Core Insights - Playtika Holding Corp. (NASDAQ:PLTK) has reached a new 52-week low of $3.51, indicating a continued downward trend in its stock price [2][3] - UBS has reduced its price target for Playtika from $5.50 to $4.00, maintaining a 'Neutral' rating due to slower growth in key social casino titles and a reduced revenue outlook for 2025 [3] Financial Performance - The company reported weaker-than-expected second-quarter results, contributing to the price target cut by UBS [3] - UBS has adjusted its 2025 revenue outlook for Playtika to approximately 3.5% below prior guidance [3] Strategic Focus - Despite current challenges, Playtika is focused on achieving its EBITDA targets and is shifting more sales to direct-to-consumer channels, which are expected to reach 40% in the long term, up from 25% today [4] - Playtika is engaged in the development and distribution of mobile games globally, positioning itself as one of the 10 cheapest penny stocks to buy now [4]

Group 1 - The article highlights the effectiveness of Trump's industrial policies, which were initially met with skepticism, but have since shown significant results in various sectors [1][14]. - The manufacturing sector has seen a return to the U.S. due to Trump's policies, with Intel and Boeing benefiting from government support and contracts [3][4]. - The U.S. steel industry has experienced a resurgence, with domestic steel prices rising and companies like U.S. Steel expanding operations due to protective tariffs and infrastructure demands [4][27]. Group 2 - Trump's focus on strategic sectors such as defense and critical resources has evolved into a systematic approach, with companies like MP Materials and Palantir positioned as key beneficiaries [6][7]. - MP Materials has transformed into a leading U.S. rare earth supplier with significant government backing, highlighting the importance of resource security [7][8]. - The nuclear energy sector has also gained traction, with companies like Centrus Energy and NuScale receiving substantial government support, leading to stock price increases [8][20][22]. Group 3 - In the energy sector, Trump's policies have led to increased domestic oil and gas production, benefiting companies like ExxonMobil and Pioneer Natural Resources through regulatory rollbacks [11][30][31]. - The infrastructure sector has seen a positive impact from Trump's $1 trillion infrastructure plan, with companies like Lowe's and Commercial Metals experiencing significant revenue growth [12][29][34]. - The article emphasizes the importance of understanding the long-term implications of Trump's policies on various industries, suggesting that companies closely aligned with these strategies are likely to thrive [15][35].

Core Perspective - Superior long-term returns are achieved through world-class execution rather than solely financial engineering [1] - The analysis focuses on operational levers that create value beyond financial statements [1] Industry Specialization - Areas of specialization include tech, e-commerce, logistics, fintech, and the broader consumer sector [1] - The focus is on identifying "sleeping giants," or businesses with strong underlying assets but lacking strategic direction [1] Investment Experience - The company has a 20-year history as an active investor, serving on investment committees for leading VC funds in Mexico and Latin America [1] - Over 30 startups have been backed as an angel investor, including early investments in five unicorns [1] Analytical Approach - The analysis aims to highlight the complexities of execution, emphasizing the "how" behind financial numbers [1] - The goal is to differentiate between companies with compelling narratives and those with scalable operations [1] Educational Background - The company holds an MBA from the University of Mannheim and a B.S. in Industrial Engineering from Tec de Monterrey [1] - Participation in the Endeavor Innovation and Growth program at Stanford University adds to the expertise [1]

Core Insights - Bingo Blitz is launching a limited-time collaboration with Garfield, enhancing the game's appeal through nostalgia and social gameplay [1][2][4] - The event will run through November, featuring exclusive Garfield-themed bingo rooms and a new Collaboration Room for community engagement [2][3] Company Overview - Bingo Blitz is recognized as the 1 free-to-play bingo game globally, with a commitment to providing high-quality user experiences and innovative features [5][6] - Playtika Holding Corp., the parent company, is a leader in mobile gaming, known for its free-to-play social games and a diverse portfolio of titles [7]

Core Viewpoint - Playtika Holding Corp (PLTK) offers a strategy for shareholders to enhance income through covered calls, with a potential total annualized return of 17.3% if the stock is not called away [2]. Group 1: Income Generation Strategy - Shareholders can sell a December 2026 covered call at a $5 strike price, collecting a premium that annualizes to an additional 6.5% return based on a 30 cents bid [2]. - If the stock is called away, shareholders could still achieve a 43.6% return from the current trading level, in addition to any dividends collected prior to the call [2]. Group 2: Dividend Yield and Volatility - The current annualized dividend yield for PLTK is 10.8%, but dividend amounts can be unpredictable and are influenced by the company's profitability [3]. - The trailing twelve-month volatility for PLTK is calculated to be 48%, which can assist in evaluating the risk-reward profile of selling covered calls [7].

