[Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) [Forward-Looking Statements Overview](index=4&type=section&id=Forward-Looking%20Statements%20Overview) Outlines inherent risks and uncertainties for forward-looking statements, detailing factors that could cause actual results to differ and official disclosure channels - Forward-looking statements are based on current expectations and projections about future events and are subject to **known and unknown risks, uncertainties, and assumptions**[12](index=12&type=chunk)[13](index=13&type=chunk) - Key factors that might cause actual results to differ include **business strategy, financial performance, market acceptance of games, financing ability, competitive and regulatory changes, platform relationships, accounting for warrants, internal controls, intellectual property rights, litigation, acquisitions, personnel, geopolitical conditions, and legal/regulatory factors**[13](index=13&type=chunk)[14](index=14&type=chunk) - The company uses its **Investor Relations website, SEC filings, press releases, public conference calls, public webcasts, and social media** to announce material information[16](index=16&type=chunk) [Part I - Financial Information](index=7&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements, including balance sheets, operations, comprehensive loss, equity, cash flows, and detailed accounting notes [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030,%202025%20and%20December%2031,%202024) Condensed Consolidated Balance Sheets Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total assets | $316,233 | $322,955 | | Total liabilities | $70,942 | $78,240 | | Total stockholders' equity | $245,291 | $244,715 | | Cash and cash equivalents | $112,860 | $109,179 | | Total current assets | $151,104 | $147,102 | | Total current liabilities | $41,436 | $49,418 | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%20June%2030,%202024) Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net revenue | $59,338 | $72,590 | $(13,252) | (18.3)% | $122,047 | $150,418 | $(28,371) | (18.9)% | | Total operating costs and expenses | $62,825 | $76,553 | $(13,728) | (17.9)% | $128,275 | $156,084 | $(27,809) | (17.8)% | | Loss from operations | $(3,487) | $(3,963) | $476 | (12.0)% | $(6,228) | $(5,666) | $(562) | 9.9% | | Net loss | $(2,948) | $(2,611) | $(337) | 12.9% | $(5,828) | $(3,178) | $(2,650) | 83.4% | | Basic net loss per share | $(0.02) | $(0.02) | $0.00 | 0.0% | $(0.05) | $(0.02) | $(0.03) | 150.0% | | Diluted net loss per share | $(0.02) | $(0.02) | $0.00 | 0.0% | $(0.05) | $(0.02) | $(0.03) | 150.0% | [Condensed Consolidated Statements of Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%20June%2030,%202024) Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(2,948) | $(2,611) | $(5,828) | $(3,178) | | Total other comprehensive income (loss) | $2,134 | $(570) | $2,180 | $(1,678) | | Comprehensive loss | $(814) | $(3,181) | $(3,648) | $(4,856) | - Other comprehensive income in Q2 2025 was positively impacted by a **$1,611k change in foreign currency translation adjustment** and a **$758k unrealized gain from derivative financial instruments**[25](index=25&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%20June%2030,%202024) Stockholders' Equity Changes (in thousands) | Metric | Balance as of Dec 31, 2024 | Net loss (6M 2025) | Stock-based compensation (6M 2025) | Repurchase of common stock (6M 2025) | Other comprehensive income (6M 2025) | Balance as of June 30, 2025 | | :------------------------- | :------------------------- | :------------------ | :--------------------------------- | :----------------------------------- | :----------------------------------- | :-------------------------- | | Total Stockholders' Equity | $244,715 | $(5,828) | $9,152 | $(3,499) | $2,180 | $245,291 | - Treasury stock increased from **$51,293k (19,450 shares) at December 31, 2024, to $54,792k (21,739 shares) at June 30, 2025**, primarily due to common stock repurchases[28](index=28&type=chunk)[122](index=122&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%20June%2030,%202024) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net cash provided by operating activities | $16,942 | $19,531 | $(2,589) | (13.3)% | | Net cash used in investing activities | $(8,030) | $(13,060) | $5,030 | (38.5)% | | Net cash used in financing activities | $(6,961) | $(32,444) | $25,483 | (78.5)% | | Net change in cash, cash equivalents, and restricted cash | $3,087 | $(26,585) | $29,672 | nm | | Cash, cash equivalents, and restricted cash at end of period | $113,473 | $106,304 | $7,169 | 6.7% | [Notes to Unaudited Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures for financial statements, covering background, accounting policies, segment reporting, acquisitions, related-party transactions, and account specifics [NOTE 1—BACKGROUND AND BASIS OF PRESENTATION](index=14&type=section&id=NOTE%201%E2%80%94BACKGROUND%20AND%20BASIS%20OF%20PRESENTATION) - **PLAYSTUDIOS, Inc.** was incorporated on **August 14, 2020**, and domesticated into a **Delaware corporation on June

PLAYSTUDIOS, Inc. (MYPS) came out with a quarterly loss of $0.02 per share versus the Zacks Consensus Estimate of a loss of $0.01. This compares to a loss of $0.02 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -100.00%. A quarter ago, it was expected that this company would post a loss of $0.02 per share when it actually produced a loss of $0.02, delivering no surprise.Over the last four quarters, the company has surpassed c ...

Financial Data and Key Metrics Changes - Second quarter revenue was $59 million, down approximately 18.3% year over year and 5.4% sequentially, reflecting continued softness in core casino and casual games [15] - Adjusted EBITDA for the quarter was $10.7 million, down 24% year over year and 14.2% sequentially, indicating limited flow through due to revenue softness [15] - DAU was 2.3 million, down from 2.6 million in the first quarter and 3.2 million in the previous year [16] - MAU was 10 million, down from 11.4 million in the first quarter [16] - ARPDAU was $0.28, up slightly from $0.26 last quarter and $0.25 a year ago, reflecting stronger monetization [16] Business Line Data and Key Metrics Changes - The core social casino portfolio continued to soften, with ongoing declines in DAU across most titles, partially offset by stronger unit level monetization in Mykonami [10] - Direct to consumer revenue for Q2 was $6.7 million, representing 13.9% of total in-app purchase revenue, up 107% year over year and 34% sequentially [10][17] - The casual portfolio remains under pressure due to challenging market dynamics, with a focus on product updates to improve engagement and retention [11] Market Data and Key Metrics Changes - The market is experiencing a rapid rise in social casinos leveraging sweepstakes mechanics, reshaping player behavior and monetization [4] - The company is seeing clear evidence that its sweepstakes proposition resonates with players, with player retention, engagement, and monetization trending positively [6] Company Strategy and Development Direction - The company launched a reinvention program last year to adapt to market changes, focusing on developing sweepstakes capabilities, expanding direct to consumer sales, and modernizing core games [5][18] - A phased approach is being taken to scale the sweepstakes initiative, with plans to be live across all eligible U.S. states later this year [7] - The company is exploring strategic acquisitions to accelerate momentum and position itself for market leadership in the sweepstakes category [8][40] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the core business but remains confident in the strategic steps being taken to adapt and evolve [18] - The company is not changing its full-year revenue and adjusted EBITDA guidance despite pacing below expectations, as it continues to evaluate investments and market dynamics [17] Other Important Information - The balance sheet remains strong, with approximately $112.9 million in cash and no debt, providing strategic latitude for capital deployment [13] - The company is committed to building a