Playtika Holding Corp. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA PLAYTIKA HOLDING CORP. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firm (PCAOB ID# 1281 ) 87 Consolidated Balance Sheets 91 Consolidated Statements of Comprehensive Income 92 Consolidated Statements of Stockholders' Equity (Deficit) 93 Consolidated Statements of Cash Flows 94 Notes to Consolidated Financial Statements 96 - 139 86 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of PLAYTIKA HOLDING CORP. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Playtika Holding Corp. (the Company) as of December 31, 2025 and 2024, 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, 2025, and the related notes and financial statement schedule listed in the Index at item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of 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 a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 87 Description of the Matter Valuation of Contingent consideration As described in Notes 2 and 16 of 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 which the purchase consideration included a liability classified contingent consideration. The Company determined the fair value of the long-term contingent consideration liability to be $280 million as of December 31, 2025. Changes in the fair value of the long-term contingent consideration are recorded as income or expense in the Company’s consolidated statements of comprehensive income. Auditing management's estimations of the fair value of the long-term contingent consideration was complex due to the significant assumptions and judgment required by management in determining the fair value of the long-term contingent consideration. The Company used the Monte Carlo simulation approach to measure the fair value of the long-term contingent consideration (the "Valuation Model"). The significant assumptions used to estimate the fair value of the long-term contingent consideration included forecasted revenue, revenue volatility rate 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 estimation of the fair value of the long-term contingent consideration, and the underlying assumptions used to develop such estimates. To test the estimated fair value of the long-term contingent consideration, we performed audit procedures that included, among others, evaluating the Company's valuation methodology and prospective financial information and testing the completeness and accuracy of the underlying data supporting the Company's significant assumptions. In addition, we compared the significant assumptions to market and economic trends and historical results . We utilized the assistance of our valuation specialists to evaluate the method used to determine the fair value of the long-term contingent consideration, which included, among others, developing an independent comparative calculation of the Valuation Model. We also performed audit procedures that included assessing the terms of the arrangement, including the conditions that must be met for the long-term contingent consideration to become payable. /s/ KOST FORER GABBAY & KASIERER A Member of EY Global We have served as the Company’s auditor since 2016. Tel-Aviv, Israel February 26, 2026 88 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of PLAYTIKA HOLDING CORP. Opinion on Internal Control Over Financial Reporting We have audited Playtika Holding Corp.'s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Playtika Holding Corp. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, 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, 2025 and 2024, 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, 2025, and the related notes financial statement schedule listed in the Index at item 15(a)(2) and our report dated February 26, 2026 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 Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 89 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KOST FORER GABBAY & KASIERER A Member of EY Global Tel-Aviv, Israel February 26, 2026 90 CONSOLIDATED BALANCE SHEETS (In millions, except for per share data) December 31, 2025 2024 ASSETS Current assets Cash and cash equivalents $ 684.2 $ 565.8 Short-term investments 136.0 — Restricted cash 1.5 1.9 Accounts receivable 161.8 187.6 Prepaid expenses and other current assets 80.4 117.5 Total current assets 1,063.9 872.8 Property and equipment, net 102.9 115.4 Operating lease right-of-use assets 124.2 89.9 Intangible assets other than goodwill, net 425.7 562.2 Goodwill 1,695.7 1,692.3 Deferred tax assets, net 173.2 119.0 Investment in unconsolidated entities 17.5 20.6 Other non-current assets 115.8 167.0 Total assets $ 3,718.9 $ 3,639.2 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Current maturities of long-term debt $ 11.1 $ 11.6 Accounts payable 80.3 58.6 Contingent consideration 454.0 25.0 Operating lease liabilities 27.5 25.7 Accrued expenses and other current liabilities 395.0 438.0 Total current liabilities 967.9 558.9 Long-term debt 2,378.0 2,388.5 Contingent consideration 280.0 354.6 Operating lease liabilities 115.4 71.4 Deferred tax liabilities 8.2 24.7 Other long-term liabilities 380.8 372.2 Total liabilities 4,130.3 3,770.3 Commitments and contingencies (Note 17 ) Stockholders' equity (deficit) Common stock of US $ 0.01 par value: 1,600.0 shares authorized; 428.8 and 427.1 shares issued, respectively, and 377.0 and 375.3 shares outstanding, respectively 4.3 4.1 Treasury stock at cost, 51.8 shares ( 603.5 ) ( 603.5 ) Additional paid-in capital 1,423.1 1,362.7 Accumulated other comprehensive income (loss) 15.9 ( 0.2 ) Accumulated deficit ( 1,251.2 ) ( 894.2 ) Total stockholders' deficit ( 411.4 ) ( 131.1 ) Total liabilities and stockholders’ deficit $ 3,718.9 $ 3,639.2 The accompanying notes are an integral part of these consolidated financial statements. 91 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions, except for per share data) Year ended December 31, 2025 2024 2023 Revenues $ 2,755.4 $ 2,549.3 $ 2,567.0 Costs and expenses Cost of revenue 758.5 692.1 718.5 Research and development 426.7 403.0 406.4 Sales and marketing 949.8 705.0 585.7 General and administrative 619.1 288.7 303.5 Impairment charges 6.4 68.9 51.3 Total costs and expenses 2,760.5 2,157.7 2,065.4 Income (loss) from operations ( 5.1 ) 391.6 501.6 Interest and other, net 167.8 111.1 109.5 Income (loss) before income taxes ( 172.9 ) 280.5 392.1 Provision for income taxes 33.5 118.3 157.1 Net income (loss) ( 206.4 ) 162.2 235.0 Other comprehensive income (loss) Foreign currency translation 23.8 ( 10.9 ) 5.6 Change in fair value of derivatives ( 7.7 ) ( 9.9 ) ( 2.6 ) Total other comprehensive income (loss) 16.1 ( 20.8 ) 3.0 Comprehensive income (loss) $ ( 190.3 ) $ 141.4 $ 238.0 Net income (loss) per share attributable to common stockholders, basic $ ( 0.55 ) $ 0.44 $ 0.64 Net income (loss) per share attributable to common stockholders, diluted $ ( 0.55 ) $ 0.44 $ 0.64 Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic 375.8 371.8 366.3 Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted 375.8 372.1 366.8 The accompanying notes are an integral part of these consolidated financial statements. 92 CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (In millions) Share Capital Shares Outstanding Amount Treasury stock Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings (deficit) Total stockholders’ equity (deficit) Balance as of January 1, 2023 363.6 $ 4.1 $ ( 603.5 ) $ 1,155.8 $ 17.6 $ ( 1,142.6 ) $ ( 568.6 ) Net income — — — — — 235.0 235.0 Stock-based compensation — — — 113.0 — — 113.0 Issuance of shares upon vesting of RSUs 6.4 * — (*) — — — Income tax withholding related to vesting of restricted stock units and other — — — ( 3.9 ) — — ( 3.9 ) 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 Issuance of shares upon vesting of RSUs 5.4 * — (*) — — — Income tax withholding related to vesting of restricted stock units and other — — — ( 2.6 ) — — ( 2.6 ) 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 ) Net income (loss) — — — — — ( 206.4 ) ( 206.4 ) Cash dividends declared ($ 0.40 per share) — — — — — ( 150.6 ) ( 150.6 ) Repurchase of common stock ( 4.4 ) ( 0.1 ) — ( 20.2 ) — — ( 20.3 ) Stock-based compensation — — — 83.5 — — 83.5 Issuance of shares upon vesting of RSUs 6.1 0.3 — (*) — — 0.3 Income tax withholding related to vesting of restricted stock units and other — — — ( 2.9 ) — — ( 2.9 ) Other comprehensive income — — — — 16.1 — 16.1 Balance as of December 31, 2025 377.0 $ 4.3 $ ( 603.5 ) $ 1,423.1 $ 15.9 $ ( 1,251.2 ) $ ( 411.4 ) _________ * Represents an amount less than 0.1 or $ 0.1 The accompanying notes are an integral part of these consolidated financial statements. 93 CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year ended December 31, 2025 2024 2023 Cash flows from operating activities Net income (loss) $ ( 206.4 ) $ 162.2 $ 235.0 Adjustments to reconcile net income (loss) to net cash from operating activities: Depreciation 46.8 46.5 45.7 Amortization of intangible assets 188.0 119.2 112.3 Impairment charges 6.4 68.9 51.3 Stock-based compensation 82.5 99.2 110.0 Change in deferred taxes, net ( 68.0 ) ( 46.5 ) ( 46.6 ) Amortization of loan discount 8.1 7.5 7.0 Change in contingent consideration 398.6 ( 9.8 ) 1.4 Loss (gain) from foreign currency 7.0 1.1 ( 2.8 ) Non-cash lease expenses (benefit), net 10.6 ( 1.4 ) 3.5 Payment of excess acquisition date fair value of contingent consideration ( 7.9 ) — — Other operating activities ( 0.4 ) — — Changes in operating assets and liabilities: Accounts receivable 28.6 10.1 ( 25.6 ) Prepaid expenses and other current and non-current assets 87.0 10.3 ( 35.0 ) Accounts payable 24.2 ( 21.3 ) ( 9.3 ) Accrued expenses and other current and non-current liabilities ( 37.4 ) 44.1 68.7 Net cash provided by operating activities 567.7 490.1 515.6 Cash flows from investing activities Purchase of property and equipment ( 36.3 ) ( 40.9 ) ( 32.6 ) Capitalization of internal use software costs ( 28.6 ) ( 31.6 ) ( 37.4 ) Purchase of software for internal use ( 21.2 ) ( 20.8 ) ( 9.2 ) Payments for business combination, net of cash acquired — ( 686.9 ) ( 159.6 ) Proceeds from short-term investments 200.6 256.5 — Purchase of short-term investments ( 336.1 ) ( 256.5 ) — Investments in unconsolidated entities ( 1.4 ) ( 2.6 ) ( 1.8 ) Other investing activities 1.3 0.7 0.4 Net cash used in investing activities ( 221.7 ) ( 782.1 ) ( 240.2 ) Cash flows from financing activities Dividends paid ( 150.2 ) ( 111.5 ) — Repayments on bank borrowings ( 19.0 ) ( 23.8 ) ( 14.3 ) Payment of tax withholdings on stock-based payments ( 2.9 ) ( 2.6 ) ( 3.9 ) Payment for share buyback ( 20.3 ) ( 0.8 ) — Payment of contingent consideration ( 37.6 ) ( 28.4 ) — Net cash used in financing activities ( 230.0 ) ( 167.1 ) ( 18.2 ) Effect of exchange rate changes on cash and cash equivalents 2.0 ( 4.9 ) 4.1 Net change in cash, cash equivalents and restricted cash 118.0 ( 464.0 ) 261.3 Cash, cash equivalents and restricted cash at the beginning of the period 567.7 1,031.7 770.4 Cash, cash equivalents and restricted cash at the end of the period $ 685.7 $ 567.7 $ 1,031.7 94 Year ended December 31, 2025 2024 2023 Supplemental cash flow disclosures Cash paid for income taxes $ 103.3 $ 92.6 $ 169.8 Cash paid for interest $ 137.2 $ 146.6 $ 146.0 Non-cash financing and investing activities Right-of-use assets acquired under operating leases $ 54.0 $ 8.8 $ 14.6 Accrued dividend $ 37.7 $ 37.3 $ — Accrued purchases of property and equipment and intangible assets $ 7.6 $ 11.0 $ 17.0 Capitalization of stock-based compensation costs $ 1.0 $ 2.0 $ 3.0 Recognition of contingent consideration liability upon business acquisition $ — $ 350.0 $ 65.4 The accompanying notes are an integral part of these consolidated financial statements. 95 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In millions, unless specified otherwise) NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of business and organization Playtika Holding Corp. (“Playtika”) and its subsidiaries (together with Playtika, the “Company”) is one of the world’s leading developers of mobile games creating fun, innovative experiences that entertain and engage its users. It has built best-in-class live game operations services and a proprietary technology platform to support its portfolio of games which enable it to drive strong user engagement and monetization. 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, 2025, the Company has leased facilities in Austria, Finland, Germany, Israel, Netherlands, Poland, Romania, Ukraine, the United Kingdom and the United States. Basis of presentation and consolidation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and include Playtika and all subsidiaries in which the Company has a controlling financial interest. Control generally equates to ownership percentage, whereby (i) affiliates that are more than 50% owned are consolidated; (ii) investments in affiliates of 50% or less but greater than 20% are generally accounted for using the equity method where the Company has determined that it has significant influence over the entities; and (iii) investments in affiliates of 20% or less, without readily determinable fair value, are generally accounted for at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. In the opinion of management, all adjustments considered necessary for a fair presentation have been recorded within the accompanying financial statements, consisting of normal, recurring adjustments, and all intercompany balances and transactions have been eliminated in the consolidation. Certain comparative figures have been reclassified to conform to the current year presentation. Investment in unconsolidated entities The Company holds certain equity investments in various unconsolidated entities that, based upon the structure of the investment, are not within the scope of equity method investment accounting that would lead to the consolidation conclusions above. Instead, these investments fall within the scope of ASC 321, Investments - Equity Securities. 