Group 1 - Playtika Holding Corp. (NASDAQ:PLTK) has had its price target lowered by UBS from $5.5 to $4 while maintaining a Neutral rating on the stock [1][3] - The company's legacy portfolio, particularly Slotomania, saw a significant decline of 39.4% year-over-year during Q2 FY2025, while Bingo Blitz revenue increased by 2.9% [2] - Playtika's strategic shift towards Direct-to-Consumer (DTC) revenue showed minimal growth of 1.3% year-over-year, with a long-term DTC target raised from 30% to 40% [3] Group 2 - Analysts from BofA, Wedbush, and TD Cowen maintain a bullish outlook on PLTK, assigning Buy ratings with price targets of $5.5, $11.5, and $14 respectively [4] - The average price target for Playtika Holding Corp. is $5.25, suggesting an upside potential of nearly 40% from current levels [4] - Playtika develops mobile games and distributes them through various web and mobile platforms, including DTC platforms [5]

Market Overview - The S&P 500 is currently trading at nearly 30 times trailing twelve months (TTM) price-to-earnings (P/E) ratio, indicating that the market is valued significantly above historical averages [1] - A blended P/E ratio is noted to be in the mid-20s, further emphasizing the elevated market valuation [1] Investment Focus - The company, PropNotes, specializes in identifying high-yield investment opportunities tailored for individual investors [1] - With a background in professional proprietary trading, the company aims to simplify complex investment concepts and provide actionable insights [1] - The analysis produced by the company is designed to assist investors in making informed decisions backed by expert research [1]

Core Insights - The change in Apple's payment rules is a significant transformation for the global mobile gaming industry in 2025, allowing game companies to bypass the 30% "Apple tax" and choose third-party payment service providers, thereby significantly reducing channel costs [1] - The new EU regulations, effective next year, will also allow developers to select third-party payment options, further lowering app store service fees [1] - Direct-to-Consumer (DTC) strategies are emerging as a major trend for increasing revenue in overseas markets in 2025 [1] Group 1: DTC Revenue Insights - Playtika reported that 25.3% of its Q2 2025 revenue came from its web store, amounting to $176 million, with a year-on-year growth of 1.3% but a quarter-on-quarter decline of 1.8% [1] - FunPlus has accelerated its DTC plans in response to regulatory changes, having established its DTC strategy following Apple's IDFA rule changes [3] - Modern Times Group indicated that DTC revenue from web games accounted for 24% of its Q2 revenue, up from 19% year-on-year [3] - SciPlay noted that approximately 18% of its Q2 2025 sales, equating to $35 million, came from its DTC store [5] - Huuuge Games reported that DTC contributed 20% to its Q1 total revenue, increasing to 21.5% in April [5] - Stillfront Group stated that DTC now represents 39% of its net revenue, up from 34% in Q2 2024 [6] - Ten Square Games reported that its web store accounted for over 19% of total revenue in March, with its fishing simulation game "Fishing Clash" generating over 26% of its revenue from its own store [6] Group 2: DTC Challenges and Strategies - DTC is not merely about establishing a web store; it requires a sophisticated system that includes localized payment options and optimized purchase funnels [9][16] - Payment preferences vary by region, with credit cards being the default globally, but alternatives like iDEAL in the Netherlands (68%) and PayPal in Germany (64%) dominating in specific markets [9][10] - Most players do not make a purchase on their first visit; 80% of first-time visitors return within 30 days, with a median conversion time of 2.6 days [11] - 50% of first-time buyers make a second purchase, with half of them returning within 7 days [11] - To enhance DTC profitability, publishers must leverage smart discounts, personalized recommendations, and repurchase incentives [15] Group 3: DTC Optimization Strategies - Key factors for improving off-platform payment conversion rates include providing a seamless user experience and fostering new payment habits [17] - Establishing persistent and easily accessible entry points for players is crucial, utilizing in-game prompts to educate them about new purchasing options [17] - Keeping players within the game during the purchase process can significantly improve conversion rates, as leaving the game can lead to a 45% drop in conversion [18] - Offering substantial incentives for web store purchases is essential, as players are more familiar with native in-app purchases [21] - Testing both native in-app purchases and web payments can provide insights into user behavior and conversion rates [25][27]