stronger, more diversified foundation to drive renewed momentum in the future [18] Q&A Session Summary Question: Can you split DAU and MAU declines between social casino and casual games? - Management indicated that declines were substantial in both categories, with more dramatic impacts in the casual space due to reduced user acquisition investments [24] Question: Any quantitative KPIs on sweepstakes performance? - Management reported positive improvements across key metrics such as retention and conversion rates, feeling optimistic about the progress made [27] Question: Guidance for Q3 expectations? - Management stated that Q3 is not expected to differ significantly from Q2, focusing on executing initiatives to restore momentum [31] Question: Any technical aspects remaining for the sweepstakes platform? - All core functionality is in place, with ongoing refinements and testing of marketing approaches to ensure effective scaling [36] Question: What types of strategic acquisitions are being considered? - The company is open to meaningful M&A opportunities to bolster efforts in the sweepstakes category and gain market share [40] Question: How does the company manage regulatory pressures regarding sweepstakes? - Management evaluates regulatory risks on a state-by-state basis and adjusts capital deployment accordingly, aiming to legitimize the sweepstakes opportunity [52] Question: Is there enough cash to manage through the transition? - Management confirmed a strong cash position, allowing for aggressive investment in growth initiatives [61]

Financial Data and Key Metrics Changes - Second quarter revenue was $59 million, down approximately 18.3% year over year and 5.4% sequentially, reflecting continued softness in core casino and casual games [16] - Adjusted EBITDA for the quarter was $10.7 million, down 24% year over year and 14.2% sequentially, indicating limited flow through due to revenue softness [16] - DAU was 2.3 million, down from 2.6 million in the first quarter and 3.2 million in the previous year [16] - MAU was 10 million, down from 11.4 million in the first quarter [16] - ARPDAU was $0.28, up slightly from $0.26 last quarter and $0.25 a year ago, reflecting stronger monetization [16] Business Line Data and Key Metrics Changes - The core social casino portfolio continued to soften, with ongoing declines in DAU across most titles, partially offset by stronger unit level monetization in Mykonami [11] - Direct to consumer revenue for Q2 was $6.7 million, representing 13.9% of total in-app purchase revenue, up 107% year over year and 34% sequentially [11][18] - The casual portfolio remains under pressure due to challenging market dynamics, with a focus on product updates to improve engagement and retention [12] Market Data and Key Metrics Changes - The market is experiencing a rapid rise in social casinos leveraging sweepstakes mechanics, reshaping player behavior and monetization [4] - The company is seeing positive early signals in player retention, engagement, and monetization from its sweepstakes initiative, which is currently live in seven states [6][27] Company Strategy and Development Direction - The company launched a reinvention program last year to adapt to market changes, focusing on developing sweepstakes capabilities, expanding direct to consumer sales, and modernizing core games [5][20] - A phased approach is being taken to scale the sweepstakes initiative, with plans to open the product to all eligible states later this year [7] - The company is exploring strategic acquisitions to accelerate momentum and position itself for market leadership in the sweepstakes category [8][40] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges in the core business but remains confident in the strategic steps being taken to adapt and evolve [19] - The company is not changing its full-year revenue and adjusted EBITDA guidance despite current performance being below expectations [18] - Management is optimistic about the early traction seen in new initiatives and believes investments made today will build a stronger foundation for future growth [20] Other Important Information - The balance sheet remains strong, with approximately $112.9 million in cash and no debt, providing strategic latitude for future investments [14][18] - The company is committed to maintaining a robust cash position to support growth initiatives [62] Q&A Session Summary Question: Can you split DAU and MAU declines between social casino and casual games? - Management indicated that declines were substantial in both categories, with more dramatic impacts in the casual space due to reduced user acquisition investments [25] Question: Any quantitative KPIs or user numbers from the sweepstakes initiative? - Management reported positive improvements across key metrics, including retention and conversion rates, and plans to open more jurisdictions as confidence grows [27] Question: What are the expectations for Q3? - Management expects Q3 to be similar to Q2, focusing on executing initiatives to restore momentum [32] Question: What is the medium or long-term goal for the casual portfolio? - Management does not expect meaningful growth from the legacy casual portfolio but is investing in upgrading products to drive better retention and engagement [44] Question: How will the company manage regulatory pressures regarding sweepstakes? - Management is actively assessing regulatory risks on a state-by-state basis and intends to help legitimize the sweepstakes opportunity [52][55] Question: Is the company comfortable with its cash position during this transition? - Management confirmed a strong cash position, allowing for aggressive investment in growth initiatives [62]

[Company Overview and Financial Highlights](index=1&type=section&id=company-overview-and-financial-highlights) PLAYSTUDIOS reported Q2 and YTD 2025 financial declines in revenue and net loss, but strong direct-to-consumer growth, while maintaining full-year guidance despite current pace [Second Quarter 2025 Financial Highlights](index=1&type=section&id=second-quarter-2025-financial-highlights) PLAYSTUDIOS reported Q2 2025 revenue of $59.3 million, a decrease from $72.6 million in Q2 2024, with a net loss of $2.9 million and consolidated AEBITDA declining to $10.7 million, while Direct-to-Consumer revenue grew by 107% to $6.7 million | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | % Change | | :----------------------------- | :----------------- | :----------------- | :---------------- | :------- | | Revenue | $59.3 | $72.6 | $(13.3) | (18.3%) | | Net loss | $(2.9) | $(2.6) | $(0.3) | (11.5%) | | Consolidated AEBITDA | $10.7 | $14.1 | $(3.4) | (24.1%) | | Direct to Consumer revenue | $6.7 | $3.2 | $3.5 | 107% | - As of June 30, 2025, cash and cash equivalents on the balance sheet was **$112.9 million**[6](index=6&type=chunk) - PLAYSTUDIOS' **$81 million** revolving credit facility remains undrawn[6](index=6&type=chunk) - The Company had **125.2 million** shares outstanding[6](index=6&type=chunk) [Year to Date 2025 Financial Highlights](index=1&type=section&id=year-to-date-2025-financial-highlights) For the six months ended June 30, 2025, PLAYSTUDIOS' revenue was $122.0 million, down from $150.4 million in the same period of 2024, with net loss increasing to $5.8 million and Consolidated AEBITDA decreasing to $23.2 million, while Direct-to-Consumer revenue rose 110% to $11.7 million | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change (Millions) | % Change | | :------------------ | :------------------ | :------------------ | :---------------- | :------- | | Revenue | $122.0 | $150.4 | $(28.4) | (18.9%) | | Net loss | $(5.8) | $(3.2) | $(2.6) | (81.3%) | | Consolidated AEBITDA | $23.2 | $29.5 | $(6.3) | (21.4%) | | Direct to Consumer revenue | $11.7 | $5.6 | $6.1 | 110% | [CEO Commentary and Strategic Priorities](index=1&type=section&id=ceo-commentary-and-strategic-priorities) CEO Andrew Pascal acknowledged significant market headwinds impacting the core business but highlighted growing traction in the direct-to-consumer channel, promising early momentum in the sweepstakes initiative, and continued progress