sentence

COMMITMENTS AND CONTINGENCIES

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.

trademark registrations that resemble the Company’s Sloto-formative trademark names, demanding that it cease use of the trademark Slotopoly.

In response, Enigmatus s.r.o.

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.

applied to register one of the Company’s trademarks in the United Kingdom and European Union, and the Company successfully opposed its applications.

In December 2016, Enigmatus s.r.o., filed a trademark infringement lawsuit, Enigmatus, s.r.o.

Playtika LTD and Caesars Interactive Entertainment, Inc., against Playtika, Ltd.

and Caesars Interactive Entertainment LLC in the Federal Court of Canada asserting that the Company’s use of the Slotomania trademarks violates its proprietary and trademark rights.

The plaintiff sought injunctive relief and monetary damages.

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.

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 November 23, 2021, the Company, its directors and certain of its officers were named in a putative class action lawsuit filed in the United States District Court for the Eastern District of New York (Bar-Asher v.

6 unchanged sentences

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’s motion to dismiss was granted with prejudice on March 18, 2024.

However, on April 15, the plaintiffs filed a notice of appeal.

The plaintiffs’ appeal has been briefed and is currently pending.

As the Company is awaiting a ruling on the appeals process, 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.

3 unchanged sentences

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.

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.

When the motion to dismiss in the class action case of Bar-Asher v.

Playtika Holding Corp.

was granted as discussed above, this action was administratively closed.

The Company does not expect this action to move forward until after the appeal of the class action case of Bar-Asher v.

Playtika Holding Corp.

has been decided.

As this stage, 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.

8 unchanged sentences

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.

The parties agreed upon a settlement which was published for review by certain third parties The Office of the Attorney General filed its position on the settlement on behalf of certain professional authorities noting certain concerns regarding the proposed settlement.

A hearing on the settlement took place on December 15, 2024, during which the court provided feedback and requested clarification regarding the proposed settlement.

In response, the Company submitted a modified settlement on January 20, 2025.

The Court has requested further clarification regarding the modified settlement and a hearing has been scheduled on February 17, 2025 to review the modified settlement.

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.

3 unchanged sentences

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.

On January 18, 2024, the court denied Playtika Holding UK II Limited’s motion to dismiss in an oral ruling.

The court issued a written opinion on May 3, 2024 granting the motion to dismiss the claims against the Company’s officers.

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 June 7, 2024, the Company received a demand letter from counsel for Scott G.

Kormos, one of the plaintiffs in the Kormos v Playtika Holding UK II Limited, et al.

matter described above, pursuant to Section 220 of the Delaware General Corporation Law (“DGCL”), seeking disclosure of certain of the Company’s books and records, particularly relating to the share repurchase program the Company announced in May 2024.

The Company has responded to the demand, stating its belief that the demand letter fails 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 Mr.

Kormos’ counsel regarding the production of materials in relation to the demand.

On December 12, 2024, the Company received a demand letter from counsel for Scott G.

Kormos, one of the plaintiffs in the Kormos v Playtika Holding UK II Limited, et al.

matter described above, pursuant to Section 220 of the DGCL, seeking disclosure of certain of the Company’s books and records, particularly relating to the pledge of the Company’s common stock by Playtika Holding UK II Limited.

The Company has responded to the demand, stating its belief that the demand letter fails 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 Mr.

Kormos’ counsel regarding the production of materials in relation to the demand.

On November 13, 2023, plaintiff Gina v.

2 unchanged sentences

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.

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

The Company also filed a motion to dismiss and a motion to compel arbitration.

District Court for the Eastern District of Tennessee issued an order to remand on September 26, 2024 and the Company filed a petition to appeal the order on October 17, 2024.

The Court granted the Company’s petition for permission to appeal on January 17, 2025, and the appeal is currently in the briefing process.

The other motions to dismiss and compel arbitration have been briefed and are currently pending.

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.

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 casino-themed social 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.

4 unchanged sentences

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.

On October 20, 2023, the plaintiff filed a motion to remand the case back to the Franklin County Circuit Court which the Company opposed.

District Court for the Northern District of Alabama issued an order to remand on January 7, 2025 and the Company filed a petition to appeal the order on January 16, 2025.