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. Due to poor performance of certain of these investments leading to significant uncertainty regarding their future viability, the Company recorded impairments of $ 4.6 million and $ 36.3 million related to these certain investments during the years ended December 31, 2025 and 2024, respectively. Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 96 Financial statements in United States dollars The currency of the primary economic environment in which the operations of Playtika and certain subsidiaries are conducted is the U.S. dollar ("dollar"); thus, the dollar is the functional currency of Playtika and certain subsidiaries. Playtika and certain subsidiaries' transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions and balances have been remeasured to dollars in accordance with ASC 830, Foreign Currency Matters . All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of comprehensive income as financial income or expenses, as appropriate. For those consolidated subsidiaries whose functional currency has been determined to be a non-dollar currency, assets and liabilities are translated at year-end exchange rates and statement of income items are translated using the date of the transaction exchange rate or at the average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in stockholders' equity (deficit). Concentration of credit risk and significant customers Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, short-term investments, restricted cash, accounts receivable and derivative contracts. The Company’s investment policy imposes certain maturity limits on the Company’s portfolio and restricts the permitted investments to the purchase of bank deposits and highly rated fixed income securities. Apple and Google are significant distribution, marketing, promotion and payment platforms for the Company's games. A significant portion of the Company’s revenues has been generated from players who accessed the Company's games through these platforms. Therefore, the Company's accounts receivable are derived mainly from sales through these two platforms. The following table summarizes the major accounts receivable of the Company as a percentage of the total accounts receivable as of the dates indicated: December 31, 2025 2024 % Apple 56 60 Google 28 29 Accounts receivable are recorded at their transaction amounts and do not bear interest. 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 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. 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 accounts for investments in debt securities in accordance with ASC No. 320, " Investments - Debt Securities ". The Company determines the appropriate classification of its investments at the time of purchase and reevaluates such designation at each balance sheet date. Unrealized gains and losses, net of tax, reported in accumulated other comprehensive 97 income (loss) in shareholders' equity (deficit). Gains and losses are determined using the specific identification method and recognized when realized in the consolidated statements of comprehensive loss. The Company periodically evaluates its available-for-sale debt securities for impairment in accordance with ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . If the amortized cost of an individual security exceeds its fair value, the Company considers its intent to sell the security or whether it is more likely than not that it will be required to sell the security before recovery of its amortized basis. If either of these criteria are met, the Company writes down the security to its fair value and records the impairment charge in the Consolidated Statements of Comprehensive Loss. If neither of these criteria are met, the Company assesses whether credit loss exists. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss may exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded, limited by the amount that the fair value is less than the amortized cost basis. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive income (loss). For the years ended December 31, 2025, 2024 and 2023 there were no credit losses. Restricted cash Restricted cash primarily consists of deposits to secure obligations under the Company's operating lease agreements and to secure company-issued credit cards . Property and equipment, net The Company states property and equipment at cost. The Company computes depreciation using the straight-line method over the estimated useful lives of the respective assets or, in the case of leasehold improvements, the lease term of the respective assets, whichever is shorter. The Company examines fully depreciated assets annually and writes off those no longer in use. The depreciation periods for the Company's property and equipment are as follows: Useful life Computers and peripheral equipment 2 to 11 years Office furniture and equipment 4 to 14 years Vehicles and aircraft 3 to 7 years Leasehold improvements Shorter of the estimated useful life or remaining term of lease 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 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. Internal use software is included in intangible assets other than goodwill, net in the accompanying consolidated balance sheets. 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. 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 $ 28.8 million, $ 32.9 million and $ 40.4 million during the years ending December 31, 2025, 2024 and 2023, respectively. The estimated useful life of costs capitalized is generally three 98 years . During the years ended December 31, 2025, 2024 and 2023, the amortization of capitalized software costs totaled approximately $ 33.3 million, $ 30.7 million and $ 31.7 million, respectively. 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 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, 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 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. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Goodwill 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, 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. 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. If, after assessing the qualitative factors, the Company determines it is more likely than not the asset is impaired, it then performs a quantitative test in which the estimated fair value of the reporting unit is compared with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its estimated fair value, an impairment loss is recognized in an amount equal to the excess, limited to the amount of goodwill allocated to the reporting unit. 99 Intangible assets other than goodwill, net Intangible assets other than goodwill are amortized over their estimated useful lives using the straight-line method, using the following ranges of useful lives: Useful life Developed games and acquired technology 1 to 10 years Trademarks and user base 1 to 5 years Internal use software 3 years Impairment of long-lived assets The Company’s long-lived assets to be held or used, including right-of-use (“ROU”) assets, and identifiable intangible assets that are subject to amortization are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, in accordance with ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets . 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 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. 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 estimated fair value. Fair value is generally estimated based on a discounted cash flow analysis. During the years ended December 31, 2025 and 2024, the Company recorded impairments related to long-lived assets in the amounts of $ 1.8 million and $ 2.7 million, respectively. There were no impairments of long-lived assets in the year ended December 31, 2023. Leases 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. 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 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 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 lease agreements with lease and non-lease components are accounted for separately. The Company does not record an asset or liability for operating leases with a term of 12 months or less. Revenue recognition The Company primarily derives revenue from the sale of virtual items associated with online games. The Company distributes its games to the end customer through various web and mobile platforms such as Apple, Google, and other web and mobile platforms, as well as through its own Direct-to-Consumer platform. Through these platforms, users can download the Company’s free-to-play games and can purchase virtual currency which is redeemed in the game for virtual goods, or players can purchase virtual goods directly (collectively referred to as virtual items) to enhance their game-playing 100 experience. The initial download of the games does not create a contract under ASC 606, Revenue from Contracts with Customers ; however, the separate election by the player to make an in-application purchase satisfies the ASC 606 criterion for creating a contract. Players can pay for their virtual item purchases through various widely accepted payment methods offered in the games. Payments from players for virtual items are required at the time of purchase, are non-refundable and relate to non-cancellable contracts that specify the Company’s obligations and cannot be redeemed for cash nor exchanged for anything other than virtual items within the Company’s games. The purchase price is a fixed amount which reflects the consideration that the Company expects to be entitled to receive in exchange for use of virtual items by its customers. The platform providers collect proceeds from the game players and remit the proceeds to the Company after deducting their respective platform fees. The Company is primarily responsible for providing the virtual items, has control over the content and functionality of games and has the discretion to establish the virtual items’ prices. Therefore, the Company is the principal and, accordingly revenues are recorded on a gross basis. Payment processing fees paid to platform providers are recorded within cost of revenue. The Company’s performance obligation is to display the virtual items within the game over the estimated life of the paying player or until the virtual item is consumed in game play based upon the nature of the virtual item. The Company categorizes its virtual items as either consumable or durable. The substantial majority of the Company’s games sell only consumable virtual items. Consumable virtual items represent items that can be consumed by a specific player action and do not provide the player any continuing benefit following consumption. 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 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. Based upon this analysis, the Company has estimated the rate at which virtual currency is consumed during game play. Accordingly, revenue is recognized using a user-based revenue model using these estimated consumption rates. The Company monitors its analysis of customer play behavior on a quarterly basis. 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 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 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. 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. impressions, offers completed, etc.) and the contractually agreed upon price per unit. 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. 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 101 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 the Company’s games. Therefore, the Company recognizes revenue related to these arrangements on a net basis. Advertising expenses Costs for marketing and advertising of the Company’s games are primarily expensed as incurred and are included in the sales and marketing expenses in the Company’s consolidated statements of comprehensive income. Such costs primarily consist of player acquisition costs. Advertising expense was $ 760.8 million, $ 563.8 million and $ 451.8 million in the years ended December 31, 2025, 2024 and 2023, respectively. Stock-based compensation expense The Company has a stock-based compensation program which provides for equity awards including time-based stock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”). Stock-based compensation expense is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense on a straight-line basis over the requisite service period for options, RSUs and certain PSUs, and on an accelerated basis for some PSUs with performance or market conditions. The Company records forfeitures as a reduction of stock-based compensation expense as those forfeitures occur. 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, and the Black-Scholes option pricing model to estimate the grant-date fair value associated with all stock options. For grants of RSUs and certain PSUs subsequent to the commencement of the Company paying dividends, the Company estimates the fair value for compensation cost using the value of its common stock on the date of grant, reduced by the present value of dividends expected to be paid on its shares of common stock prior to vesting. 