on Tetris Block Party development as key strategic priorities for future growth and business stabilization - The core business continues to navigate meaningful market headwinds[3](index=3&type=chunk) - Strategic priorities include growing traction in the direct-to-consumer channel, promising early momentum in the sweepstakes initiative, and continued progress on the development of Tetris Block Party[3](index=3&type=chunk) [Recent Business Highlights](index=2&type=section&id=recent-business-highlights) Recent business highlights include the continued development of sweepstakes promotional capabilities targeting a Q4 2025 launch, expanded direct-to-consumer monetization, progress on Tetris Block Party development for a Q4 2025 launch, strengthening of the playAWARDS platform, and the repurchase of 1.4 million shares of Class A common stock - Continued development of sweepstakes promotional capabilities, expected to launch externally in available markets in **Q4 2025**[12](index=12&type=chunk) - Progressed development of Tetris Block Party, targeting launch in **Q4 2025**[12](index=12&type=chunk) - Repurchased an aggregate of **1.4 million** shares of Class A common stock at an average price of **$1.41** per share in the quarter[12](index=12&type=chunk) [Full Year 2025 Guidance](index=2&type=section&id=full-year-2025-guidance) The Company maintains its full year 2025 guidance for net revenue in the range of $250 million to $270 million and Consolidated AEBITDA in the range of $45 million to $55 million, despite not currently being on pace to meet these targets | Metric | Full Year 2025 Guidance (Millions) | | :------------------- | :------------------------------- | | Net Revenue | $250 - $270 | | Consolidated AEBITDA | $45 - $55 | - The Company is not changing its full year 2025 guidance, although it is currently not on pace to meet it[8](index=8&type=chunk) [About PLAYSTUDIOS, Inc.](index=2&type=section&id=about-playstudios-inc) PLAYSTUDIOS is an award-winning developer of free-to-play mobile and social games, also known for its playAWARDS loyalty platform offering real-world rewards [Company Description and Offerings](index=2&type=section&id=company-description-and-offerings) PLAYSTUDIOS is an award-winning developer of free-to-play mobile and social games, known for titles like Tetris® mobile app, Pop! Slots, and myVEGAS Slots, and is the creator of the playAWARDS loyalty platform, which allows players to earn real-world rewards from global hospitality, entertainment, and leisure brands - PLAYSTUDIOS is an award-winning developer of free-to-play mobile and social games, including the iconic Tetris® mobile app, Pop! Slots, myVEGAS Slots, myVEGAS Blackjack, my KONAMI Slots, myVEGAS Bingo, MGM Slots Live, Solitaire, Spider Solitaire and Sudoku[10](index=10&type=chunk) - Creator of the groundbreaking playAWARDS loyalty platform, which enables players to earn real-world rewards from a global collection of hospitality, entertainment, and leisure brands[10](index=10&type=chunk) - playAWARDS partners include MGM Resorts International, Wolfgang Puck, Norwegian Cruise Line, Resorts World, IHG, Bowlero, Gray Line Tours, and Hippodrome Casino among others[10](index=10&type=chunk) [Performance Indicators Definitions](index=2&type=section&id=performance-indicators-definitions) This section defines key metrics for playGAMES, including DAU, MAU, and ARPDAU, and for the playAWARDS platform, such as Available Rewards and Retail Value of Purchases [playGAMES Key Performance Indicators Definitions](index=3&type=section&id=playgames-key-performance-indicators-definitions) This section defines key metrics used to track player engagement and monetization for playGAMES, including Daily Active Users (DAU), Monthly Active Users (MAU), Daily Paying Users (DPU), Daily Payer Conversion, and Average Daily Revenue Per DAU (ARPDAU) - DAU (Daily Active Users): Number of individuals who played a game on a particular day, tracked by player ID for PLAYSTUDIOS games and app instance ID for Brainium games[14](index=14&type=chunk) - MAU (Monthly Active Users): Number of individuals who played a game in a particular month, tracked similarly to DAU[15](index=15&type=chunk) - ARPDAU (Average Daily Revenue Per DAU): Average daily revenue per Average DAU, calculated as game and advertising revenue for the period divided by days and Average DAU, used to measure overall monetization[18](index=18&type=chunk) [playAWARDS Platform Metrics Definitions](index=3&type=section&id=playawards-platform-metrics-definitions) This section defines key metrics for the playAWARDS platform, such as Available Rewards, Purchases, Retail Value of Purchases, and Retail Value of Daily Rewards Inventory, which are used to measure audience interest, engagement, and the real-world value of rewards - Available Rewards: Monthly average number of unique real-world partner rewards available in applications' rewards stores, excluding PLAYSTUDIOS digital rewards[19](index=19&type=chunk) - Purchases: Total number of real-world partner rewards purchased for the period in which a player exchanges loyalty points for a reward, net of refunds, excluding PLAYSTUDIOS digital rewards[20](index=20&type=chunk)[21](index=21&type=chunk) - Retail Value of Purchases: Cumulative retail value of all rewards listed as Purchases for the period, as determined by the partner, used to understand the real-world value of rewards purchased by players[22](index=22&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=non-gaap-financial-measures) This section defines Consolidated AEBITDA as a non-GAAP measure, explaining its calculation and management's rationale for its use in performance analysis [Consolidated AEBITDA Definition and Rationale](index=4&type=section&id=consolidated-aebitda-definition-and-rationale) Consolidated AEBITDA is presented as a non-GAAP measure, defined as net income (loss) before interest, income taxes, depreciation and amortization, restructuring and related costs, stock-based compensation, and other income/expense items, which management believes provides useful information for analyzing and benchmarking business performance by excluding certain fluctuating or non-cash costs - Consolidated AEBITDA is defined as net income (loss) before interest, income taxes, depreciation and amortization, restructuring and related costs, stock-based compensation expense, and other income and expense items[25](index=25&type=chunk) - Management believes Consolidated AEBITDA provides useful information to investors regarding the Company's results of operations because it assists in analyzing and benchmarking performance and value, providing an indicator not affected by fluctuations in certain costs or other items[26](index=26&type=chunk) [Forward-Looking Statements](index=4&type=section&id=forward-looking-statements) This section provides a cautionary statement regarding forward-looking statements, highlighting potential material differences in actual results due to various known and unknown risks and uncertainties [Disclaimer and Risk Factors](index=4&type=section&id=disclaimer-and-risk-factors) This section serves as a cautionary statement, indicating that the press release contains forward-looking statements regarding future financial performance, operations, and strategic plans, and highlights that actual results may differ materially due to known and unknown risks, uncertainties, and assumptions - This press release contains forward-looking statements regarding future financial and operating performance, liquidity, capital resources, game development and release plans, business restructuring, and M&A strategy[27](index=27&type=chunk) - Actual results may differ materially from predictions due to known and unknown risks, uncertainties, and assumptions, including those related to the ability to develop and publish games, defects in IT infrastructure, player attraction and retention, market acceptance of new games, competition, financial performance, and legal/regulatory developments[27](index=27&type=chunk)[28](index=28&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=condensed-consolidated-financial-statements) This section