Financial Data and Key Metrics Changes - The company reported revenue of $696 million for Q2 2025, reflecting a 1.4% sequential decline but an 11% year-over-year increase [12] - Adjusted EBITDA for the quarter was $167 million, showing a slight sequential decline of 0.2% and a year-over-year decrease of 12.6% [12] - GAAP net income for the quarter was $33.2 million, representing an 8.5% sequential increase but a 61.7% year-over-year decrease [12] Business Line Data and Key Metrics Changes - D2C revenue for the quarter was $175.9 million, reflecting a 1.8% sequential decline and a 1.3% year-over-year increase [13] - Bingo Blitz revenue was $160.2 million, down 1.3% sequentially but up 2.9% year-over-year [14] - Slotomania revenue was $86.5 million, down 22.7% sequentially and 35.4% year-over-year [16] - June's Journey revenue was $69.1 million, up 0.3% sequentially but down 7.4% year-over-year [17] Market Data and Key Metrics Changes - The average DAU decreased by 2.2% sequentially but increased by 8.6% year-over-year to 8.8 million [23] - The average DPU declined by 3.1% sequentially and increased by 26.8% year-over-year to $378,000 [23] - ARPDAU was flat versus Q1 and increased by 2.4% year-over-year to $0.87 [23] Company Strategy and Development Direction - The company is increasing its long-term target for D2C revenue from 30% to 40% to sustain EBITDA and free cash flow [7][14] - The development of a new slot game is on track for launch in Q4 2025, viewed as a key growth driver [9] - The company is focusing on expanding its advertising business, which saw double-digit growth sequentially [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing headwinds in mobile gaming but remains committed to strategic priorities [5] - The company is optimistic about the performance of Disney Solitaire and the Super Play portfolio [6] - Management noted that while some mature titles are experiencing revenue declines, recently acquired titles are transitioning from EBITDA negative to positive [7] Other Important Information - The company has approximately $592.1 million in cash, cash equivalents, and short-term investments as of June 30 [22] - Cost of revenue increased by 16.4% year-over-year, driven by revenue growth and increased amortization expenses [19] - Operating expenses increased by 22.6% year-over-year, primarily due to higher performance marketing spending [20] Q&A Session Summary Question: Insights on stabilizing older titles like Slotomania - Management shared that they are learning from the monetization issues in Slotomania and are encouraged by the changes being made [25][27] Question: Economics of Disney Solitaire - Management indicated that while licensing costs are not disclosed, Disney Solitaire is scaling faster than previous titles and is a successful collaboration [30][32] Question: Structural shifts in the mobile gaming market - Management stated that investments are focused on category-leading games, with less emphasis on older titles lacking leadership [33] Question: Impact of sweepstakes on social casino business - Management acknowledged pressure in the social casino category but could not provide specific numbers related to sweepstakes [39] Question: Appetite for more IP or licensing arrangements - Management expressed openness to pursuing licensed IP opportunities that align with their strategy [42] Question: Development of Jackpot Tour - Management indicated that Jackpot Tour is expected to differentiate itself in the market, with more details to be shared in the future [44][45] Question: Impact of app store fee changes - Management noted that changes in the payment landscape have been a positive tailwind, aiding in the increase of D2C penetration [49][50]

PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS (Unaudited)](index=6&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) Presents unaudited consolidated financial statements and notes on accounting policies, financial instruments, debt, and equity [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $565.8 | $500.9 | | Short-term investments | — | $91.2 | | Total current assets | $916.5 | $872.8 | | Total assets | $3,636.8 | $3,639.2 | | Total current liabilities | $664.5 | $558.9 | | Long-term debt | $2,383.3 | $2,388.5 | | Contingent consideration | $354.6 | $150.0 | | Total liabilities | $3,724.6 | $3,770.3 | | Total stockholders' deficit | $(87.8) | $(131.1) | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Consolidated Statements of Comprehensive Income Highlights (in millions, except per share data) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $696.0 | $627.0 | $1,402.0 | $1,278.2 | | Total costs and expenses | $586.3 | $486.3 | $1,224.5 | $1,039.4 | | Income from operations | $109.7 | $140.7 | $177.5 | $238.8 | | Net income | $33.2 | $86.6 | $63.8 | $139.6 | | Basic Net income per share | $0.09 | $0.23 | $0.17 | $0.38 | | Diluted Net income per share | $0.09 | $0.23 | $0.17 | $0.38 | [Consolidated Statements of Stockholders' Deficit](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Deficit) Changes in Stockholders' Deficit (Six Months Ended June 30, 2025, in millions) | Item | Amount | | :--------------------------------- | :----- | | Balances at January 1, 2025 | $(131.1) | | Net income | $63.8 | | Cash dividend declared | $(75.2) | | Repurchase of common stock | $(10.9) | | Stock-based compensation | $43.5 | | Other comprehensive income | $23.8 | | Balances at June 30, 2025 | $(87.8) | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in millions) | Cash Flow Activity | 2025 | 2024 | | :--------------------------------------- | :----- | :----- | | Net cash provided by operating activities | $164.9 | $180.1 | | Net cash used in investing activities | $(135.2) | $(449.1) | | Net cash used in financing activities | $(97.0) | $(48.6) | | Net change in cash, cash equivalents and restricted cash | $(65.3) | $(319.9) | | Cash, cash equivalents and restricted cash at end of period | $502.4 | $711.8 | [Notes to the Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) - The company completed the acquisition of SuperPlay Ltd. on November 20, 2024, for an aggregate purchase price of **$700.0 million** upfront, plus earnout payments of **up to $1.250 billion** based on future performance. The contingent consideration liability was adjusted to an estimated fair value of **$310.0 million** as of June 30, 2025, resulting in **$44.6 million income** for the six months ended June 30, 2025[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - Apple and Google are significant distribution and payment platforms, accounting for **58%** and **27%** of total accounts receivable, respectively, as of June 30, 2025[38](index=38&type=chunk) - The company uses interest rate swap contracts with a total notional value of **$1.0 billion** to hedge against fluctuating interest rates on its variable rate debt, and foreign currency derivative contracts to reduce exposure to exchange rate fluctuations for expenses denominated in EUR, ILS, PLN, and RON, hedging approximately **$175.6 million** of future salary expenses[44](index=44&type=chunk)[46](index=46&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk)[79](index=79&type=chunk) - A cash dividend of **$0.10 per share** (**$37.6 million total**) was declared on May 8, 2025, payable on July 7, 2025. The company repurchased approximately **1.2 million shares** of common stock at an average cost of **$4.92 per share** during the three months ended June 30, 2025, with **$138.3 million remaining** under the stock repurchase program[68](index=68&type=chunk)[69](index=69&type=chunk) - Total stock-based compensation costs were **$43.5 million** for the six months ended June 30, 2025, down from **$47.7 million** in the prior year period. Unrecognized stock-based compensation expenses totaled approximately **$151.8 million** as of June 30, 2025, expected to be recognized over weighted average periods of **1.2 to 2.7 years**[73](index=73&type=chunk)[74](index=74&type=chunk) - The company's long-term debt includes a **$1.9 billion Term Loan** (**7.190% interest**, maturing 2028) and **$600.0 million Senior Notes** (**4.250% interest**, maturing 2029). The Revolving Credit Facility was **decreased from $600 million to $550 million** and its maturity was conditionally extended to **September 11, 2027**[58](index=58&type=chunk)[59](index=59&type=chunk)[62](index=62&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - The company is involved in several legal proceedings, including class action lawsuits alleging violations of federal securities laws, derivative actions, and multiple state-level lawsuits and arbitration demands alleging that its social casino-themed games constitute illegal gambling. The Washington State Attorney General also sent a letter alleging gambling and consumer protection law violations[88](index=88&type=chunk)[89](index=89&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) Disaggregated Revenue (Six Months Ended June 30, in millions) | Category | 2025 | 2024 | | :-------------------------- | :------- | :------- | | **Geographic location:** | | | | USA | $900.2 | $865.2 | | EMEA | $320.4 | $237.4 | | APAC | $96.6 | $86.7 | | Other | $84.8 | $88.9 | | **Platform type:** | | | | Third-party platforms | $1,046.9 | $933.0 | | Direct-to-consumer platforms | $355.1 | $345.2 | - The effective tax rate for the six months ended June 30, 2025, was **26.0%**, compared to **28.5%** for the same period in 2024, primarily influenced by Global Intangible Low-Taxed Income, foreign tax rates, state income taxes, and valuation allowance changes[114](index=114&type=chunk) - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, and the company is currently assessing its impact, which will be reflected in the Q3 2025 Form 10-Q[119](index=119&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=33&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial condition, operating results, key performance drivers, and Adjusted EBITDA [Overview](index=33&type=section&id=Overview) - Playtika is a leading developer of free-to-play mobile games, leveraging best-in-class live game operations and a proprietary technology platform to drive user engagement and monetization[121](index=121&type=chunk) - The company's headquarters and a majority of its senior leadership and professionals (**approximately 1,340 employees**) are located in Israel, making it susceptible to the ongoing multi-front armed conflict in the region, though no direct material financial impact has been reported to date[122](index=122&type=chunk)[123](index=123&type=chunk) [Components of our Results of Operations](index=33&type=section&id=Components%20of%20our%20Results%20of%20Operations) - Revenue is primarily derived from the sale of virtual items in free-to-play online games, distributed through third-party platforms (e.g., Apple, Google) and direct-to-consumer platforms, with the company acting as the principal[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) - Cost of revenue includes payment processing fees (**30%** for third-party platforms vs. **3-4%** for direct-to-consumer), customer support, hosting, and depreciation/amortization[126](index=126&type=chunk)[127](index=127&type=chunk) - General and administrative expenses include adjustments to contingent consideration payable and legal settlement expenses, in addition to corporate support costs[130](index=130&type=chunk) - Interest and other, net, includes interest expense from the Credit Agreement, interest income from cash/investments, and foreign currency translation differences[132](index=132&type=chunk)[133](index=133&type=chunk) [Consolidated Operating Results of Playtika Holding Corp](index=35&type=section&id=Consolidated%20Operating%20Results%20of%20Playtika%20Holding%20Corp) - Key operating metrics include Daily Active Users (DAUs), Daily Paying Users (DPUs), Daily Payer Conversion, Average Revenue per Daily Active User (ARPDAU), and Monthly Active Users (MAUs), used to measure user engagement, audience scale, and monetization[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Key Financial and Operating Metrics (in millions, except percentages, Average DPUs and ARPDAU) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $696.0 | $627.0 | $1,402.0 | $1,278.2 | | Total costs and expenses | $586.3 | $486.3 | $1,224.5 | $1,039.4 | | Operating income | $109.7 | $140.7 | $177.5 | $238.8 | | Net income | $33.2 | $86.6 | $63.8 | $139.6 | | Adjusted EBITDA | $167.0 | $191.0 | $334.3 | $376.6 | | Average DAUs | 8.8 | 8.1 | 8.9 | 8.4 | | Average DPUs (in thousands) | 378 | 298 | 384 | 303 | | Average Daily Payer Conversion | 4.3 % | 3.7 % | 4.3 % | 3.6 % | | ARPDAU | $0.87 | $0.85 | $0.87 | $0.83 | | Average MAUs | 30.0 | 27.7 | 30.9 | 30.3 | - Revenues increased by **$69.0 million (3M