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. The Company’s estimate of the grant-date fair value 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 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, typically two to three years, based on the average time between the grant date and the final vesting date of the respective RSU award. 102 – Expected volatility – Prior to obtaining sufficient trading history of its own stock, 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 assumptions. 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. Higher volatility and longer expected terms result in an increase to stock-based compensation determined at the date of grant. Future stock-based compensation cost and unrecognized stock-based compensation will increase to the extent that the Company grants additional equity awards to employees or assumes unvested equity awards in connection with acquisitions. 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. 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 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. See Note 14, Equity Transactions and Stock Incentive Plan, for additional disclosure. Income taxes The Company accounts for income taxes using the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences will reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. Deferred tax assets and deferred tax liabilities are presented under long-term assets and long-term liabilities, respectively. The need to establish valuation allowances for deferred tax assets is assessed periodically based on the more likely than not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company’s experience with operating loss and tax credit carryforwards expiring unused and tax planning alternatives. The Company implements a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50 % (cumulative basis) likely to be realized upon ultimate settlement. The Tax Cuts and Jobs Act (“TCJA”) subjects a U.S. shareholder to tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. The Company can make an accounting policy election to either treat taxes due on the GILTI inclusion as a current period expense or factor such amounts into the measurement of deferred taxes. The Company elected to account for the income tax effects of GILTI as a “period cost,” or an income tax expense in the year the tax is incurred. The Company classifies interest and penalties on income taxes (which includes uncertain tax positions) as taxes on income. Employee related benefits Appreciation and retention plan In August 2019, the Company adopted the Playtika Holding Corp. 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 103 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 20, 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 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, 2025, 2024 and 2023 was $ 10.8 million, $ 8.4 million and $ 7.6 million, respectively, and is recorded in respective functional line items. Exit or disposal activities The Company accounts for exit or disposal cost obligations, including restructuring activities, under ASC 420-10, Exit or Disposal Cost Obligations , which requires that companies only record liabilities for such activities when such liabilities have been incurred. Derivative instruments The Company uses interest rate swap contracts to reduce its exposure to fluctuating interest rates associated with the Company’s variable rate debt, and to effectively increase the portion of debt upon which the Company pays a fixed interest rate. The Company’s interest rate swap agreements are designated as cash flow hedges under ASC 815, Derivatives and Hedging (“ASC 815”), involving the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreement, without the exchange of the underlying notional amount. These hedges are highly effective in offsetting changes in the Company’s future expected cash flows due to the fluctuation of the Company’s variable rate debt. The Company monitors the effectiveness of its hedges on a quarterly basis, both qualitatively and quantitatively. The Company performed a regression analysis at inception of the hedging relationship and at period end in which it compared the change in the fair value of the swap transactions and the change in fair value of a hypothetical interest rate swap having terms that identically match the terms of the debt's interest rate payments based on historical swap rates. 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. The Company monitors the effectiveness of its hedges on a quarterly basis, both qualitatively and quantitatively, and expects these hedges to remain highly effective at offsetting fluctuations in exchange rates through their respective maturity dates. See Note 15, Derivative Instruments, for additional discussion. 104 The fair value of derivative financial instruments is recognized as an asset or liability at each balance sheet date, with changes in fair value recorded in other comprehensive income on the consolidated statements of comprehensive income until the future underlying transactions occur. 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 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. Fair value of financial instruments The Company accounts for fair value in accordance with ASC 820. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a three tier hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying value of accounts receivable and payables and the Company's cash and cash equivalents and restricted cash, approximates fair value due to the short time to expected payment or receipt of cash. Net income per share attributable to common stockholders For all periods presented herein, basic net income per share is calculated by dividing net income by the weighted-average common shares outstanding. 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. 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. The Company uses the treasury stock method on a grant-by-grant basis as the method for determining the dilutive effect of options, RSUs and PSUs. Under this method, it is assumed that the hypothetical proceeds received upon settlement are used to repurchase common shares at the average market price during the period. Accounting standards recently adopted by the Company In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) . ASU 2023-09 requires that public business entities expand their annual disclosures related to rate reconciliation and income taxes paid, and provide a disaggregated presentation between domestic and foreign income or loss from continuing operations before income tax expense and income tax expense or benefit from continuing operations. The Company adopted this standard as of January 1, 2025 on a retrospective basis. The adoption of this standard affected disclosures in Note 22, Income Taxes . In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 provides a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers . The practical expedient assumes that current conditions as of the balance sheet 105 date do not change for the remaining life of the assets. The Company adopted this standard as of January 1, 2026. 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 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. In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40). ASU 2025-06 requires public companies to apply property, plant, and equipment-style disclosure requirements to internal-use software costs, eliminate stage-based capitalization models, and begin capitalizing software development costs once management commits to funding a project and completion is probable under the new “probable-to-complete” threshold. This guidance is effective for annual periods beginning after December 15, 2027. The Company is currently evaluating the impact of adopting ASU 2025-06. NOTE 2. BUSINESS COMBINATIONS 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 (“SuperPlay Adjusted EBITDA”) 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 . Management has accounted for this acquisition as a business combination. As such, management has recorded the identified assets and liabilities at their respective fair value. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities was recorded as goodwill. The purchase consideration also included a liability classified contingent consideration, measured at fair value through earnings. The Company finalized the purchase accounting valuation in the fourth quarter of 2025. During the year ended December 31, 2025, the Company adjusted goodwill, other current assets and deferred tax asset. Other than these adjustments, there were no other material changes to the initial purchase price allocation. 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. 106 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed or incurred (in millions): Consideration Total Consideration $ 1,054.9 Less: Cash acquired ( 19.9 ) Total consideration, net of cash acquired 1,035.0 Less: Acquisition date fair value of contingent consideration ( 350.0 ) Less: 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 33.9 Property and equipment 9.8 Intangible assets other than goodwill 352.0 Goodwill 701.5 Deferred tax asset 22.1 Deferred consideration 1.9 Deferred tax liability ( 47.6 ) Contingent consideration ( 350.0 ) Liabilities assumed ( 64.2 ) 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 as of the acquisition date using a Monte Carlo simulation. The significant assumptions used in the model include revenue volatility of 20 %, discount rate of 14.3 % and a 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. In May 2025, the Share Purchase Agreement was amended to adjust certain covenants. During the year ended December 31, 2025, the Company recorded $ 379.4 million of expense to adjust contingent consideration associated with the SuperPlay Acquisition to its estimated fair value of $ 734.0 million as of December 31, 2025, which is comprised of $ 454.0 million in current Contingent consideration and $ 280.0 million in long-term Contingent consideration on the accompanying consolidated balance sheet. 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 107 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 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. 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. 108 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed or incurred (in millions): Consideration Total Consideration $ 140.5 Less: Cash acquired ( 0.8 ) Total consideration, net of cash acquired 139.7 Less: Deferred consideration ( 3.7 ) Less: Acquisition date fair value of contingent consideration ( 63.0 ) 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 Intangible assets other than goodwill 14.8 Goodwill 127.6 Deferred tax asset 3.4 Deferred consideration ( 3.7 ) Contingent consideration ( 63.0 ) Deferred tax liability ( 3.4 ) Liabilities assumed ( 7.1 ) Total identifiable assets acquired and liabilities assumed 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 On August 28, 2023, the Company completed the acquisition of the Youda Games (the “Youda Games”) portfolio from Azerion Group N.V. consistent with the Company’s strategy to increase its breadth of entertainment genres and leverage the Company’s technology platforms and live operations. Terms of the acquisition agreement include initial cash consideration of EUR 81.3 million plus an earnout based on the performance of the acquired business, with a maximum total consideration of EUR 150 million, subject to customary adjustments. The acquisition was accounted for as a business combination. Within the accompanying consolidated financial statements, management has recorded the assets acquired and liabilities assumed 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. This valuation was finalized during the fourth quarter 2023 with no material adjustments from the Company’s initial estimates. The goodwill, which is deductible for tax purposes, is generally attributable to synergies between the Company's and Youda Game's respective studio operations and games. 109 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed or incurred (in millions): Consideration Total Consideration $ 89.9 Less: Acquisition date fair value of contingent consideration ( 2.4 ) Consideration paid as of August 28, 2023 $ 87.5 Identifiable assets acquired and liabilities assumed or incurred Intangible assets other than goodwill $ 45.3 Goodwill 44.6 Contingent consideration ( 2.4 ) 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. Transaction costs incurred by the Company in connection with the Youda Games acquisition, were approximately $ 1.6 million for the year ended December 31, 2025, and were recorded within general and administrative expenses in the consolidated statements of comprehensive income. Pro forma results of operations for this acquisition subsequent to the August 28, 2023 acquisition date have not been presented because the incremental results from Youda Games, both individually and when aggregated with InnPlay pro forma results of operations, are not material to the consolidated statements of comprehensive income presented herein. Other development transactions During 2025, 2024 and 2023, the Company 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. NOTE 3. CASH EQUIVALENTS Cash equivalents at December 31, 2025 and 2024 are as follow (in millions): December 31, 2025 2024 Money market funds $ 291.3 $ 331.4 Term deposits 198.5 93.1 Commercial papers 39.8 10.0 Total cash equivalents $ 529.6 $ 434.5 As of December 31, 2025, 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. 