presents the Condensed Consolidated Statement of Operations, showing net revenue and loss trends, and the Condensed Consolidated Balance Sheets, detailing assets, liabilities, and equity [Condensed Consolidated Statement of Operations](index=6&type=section&id=condensed-consolidated-statement-of-operations) The Condensed Consolidated Statement of Operations shows a net loss of $2.9 million for Q2 2025 (vs. $2.6 million in Q2 2024) and $5.8 million for YTD 2025 (vs. $3.2 million in YTD 2024), with net revenue decreasing significantly from $72.6 million to $59.3 million in Q2 and from $150.4 million to $122.0 million YTD, while operating expenses also saw reductions | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $59,338 | $72,590 | $122,047 | $150,418 | | Total operating costs and expenses | $62,825 | $76,553 | $128,275 | $156,084 | | Loss from operations | $(3,487) | $(3,963) | $(6,228) | $(5,666) | | Net loss | $(2,948) | $(2,611) | $(5,828) | $(3,178) | | Basic Net loss per share | $(0.02) | $(0.02) | $(0.05) | $(0.02) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=condensed-consolidated-balance-sheets) As of June 30, 2025, PLAYSTUDIOS reported total assets of $316.2 million, a decrease from $323.0 million at December 31, 2024, with cash and cash equivalents increasing slightly to $112.9 million, total liabilities decreasing to $70.9 million, and total stockholders' equity seeing a slight increase to $245.3 million | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $112,860 | $109,179 | | Total current assets | $151,104 | $147,102 | | Total assets | $316,233 | $322,955 | | Total current liabilities | $41,436 | $49,418 | | Total liabilities | $70,942 | $78,240 | | Total stockholders' equity | $245,291 | $244,715 | [Reconciliation of Net Loss to Consolidated AEBITDA](index=8&type=section&id=reconciliation-of-net-loss-to-consolidated-aebitda) This section provides a detailed reconciliation of net loss to Consolidated AEBITDA, illustrating the adjustments made and the resulting AEBITDA margins for the reported periods [AEBITDA Reconciliation and Margin](index=8&type=section&id=aebitda-reconciliation-and-margin) The reconciliation shows that Consolidated AEBITDA for Q2 2025 was $10.7 million (18.1% margin), down from $14.1 million (19.5% margin) in Q2 2024, and for the six months ended June 30, 2025, AEBITDA was $23.2 million (19.0% margin), compared to $29.5 million (19.6% margin) in the prior year, with key adjustments including depreciation & amortization and stock-based compensation expense | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(2,948) | $(2,611) | $(5,828) | $(3,178) | | Depreciation & amortization | $9,535 | $11,654 | $19,167 | $23,220 | | Stock-based compensation expense | $4,608 | $4,930 | $8,866 | $9,724 | | Consolidated AEBITDA | $10,714 | $14,138 | $23,201 | $29,452 | | Consolidated AEBITDA Margin | 18.1% | 19.5% | 19.0% | 19.6% | [Supplemental Data](index=9&type=section&id=supplemental-data) This section provides disaggregated financial data by segment, a detailed net revenue breakdown by type and platform, and key performance indicators for both playGAMES and playAWARDS [Segment Information](index=9&type=section&id=segment-information) This section provides financial data disaggregated by reportable segments, playGAMES and playAWARDS, for Q2 and YTD 2025 versus 2024, detailing their respective net revenues, expenses, and AEBITDA contributions | Metric (in thousands) | Q2 2025 playGAMES | Q2 2024 playGAMES | Q2 2025 playAWARDS | Q2 2024 playAWARDS | YTD 2025 playGAMES | YTD 2024 playGAMES | YTD 2025 playAWARDS | YTD 2024 playAWARDS | | :-------------------- | :---------------- | :---------------- | :----------------- | :----------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Net revenue | $59,109 | $72,588 | $229 | $2 | $121,664 | $150,416 | $383 | $2 | | Reportable segment AEBITDA | $16,475 | $21,920 | $(2,386) | $(3,476) | $34,784 | $45,371 | $(4,675) | $(7,098) | [Net Revenue Breakdown](index=11&type=section&id=net-revenue-breakdown) This section details the breakdown of net revenue by type (virtual currency, advertising, other) and by platform (third-party, direct-to-consumer) for Q2 and YTD 2025 versus 2024, highlighting overall revenue decline but strong growth in direct-to-consumer channels | Metric (in thousands) | Q2 2025 | Q2 2024 | % Change (QoQ) | YTD 2025 | YTD 2024 | % Change (YoY) | | :-------------------- | :------ | :------ | :------------- | :------- | :------- | :------------- | | Virtual currency revenue | $48,208 | $56,477 | (14.6%) | $99,049 | $116,724 | (15.1%) | | Advertising revenue | $11,128 | $16,006 | (30.5%) | $22,991 | $33,448 | (31.3%) | | Direct-to-consumer (DTC) platforms revenue | $6,683 | $3,232 | 106.8% | $11,654 | $5,556 | 109.8% | | DTC revenue as a percentage of virtual currency revenue | 13.9% | 5.7% | 143.9% | 11.8% | 4.8% | 145.8% | [playGAMES Key Performance Indicators](index=12&type=section&id=playgames-key-performance-indicators) This section presents key operational metrics for playGAMES, including Average DAU, MAU, DPU, Daily Payer Conversion, and ARPDAU, for Q2 and YTD 2025 versus 2024, indicating a decline in user engagement but improved monetization per active user | Metric | Q2 2025 | Q2 2024 | Change | % Change | YTD 2025 | YTD 2024 | Change | % Change | | :----------------------------- | :------ | :------ | :----- | :------- | :------- | :------- | :----- | :------- | | Average DAU (in thousands) | 2,347 | 3,220 | (873) | (27.1%) | 2,489 | 3,357 | (868) | (25.9%) | | Average MAU (in thousands) | 10,046 | 13,597 | (3,551) | (26.1%) | 10,730 | 14,174 | (3,444) | (24.3%) | | Average DPU (in thousands) | 19 | 24 | (5) | (20.8%) | 20 | 26 | (6) | (23.1%) | | ARPDAU (in dollars) | $0.28 | $0.25 | $0.03 | 12.0% | $0.27 | $0.25 | $0.02 | 8.0% | [playAWARDS Key Performance Indicators](index=12&type=section&id=playawards-key-performance-indicators) This section presents key operational metrics for the playAWARDS platform, including Available Rewards, Purchases, Retail Value of Purchases, and Retail Value of Daily Rewards Inventory, for Q2 and YTD 2025 versus 2024, showing a decrease in rewards and purchases but an increase in the retail value of daily rewards inventory | Metric (in thousands) | Q2 2025 | Q2 2024 | Change | % Change | YTD 2025 | YTD 2024 | Change | % Change | | :-------------------------------- | :------ | :------ | :----- | :------- | :------- | :------- | :----- | :------- | | Available Rewards (in units) | 331 | 561 | (230) | (41.0%) | 349 | 541 | (192) | (35.5%) | | Purchases (in units) | 199 | 520 | (321) | (61.6%) | 480 | 1,020 | (540) | (52.9%) | | Retail Value of Purchases | $12,662 | $31,405 | $(18,743) | (59.7%) | $29,647 | $71,997 | $(42,350) | (58.8%) | | Retail Value of Daily Rewards Inventory | $3,060 | $1,775 | $1,285 | 72.4% | $2,532 | $1,838 | $694 | 37.8% |

[Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) [Forward-Looking Statements Disclosure](index=4&type=section&id=Forward-Looking%20Statements%20Disclosure) This section outlines forward-looking statements, emphasizing reliance on current expectations and known/unknown risks - Forward-looking statements are based on current expectations and projections, subject to known and unknown risks and uncertainties[12](index=12&type=chunk)[13](index=13&type=chunk) - Key factors that could cause actual results to differ include business strategy, financial performance, market acceptance, financing, operational changes, platform relationships, intellectual property, litigation, acquisitions, personnel, geopolitical conditions, and public health events[13](index=13&type=chunk)[14](index=14&type=chunk) - The company uses its Investor Relations website, SEC filings, press releases, conference calls, webcasts, and social media for material information disclosure[16](index=16&type=chunk) [Part I - Financial Information](index=7&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) PLAYSTUDIOS' unaudited condensed consolidated financial statements report a net loss of **$2.88 million** for Q1 2025 [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) [Condensed Consolidated