YoY)** and **$123.8 million (6M YoY)**, primarily due to incremental revenues from the SuperPlay acquisition, partially offset by reduced monetization in slot-themed games[144](index=144&type=chunk)[145](index=145&type=chunk) - Sales and marketing expenses significantly increased by **$88.3 million (3M YoY)** and **$169.7 million (6M YoY)**, largely driven by increased media buy and depreciation/amortization from the SuperPlay acquisition[148](index=148&type=chunk) - General and administrative expenses decreased by **$30.2 million (3M YoY)** and **$36.8 million (6M YoY)**, mainly due to a decrease in appreciation and retention expense and an adjustment to contingent consideration related to the SuperPlay earnout. Excluding these, G&A increased due to SuperPlay-related headcount[149](index=149&type=chunk) - Net income decreased by **$53.4 million (3M YoY)** and **$75.8 million (6M YoY)** compared to the same periods in 2024[155](index=155&type=chunk) [Reconciliation of Adjusted EBITDA to Net Income](index=38&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20to%20Net%20Income) Adjusted EBITDA Reconciliation (in millions) | Metric | 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 income | $33.2 | $86.6 | $63.8 | $139.6 | | Provision for income taxes | $11.9 | $33.7 | $22.4 | $55.6 | | Interest expense and other, net | $64.6 | $20.4 | $91.3 | $43.6 | | Depreciation and amortization | $61.0 | $38.7 | $120.2 | $77.9 | | Stock-based compensation | $17.5 | $22.9 | $43.0 | $46.6 | | Impairment charge | $0.4 | — | $0.4 | $7.0 | | Changes in estimated value of contingent consideration | $(33.0) | $(16.3) | $(26.1) | $(13.4) | | Acquisition and related expenses | $3.6 | $0.5 | $10.1 | $2.7 | | Other items | $7.8 | $4.5 | $9.2 | $17.0 | | **Adjusted EBITDA** | **$167.0** | **$191.0** | **$334.3** | **$376.6** | | Net income margin | 4.8 % | 13.8 % | 4.6 % | 10.9 % | | Adjusted EBITDA margin | 24.0 % | 30.5 % | 23.8 % | 29.5 % | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary liquidity sources include cash flows from operations, unrestricted cash and cash equivalents, short-term investments, and a **$550 million revolving credit facility**. Cash and cash equivalents plus short-term investments totaled **$592.1 million** as of June 30, 2025[162](index=162&type=chunk) - Net cash provided by operating activities for the six months ended June 30, 2025, was **$164.9 million**, a decrease from **$180.1 million** in the prior year period[168](index=168&type=chunk) - Net cash used in investing activities significantly decreased to **$135.2 million** for the six months ended June 30, 2025, from **$449.1 million** in the prior year, mainly due to lower purchases of short-term investments[169](index=169&type=chunk) - Net cash used in financing activities increased to **$97.0 million** for the six months ended June 30, 2025, from **$48.6 million** in the prior year, primarily due to higher cash dividends paid and stock repurchases[170](index=170&type=chunk)[171](index=171&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=41&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Outlines exposure to interest rate, investment, and foreign currency risks, detailing mitigation strategies [Interest rate risk](index=41&type=section&id=Interest%20rate%20risk) - The company's Term Loan and Revolving Credit Facility are floating rate facilities, exposing it to interest rate fluctuations. Interest rate swap agreements with a total notional value of **$1.0 billion** are used to reduce this exposure by fixing interest rates[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) - A hypothetical **100 basis point** increase or decrease in weighted average interest rates would impact the company's interest expense by **$8.2 million** over a twelve-month period, considering the effect of interest rate swaps[180](index=180&type=chunk) - The fair value of the company's **$600.0 million Senior Notes** is sensitive to interest rate movements; a **100 basis point increase** would decrease their fair value by **$17.8 million**, while a **100 basis point decrease** would increase it by **$18.5 million** as of June 30, 2025[181](index=181&type=chunk) [Investment risk](index=43&type=section&id=Investment%20risk) - The company's cash, cash equivalents, restricted cash (**$502.4 million**) and short-term investments (**$91.2 million**) are primarily held in commercial papers, bank