110 NOTE 4. SHORT-TERM INVESTMENTS Short-term investments at December 31, 2025 are as follows (in millions): December 31, 2025 Amortized cost Allowance for credit losses Unrealized gains, gross Unrealized losses, gross Term deposits $ 71.8 $ — $ — $ — Commercial papers 64.2 — — — Total short-term investments $ 136.0 $ — $ — $ — The Company did not hold short-term investments at December 31, 2024. NOTE 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets at December 31, 2025 and 2024 are as follows (in millions): December 31, 2025 2024 Government authorities $ 34.4 $ 55.3 Prepaid expenses 21.6 28.2 Deferred charges 5.5 9.4 Derivative instruments - interest rate swaps 4.9 19.4 Other 14.0 5.2 Total prepaid expenses and other current assets $ 80.4 $ 117.5 NOTE 6. PROPERTY AND EQUIPMENT, NET Property and equipment, net at December 31, 2025 and 2024 are as follow (in millions): December 31, 2025 2024 Computers and peripheral equipment $ 249.7 $ 240.3 Office furniture and equipment 20.3 19.0 Vehicles and aircraft 9.0 9.0 Leasehold improvements 70.3 69.8 Total property and equipment, gross 349.3 338.1 Accumulated depreciation ( 246.4 ) ( 222.7 ) Total property and equipment, net $ 102.9 $ 115.4 Depreciation expense was $ 46.8 million, $ 46.5 million and $ 45.7 million in the years ended December 31, 2025, 2024 and 2023, respectively. 111 NOTE 7. GOODWILL Changes in goodwill for the years ended December 31, 2025 and 2024 were as follows (in millions): Year ended December 31, 2025 2024 Balance at beginning of period $ 1,692.3 $ 987.2 Foreign currency translation adjustments 13.4 ( 6.5 ) Goodwill acquired during the year — 711.6 Adjustment to purchase price allocation ( 10.0 ) — Balance at end of period $ 1,695.7 $ 1,692.3 As of October 1 of each year, the Company performed its annual goodwill impairment analysis. Accordingly, during the years ended December 31, 2025, 2024 and 2023, no impairment charge was recognized. NOTE 8. INTANGIBLE ASSETS OTHER THAN GOODWILL The carrying amounts and accumulated amortization expenses of the acquired intangible assets other than goodwill, net, including the impact of foreign currency exchange translation, at December 31, 2025 and 2024 were as follows (in millions): December 31, 2025 Weighted average remaining useful life (in years) Balance December 31, 2024 Historical cost basis: Developed games and acquired technology 4.6 $ 972.2 $ 948.7 Trademarks and user base 1.0 94.1 94.1 Internal use software 2.6 228.8 199.6 1,295.1 1,242.4 Accumulated amortization Developed games and acquired technology ( 623.6 ) ( 518.1 ) Trademarks and user base ( 94.0 ) ( 43.6 ) Internal use software ( 151.8 ) ( 118.5 ) ( 869.4 ) ( 680.2 ) Intangible assets other than goodwill, net $ 425.7 $ 562.2 The Company has included amortization of acquired intangible assets directly attributable to revenue-generating activities in cost of revenue. The Company has included amortization of acquired intangible assets not directly attributable to revenue-generating activities in operating expenses. During the years ended December 31, 2025, 2024 and 2023, the Company recorded amortization expense in the amounts of $ 188.0 million, $ 119.2 million and $ 112.3 million, respectively. There was $ 1.4 million of impairment to intangible assets in the year ended December 31, 2025. 112 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 impairmen t 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. As of December 31, 2025, the total expected future amortization related to intangible assets was as follows (in millions): 2026 $ 133.5 2027 84.7 2028 67.2 2029 52.2 2030 47.2 Thereafter 40.9 Total $ 425.7 NOTE 9. OTHER NON-CURRENT ASSETS Other non-current assets at December 31, 2025 and 2024 are as follows (in millions): December 31, 2025 2024 Long-term tax assets $ 107.5 $ 153.1 Deposits 4.3 4.1 Unrecognized gain on interest rate swaps — 9.8 Other 4.0 — Total other non-current assets $ 115.8 $ 167.0 NOTE 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities at December 31, 2025 and 2024 are as follows (in millions): December 31, 2025 2024 Employees and related expenses $ 142.3 $ 153.7 Accrued expenses 113.9 113.3 Media buy 57.2 47.9 Dividend payable 37.7 37.3 Deferred revenues 28.8 36.4 Tax accruals 15.1 49.4 Total accrued expenses and other current liabilities $ 395.0 $ 438.0 113 NOTE 11. OTHER LONG-TERM LIABILITIES Other long-term liabilities at December 31, 2025 and 2024 are as follows (in millions): December 31, 2025 2024 Long-term tax reserves $ 378.9 $ 369.9 Unrecognized loss on interest rate swaps 1.5 — Other 0.4 2.3 Total other long-term liabilities $ 380.8 $ 372.2 NOTE 12. LEASES 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. Certain lease agreements include rental payments that are adjusted periodically for the consumer price index ("CPI"). The Company’s ROU assets and lease liabilities were calculated using the initial CPI and will not be subsequently adjusted. Any increases or decreases in lease payments resulting from subsequent changes in the CPI are expensed as incurred. 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: December 31, 2025 December 31, 2024 Weighted average remaining lease term (years) 6.8 6.3 Weighted average discount rates 4.7 % 4.5 % Total operating lease expense was $ 27.8 million, $ 23.9 million and $ 23.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $ 28.1 million, $ 24.6 million and $ 18.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company recognized $ 1.0 million, $ 0.6 million and $ 0.1 million of income in December 31, 2025, 2024 and 2023 respectively, related to the subleases for office space with a weighted average remaining lease term of 3.1 years. Maturities of lease liabilities are as follows (in millions): 2026 $ 33.0 2027 27.8 2028 22.0 2029 21.3 2030 17.9 Thereafter 43.3 Total undiscounted cash flows 165.3 Less: imputed interest ( 22.4 ) Present value of lease liabilities $ 142.9 114 NOTE 13. DEBT December 31, 2025 December 31, 2024 (in millions, except interest rates) Maturity Interest rate Book value Face value Book value Term Loan 2028 6.780 % $ 1,793.2 $ 1,809.8 $ 1,805.4 Senior Notes 2029 4.250 % 595.9 600.0 594.7 Revolving Credit Facility 2027 n/a — — — Total debt 2,389.1 2,409.8 2,400.1 Less: Current portion of long-term debt ( 11.1 ) ( 19.0 ) ( 11.6 ) Long-term debt $ 2,378.0 $ 2,390.8 $ 2,388.5 Book value of debt in the table above is reported net of deferred issuance costs and original issue discount of $ 20.7 million and $ 28.7 million at December 31, 2025 and 2024, respectively. Credit Agreement 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 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 January 15, 2021, the Company increased the borrowing capacity of the Revolving Credit Facility from $ 350 million to $ 550 million. On March 11, 2021, the Company amended the Credit Agreement pursuant to an Incremental Assumption Agreement No. 3 and Second Amendment to Credit Agreement (the “Second Amendment”). The Second Amendment, among other things, effected a refinancing of the Old Term Loan with a new $ 1.9 billion senior secured first lien term loan borrowed under the Credit Agreement (the “New Term Loan”), increased the Revolving Credit Facility to $ 600 million and extended the maturity of the Revolving Credit Facility to March 11, 2026. The New Term Loan matures on March 11, 2028 and requires scheduled quarterly principal payments in amounts equal to 0.25 % of the original aggregate principal amount of the New Term Loan, with the balance due at maturity. On April 23, 2025, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement which, among other things, (a) amended the Pricing Grid (as defined in the Credit Agreement) for the Company’s revolving credit facility under the Credit Agreement (the “Revolving Credit Facility”), and (b) decreased the aggregate principal amount of the Revolving Credit Facility from $ 600 million to $ 550 million . The Fourth Amendment was also intended to extend the maturity of the Revolving Credit Facility to September 11, 2027, subject to the Credit Agreement being filed and registered with the National Development and Reform Commission of the People’s Republic of China (the “NDRC”) unless the NDRC states in writing that such registration is not required. This filing requirement with the NDRC is required of the Company’s controlling shareholder due to the fact that the controlling shareholder is controlled by a citizen of the People’s Republic of China. On December 9, 2025, the Company’s controlling shareholder elected to withdraw its filing of the Credit Agreement with the NDRC and, as a result, the maturity of the Revolving Credit Facility was not extended under the Fourth Amendment. On February 16, 2026, the Company entered into an Incremental Assumption Agreement No. 4 and Fifth Amendment (the “Fifth Amendment”) to the Credit Agreement which, among other things, will effect a refinancing of the Company’s existing $ 550 million revolving credit facility under the Credit Agreement (the “New Revolving Credit Facility”) on March 11, 2026 subject to the satisfaction of certain conditions set forth therein. The New Revolving Credit Facility will mature on March 6, 115 2027. Other than the revised maturity date, the New Revolving Credit Facility retains the same material terms as the Company’s existing revolving credit facility immediately prior to the effectiveness of the Fifth Amendment. The Credit Agreement allows the Company to request one or more incremental term loan facilities, incremental revolving credit facilities and/or increases to the New Term Loan or the Revolving Credit Facility in an aggregate amount of up to the sum of (x) the greater of (1) $ 800 million and (2) 1.00 times EBITDA (as defined in the Credit Agreement) plus (y) the amount of certain voluntary prepayments of indebtedness plus (z) such additional amount so long as, (i) in the case of loans under additional credit facilities that are secured by liens on the collateral securing the Credit Agreement, the Company's net total secured leverage ratio on a pro forma basis would not exceed 3.50 to 1.00 (or in the case of incremental facilities to fund certain investments and acquisitions, the net total secured leverage ratio immediately prior to such incurrence) and (iii) in the case of any other loans under additional credit facilities, the Company's fixed charge coverage ratio on a pro forma basis would not be less than 2.00 to 1.00 (or in the case of incremental facilities to fund certain investments and acquisitions, the fixed charge coverage ratio immediately prior to such incurrence), in each case, subject to certain conditions and receipt of commitments by existing or additional financial institutions or institutional lenders. All future borrowings under the Credit Agreement are subject to the satisfaction of customary conditions, including the absence of a default and the accuracy of representations and warranties, subject to certain exceptions. Interest and Fees Pursuant to the terms of the Fourth Amendment in 2025, borrowings under the Revolving Credit Facility bear interest at a rate equal to, at the Company’s option, either (a) a forward-looking term rate based on the secured overnight financing rate for the applicable interest period (“Term SOFR”), subject to a floor of 0.00 % or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50 % , (ii) the prime rate as determined by the administrative agent and (iii) the one-month Term SOFR plus 1.00 % per annum, in each case plus an applicable margin. Such applicable margin with respect to the Revolving Credit Facility is 3.00 % per annum in the case of any Term SOFR loan and 2.00 % per annum in the case of any base rate loan, subject to three 0.25 % step-downs based on the Company’s first lien net leverage ratio. 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 unused commitments of such lender, subject to two 0.125 % step-downs based on the Company’s first lien net 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. On June 19, 2023, the Company amended the Credit Agreement pursuant to a Third Amendment to Credit Agreement (the “Third Amendment”). The Third Amendment amended the Credit Agreement to bear interest or incur fees and other amounts denominated in Dollars to be based on the Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus an applicable spread adjustment, rather than the previously permitted Adjusted Eurocurrency Rate, starting in the third quarter of 2023. The amendment did not have an impact on the Company’s consolidated financial statements or the effectiveness of the Company’s interest rate swap agreements. In addition, on a quarterly basis, the Company is required to pay each lender under the Revolving Credit Facility a commitment fee in respect of any unused commitments under the Revolving Credit Facility in the amount of 0.50 % of the principal amount of the daily unused commitments of such lender, subject to step-downs to 0.375 % and 0.25 % based upon the Company's senior secured leverage ratio. The Company is also required to pay customary agency fees as well as letter of credit participation fees on outstanding letters of credit. The Credit Agreement permits voluntary prepayments and requires mandatory prepayments in certain events including among others, 50 % (subject to step-downs to 25 % and 0 % based upon the Company’s net total secured leverage ratio) of the Company’s excess cash flow to the extent such amount exceeds $ 10 million, certain net cash proceeds from non-ordinary asset sale transactions (subject to reinvestment rights), and 100 % of net proceeds of any issuance of debt (except for debt permitted to be incurred by the Credit Agreement). The Company is not required to make an excess cash flow payment based upon its secured leverage ratio for 2025. 