Statements of Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) [Condensed Consolidated Statements of Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------- | :---------------- | :----- | :------- | | Total assets | $313,775 | $322,955 | $(9,180) | (2.8)% | | Total liabilities | $69,693 | $78,240 | $(8,547) | (10.9)% | | Total stockholders' equity | $244,082 | $244,715 | $(633) | (0.3)% | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | :----- | :------- | | Net revenue | $62,709 | $77,828 | $(15,119) | (19.4)% | | Loss from operations | $(2,741) | $(1,703) | $(1,038) | 61.0% | | Net loss | $(2,880) | $(567) | $(2,313) | 407.9% | | Basic net loss per share | $(0.02) | $0.00 | $(0.02) | nm | | Diluted net loss per share | $(0.02) | $0.00 | $(0.02) | nm | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | Net cash provided by operating activities | $3,300 | $4,998 | $(1,698) | (34.0)% | | Net cash used in investing activities | $(3,609) | $(6,522) | $2,913 | (44.7)% | | Net cash used in financing activities | $(2,456) | $(4,263) | $1,807 | (42.4)% | | Net change in cash, cash equivalents, and restricted cash | $(2,681) | $(5,909) | $3,228 | (54.6)% | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies, segment reporting, business combinations, and specific financial line items [NOTE 1—BACKGROUND AND BASIS OF PRESENTATION](index=13&type=section&id=NOTE%201%E2%80%94BACKGROUND%20AND%20BASIS%20OF%20PRESENTATION) [NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=14&type=section&id=NOTE%202%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) [NOTE 3—SEGMENT REPORTING](index=15&type=section&id=NOTE%203%E2%80%94SEGMENT%20REPORTING) [NOTE 4—BUSINESS COMBINATIONS](index=17&type=section&id=NOTE%204%E2%80%94BUSINESS%20COMBINATIONS) [NOTE 5—RELATED-PARTY TRANSACTIONS](index=18&type=section&id=NOTE%205%E2%80%94RELATED-PARTY%20TRANSACTIONS) [NOTE 6—RECEIVABLES, NET](index=18&type=section&id=NOTE%206%E2%80%94RECEIVABLES,%20NET) [NOTE 7—PREPAID EXPENSES AND OTHER CURRENT ASSETS](index=19&type=section&id=NOTE%207%E2%80%94PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) [NOTE 8—FAIR VALUE MEASUREMENT](index=19&type=section&id=NOTE%208%E2%80%94FAIR%20VALUE%20MEASUREMENT) [NOTE 9—PROPERTY AND EQUIPMENT, NET](index=20&type=section&id=NOTE%209%E2%80%94PROPERTY%20AND%20EQUIPMENT,%20NET) [NOTE 10—INTANGIBLE ASSETS AND INTERNAL-USE SOFTWARE, NET](index=21&type=section&id=NOTE%2010%E2%80%94INTANGIBLE%20ASSETS%20AND%20INTERNAL-USE%20SOFTWARE,%20NET) [NOTE 11—ACCRUED AND OTHER LIABILITIES](index=22&type=section&id=NOTE%2011%E2%80%94ACCRUED%20AND%20OTHER%20LIABILITIES) [NOTE 12—LEASES](index=24&type=section&id=NOTE%2012%E2%80%94LEASES) [NOTE 13—LONG-TERM DEBT](index=25&type=section&id=NOTE%2013%E2%80%94LONG-TERM%20DEBT) [NOTE 14—REVENUE FROM CONTRACTS WITH CUSTOMERS](index=26&type=section&id=NOTE%2014%E2%80%94REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) [NOTE 15—INCOME TAXES](index=27&type=section&id=NOTE%2015%E2%80%94INCOME%20TAXES) [NOTE 16—COMMITMENTS AND CONTINGENCIES](index=27&type=section&id=NOTE%2016%E2%80%94COMMITMENTS%20AND%20CONTINGENCIES) [NOTE 17—STOCKHOLDERS' EQUITY](index=29&type=section&id=NOTE%2017%E2%80%94STOCKHOLDERS'%20EQUITY) [NOTE 18—STOCK-BASED COMPENSATION](index=32&type=section&id=NOTE%2018%E2%80%94STOCK-BASED%20COMPENSATION) [NOTE 19—NET LOSS PER SHARE](index=32&type=section&id=NOTE%2019%E2%80%94NET%20LOSS%20PER%20SHARE) - PLAYSTUDIOS develops and operates online and mobile social gaming applications, primarily free-to-play, incorporating a loyalty program with 'real world' rewards[32](index=32&type=chunk) - The company adopted ASU 2023-07, Segment Reporting, for the year ended December 31, 2024, with no effect on financial position, results, or cash flows[42](index=42&type=chunk) - The company acquired Pixode Games Limited on July 1, 2024, for **$3.5 million cash** at closing, with potential additional contingent consideration up to **$113.5 million** based on product and financial milestones[53](index=53&type=chunk)[54](index=54&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) [Overview](index=34&type=section&id=Overview) PLAYSTUDIOS develops free-to-play mobile and social games, integrating a unique playAWARDS loyalty program for 'real world' rewards - PLAYSTUDIOS develops and publishes free-to-play casual games for mobile and social platforms, including social casino games and titles like Tetris and Brainium games[113](index=113&type=chunk) - The proprietary playAWARDS program allows players to earn loyalty points for 'real world' rewards, with most rewards provided by partners at no cost to the company[114](index=114&type=chunk)[120](index=120&type=chunk) - Primary revenue sources are in-game virtual currency sales and in-game advertising[116](index=116&type=chunk)[117](index=117&type=chunk) [Key Factors Affecting Our Performance](index=35&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) Performance is influenced by platform agreements, user acquisition, game development, and the playAWARDS loyalty program - Performance is significantly affected by third-party platform agreements (Apple App Store, Google Play Store) which charge transaction fees (typically **30%**) and can unilaterally change terms[119](index=119&type=chunk) - User acquisition and player monetization are vital, involving substantial spending on advertising and optimizing virtual currency sales while managing game economies[119](index=119&type=chunk) - Continuous investment in game development, new content, and enhancements to the playAWARDS and myVIP programs is necessary to maintain player engagement and retention[119](index=119&type=chunk) - The ability to provide desirable real-world rewards, at no cost to the company from partners, directly impacts players' willingness to make in-game purchases[120](index=120&type=chunk) [Key Performance Indicators](index=36&type=section&id=Key%20Performance%20Indicators) PLAYSTUDIOS tracks KPIs for playGAMES and playAWARDS segments to monitor audience engagement, monetization, and program value [playGAMES KPIs](index=36&type=section&id=playGAMES%20KPIs) [playAWARDS KPIs](index=37&type=section&id=playAWARDS%20KPIs) - Key performance indicators are used to track historical performance, identify player activity trends, and set strategic goals, but can fluctuate due to platform policies, seasonality, and new content[121](index=121&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Net revenue decreased by **19.4%** to **$62.7 million** in Q1 2025, leading to a net loss of **$2.88 million** [Overall Financial Performance](index=38&type=section&id=Overall%20Financial%20Performance) [Net Revenue by Reportable Segment](index=38&type=section&id=Net%20Revenue%20by%20Reportable%20Segment) [playGAMES Segment Performance](index=39&type=section&id=playGAMES%20Segment%20Performance) [playAWARDS Segment Performance](index=39&type=section&id=playAWARDS%20Segment%20Performance) [Operating Expenses Analysis](index=40&type=section&id=Operating%20Expenses%20Analysis) [Other Income, Net](index=41&type=section&id=Other%20Income,%20Net) [Provision for Income Taxes](index=41&type=section&id=Provision%20for%20Income%20Taxes) [Segment AEBITDA Comparison](index=41&type=section&id=Segment%20AEBITDA%20Comparison) Consolidated Results of Operations (in thousands, except percentages) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | % Change | | :---------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Net revenue | $62,709 | $77,828 | $(15,119) | (19.4)% | | Operating expenses | $65,450 | $79,531 | $(14,081) | (17.7)% | | Operating loss | $(2,741) | $(1,703) | $(1,038) | 61.0% | | Net loss | $(2,880) | $(567) | $(2,313) | 407.9% | | Net loss margin | (4.6)% | (0.7)% | (3.9)pp | 557.1% | Net Revenue by Reportable Segment (in thousands) | Segment | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :-------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | playGAMES | $62,555 | $77,828 | $(15,273) | (19.6)% | | playAWARDS | $154 | $0 | $154 | nm | playGAMES Net Revenues and Key Performance Indicators (in thousands, except percentages and ARPDAU) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | Virtual