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)

Financial Performance - Playtika's revenue reached $696 million, reflecting an 11% increase year-over-year[7] - GAAP Net Income was $33.2 million, a decrease of (61.7)% year-over-year[7] - Adjusted Net Income was $6.5 million, a decrease of (91.4)% year-over-year[7] - Adjusted EBITDA was $167 million, a decrease of (12.6)% year-over-year[7] - The Adjusted EBITDA margin was 24%, compared to 30.5% in Q2 2024[7] Key Performance Indicators - Average Daily Paying Users were 378,000, an increase of 26.8% year-over-year[8] - Average Payer Conversion was 4.3%, up from 3.7% in Q2 2024[8] Game Performance - Bingo Blitz revenue was $160.2 million, an increase of 2.9% year-over-year[8] - Slotomania revenue was $86.5 million, a decrease of (35.4)% year-over-year[8] - June's Journey revenue was $69.1 million, a decrease of (7.4)% year-over-year[8] Liquidity and Debt - Cash, cash equivalents, and ST investments totaled $592.1 million as of June 30, 2025[7] - The company has approximately $1.14 billion in available liquidity[22]

[Q2 2025 Financial Results Overview](index=1&type=section&id=Q2%202025%20Financial%20Results%20Overview) Playtika reported resilient Q2 2025 results with revenue growth and strategic DTC platform expansion [Executive Summary & Key Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Financial%20Highlights) Playtika's Q2 2025 revenue increased **11.0% YoY**, driven by game success and an increased DTC target | Metric | Q2 2025 ($ million) | Sequential Change | YoY Change | | :-------------------------------- | :------------------ | :---------------- | :--------- | | Revenue | 696.0 | (1.4)% decrease | 11.0% increase | | DTC Platforms Revenue | 175.9 | (1.8)% decrease | 1.3% increase | | GAAP Net Income | 33.2 | 8.5% increase | (61.7)% decrease | | Adjusted Net Income | 6.5 | (82.0)% decrease | (91.4)% decrease | | Adjusted EBITDA | 167.0 | (0.2)% decrease | (12.6)% decrease | | Cash, cash equivalents, and short-term investments | 592.1 | N/A | N/A | - CEO Robert Antokol highlighted the success of Disney Solitaire, achieving a **$100 million annual run-rate revenue**, and strong engagement and DTC revenue growth for Bingo Blitz[3](index=3&type=chunk) - CFO Craig Abrahams stated the DTC business remains a key priority, with the long-term target for DTC revenue increased from **30% to 40%** to balance margins[3](index=3&type=chunk) [Selected Operational Metrics and Business Highlights](index=1&type=section&id=Selected%20Operational%20Metrics%20and%20Business%20Highlights) Q2 2025 operational metrics show increased paying users and a new game launch planned for Q4 2025 | Metric | Q2 2025 | Sequential Change | YoY Change | | :-------------------------- | :------ | :---------------- | :--------- | | Average Daily Paying Users | 378K | (3.1)% decrease | 26.8% increase | | Average Payer Conversion | 4.3% | Consistent with Q1 2025 | Up from 3.7% in Q2 2024 | | Bingo Blitz Revenue | $160.2M | (1.3)% decrease | 2.9% increase | | Slotomania Revenue | $86.5M | (22.7)% decrease | (35.4)% decrease | | June's Journey Revenue | $69.1M | 0.3% increase | (7.4)% decrease | - Playtika announced plans for the global launch of a new slot game, Jackpot Tour, in **Q4 2025**[6](index=6&type=chunk) [Quarterly Dividend Announcement](index=2&type=section&id=Quarterly%20Dividend%20Announcement) Playtika's Board declared a **$0.10 per share** cash dividend payable in October 2025 - A cash dividend of **$0.10 per share** of common stock was declared, payable on October 10, 2025, to stockholders of record as of September 26, 2025[7](index=7&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) The company revised its full-year 2025 revenue guidance while maintaining Adjusted EBITDA guidance - Playtika revised its full-year revenue guidance to between **$2.70 billion and $2.75 billion**[8](index=8&type=chunk) - The company maintained its Adjusted EBITDA guidance for the full year between **$715 million and $740 million**[8](index=8&type=chunk) [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) Playtika management will host a conference call on August 7, 2025, to discuss