116 Collateral and Guarantors The borrowings under the Credit Agreement are guaranteed by certain material, wholly-owned restricted subsidiaries of the Company, and are secured by a pledge of substantially all of the existing and future property and assets of the Company and the guarantors (subject to exceptions), including a pledge of the capital stock of the domestic subsidiaries held by the Company and the domestic guarantors and 65 % (or 100 % in the case of certain of the guarantors) of the capital stock of the first-tier foreign subsidiaries held by the Company and the domestic guarantors, in each case subject to exceptions. The Credit Agreement requires that the Company and the guarantors (a) generate at least 80.0 % of the EBITDA of the Company and its restricted subsidiaries for the four fiscal quarters most recently ended prior to the end of each fiscal quarter and (b) own all “Material Intellectual Property” (defined as any intellectual property rights consisting of registered trademarks or copyrights subsisting in the name or logo of any game that generates more than 5 % of the EBITDA of the Company and its restricted subsidiaries for the then most recently ended four fiscal quarters) on the last day of the four fiscal quarters most recently ended prior to the end of each fiscal quarter. If the Company and the guarantors do not satisfy such requirement, then the Company must cause sufficient additional subsidiaries (which, subject to certain limitations, may include guarantors located in jurisdictions other than the United States, England and Wales and the State of Israel) to become guarantors in order to satisfy such requirement. During the year ended December 31, 2021, the Company voluntarily designated certain subsidiaries in Germany, Austria and Finland as additional guarantors. As of December 31, 2025, the Company was in compliance with these requirements. Restrictive Covenants The Revolving Credit Facility includes a maximum first-priority net senior secured leverage ratio financial maintenance covenant of 6.25 to 1.00, calculated as total first lien senior secured net debt divided by Adjusted EBITDA. At December 31, 2025, the Company’s first-priority net senior secured leverage ratio was 1.31 to 1.00 based upon Adjusted EBITDA of $ 753.2 million and net debt (as defined in the Credit Agreement) of $ 989.6 million. In addition, the Credit Agreement includes negative covenants, subject to certain exceptions, restricting or limiting the Company's ability and the ability of its restricted subsidiaries to, among other things: (i) make non-ordinary course dispositions of assets; (ii) make certain mergers and acquisitions; (iii) complete dividends and stock repurchases and optional redemptions (and optional prepayments) of subordinated debt; (iv) incur indebtedness; (v) make certain loans and investments; (vi) incur liens and certain fixed charges; (vii) transact with affiliates; (viii) change the business of the Company and its restricted subsidiaries; (ix) enter into sale/leaseback transactions; (x) allow limitations on negative pledges and the ability of restricted subsidiaries to pay dividends or make distributions; (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. The Company was in compliance with its financial and other covenants under the Credit Agreement as of December 31, 2025. Offering of 4.250 % Senior Notes due 2029 Indenture On March 11, 2021, the Company issued $ 600.0 million aggregate principal amount of its 4.250 % senior notes due 2029 (the “Notes”) under an indenture, dated March 11, 2021 (the “Indenture”), among the Company, the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee (the “Trustee”). Maturity and Interest The Notes mature on March 15, 2029. Interest on the Notes will accrue at a rate of 4.250 % per annum. Interest on the Notes is payable semi-annually in cash in arrears on March 15 and September 15 of each year. 117 Guarantees 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”). Ranking The Notes and the note guarantees rank equally in right of payment to all of the Company’s and the subsidiary guarantors’ existing and future senior indebtedness and senior in right of payment to all of the Company’s and the subsidiary guarantors’ future subordinated indebtedness. The Notes and the note guarantees are effectively subordinated to any of the Company’s and the subsidiary guarantors’ existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness, including indebtedness outstanding under the Credit Agreement. In addition, the Notes and the note guarantees are structurally subordinated to the existing and future liabilities of the Company’s non-guarantor subsidiaries. Redemption 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) 101.063 % of the principal amount thereof, should such redemption occur before March 15, 2026, and (ii) 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. Covenants 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. Change of Control In the event of a change of control, the Company must offer to repurchase the Notes at a repurchase price equal to 101 % of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. Events of Default Events of default under the Indenture include, among others, the following with respect to the Notes: default which continues for 30 days in the payment of interest on the Notes; default in payment of the principal of, or premium, if any, on the Notes; failure to comply with certain covenants in the Indenture for 60 days (or 120 days with respect to the covenant relating to the provision of financial reports) upon the receipt of notice from the Trustee or holders of at least 25 % in aggregate principal amount of the Notes; acceleration or payment default of indebtedness of the Company or certain of its subsidiaries in excess of a specified amount that remains uncured following the applicable grace period provided in such indebtedness; final judgments against the Company or certain of its subsidiaries in excess of a specified amount that remains unpaid for 45 days; and certain events of bankruptcy or insolvency with respect to the Company or certain of its subsidiaries. In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or certain of its subsidiaries, all Notes then outstanding will become due and payable immediately without further action or notice. If any other event of default occurs with respect to the Notes, the Trustee or holders of at least 25 % in aggregate principal amount of the Notes may declare all Notes then outstanding to be due and payable immediately. 118 Scheduled principal payments of long-term debt The scheduled principal payments due on long-term debt are as follows (in millions): 2026 $ 19.0 2027 19.0 2028 1,771.8 2029 600.0 Total $ 2,409.8 NOTE 14. EQUITY TRANSACTIONS AND STOCK INCENTIVE PLAN Common stock The following are the rights and privileges of the Company’s common shares: Dividends - The holders of outstanding shares of the Company’s common stock are entitled to receive dividends out of funds legally available at the times and in the amounts which its board of directors may determine. Voting rights – Holders of the Company’s common shares are entitled to one vote per share. Liquidation – Upon the Company’s liquidation, dissolution or winding-up, the assets legally available for distribution to the Company’s stockholders would be distributable ratably among the holders of the Company’s common shares. Preemptive or similar rights – None of the Company’s common shares is entitled to preemptive rights or subject to redemption. Overview of Stock Incentive Plan On May 26, 2020, the Board of Directors of the Company approved the Playtika Holding Corp. 2020 Incentive Award Plan (the “Plan”). 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, 2025, a total of 75.6 million shares of the Company’s common stock had been allocated to awards granted under the Plan and 8.4 million shares remained available for future grants. If, on January 1st of each year through January 2030, the number of shares available for grant is less than 3.5 % of the total shares of the Company’s outstanding common stock, then the number of shares available for grant will increase to an amount equal to the lesser of (i) 3.5 % of the total shares of the Company’s outstanding common stock or (ii) such number of shares determined by the Board of Directors. On January 1, 2026, 2025 and 2024, the number of shares of issuance under the Plan increased by 4.6 million, 12.2 million and 7.2 million, respectively. Option Repricing On February 7, 2022, the Compensation Committee of the Board of Directors of the Company approved an amendment to 5,303,242 options granted in 2021 that were scheduled to vest after the first anniversary of the grant date (the “Adjusted Portion”). The Adjusted Portion was amended to reduce the per share exercise prices of such Adjusted Portion to $ 18.71 . The Company accounted for the repricing as a modification and is recording incremental compensation expense of approximately $ 8.8 million from the time of the repricing through the remaining vesting period. There were no awards included in this repricing to any named executive officers or other executives defined as insiders according to Section 16 of the Securities Exchange Act of 1934. 119 Tender Offer On August 29, 2022, the Company announced a tender offer for the purchase of up to 51,813,472 shares of its issued and outstanding common stock, par value $ 0.01 per share (each, a “Share” and collectively, “Shares”) or such lesser number of Shares as are properly tendered and not properly withdrawn, at a price of $ 11.58 per Share (the "Tender Offer"). On October 10, 2022, the Company announced that it accepted for purchase 51,813,472 Shares for an aggregate cost of $ 600 million, excluding fees and expense related to the Tender Offer. The number of shares that the Company has accepted for purchase in the Tender Offer represented approximately 12.6 % of the total number of shares that were outstanding as of September 30, 2022. The Company’s shares outstanding and treasury stock are presented, and both basic and diluted earnings per share have been calculated, as if the entire 51,813,472 shares accepted in the Tender Offer were purchased on the closing date of the Tender Offer. Cash Dividend On April 4, July 7 and October 10, 2025, in accordance with approval by the Board of Directors of the Company (“the Board”), the Company paid cash dividends of $ 0.10 per share 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 9, 2026 to stockholders of record as of the close of business on December 26, 2025. The dividend payable amount of $ 37.7 million is recorded in accrued expenses and other current liabilities at December 31, 2025. 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. 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, 2025, the Company repurchased approximately 4.4 million shares of its common stock at an average cost of $ 4.61 per share. As of December 31, 2025, $ 129.0 million remains available under the Company’s stock repurchase program. Stock options The following table summarizes the Company’s stock option activity: Stock Weighted Weighted Options Average Average Intrinsic Outstanding Remaining Exercise Value (in millions) Term (in years) Price (in millions) Outstanding at January 1, 2025 1.3 6.7 $ 17.42 $ — Granted — $ — Exercised — $ — Forfeited ( 0.2 ) $ 18.61 Expired — $ — Outstanding at December 31, 2025 1.1 5.7 $ 17.16 $ — Exercisable at December 31, 2025 1.0 5.6 $ 17.65 $ — There were no stock options exercised during the years ended December 31, 2025, 2024 or 2023. There were no stock options granted during the years ended December 31, 2025 and 2024. The Company will issue new shares of common stock upon exercise of stock options. 120 For options, 25 % of the options generally vest on the first anniversary of the grant date, and the remaining 75 % of the options vest in equal quarterly installments during the three years following the first anniversary of the grant date. The stock options have a contractual term of ten years . Except as provided in an option agreement between the Company and the employee, if an employee is terminated (voluntarily or involuntarily), any unvested awards as of the date of termination will be forfeited. RSUs The following table summarizes the Company’s RSU activity: Weighted Total Fair Average Value of Shares Grant Date Shares Vested (in millions) Fair Value (in millions) Outstanding at January 1, 2023 14.9 $ 18.69 Granted 13.8 $ 8.81 Vested ( 6.4 ) $ 19.00 $ 61.6 Forfeited ( 1.0 ) $ 17.67 Outstanding at December 31, 2023 21.3 $ 12.24 Granted 7.4 $ 6.36 Vested ( 5.7 ) $ 16.98 $ 42.2 Forfeited ( 3.4 ) $ 11.75 Outstanding at December 31, 2024 19.6 $ 8.70 Granted 8.4 $ 3.68 Vested ( 6.6 ) $ 10.08 $ 29.8 Forfeited ( 3.0 ) $ 8.54 Outstanding at December 31, 2025 18.4 $ 5.94 The table below summarizes the assumptions used for the RSUs granted in the years ended December 31, 2025 and 2024: Year ended December 31, 2025 2024 Risk-free interest rate 3.52 % - 4.22 % 3.67 % - 4.57 % Expected dividend yield 5.42 % - 10.58 % 4.87 % - 5.67 % Expected term in years 2.3 - 3.1 2.3 - 3.6 RSUs generally vest over three to four years from the grant date with a portion vesting on the first anniversary of the grant date and the remaining vesting in quarterly installments. RSUs granted to the Board of Directors of the Company vest immediately. 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. PSUs 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. 121 If the Company’s annual revenue growth rate for a performance period is between two achievement levels, the achievement percentage will be determined by linear interpolation between the applicable achievement levels. 