currency revenue | $50,692 | $60,247 | $(9,555) | (15.9)% | | Advertising revenue | $11,863 | $17,442 | $(5,579) | (32.0)% | | Net revenue | $62,555 | $77,828 | $(15,273) | (19.6)% | | Average DAU | 2,632 | 3,495 | (863) | (24.7)% | | Average MAU | 11,422 | 14,752 | (3,330) | (22.6)% | | Average DPU | 21 | 27 | (6) | (22.2)% | | ARPDAU (in dollars) | $0.26 | $0.24 | $0.02 | 8.3% | Operating Expenses (in thousands) | Expense Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------- | | Cost of revenue | $15,779 | $18,951 | $(3,172) | | Selling and marketing | $13,169 | $18,576 | $(5,407) | | Research and development | $13,674 | $18,021 | $(4,347) | | General and administrative | $11,861 | $11,779 | $82 | | Depreciation and amortization | $9,632 | $11,566 | $(1,934) | | Restructuring expenses | $1,335 | $638 | $697 | | Total operating expenses | $65,450 | $79,531 | $(14,081) | [Non-GAAP Measures](index=44&type=section&id=Non-GAAP%20Measures) This section defines and reconciles Consolidated Adjusted EBITDA (AEBITDA) and Consolidated AEBITDA Margin - Consolidated Adjusted EBITDA (AEBITDA) is a non-GAAP measure defined as net income before interest, income taxes, depreciation and amortization, restructuring costs, stock-based compensation, changes in fair value of warrant liabilities, and other income/expense items[152](index=152&type=chunk) - Consolidated AEBITDA Margin is calculated as the percentage of Consolidated AEBITDA to revenue[152](index=152&type=chunk) Consolidated AEBITDA and Margin (in thousands, except percentages) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | % Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Consolidated AEBITDA | $12,487 | $15,314 | $(2,827) | (18.5)% | | Consolidated AEBITDA Margin | 19.9% | 19.7% | 0.2pp | 1.0% | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) PLAYSTUDIOS maintains **$107.1 million** in cash, with sufficient liquidity for the next 12 months [Debt](index=46&type=section&id=Debt) [Cash Flows](index=46&type=section&id=Cash%20Flows) [Contractual Obligations, Commitments, and Contingencies](index=46&type=section&id=Contractual%20Obligations,%20Commitments,%20and%20Contingencies) - Cash and cash equivalents totaled **$107.1 million** as of March 31, 2025[157](index=157&type=chunk) - The company believes current liquidity is sufficient for operations and capital expenditures for at least the next twelve months, but may seek additional financing opportunistically for growth investments[157](index=157&type=chunk)[158](index=158&type=chunk) - No outstanding balances under the **$75.0 million** revolving credit facility as of March 31, 2025[159](index=159&type=chunk) Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Net cash provided by operating activities | $3,300 | $4,998 | $(1,698) | | Net cash used in investing activities | $(3,609) | $(6,522) | $2,913 | | Net cash used in financing activities | $(2,456) | $(4,263) | $1,807 | [Critical Accounting Policies and Estimates](index=46&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statements adhere to U.S. GAAP, with no material changes to critical accounting policies since the 2024 10-K - Financial statements require estimates and assumptions affecting reported amounts of assets, liabilities, revenue, and expenses[165](index=165&type=chunk) - No material changes to critical accounting policies and estimates compared to the 2024 Annual Report on Form 10-K[166](index=166&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) [Market Risk Disclosures](index=47&type=section&id=Market%20Risk%20Disclosures) PLAYSTUDIOS is exempt from market risk disclosures as a 'smaller reporting company' - PLAYSTUDIOS is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a 'smaller reporting company'[167](index=167&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) [Evaluation of Disclosure Controls and Procedures](index=47&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, ensuring timely and accurate reporting - The company's CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025[168](index=168&type=chunk) - Disclosure controls provide reasonable assurance for timely and accurate information recording, processing, summarizing, and reporting[168](index=168&type=chunk) [Changes in Internal Control over Financial Reporting](index=47&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes occurred in internal control over financial reporting during Q1 2025 - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2025[169](index=169&type=chunk) [Part II. OTHER INFORMATION](index=48&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) PLAYSTUDIOS is involved in routine litigation, not expected to materially affect its financial position - The company is party to ordinary and routine litigation incidental to its business[170](index=170&type=chunk) - Management believes the final outcome of current legal matters will not have a material adverse effect on the company's business[170](index=170&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the 2024 Annual Report on Form 10-K - No material changes to risk factors previously disclosed in the 2024 Annual Report on Form 10-K[171](index=171&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) PLAYSTUDIOS repurchased **1.33 million shares** of Class A common stock, with **$41.4 million** remaining in the program Share Repurchases (Quarter Ended March 31, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of a Publicly Announced Program | Dollar Value of Shares that May Yet be Purchased Under the Program (in thousands) | | :-------------------------------- | :------------------------------- | :--------------------------- | :--------------------------------------------------------------------- | :----------------------------------------------------------------------------- | | January 1, 2025 - January 31, 2025 | 542,877 | $1.82 | 416,884 | $42,734 | | February 1, 2025 - February 28, 2025 | 527,870 | $1.77 | 244,922 | $42,306 | | March 1, 2025 - March 31, 2025 | 258,751 | $1.37 | 248,030 | $41,964 | - The stock repurchase program was extended through November 1, 2025, with **$41.4 million** remaining availability after subsequent purchases post-March 31, 2025[105](index=105&type=chunk)[106](index=106&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - No defaults upon senior securities[174](index=174&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to PLAYSTUDIOS - Mine Safety Disclosures are not applicable to PLAYSTUDIOS[174](index=174&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) Joel Agena adopted a Rule 10b5-1 trading plan for Class A common stock sales, effective through March 16, 2026 - Joel Agena, General Counsel and Secretary, adopted a Rule 10b5-1 trading plan on March 12, 2025[174](index=174&type=chunk) - The plan provides for the sale of up to **225,391 shares** of Class A common stock, up to **100%** of shares received from vesting RSUs (**125,000 gross**), and up to **233,044 shares** from vested stock option exercises[174](index=174&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed or incorporated by reference into the Quarterly Report on Form 10-Q - Exhibits include Certificate of Incorporation, Bylaws, Certifications of CEO and CFO, and Inline XBRL documents[179](index=179&type=chunk) [Signatures](index=52&type=section&id=Signatures) The report was signed by Andrew Pascal (CEO) and Scott Peterson (CFO) on May 9, 2025 - The report was signed by Andrew Pascal (Chairman and CEO) and Scott Peterson (CFO) on May 9, 2025[182](index=182&type=chunk)

Company Performance - PLAYSTUDIOS, Inc. reported a quarterly loss of $0.02 per share, aligning with the Zacks Consensus Estimate, compared to break-even earnings per share a year ago [1] - The company posted revenues of $62.71 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.91% and down from $77.83 million year-over-year [2] - Over the last four quarters, PLAYSTUDIOS has surpassed consensus EPS estimates three times, but has topped consensus revenue estimates only once [2] Stock Movement and Outlook - PLAYSTUDIOS shares have declined approximately 27.4% since the beginning of the year, contrasting with the S&P 500's decline of 3.3% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $63.44 million, and -$0.01 on revenues of $263.76 million for the current fiscal year [7] Industry Context - The Gaming industry, to which PLAYSTUDIOS belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact PLAYSTUDIOS' stock performance [5]