deposits, and money market funds. Due to their short-term nature, a hypothetical **100 basis point change** in interest rates would have an immaterial impact on their fair value[182](index=182&type=chunk) [Foreign currency risk](index=43&type=section&id=Foreign%20currency%20risk) - The company is exposed to foreign currency risk due to operating expenses denominated in currencies such as EUR, ILS, PLN, and RON. This risk is partially mitigated by revenues recognized in the same currencies and by using derivative contracts to hedge approximately **$175.6 million** of future salary expenses[183](index=183&type=chunk)[185](index=185&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=43&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Details management's evaluation of disclosure controls and procedures, confirming no material internal control changes - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[187](index=187&type=chunk)[188](index=188&type=chunk) - There were no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the company's internal control during the quarter ended June 30, 2025[188](index=188&type=chunk) PART II. OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=45&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Refers to Note 9 for a comprehensive description of legal proceedings and commitments - For a detailed description of the company's legal proceedings, refer to Note 9, Commitments and Contingencies, in Part I, Item 1 of this quarterly report[189](index=189&type=chunk) [ITEM 1A. RISK FACTORS](index=45&type=section&id=ITEM%201A.%20RISK%20FACTORS) Highlights key risks: platform reliance, indebtedness, legal challenges, geopolitical instability, and Chinese investor control [Reliance on Third-Party Platforms](index=45&type=section&id=Reliance%20on%20Third-Party%20Platforms) - The company relies heavily on third-party platforms like the iOS App Store, Facebook, and Google Play Store for game distribution and revenue collection, with **68.6% of its 2024 revenues** generated through these platforms[190](index=190&type=chunk) - Risks include platform providers discontinuing or limiting access, increasing fees, modifying policies, or blocking certain game genres. Recent instances include Google blocking games in 13 countries and Indonesia, and a block on the company's domain in Turkey affecting multiple games[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) [Substantial Indebtedness](index=46&type=section&id=Substantial%20Indebtedness) - The company has substantial indebtedness, including a **$1.9 billion Term Loan** and **$600.0 million Senior Notes**, which could limit its ability to borrow additional capital, dedicate cash flow to debt service, and restrict operational flexibility[195](index=195&type=chunk)[196](index=196&type=chunk) - Restrictive covenants in debt instruments limit activities such as incurring additional debt, making investments, paying dividends, and repurchasing stock. Non-compliance could lead to an event of default and acceleration of indebtedness[197](index=197&type=chunk)[200](index=200&type=chunk) - Future earnout payments of **up to $1.250 billion** for the SuperPlay acquisition could strain cash flows, especially if the conditional extension of the Revolving Credit Facility maturity is not satisfied[198](index=198&type=chunk) [Legal or Regulatory Restrictions](index=48&type=section&id=Legal%20or%20Regulatory%20Restrictions) - Significant opposition to social gaming, particularly social casino-themed games, could lead to new legislation or regulatory frameworks that prohibit games, restrict advertising, or substantially increase compliance costs[201](index=201&type=chunk) - The company faces multiple lawsuits and arbitration demands in various U.S. states (e.g., Alabama, Tennessee, Kentucky, Washington) alleging that its social casino-themed games constitute illegal gambling and seeking recovery of player payments. The Washington State Attorney General has also issued allegations[203](index=203&type=chunk)[207](index=207&type=chunk) - The expansion of illegal gambling lawsuits to include 'Match 3' puzzle games (e.g., Royal Match) could adversely impact the company's casual games. Consumer protection concerns regarding in-game purchases by children and targeting 'vulnerable' users also pose risks[205](index=205&type=chunk)[206](index=206&type=chunk)[209](index=209&type=chunk) [Geopolitical