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. On November 12, 2025, the Compensation Committee of the Board of Directors of the Company approved AGR PSU grants to certain employees pursuant to the Plan (the “2025 PSUs”). For each annual performance period consisting of calendar years 2026 through 2028, up to one-third of the 2025 PSUs will be eligible to vest based on the performance criteria above. 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. 122 The following table summarizes the Company’s PSU activity: Weighted Total Fair Average Value of Shares (1) Grant Date Shares Vested (in millions) Fair Value (in millions) Outstanding at January 1, 2023 3.2 $ 9.72 Granted — $ — Vested ( 0.4 ) $ 9.72 $ 4.2 Forfeited ( 0.6 ) $ 9.72 Outstanding at December 31, 2023 2.2 $ 9.72 Granted 9.8 $ 4.86 Vested * $ 9.72 * Forfeited ( 1.1 ) $ 9.72 Outstanding at December 31, 2024 10.9 $ 5.33 Granted 0.5 $ 3.50 Vested * $ 9.72 * Forfeited ( 0.6 ) $ 9.72 Outstanding at December 31, 2025 10.8 $ 5.02 __________ (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. * Represents an amount less than 0.1 or $ 0.1 The table below summarizes the assumptions used for the PSUs granted in the years ended December 31, 2025 and 2024: Year ended December 31, 2025 2024 Risk-free interest rate 3.52 % - 3.62 % 4.25 % - 4.31 % Expected dividend yield 9.48 % 5.62 % Expected term in years 1.0 - 3.0 1.0 - 3.0 As of December 31, 2025, the Company believed it probable that the 2026, 2027 and 2028 performance targets of the 2024 PSUs and 2025 PSUs, as outlined in the amended award agreements, would achieve 50 % achievement of their respective performance criteria, as defined. Therefore, 50 % 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 19, 2026, the Compensation Committee of the Board of Directors of the Company ratified the Company’s Adjusted EBITDA, AGR and TSR performance for 2025 and approved the vesting of 100 % of the Adjusted EBITDA PSU and AGR PSU awards eligible to vest for the 2025 performance period. 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. 123 Stock-based compensation The following table summarizes stock-based compensation costs by award type (in millions): Year ended December 31, 2025 2024 2023 Stock options $ 0.9 $ 3.2 $ 3.4 RSUs 58.8 97.8 106.7 PSUs 23.8 0.2 2.9 Total stock-based compensation costs $ 83.5 $ 101.2 $ 113.0 The following table summarizes stock-based compensation costs, net of amounts capitalized, as reported on the Company’s consolidated statements of comprehensive income (in millions): Year ended December 31, 2025 2024 2023 Research and development expenses $ 16.8 $ 30.1 $ 37.4 Sales and marketing expenses 3.5 6.5 9.1 General and administrative expenses 62.2 62.6 63.5 Total stock-based compensation costs, net of amounts capitalized $ 82.5 $ 99.2 $ 110.0 During the years ended December 31, 2025, 2024 and 2023, the Company capitalized $ 1.0 million, $ 2.0 million and $ 3.0 million of stock-based compensation cost, respectively. As of December 31, 2025, the Company’s unrecognized stock-based compensation expenses related to stock options, RSUs and PSUs was approximately $ 0.3 million, $ 103.0 million and $ 20.1 million, respectively. The expense related to stock options, RSUs and PSUs are expected to be recognized over a weighted average period of 0.9 years, 2.6 years and 1.8 years, respectively. NOTE 15. DERIVATIVE INSTRUMENTS Interest rate swap agreements In March 2021, 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 as the counterparty to reduce the Company’s counterparty risk. 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 January 2023, the Company entered into two additional interest rate swap agreements, each with a notional value of $ 250 million. Each of these swap agreements is with a different financial institution, and each swap requires the Company to pay a fixed interest rate of 3.435 % in exchange for receiving one-month LIBOR for six months and one-month Term SOFR afterwards. The interest rate swap agreements settle monthly commencing in February 2023 through their termination dates on February 28, 2028. The estimated fair value of the Company’s interest rate swap agreements is derived from a discounted cash flow analysis. The aggregate fair value of the Company’s interest rate swap agreements was a net asset of $ 2.8 million as of December 31, 2025 and an asset of $ 29.2 million as of December 31, 2024 and was recorded in the accompanying consolidated balance 124 sheets based upon the timing of the underlying expected cash flows in amounts detailed in Note 16, Fair Value Measurements . Foreign currency hedge agreements At December 31, 2025, 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 and certain operating expenses the Company had hedged was approximately $ 206.6 million, and all contracts are expected to mature during the upcoming 12 months. The aggregate fair value of the Company’s derivative contracts was a net asset of $ 12.8 million as of December 31, 2025 and a net liability of $ 2.2 million as of December 31, 2024 and was recorded in the accompanying consolidated balance sheets in amounts detailed in Note 16, Fair Value Measurements . The following table summarizes the volume of derivative instrument activity (in millions): Year ended December 31, 2025 2024 2023 Derivative instruments - foreign currency derivative contracts $ 225.9 $ 198.4 $ 302.3 Derivative instruments - interest rate swaps — — 500.0 Derivative instruments - others (non-hedging) — — 1.6 NOTE 16. FAIR VALUE MEASUREMENTS The Company’s assessment of goodwill and other intangible assets for impairment includes an assessment using various Level 2 (discount rate) and Level 3 (forecasted cash flows) inputs. The following table summarizes the fair value measurement of the Company’s long-term debt (in millions): December 31, 2025 Face Value Fair Value Fair Value Hierarchy Term Loan $ 1,809.8 $ 1,746.5 Level 2 Senior Notes 600.0 539.3 Level 2 Total debt $ 2,409.8 $ 2,285.8 December 31, 2024 Face Value Fair Value Fair Value Hierarchy Term Loan $ 1,828.8 $ 1,831.1 Level 2 Senior Notes 600.0 541.5 Level 2 Total debt $ 2,428.8 $ 2,372.6 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. 125 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): Fair Value at Pricing Category December 31, 2025 December 31, 2024 Cash equivalents Money market funds Level 1 $ 291.3 $ 331.4 Term deposits Level 2 198.5 93.1 Commercial papers Level 2 39.8 10.0 Short-term investments Term deposits Level 1 $ 71.8 $ — Commercial papers Level 2 64.2 — Prepaid expenses and other current assets Derivative instruments - interest rate swaps Level 2 $ 4.9 $ 19.4 Derivative instruments - foreign currency derivative contracts Level 2 12.9 1.1 Other non-current assets: Derivative instruments - interest rate swaps Level 2 $ — $ 9.8 Accrued expenses and other current liabilities: Derivative instruments - interest rate swaps Level 2 $ 0.6 $ — Derivative instruments - foreign currency derivative contracts Level 2 * 3.3 Other long-term liabilities Derivative instruments - interest rate swaps Level 2 $ 1.5 $ — __________ * Represents an amount less than 0.1 or 0.1 The carrying value of accounts receivable, accounts payables, restricted cash, and the majority of cash equivalents approximates fair value due to the short time to expected payment or receipt of cash. The Company classifies its short-term investments, derivative financial instruments and some cash equivalents within Level 2 because they are valued using inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded. 126 The change in fair value of contingent consideration payable was valued using significant unobservable inputs (Level 3), was included in the general and administrative expenses in the Company’s consolidated statements of comprehensive income and consisted of the following (in millions): Balance as of January 1, 2024 $ 66.8 Recorded in connection with SuperPlay acquisition 350.0 Payment of contingent consideration ( 26.7 ) Fair value adjustments based upon post-acquisition performance ( 9.8 ) Reclassification to accrued expenses ( 0.7 ) Balance as of December 31, 2024 (1) 379.6 Payment of contingent consideration ( 44.2 ) Fair value adjustments based upon post-acquisition performance 398.6 Balance as of December 31, 2025 (2) $ 734.0 _______ (1) Amount comprised of $ 354.6 million and $ 25.0 million for SuperPlay and InnPlay acquisitions, respectively. (2) Amount comprised of $ 734.0 million for SuperPlay acquisition. The Company estimated the fair value of its contingent consideration liabilities using a Monte Carlo simulation to model components of cash flow analyses. The significant assumptions used in the SuperPlay model as of December 31, 2025 include revenue volatility of 20 %, discount rate of 12.3 % and a risk free rate of 4.8 %. 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 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 under ASC 825 for any financial assets or liabilities. NOTE 17. COMMITMENTS AND CONTINGENCIES On April 10, 2023, Playtika Holding UK II Limited, the Company’s controlling shareholder, and certain officers of the Company were sued (Kormos v Playtika Holding UK II Limited, et al.) in the Delaware Chancery Court. The lawsuit alleges generally that the defendants breached fiduciary duties owed to the Company and its stockholders with respect to the controlling shareholder’s indication of an interest in selling some or all of its shares, and the resulting strategic review process and self-tender offer. On August 18, 2023, defendants filed with the Court motions to dismiss the claims. A hearing on the motions to dismiss was held on November 21, 2023. On January 18, 2024, the court denied Playtika Holding UK II Limited’s motion to dismiss in an oral ruling. The court issued a written opinion on May 3, 2024 granting the motion to dismiss the claims against the Company’s officers. The plaintiffs and the remaining defendant agreed to a settlement agreement and submitted the settlement agreement to the Court for approval on October 8, 2025. The Court approved the settlement agreement on January 21, 2026. The terms of the settlement do not involve any financial obligation of the Company and are not expected to have any financial impact to the Company’s financial statements as a whole. On November 13, 2023, plaintiff Gina Burt filed a lawsuit against the Company and its subsidiary, Playtika Ltd., in the Circuit Court of Coffee County, Tennessee, alleging that the Company’s social casino-themed games are unlawful gambling under Tennessee law. The lawsuit seeks to recover all amounts paid by Tennessee residents to the Company in connection with its games during the period beginning one year before the filing of the lawsuit until the case is resolved but excluding any residents who spent $ 75,000 or more during such time period. The plaintiff filed an amended complaint on August 28, 2025. The Company removed the case to federal court on September 29, 2025. In response to a joint motion of the parties, on January 28, 2026, the court entered an order compelling arbitration of plaintiff’s claims. 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 127 under Alabama law. The lawsuit seeks to recover all amounts paid by Alabama residents to the Company in connection with its games during the period beginning one year before the filing of the lawsuit until the case is resolved. After the Company removed the case to the U.S. District Court for the Northern District of Alabama, plaintiff dismissed the complaint and filed a very similar new complaint in the Circuit Court of Franklin County, Alabama on August 25, 2023. The new complaint asserted the same cause of action and bases for relief, but limited the requested recovery to the amounts paid to the Company in connection with its games only by those Alabama residents who spent less than $ 75,000 during the one year before the filing of the lawsuit until the case is resolved. The court ordered arbitration and stayed the case on August 20, 2025. The parties held a preliminary arbitration conference call on December 5, 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 June 6, 2025, plaintiff Stuart Mills filed a putative class action lawsuit against the Company and its subsidiary, Playtika Ltd., on behalf of all Alabama-based players of the Company’s games in the Circuit Court of Franklin County, Alabama. The suit, like the suit brought by Gayla Hamilton Mills, alleges 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. The suit was filed by the same counsel who represent Gayla Hamilton Mills. The Company removed the case to the U.S. District Court for the Northern District of Alabama on July 11, 2025. Plaintiff’s motion to remand to state court was filed on August 11, 2025. The court denied the motion to remand and compelled the parties to arbitration on January 20, 2026. Plaintiff filed a petition seeking permission for interlocutory review by the Eleventh Circuit U.S. Court of Appeals of the denial of his motion to remand on January 30, 2026. The Company filed its response to the petition on February 9, 2026. 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 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 to which plaintiff is entitled to. The Company filed a motion to compel arbitration on July 11, 2025. Plaintiff filed an opposition to the renewed motion on July 25, 2025 and the Company filed its reply on August 8, 2025. The motion remains pending. In addition, on November 21, 2025, the court on its own initiative ordered both parties to submit briefs addressing whether plaintiff possesses Article III (constitutional) standing for purposes of jurisdiction in federal court. The parties submitted simultaneous briefs on December 22, 2025, in response to that order. 