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 August 22, 2024, plaintiff Dianne Fuqua filed a lawsuit against the Company and its subsidiary, Playtika Ltd., in the District Court for the Western District of Kentucky, alleging that the Company’s casino-themed social games are unlawful gambling under Kentucky law.

The lawsuit seeks to recover three times the amount paid by Kentucky residents to the Company from its games during the period from August 2019 through June 2023 plus interest, costs and any other relief plaintiff is entitled to.

The Company filed a motion to dismiss and a motion to compel arbitration on January 31, 2025.

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 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.

2 unchanged sentences

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

The Customs House submitted its statement of defense on April 17, 2024 and the Company submitted its response to the statement of defense on June 16.

A pre-trial meeting has been scheduled for June 17, 2025.

In the meantime, the parties have continued to engage in the discovery process and have also engaged in preliminary settlement discussions.

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.

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.

On June 1, 2024, the Company received pre-arbitration notices from a law firm purporting to represent 5,264 claimants who have played the Company’s games and intend to file arbitration demands alleging that the Company’s games are unlawful or that they otherwise have suffered harm for which recovery is available.

On July 26, 2024, the law firm filed arbitration demands on behalf of 4,549 claimants.

On September 13, 2024, the arbitrator requested that the Company waive certain dispute resolution provisions in its terms of service as a condition to its administering the arbitration.

The Company declined to waive such provisions and, as a result, the arbitration was closed on October 3, 2024.

On September 16, 2024, the Company received pre-arbitration notices from the same law firm purporting to represent an additional 2,560 claimants

alleging the same claims as the other claimants.

As of the date hereof, the Company lacks adequate information to assess the nature or validity of these claims.

As such, the Company cannot estimate what impact, if any, these claims may have on its results of operations, financial condition or cash flows.

The Company intends to defend these claims vigorously.

On October 17, 2024, the Company received pre-arbitration notices from a different set of affiliated law firms purporting to represent 798 claimants who have played the Company’s games and intend to file arbitration demands alleging that the Company’s games are unlawful and that the claimants made purchases in the Company’s games which were the result of unfair and deceptive practices that violate consumer protection laws.

On January 31, 2025, the affiliated law firms filed arbitration demands on behalf of approximately 1,500 claimants.

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

The Company intends to defend these claims vigorously.

In December 2024, the Company provided to the Seller parties in the Youda Games acquisition the calculation of the earnout amount.

The Sellers have disputed the calculation of the earnout amount.

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

The Company intends to defend its positions vigorously.

REVENUE FROM CONTRACTS WITH CUSTOMERS

23 unchanged sentences

Contract liabilities (2)

(1) Contract assets are included within prepaid expenses and other current assets as “deferred charges” in the Company’s consolidated balance sheets.

(1) Contract assets are included within prepaid expenses and other current assets in the Company’s consolidated balance sheets.

(2) Contract liabilities are included within accrued expenses and other current liabilities as “deferred revenues” in the Company’s consolidated balance sheets.

During the year ended December 31, 2023, the Company recognized all of its contract liabilities balance as of December 31, 2022.

During the year ended December 31, 2024, the Company recognized $ 45.5 million of its contract liabilities balance that were outstanding as of December 31, 2023.

Unsatisfied performance obligations

2 unchanged sentences

The Company operates its business as one operating segment and one reportable segment.

The Company has identified its Chief Executive Officer as its Chief Operating Decision Maker (“CODM”.) The CODM uses revenues and net income for purposes of assessing performance and deciding how to allocate resources.

In addition to revenues and net income, the following significant expense categories and amounts are regularly provided to the CODM for use when allocating resources:

advertising expense (as disclosed in Note 1, Organization and Summary of Significant Accounting Policies ,) and interest expense (as disclosed in Note 20, Interest and Other, Net .) Asset information as presented on the consolidated balance sheets is provided to the CODM.

The Company’s long-lived assets, net, by country of domicile are as follows (in millions):

12 unchanged sentences

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.

In the event of such a termination, such participant will also remain eligible to receive payments in respect of his or her appreciation units for all vesting dates that have not yet occurred prior to the date of such termination, which payments will be made as and when such payments are made to other appreciation unit holders.