Financial Data and Key Metrics Changes - First quarter revenue was $63 million, down approximately 19% year over year, reflecting continued softness in both social casino and casual portfolios [17] - Adjusted EBITDA for the quarter was $12 million, an 18.5% decline year over year and flat sequentially [18] - DAU was 2.6 million, down 25% year over year and down 3% sequentially [19] - MAU was 11.4 million, down 23% year over year and largely flat sequentially [19] - Adjusted EBITDA margin was 20%, up 20 basis points from the same period last year [18] Business Line Data and Key Metrics Changes - The social casino portfolio faced category-wide headwinds, but monetization improved across several core titles, with ARPDAU increasing year over year in POP slots, Mykonami, and especially in the MyVegas franchise [9] - Direct to consumer channel generated approximately $5 million in in-app purchase revenue, representing 9.8% of total IAP revenue in the quarter, compared to $2.3 million or 3.9% in Q1 2024 [10] - Casual segment performance remained soft across both Brame and Tetris Prime, with Brame showing early signs of monetization improvement [11] Market Data and Key Metrics Changes - The social casino category is being impacted by the rising popularity of sweepstakes-style offerings, which are capturing increasing mindshare and spend from players [6] - The daily average retail value of available rewards increased by 5% to approximately $2 million per day [14] Company Strategy and Development Direction - The company is focused on a reinvention plan to improve clarity, efficiency, and discipline, with a strong emphasis on compliance in developing a sweepstakes solution [5][7] - Development continues on the new casual Tetris title, Tetris Block Party, with a planned Q4 launch [8] - The Play Awards platform is central to the strategy of being a leader in rewarded play, with new award partnerships launched to enhance the loyalty ecosystem [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the market but expressed confidence in the reinvention plan and the potential for future growth [5] - The company reaffirmed its full-year 2025 guidance of net revenue between $250 million and $270 million and consolidated adjusted EBITDA between $45 million and $55 million [21] Other Important Information - The balance sheet remains strong, ending the quarter with approximately $107 million in cash and no outstanding debt [15] - The company is actively assessing strategic M&A opportunities that align with growth priorities [15] Q&A Session Summary Question: Confidence in executing the Q2 launch of the new sweepstakes product - Management expressed confidence in the ability to introduce and slowly scale the sweepstakes offering in Q2, with a measured introduction in several jurisdictions initially [25][26] Question: Success factors driving DTC revenue growth - The success is attributed to a focus on driving more consumption directly through incentives and a loyalty program, with expectations for continued momentum due to recent legal rulings [27][30] Question: Changes in the sweepstakes development phase - Management indicated that the focus has been on validating the technical stability and performance of the platform, with plans for a measured market introduction [35][36] Question: Benefits expected from the Apple Epic Games lawsuit - The ruling allows for more aggressive routing of purchases through direct channels, which is expected to improve user conversion and margin [38][40] Question: Integration of Play Awards with sweepstakes - Management believes that the loyalty program will enhance the sweepstakes promotional mechanic, driving deeper player engagement [45][46]

Financial Data and Key Metrics Changes - First quarter revenue was $63 million, down approximately 19% year over year, reflecting continued softness in both social casino and casual portfolios [16] - Adjusted EBITDA for the quarter was $12 million, an 18.5% decline year over year and flat sequentially [17] - DAU was 2.6 million, down 25% versus Q1 of 2024, and MAU was 11.4 million, down 23% year over year [18] - Adjusted EBITDA margin was 20%, up 20 basis points from the same period last year [17] Business Line Data and Key Metrics Changes - The social casino portfolio faced category-wide headwinds, but monetization improved across several core titles, with ARPDAU increasing year over year in POP slots, Mykonami, and especially in the MyVegas franchise [8][10] - Direct to consumer channel generated approximately $5 million in in-app purchase revenue, representing 9.8% of total IAP revenue in the quarter, compared to $2.3 million or 3.9% in Q1 of 2024 [10][11] - Casual segment performance remained soft across both Brame and Tetris Prime, with Brame showing early signs of monetization improvement [11][12] Market Data and Key Metrics Changes - The social casino category is being impacted by the rising popularity of sweepstakes-style offerings, which are capturing increasing mindshare and spend from players [5] - The company is developing a sweepstakes solution to address the competitive landscape and has launched an internal alpha of its sweepstakes promotional platform [5][6] Company Strategy and Development Direction - The company is focused on a reinvention plan to operate with more clarity, efficiency, and discipline, aiming to stabilize its core business and unlock future growth [4][6] - Development continues on the new casual Tetris title, Tetris Block Party, with a planned Q4 launch [7][12] - The Play Awards platform is central to the company's strategy of being a leader in rewarded play, enhancing player engagement and loyalty [13][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the market but expressed confidence in the reinvention plan and the potential for future growth [4][16] - The company reaffirmed its full-year 2025 guidance of net revenue between $250 million and $270 million and consolidated adjusted EBITDA between $45 million and $55 million [20] Other Important Information - The company ended the quarter with approximately $107 million in cash and no outstanding debt [15] - The daily average retail value of available rewards increased by 5% to approximately $2 million per day [14] Q&A Session Summary Question: Confidence in Q2 launch of the new sweepstakes product - Management expressed confidence in the ability to introduce and slowly scale the sweepstakes offering in Q2, with a measured introduction in several jurisdictions initially [23][25] Question: Success factors driving DTC revenue growth - The growth in DTC revenue is driven by offering incentives for users to transact directly, with expectations for continued momentum due to recent legal rulings [26][28] Question: Changes in sweepstakes development phase - The focus has been on validating the technical stability and performance of the platform, with plans for a measured market introduction [32][34] Question: Benefits expected from the Apple Epic Games lawsuit - Management anticipates improved user adoption of direct purchases and margin improvement due to reduced fees on direct sales [36][38] Question: Integration of Play Awards with sweepstakes - Management believes that the loyalty program and sweepstakes promotional mechanic will complement each other, enhancing player engagement [42][44]