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 October 27, 2025, plaintiff Andrew Wright filed a putative class action lawsuit against the Company and its subsidiary, Playtika Ltd., in the U.S. District Court for the District of Utah, alleging that the Company’s social casino-themed games are unlawful gambling under Utah law. The lawsuit seeks to recover twice the amount of economic losses suffered by Utah residents to the Company in connection with its social casino-themed games plus interest and attorneys’ fees. The Company filed a motion to compel arbitration on February 17, 2026. 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 October 29, 2025, plaintiff William Barbarino filed a putative class action lawsuit against the Company and its subsidiary, Playtika Ltd., in the U.S. District Court for the District of New Jersey, alleging that the Company’s social casino-themed games are unlawful gambling under federal and New Jersey law. The lawsuit seeks to recover up to three times the amount of economic losses suffered by New Jersey residents to the Company in connection with its social casino-themed games plus interest, attorneys’ fees and other relief the plaintiff and the putative class may be entitled to. The parties filed a joint stipulation and proposed order submitting the claims to arbitration, staying the case and preserving the parties’ positions on January 27, 2026. 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. 128 On June 24, 2025, we received a letter from the Attorney General of the State of Washington alleging that our social casino-themed and bingo-themed games violate state gambling and consumer protection laws, and requesting that we pay certain monetary penalties and prevent those games from being available to play in the state in the future. The Attorney General initiated a lawsuit in King County Superior Court in the State of Washington on February 3, 2026, against the Company and several of its subsidiaries asserting those same allegations. The Attorney General is seeking injunctive and declaratory relief, recovery of monies spent by Washington players in the games, civil statutory penalties, costs and fees, and other relief. 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 July 8, 2025, the Company received pre-arbitration notices from another law firm purporting to represent 3,860 claimants who have played the Company’s games and intend to file arbitration demands alleging that the Company’s social casino-themed games violate state laws against gambling and that the games use false, deceptive and misleading practices. The notice demands the payment of the greater of $ 5,000 or the actual amount of in-game losses for the claimants, plus punitive and other damages and attorneys’ fees as well as the cessation of the alleged unlawful conduct. On August 5, 2025, we were notified that the law firm was continuing to solicit claimants and that they now represented 4,688 claimants. On November 4, 2025, the law firm filed arbitration demands on behalf of 1,642 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 February 10, 2026, the Company received pre-arbitration notices from another law firm purporting to represent 3,061 claimants who have played the Company’s games and intend to file arbitration demands alleging that the Company’s games violate state laws against gambling, that the games use unfair and deceptive practices and that the Company has been unjustly enriched. The notice demands the full restitution of all amounts expended by the claimants, restitution and disgorgement, interest, and other damages and attorneys’ fees. 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 December 8, 2025, Toni Morrow filed a putative class action complaint in the United States District Court for the Western District of Washington against SuperPlay Ltd., relating to the game Dice Dreams . The complaint alleges, among other things, that the game constitutes unlawful gambling under Washington law and includes unfair and deceptive practices in connection with in-game purchase offers and purported “sales”, and seeks, inter alia, injunctive relief and restitution. The matter is in its preliminary stages. Accordingly, 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 this matter vigorously. On December 10, 2025, Maor Ben Shoshan filed a Motion for Certification of a class action lawsuit in the District Court in Central Lod, Israel, against Playtika Group Israel Ltd. (“PGI”), alleging misleading price presentation in connection with in-app purchases offered to Israeli users in U.S. dollars in several Playtika games, including Slotomania, House of Fun, Caesars Slots , and others, resulting in higher final charges due to undisclosed foreign currency conversion rates and related fees. The lawsuit seeks NIS 18,357 in personal damages to the petitioner and approximately NIS 28 million in damages to the tentative class or approximately USD $ 8.8 million, using the exchange rate of NIS 3.19 : USD $1.00, which was the exchange rate in effect on December 31, 2025. A pre-trial hearing on the motion is scheduled for September 9, 2026, and PGI is required to submit its response to the motion within 90 days. 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. On January 5, 2026, Daniela Beninati filed a putative class action in the Federal Court of Australia (Victoria Registry) against the Company, alleging that certain of our social casino-themed games constitute unlawful interactive gambling services under the Australian Interactive Gambling Act 2001 (Cth), and that the Company engaged in misleading or deceptive conduct and unconscionable conduct in violation of the Australian Consumer Law in connection with the marketing and monetization of such games. The complaint seeks, inter alia, declaratory and injunctive relief, restitution of amounts paid for in-game virtual currency by Australian-based users, damages, interest and costs. The matter is in its preliminary stages. Accordingly, 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 this matter vigorously. 129 On March 26, 2024, the Tel Aviv 3 Tax Office (the “ITA”) issued an assessment order (the “2017 Assessment Order”) to Playtika Ltd. for tax year 2017 alleging that Playtika Ltd. should have applied a higher tax rate to certain income and denying certain tax credits. The 2017 Assessment Order claimed that, as of March 26, 2024, Playtika Ltd. was obliged to pay additional taxes (including interest and CPI linkage) for tax year 2017 in the amount of approximately NIS 72.9 million. On April 14, 2024, Playtika Ltd. filed a notice of appeal in the Tel Aviv District Court challenging the 2017 Assessment Order. On May 15, 2024, the ITA filed its statement of assessment grounds, and on December 1, 2024, Playtika Ltd. filed its statement of appeal grounds. On June 12, 2025, the ITA issued an assessment order (the “2018 Assessment Order”) for tax year 2018 in which it repeated similar arguments to those raised in the 2017 Assessment Order and also disallowed certain aircraft-related business expenses. The 2018 Assessment Order claimed that, as of June 12, 2025, Playtika Ltd. was obliged to pay additional taxes (including interest and CPI linkage) for tax year 2018 in the amount of approximately NIS 85.8 million. On June 26, 2025, Playtika Ltd. filed a notice of appeal and a case was opened in the Tel Aviv District Court. On July 14, 2025, the ITA filed its statement of assessment grounds, and on September 29, 2025, Playtika Ltd. filed its statement of appeal grounds. On December 14, 2025, the cases relating to the 2017 Assessment Order and 2018 Assessment Order were consolidated and a preliminary hearing occurred. At the preliminary hearing, the Court determined that, in light of the expected imminent issuance of assessment orders for additional years, the deadlines for filing affidavits and the evidentiary hearing date for witness examinations would be set after the arguments are filed in connection with the additional assessment orders for tax years 2019-2021. In this hearing, the ITA informed the Court that it was rescinding its claims disallowing the aircraft-related business expenses. On December 11, 2025, the ITA issued an assessment order (the “2019-2021 Assessment Order”) to Playtika Ltd. for tax years 2019-2021. In that order, the ITA repeated similar arguments to those raised in the 2017 Assessment Order and the 2018 Assessment Order and also denied foreign tax credits in the amount of approximately NIS 19 million for tax years 2019-2021. In addition, in the 2019-2021 Assessment Order, the ITA alleged that the interest rate set for intercompany loans Playtika Ltd. provided should have been higher under transfer pricing principles. The ITA also claimed a “secondary adjustment” in the form of interest on a deemed debt balance in favor of Playtika Ltd., due to the additional deemed income owed to Playtika Ltd. per the ITA’s claims. The 2019-2021 Assessment Order claimed that, as of December 11, 2025, Playtika Ltd. was obliged to pay additional taxes (including interest and CPI linkage) for tax years 2019-2021 in the amount of approximately NIS 312.9 million. On December 31, 2025, Playtika Ltd.filed a notice of appeal regarding the 2019-2021 Assessment Order and a case was opened in the Tel Aviv District Court. On January 28, 2026, the ITA filed its statement of assessment grounds. Playtika Ltd.’s current deadline for filing its appeal arguments is March 1, 2026 (subject to extensions). The total amount of the assessments under the 2017 Assessment Order, the 2018 Assessment Order and the 2019-2021 Assessment Order was approximately USD $ 148 million as of the respective dates of the assessment orders, using the exchange rate of NIS 3.19 : USD $1.00, which was the exchange rate in effect on December 31, 2025. This amount remains subject to continued accrual interest and linkage of the Israeli CPI until paid. The Company intends to pursue this case vigorously. See Note 22, Income Taxes , for additional information. NOTE 18. REVENUE FROM CONTRACTS WITH CUSTOMERS The following table provides information about disaggregated revenue by geographic location of the Company's players and type of platform (in millions): Year ended December 31, 2025 2024 2023 Geographic location USA $ 1,741.9 $ 1,700.6 $ 1,777.5 EMEA 647.0 495.9 431.9 APAC 204.0 176.8 180.9 Other 162.5 176.0 176.7 Total $ 2,755.4 $ 2,549.3 $ 2,567.0 130 Revenues through third-party platforms and through the Company’s own Direct-to-Consumer platforms were as follows (in millions): Year ended December 31, 2025 2024 2023 Revenues Third-party platforms $ 1,940.9 $ 1,855.1 $ 1,927.6 Direct-to-Consumer platforms 814.5 694.2 639.4 Total $ 2,755.4 $ 2,549.3 $ 2,567.0 Contract balances Payments from players for virtual items are collected by platform providers or payment processors and remitted to the Company (net of the platform or clearing fees) generally within 30 days after the player transaction. The Company’s right to receive the payments collected by the platform providers or payment processors is recorded as an accounts receivable as the right to receive payment is unconditional. Deferred revenues, which represent a contract liability, represent mostly unrecognized fees billed for virtual items which have not yet been consumed at the balance sheet date. Platform fees paid to platform providers or payment processors and associated with deferred revenues represent a contract asset. Balances of the Company’s contract assets and liabilities are as follows (in millions): December 31, 2025 2024 Accounts receivable $ 161.8 $ 187.6 Contract assets (1) 5.5 9.4 Contract liabilities (2) 28.8 36.4 _______ (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, 2025, the Company recognized $ 34.7 million of its contract liabilities balance that were outstanding as of December 31, 2024. Unsatisfied performance obligations Substantially all of the Company’s unsatisfied performance obligations relate to contracts with an original expected length of one year or less. NOTE 19. SEGMENT INFORMATION 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 131 expense (as disclosed in Note 21, 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): December 31, 2025 2024 Israel $ 90.7 $ 95.4 USA 57.0 58.4 Germany 33.4 5.9 Ukraine 22.6 15.4 Other 23.4 30.2 Total long-lived assets, net $ 227.1 $ 205.3 NOTE 20. APPRECIATION AND RETENTION PLANS In August 2019, the Board approved the 2021-2024 Retention Plan. Under the 2021-2024 Retention Plan, eligible employees may be granted retention awards 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 in each of the plan years, determined as follows: For 2021, (A) 14 % of the 2021-2024 Retention Plan Adjusted EBITDA for such calendar year, less (B) $ 25,000,000 . For 2022, (A) 14.5 % of the 2021-2024 Retention Plan Adjusted EBITDA for such calendar year, less (B) $ 25,000,000 . For each of 2023 and 2024, (A) 15.0 % of the 2021-2024 Retention Plan Adjusted EBITDA for such calendar year, less (B) $ 25,000,000 . Initial awards were granted under the 2021-2024 Retention Plan in August 2019, with subsequent awards to employees or consultants hired or retained after such date granted at the discretion of the administrator. In October 2020, 43,000 appreciation units held under the 2021-2024 Retention Plan were cancelled. Pursuant to an amendment to the 2021-2024 Retention Plan adopted in October 2020, these cancelled appreciation units are considered “retired units” for purposes of the plan, and will be deemed to be outstanding and eligible for payment solely for purposes of determining the per unit value to be paid to participants, but no amounts will be paid with respect to such retired units. Retention Plan Adjusted EBITDA represents Adjusted EBITDA further adjusted to reflect certain elements of cash-based compensation including retention unit awards and appreciation unit awards under the 2021-2024 Plan and retention awards to key individuals with acquired companies. The Company recognized compensation expenses in respect of retention bonus and appreciation unit awards under the 2021-2024 Plan of $ 92.5 million and $ 111.9 million during the years ended December 31, 2024 and 2023 respectively. No awards were granted or expense recognized during the year ended December 31, 2025 due to conclusion of the plan in 2024. The Company has also granted retention awards to key individuals associated with acquired companies as an incentive to retain those individuals on a long-term basis. The Company recognized compensation expenses associated with these development-related retention payments of $ 0.4 million and $ 0.3 million for the years ended December 31, 2024 and 2023, respectively. No compensation expense associated with these development-related retention payments was recognized during the year ended December 31, 2025. 