For all other participants, in the event of termination due to death or disability on or after January 1, 2021, but prior to December 31, 2024, the participant will receive a payment in respect of 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, pro-rated for the portion of the period between January 1, 2021 and December 31, 2024 that has elapsed prior to termination, payable within 60 days following termination.

In addition, the participant will retain the right to receive payments for a pro-rated portion of his or her appreciation units for all vesting dates that have not yet occurred prior to the date of such termination, which payments will be made as and when such payments are made to other appreciation unit holders.

All payments triggered by a termination of employment or service will be subject to the execution of a general release of claims in favor of the company.

If a participant terminates service for any reason other than as described above, the participant will immediately forfeit all unearned benefits related to his or her unvested retention units and appreciation units.

In October 2020, 43,000 appreciation units held under the 2021-2024 Retention Plan were cancelled.

4 unchanged sentences

The Company recognized compensation expenses associated with these development-related retention payments of $ 0.4 million, $ 0.3 million and $ 7.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

INTEREST EXPENSE AND OTHER, NET

Interest expense and other, net for the years ended December 31, 2023, 2022 and 2021, are as follows (in millions):

INTEREST AND OTHER, NET

Interest and other, net for the years ended December 31, 2024, 2023 and 2022, are as follows (in millions):

Year ended December 31,

10 unchanged sentences

Net operating loss carry-forwards $ 54.2 $ 32.6

Accrued employee costs 8.7 8.3

Research and development expenses 83.1 57.7

22 unchanged sentences

( 24.7 ) ( 29.6 )

Net deferred tax (liabilities) assets $ 69.7 $ 21.7

Based on available evidence, management believes it is not more-likely-than-not that $ 45.0 million U.S.

and Israel deferred tax assets will be fully realizable.

Net deferred tax assets (liabilities) $ 94.3 $ 69.7

Based on available evidence, management believes it is not more-likely-than-not that $ 60.3 million U.S., Israel, and Finland deferred tax assets will be fully realizable.

Accordingly, in those jurisdictions, the Company has recorded a valuation allowance against these assets.

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.

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.

For the year ended December 31, 2023, the Company 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.

As of December 31, 2024, the Company has reevaluated its assertion and reversed the previously accrued deferred tax liability for undistributed foreign earnings and recognized $ 11.0 million of tax benefit.

The Company considers

all undistributed earnings of its non-U.S.

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

33 unchanged sentences

Change in uncertain tax positions 5.0 % 8.9 % 0.6 %

Repatriation of undistributed dividends 2.8 % — % ( 11.3 ) %

Repatriation of undistributed earnings ( 3.9 ) % 2.8 % — %

Return-To-Provision Adjustments 0.1 % ( 1.2 ) % ( 4.7 ) %

4 unchanged sentences

The Company expects that the Israeli subsidiaries qualifying as Preferred Technology Enterprises in the current year will continue to qualify as Preferred Technology Enterprises or become Special Preferred Technology Enterprises in subsequent tax years.

Income not eligible for Preferred Technology Enterprise benefits is taxed at the regular corporate tax rate at 23% beginning in 2018.

Income not eligible for Preferred Technology Enterprise benefits is taxed at the regular corporate tax

rate at 23% beginning in 2018.

Non-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence.

During the fourth quarter of 2022, the Company received an assessment from the Israel Tax Authority asserting that a smaller proportion of the Company’s 2017 earnings qualified for reduced tax rates under the Preferred Technology Enterprise regime than what the Company had asserted on its tax return.

During the first quarter of 2024, the Company received a final assessment from the Israel Tax Authority asserting that a smaller proportion of the Company’s 2017 earnings qualified for reduced tax rates under the Preferred Technology Enterprise regime than what the Company had asserted on its tax return.

Applying this same assertion to all open tax years 2017 through 2024, the assessment results in an aggregate exposure of approximately $ 93.6 million more income tax than what the Company has included on its prior tax returns for 2017 through 2023, or expects to include on its upcoming 2024 tax return.

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.

During the fourth quarter of 2024, the Company filed an appeal to the Israeli court of the 2017 final 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.

36 unchanged sentences

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

40 unchanged sentences

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