Instability in Israel](index=49&type=section&id=Geopolitical%20Instability%20in%20Israel) - The company has significant operations and most of its senior management in Israel, making its business vulnerable to political, economic, and military instability, including the ongoing war with Hamas and escalated conflict with Iran[212](index=212&type=chunk)[214](index=214&type=chunk) - Escalation or continuation of conflicts could result in military reserve duty call-ups, damage to infrastructure, diplomatic rifts, and economic boycotts, all of which could materially adversely affect operations and financial results[213](index=213&type=chunk)[214](index=214&type=chunk) [Chinese Investor Control](index=50&type=section&id=Chinese%20Investor%20Control) - The company's control by a Chinese individual (Yuzhu Shi) and company (Giant) could subject it to new U.S. and Chinese laws, potentially restricting its ability to operate as a publicly traded company in the U.S. or impacting its financial performance due to changing U.S.-China relations[215](index=215&type=chunk)[216](index=216&type=chunk) - China's Foreign Debt Rules require approvals from the NDRC for certain indebtedness, which could significantly impact the company's ability to incur new debt or amend existing debt on competitive terms or in a timely manner. The extension of the Revolving Credit Facility maturity is currently subject to NDRC approval[217](index=217&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES](index=51&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS,%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) Provides details on the company's stock repurchase program, including shares repurchased and remaining authorization - The Board of Directors authorized a stock repurchase program for **up to $150.0 million** of common stock on May 9, 2024[219](index=219&type=chunk) Common Stock Repurchases (Quarter Ended June 30, 2025) | Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs | |---|---|---|---|---| | April 1 through April 30, 2025 | 420 | $5.01 | 420 | 142,228 | | May 1 through May 31, 2025 | 418 | $4.99 | 418 | 140,138 | | June 1 through June 30, 2025 | 395 | $4.76 | 395 | 138,253 | | **Total** | **1,233** | **$4.92** | **1,233** | **138,253** | [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=52&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) Confirms no defaults upon senior securities during the reporting period - There were no defaults upon senior securities during the period[221](index=221&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=52&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) States no mine safety disclosures to report - There were no mine safety disclosures[222](index=222&type=chunk) [ITEM 5. OTHER INFORMATION](index=52&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Reports no officers or directors adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No officers or directors adopted or terminated any 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[223](index=223&type=chunk) [ITEM 6. EXHIBITS](index=53&type=section&id=ITEM%206.%20EXHIBITS) Lists all exhibits filed as part of the Form 10-Q, including amendments, certifications, and XBRL documents Exhibits Filed | Exhibit Number | Exhibit Description | Filed or Furnished Herewith | |---|---|---| | 2.1 | Second Amendment to Share Purchase Agreement, dated as of May 29, 2025, by and among Playtika Holding Corp., Playtika Ltd., SuperPlay Ltd., the shareholders of SuperPlay Ltd. and Gigi Levy-Weiss, as the shareholder representative | X | | 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | 32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | 32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | 101.INS | Inline XBRL Instance Document | | | 101.SCH | Inline XBRL Taxonomy Extension Schema Document | | | 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | | 101.DEF | Inline XBRL Taxonomy Extension Calculation Definition Document | | | 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | | | 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | | 104 | Cover Page Interactive Data File | | SIGNATURES - The Quarterly Report on Form 10-Q was signed on August 7, 2025, by Robert Antokol, Chief Executive Officer and Chairperson of the Board, and Craig Abrahams, President and Chief Financial Officer, on behalf of Playtika Holding Corp[226](index=226&type=chunk)