132 NOTE 21. INTEREST AND OTHER, NET Interest and other, net for the years ended December 31, 2025, 2024 and 2023, are as follows (in millions): Year ended December 31, 2025 2024 2023 Interest expense $ 143.3 $ 155.2 $ 154.2 Interest income ( 25.3 ) ( 56.1 ) ( 43.9 ) Foreign currency translation differences, net 49.5 11.6 ( 1.3 ) Other 0.3 0.4 0.5 Total interest expense and other, net $ 167.8 $ 111.1 $ 109.5 NOTE 22. INCOME TAXES Deferred tax assets and liabilities Deferred taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts recorded for tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows (in millions): December 31, 2025 2024 Deferred tax assets Net operating loss carry-forwards $ 63.5 $ 54.2 Research and development expenses 114.3 83.1 Operating lease liabilities 21.3 18.3 Stock-based compensation 28.1 19.1 Interest expense 22.4 21.2 Foreign tax credit carryforward 24.5 37.2 Other 24.2 17.9 Deferred tax assets 298.3 251.0 Valuation allowances ( 51.8 ) ( 60.3 ) Net deferred tax assets 246.5 190.7 Deferred tax liabilities Intangible assets ( 48.1 ) ( 59.9 ) Property and equipment ( 7.1 ) ( 8.0 ) Derivative instruments ( 0.7 ) ( 6.8 ) Operating lease right-of-use assets ( 19.5 ) ( 17.7 ) Other ( 6.1 ) ( 4.0 ) Deferred tax liabilities ( 81.5 ) ( 96.4 ) Net deferred tax assets (liabilities) $ 165.0 $ 94.3 133 Deferred taxes are reported in the accompanying consolidated balance sheets as follows (in millions): December 31, 2025 2024 Deferred tax assets, net $ 173.2 $ 119.0 Deferred tax liabilities, net ( 8.2 ) ( 24.7 ) Net deferred tax assets (liabilities) $ 165.0 $ 94.3 Based on available evidence, management believes it is not more-likely-than-not that $ 51.9 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. 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. Determination of the amount of any deferred income or withholding tax liability on these earnings is not practicable. Net operating loss carry-forwards The Company has net operating loss carryforwards in certain jurisdictions, including Israel and Finland of $ 258.9 million and $ 43.8 million, respectively. The net operating losses in Israel are carried forward indefinitely. The net operating losses in Finland expire from 2031 through 2035. The Company’s income tax return is subject to examination by federal, state and non-U.S. tax authorities. The 2022 through 2024 U.S. federal income tax filings are currently open tax years available for examination by the IRS. The IRS is currently examining tax year 2022. U.S. state tax jurisdictions have statutes of limitation generally ranging from three to five years , with the earliest open tax year for the Company being 2020. Years still open to examination by tax authorities in Israel, which is the main jurisdiction other than the U.S., are 2017 through 2024, which years are currently under examination. Income (loss) before income taxes is comprised as follows (in millions): Year ended December 31, 2025 2024 2023 Domestic (U.S.) $ 133.5 $ 92.9 $ 97.2 Foreign ( 306.4 ) 187.6 294.9 Income (loss) before taxes on income $ ( 172.9 ) $ 280.5 $ 392.1 134 Effective income tax rate reconciliations are as follows: Year ended December 31, 2025 2024 2023 US Statutory Tax Rate $ ( 36.4 ) 21.0 % $ 58.9 21.0 % $ 82.3 21.0 % State taxes, net of federal benefit (1) 3.8 ( 2.2 ) % 7.8 2.8 % 8.0 2.0 % Foreign tax effects: Israel Foreign Rate Differential ( 8.8 ) 5.1 % 4.7 1.7 % 3.6 0.9 % Jurisdictional Tax Incentives 6.3 ( 3.6 ) % ( 8.2 ) ( 2.9 ) % ( 18.1 ) ( 4.6 ) % Nondeductible Stock-based Compensation 3.2 ( 1.8 ) % 8.2 2.9 % 5.4 1.4 % Valuation of Contingent Consideration 44.6 ( 25.8 ) % ( 5.7 ) ( 2.0 ) % 0.3 0.1 % Change in Valuation Allowances 3.6 ( 2.1 ) % 7.3 2.6 % 4.5 1.1 % Repatriation of Undistributed Dividends — — % ( 11.0 ) ( 3.9 ) % 11.0 2.8 % Other ( 1.3 ) 0.8 % 3.6 1.3 % ( 3.0 ) ( 0.8 ) % United Kingdom Impairment — — % 6.3 2.2 % — — % Other 1.9 ( 1.1 ) % 1.4 0.5 % 2.1 0.5 % Germany Foreign Rate Differential 6.3 ( 3.6 ) % 5.1 1.8 % 6.2 1.6 % Other — — % 0.9 0.3 % 1.0 0.3 % Finland Change in Valuation Allowances 0.5 ( 0.3 ) % 8.1 2.9 % — — % Other 1.3 ( 0.7 ) % ( 0.1 ) — % 0.6 0.2 % Other Jurisdictions Other 0.4 ( 0.2 ) % 2.3 0.8 % 0.9 0.2 % Cross-border tax laws GILTI and other international adjustments 17.7 ( 10.2 ) % 11.0 3.9 % 13.1 3.3 % Nontaxable or nondeductible items 162(m) Limitation 4.5 ( 2.6 ) % 3.4 1.2 % 3.8 1.0 % Other 0.5 ( 0.3 ) % 2.7 1.0 % 1.1 0.3 % Changes in UTBs ( 15.3 ) 8.9 % 14.0 5.0 % 34.9 8.9 % Other reconciling items Other 0.7 ( 0.6 ) % ( 2.4 ) ( 0.9 ) % ( 0.6 ) ( 0.1 ) % Total tax expense/Effective tax rate $ 33.5 ( 19.3 ) % $ 118.3 42.2 % $ 157.1 40.1 % __________ (1) For 2025, state taxes in Pennsylvania, New York, Minnesota, California, Maryland, Georgia, Illinois, and Tennessee made up the majority (greater than 50 percent) of the tax effect in this category. For 2024, state taxes in Pennsylvania, California, New York, Minnesota, Illinois, Georgia, and Maryland made up the majority (greater than 50 percent) of the tax effect in this category. For 2023, state taxes in Pennsylvania, California, Minnesota, Georgia, Florida, New York, Maryland, and Illinois made up the majority (greater than 50 percent) of the tax effect in this category. The Company believes that certain of its Israeli subsidiaries qualify as Preferred Technology Enterprises, entitled to a special tax track, under the Israeli Investment Law, 5719-1959 (the “Investment Law”) and accordingly are eligible for a reduced corporate tax rate of 12% on their preferred technology income, as defined in the Investment Law, beginning from tax year 2017 and onwards. A Preferred Technology Enterprise becomes a Special Preferred Technology Enterprise and is entitled to a reduced corporate tax rate of 6% on their preferred technology income when the worldwide revenues reach ILS 10 billion 135 annually. Income not eligible for Preferred Technology Enterprise benefits is taxed at the regular corporate tax rate at 23% beginning in 2018. Consistent with final assessment received for tax year 2017 in 2024, during 2025, the Company received final assessments from the Israel Tax Authority for tax years 2018 through 2021, similarly asserting that a smaller proportion of the Company’s earnings for these years qualified for reduced tax rates under the Preferred Technology Enterprise regime than what the Company had asserted on its tax return. As such, the Company has filed a tax appeal with the Israeli district court during 2025, resulting in tax years 2018 through 2021 being consolidated with ongoing court litigation for tax year 2017. Applying the Israeli Tax Authority’s assertion to all open tax years 2017 through 2025, the Company 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. The One Big Beautiful Bill Act (“OBBBA”), was signed into law on July 4, 2025. The OBBBA did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2025. The provision for income taxes is comprised as follows (in millions): Year ended December 31, 2025 2024 2023 Current $ 87.8 $ 153.0 $ 214.0 Deferred ( 54.3 ) ( 34.7 ) ( 56.9 ) Total $ 33.5 $ 118.3 $ 157.1 Domestic (U.S.) $ 60.9 $ 12.2 $ 42.4 Foreign ( 27.4 ) 106.1 114.7 Total $ 33.5 $ 118.3 $ 157.1 Year ended December 31, 2025 2024 2023 U.S. Federal Current $ 74.9 $ 32.4 $ 63.1 Deferred ( 18.7 ) ( 30.1 ) ( 30.8 ) Total $ 56.2 $ 2.3 $ 32.3 U.S. State Current $ 3.6 $ 10.7 $ 9.9 Deferred 1.1 ( 0.8 ) 0.2 Total $ 4.7 $ 9.9 $ 10.1 Foreign Current $ 9.3 $ 109.9 $ 141.0 Deferred ( 36.7 ) ( 3.8 ) ( 26.3 ) Total $ ( 27.4 ) $ 106.1 $ 114.7 136 The cash paid for income taxes is comprised as follows (in millions): Year ended December 31, 2025 2024 2023 Federal $ 72.6 $ 25.5 $ 22.0 State and local 5.8 12.8 15.8 Foreign Israel ( 40.3 ) 5.4 70.8 Germany 32.1 15.5 10.6 Austria 16.2 11.6 28.5 United Kingdom 11.1 16.2 19.8 All other foreign 5.8 5.6 2.3 Income taxes paid, net of amounts refunded $ 103.3 $ 92.6 $ 169.8 Uncertain tax positions A reconciliation of the opening and closing balances of total unrecognized tax benefits is as follows (in millions): Year ended December 31, 2025 2024 Balance as of January 1 $ 294.0 $ 261.0 Increases in respect of tax positions related to the current year 44.1 38.9 Increases in respect of tax positions related to prior years 20.1 0.8 Increases in respect to exchange rate fluctuations 40.5 — Reductions in respect of settlements with authorities — ( 5.2 ) Reductions in respect of expirations of statute of limitations ( 81.8 ) — Reductions in respect of exchange rate fluctuations — ( 1.5 ) Balance as of December 31 $ 316.9 $ 294.0 Included in the balance of total unrecognized tax benefits at December 31, 2025 is $ 129.8 million of tax benefits that if recognized, would affect the Company’s effective tax rate. The balance of the accrual relating to interest and penalties as of December 31, 2025 and 2024 is $ 27.6 million and $ 26.4 million, respectively. The amount of interest and penalties included in the Company’s consolidated statements of comprehensive income for the years ended December 31, 2025, 2024 and 2023 is $ 1.2 million, $ 6.7 million and $ 7.2 million, respectively. 137 NOTE 23. ACCUMULATED OTHER COMPREHENSIVE INCOME The following table shows a summary of changes in accumulated other comprehensive income (loss), net of tax, for the respective periods (in millions): Foreign Currency Translation Interest Rate Swaps Foreign Currency Derivative Contracts Total Balance as of January 1, 2024 $ ( 10.0 ) $ 27.8 $ 2.8 $ 20.6 Other comprehensive income (loss) before reclassifications ( 10.9 ) 18.3 ( 5.3 ) 2.1 Amounts reclassified from accumulated other comprehensive income (loss) — ( 23.6 ) 0.7 ( 22.9 ) Balance as of December 31, 2024 ( 20.9 ) 22.5 ( 1.8 ) ( 0.2 ) Other comprehensive income (loss) before reclassifications 23.8 ( 3.9 ) 23.4 43.3 Amounts reclassified from accumulated other comprehensive income (loss) — ( 16.7 ) ( 10.5 ) ( 27.2 ) Balance as of December 31, 2025 $ 2.9 $ 1.9 $ 11.1 $ 15.9 The amounts in the summary of changes in accumulated other comprehensive income (loss) tables, above, are net of tax expense/(benefits) as follows (in millions): Year ended December 31, 2025 2024 2023 Interest rate swaps $ ( 6.1 ) $ ( 1.6 ) $ ( 3.0 ) Foreign currency derivative contracts 2.4 ( 0.9 ) 1.4 Amounts reclassified from accumulated other comprehensive income for interest rate swaps and foreign currency derivative contracts were reclassified to interest expense and operating expenses, respectively, in the Company’s consolidated statements of comprehensive income during the years ended December 31, 2025 and 2024. NOTE 24. NET INCOME (LOSS) ATTRIBUTABLE TO ORDINARY STOCKHOLDERS The following table sets forth the computation of basic and diluted net income (loss) per share attributable to ordinary stockholders (in millions, except per share data): Year ended December 31, 2025 2024 2023 Numerator: Net income (loss) $ ( 206.4 ) $ 162.2 $ 235.0 Denominator: Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic 375.8 371.8 366.3 Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted 375.8 372.1 366.8 Net income (loss) per share, basic $ ( 0.55 ) $ 0.44 $ 0.64 Net income (loss) per share, diluted $ ( 0.55 ) $ 0.44 $ 0.64 138 The following outstanding employee equity awards were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive for the periods presented (in millions): Year ended December 31, 2025 2024 2023 Stock options 1.1 1.5 2.2 RSUs 18.4 14.4 10.9 Total 19.5 15.9 13.1 For the years ended December 31, 2025, 2024 and 2023, 10.8 million, 10.9 million and 2.2 million PSUs, respectively, were excluded from the calculation of diluted net income per share, because the minimum performance measures were not yet met. NOTE 25. SUBSEQUENT EVENTS On January 14, 2026, the Company announced a reduction in workforce by approximately fifteen percent, expected to be substantially complete during the first quarter of 2026. Severance liabilities associated with this reduction in force will be recorded as the reduction of force is completed. The Company’s management evaluates subsequent events through the date of issuance of the consolidated financial statements. Other than the reduction in force, the Fifth Amendment to the Credit Agreement disclosed in Note 13, Debt, and equity-related items disclosed in Note 14, Equity Transactions and Stock Incentive Plan, there have been no other subsequent events that occurred during such period that would require adjustment to or disclosure in the consolidated financial statements as of and for the year ended December 31, 2025. 139 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.