[First Quarter 2025 Earnings Release](index=1&type=section&id=PLAYSTUDIOS%2C%20INC.%20ANNOUNCES%20FIRST%20QUARTER%20RESULTS) PLAYSTUDIOS reported first-quarter 2025 revenue of $62.7 million and a net loss of $2.9 million, reflecting continued challenging market conditions [First Quarter 2025 Overview and Highlights](index=1&type=section&id=First%20Quarter%20Financial%20Highlights) PLAYSTUDIOS reported first-quarter 2025 revenue of $62.7 million and a net loss of $2.9 million, reflecting continued challenging market conditions - CEO Andrew Pascal noted a focused start to 2025 amidst a business and industry transition, with progress in sweepstakes capabilities, direct-to-consumer channels, playAWARDS ecosystem, and 'Tetris Block Party' development[3](index=3&type=chunk) Financial Metric Comparison (Q1 2025 vs. Q1 2024) | Financial Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $62.7 million | $77.8 million | | Net Loss | $2.9 million | $0.6 million | | Consolidated AEBITDA | $12.5 million | $15.3 million | | AEBITDA Margin | 19.9% | 19.7% | | Direct to Consumer Revenue | $5.0 million | $2.3 million | - Recent business developments include progress on the Reinvention plan targeting **$25-$30 million** in annualized cost savings, 'Tetris Block Party' on track for Q4 2025 launch, and repurchase of **0.9 million** shares at an average price of **$1.71** per share[10](index=10&type=chunk) [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025%20Guidance) PLAYSTUDIOS has maintained its full-year 2025 financial guidance, signaling confidence in its operational strategy and cost-saving initiatives despite the challenging first quarter Full Year 2025 Guidance Range | Guidance Metric | Full Year 2025 Range | | :--- | :--- | | Net Revenue | $250 to $270 million | | Consolidated AEBITDA | $45 to $55 million | [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents the company's condensed consolidated financial statements, including the statement of operations and balance sheets [Condensed Consolidated Statement of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20OPERATIONS) For the first quarter of 2025, the company's net revenue decreased to $62.7 million from $77.8 million, resulting in a wider loss from operations and a net loss of $2.9 million Condensed Consolidated Statement of Operations (In thousands) | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net revenue | $62,709 | $77,828 | | Total operating costs and expenses | $65,450 | $79,531 | | Loss from operations | $(2,741) | $(1,703) | | Net loss | $(2,880) | $(567) | | Net loss per share, diluted | $(0.02) | $— | [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, PLAYSTUDIOS reported a solid liquidity position with $107.1 million in cash and cash equivalents and an undrawn $81 million revolving credit facility Condensed Consolidated Balance Sheets (In thousands) | (In thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $107,097 | $109,179 | | Total current assets | $145,449 | $147,102 | | Total assets | $313,775 | $322,955 | | Total current liabilities | $40,385 | $49,418 | | Total liabilities | $69,693 | $78,240 | | Total stockholders' equity | $244,082 | $244,715 | - As of March 31, 2025, the company's **$81 million** revolving credit facility remains undrawn, indicating strong liquidity[4](index=4&type=chunk) [Non-GAAP Measures and Supplemental Data](index=8&type=section&id=Supplemental%20Data) This section provides reconciliations of non-GAAP financial measures and detailed supplemental data on segment performance and key performance indicators [Reconciliation of Net Loss to Consolidated AEBITDA](index=8&type=section&id=RECONCILIATION%20OF%20NET%20LOSS%20TO%20CONSOLIDATED%20AEBITDA) Consolidated AEBITDA for Q1 2025 was $12.5 million, down from $15.3 million in Q1 2024, with a slight margin improvement to 19.9% due to lower operating costs Reconciliation of Net Loss to Consolidated AEBITDA (In thousands) | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net loss | $(2,880) | $(567) | | Depreciation & amortization | $9,632 | $11,566 | | Stock-based compensation expense | $4,258 | $4,794 | | Restructuring and related | $1,335 | $638 | | **Consolidated AEBITDA** | **$12,487** | **$15,314** | | **Consolidated AEBITDA Margin** | **19.9%** | **19.7%** | [Segment Information](index=9&type=section&id=SUPPLEMENTAL%20DATA%20-%20SEGMENT%20INFORMATION) The playGAMES segment remains the primary revenue driver, generating $62.6 million in revenue and $18.3 million in segment AEBITDA for Q1 2025, despite a decline from the prior year Segment Information (In thousands) | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **playGAMES Net Revenue** | $62,555 | $77,828 | | **playGAMES Segment AEBITDA** | $18,309 | $23,451 | | **playAWARDS Net Revenue** | $154 | $— | | **playAWARDS Segment AEBITDA** | $(2,289) | $(3,622) | [Net Revenue Breakdown](index=10&type=section&id=SUPPLEMENTAL%20DATA%20-%20NET%20REVENUE) Total net revenue declined in Q1 2025, with virtual currency and advertising revenue falling, but direct-to-consumer platform revenue grew significantly by 113.9% Net Revenue Breakdown (In thousands) | Revenue Type (In thousands) | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Virtual currency | $50,840 | $60,247 | (15.6%) | | Advertising | $11,863 | $17,442 | (32.0%) | | **Total net revenue** | **$62,709** | **$77,828** | **(19.4%)** | - Direct-to-consumer (DTC) revenue increased by **113.9%** to **$4.97 million** from **$2.32 million** in the prior year quarter[36](index=36&type=chunk) [Key Performance Indicators (KPIs)](index=11&type=section&id=SUPPLEMENTAL%20DATA%20%E2%80%93%20KEY%20PERFORMANCE%20INDICATORS) In Q1 2025, playGAMES user engagement metrics declined, but monetization efficiency improved with an 8.3% increase in ARPDAU, while playAWARDS platform activity significantly contracted playGAMES Key Performance Indicators | playGAMES KPIs | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Average DAU (in thousands) | 2,632 | 3,495 | (24.7%) | | Average MAU (in thousands) | 11,422 | 14,752 | (22.6%) | | ARPDAU (in dollars) | $0.26 | $0.24 | 8.3% | playAWARDS Key Performance Indicators | playAWARDS KPIs | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Purchases (in thousands of units) | 281 | 501 | (44.0%) | | Retail Value of Purchases (in thousands) | $16,984 | $40,591 | (58.2%) | [Definitions and Disclosures](index=2&type=section&id=Definitions%20and%20Disclosures) This section outlines the definitions of key performance indicators, non-GAAP financial measures, and important disclosures regarding forward-looking statements [Performance Indicators Definitions](index=2&type=section&id=Performance%20Indicators) The company uses several key performance indicators (KPIs) to manage its business, including audience and monetization metrics for playGAMES and engagement metrics for playAWARDS - playGAMES metrics measure audience size and engagement (**DAU**, **MAU**) and monetization (**DPU**, **ARPDAU**)[11](index=11&type=chunk)[12](index=12&type=chunk)[15](index=15&type=chunk) - playAWARDS metrics measure the value and engagement of the loyalty program, tracking the variety of rewards (**Available Rewards**), player redemptions (**Purchases**), and the real-world value provided to players (**Retail Value of Purchases**)[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) PLAYSTUDIOS discloses Consolidated Adjusted EBITDA (AEBITDA) and Consolidated AEBITDA Margin as non-GAAP financial measures, used by management to analyze and benchmark business performance - Consolidated AEBITDA is defined as net income (loss) adjusted for interest, taxes, depreciation, amortization, stock-based compensation expense, restructuring costs, and other infrequent or non-cash items[22](index=22&type=chunk) - Management uses Consolidated AEBITDA to compare operating performance across periods and against other companies, as it removes the impact of different financing and capital structures[23](index=23&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This press release includes forward-looking statements concerning future financial performance, game development plans, and the impact of restructuring, which are subject to significant risks and uncertainties - The report contains forward-looking statements regarding future financial and operating performance, game release plans, and anticipated cost reductions from restructuring[24](index=24&type=chunk) - These statements are subject to risks including competition, technological changes, ability to retain players, and general economic conditions, with no obligation for the company to update them[25](index=25&type=chunk)