Q2 results - A conference call will be held on **August 7, 2025**, at 5:30 a.m. Pacific Time (8:30 a.m. Eastern Time) to discuss the results, accessible via investors.playtika.com[9](index=9&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of Playtika and important disclosures regarding forward-looking statements [About Playtika Holding Corp.](index=2&type=section&id=About%20Playtika%20Holding%20Corp.) Playtika is a leading mobile gaming entertainment and technology company, founded in 2010 in Israel - Playtika (NASDAQ:PLTK) is a mobile gaming entertainment and technology market leader with a diverse portfolio of game titles[11](index=11&type=chunk) - Founded in **2010**, Playtika was an early pioneer in offering free-to-play social games on social networks and mobile platforms[11](index=11&type=chunk) - The company is headquartered in Herzliya, Israel, and operates with employees across offices worldwide, aiming to entertain globally[11](index=11&type=chunk) [Forward-Looking Statements & Risk Factors](index=2&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) Forward-looking statements are subject to significant risks and uncertainties that may cause actual results to differ - The press release contains forward-looking statements regarding business strategy, plans, and future operations, identified by words like 'anticipate,' 'expect,' 'will,' and 'would'[12](index=12&type=chunk)[13](index=13&type=chunk) - These statements are based on current expectations and projections, but involve significant risks, uncertainties, and assumptions, including those discussed in SEC filings[14](index=14&type=chunk) - Important factors that could cause actual results to differ include reliance on third-party platforms, dependence on a limited number of games/users for revenue, ability to compete, integrate acquisitions, retain players, develop new products, significant indebtedness, and geopolitical events[15](index=15&type=chunk)[16](index=16&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents Playtika's balance sheets, income statements, and cash flow statements for Q2 2025 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased, total liabilities decreased, and stockholders' deficit improved as of June 30, 2025 | Metric | June 30, 2025 ($ million) | December 31, 2024 ($ million) | Change ($ million) | | :-------------------------------- | :-------------------------- | :---------------------------- | :----------------- | | Total Assets | 3,636.8 | 3,639.2 | (2.4) | | Total Liabilities | 3,724.6 | 3,770.3 | (45.7) | | Total Stockholders' Deficit | (87.8) | (131.1) | 43.3 | | Cash and cash equivalents | 500.9 | 565.8 | (64.9) | | Short-term investments | 91.2 | 0 | 91.2 | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Q2 2025 revenues increased YoY, but net income and comprehensive income significantly decreased | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | YoY Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------- | | Revenues | $696.0M | $627.0M | $69.0M | | Total costs and expenses | $586.3M | $486.3M | $100.0M | | Income from operations | $109.7M | $140.7M | $(31.0)M | | Interest and other, net | $64.6M | $20.4M | $44.2M | | Net income | $33.2M | $86.6M | $(53.4)M | | Comprehensive income | $56.5M | $81.8M | $(25.3)M | | Net income per share (diluted) | $0.09 | $0.23 | $(0.14) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, operating cash flow decreased, while investing cash flow improved and financing cash flow increased | Metric | Six months ended June 30, 2025 ($ million) | Six months ended June 30, 2024 ($ million) | YoY Change ($ million) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------- | | Cash flows from operating activities | 164.9 | 180.1 | (15.2) | | Net cash used in investing activities | (135.2) | (449.1) | 313.9 | | Net cash used in financing activities | (97.0) | (48.6) | (48.4) | | Dividend paid | (74.9) | (37.1) | (37.8) | | Payment for share buyback | (10.9) | 0 | (10.9) | | Net change in cash, cash equivalents and restricted cash | (65.3) | (319.9) | 254.6 | [Calculation of Free Cash Flow](index=7&type=section&id=Calculation%20of%20Free%20Cash%20Flow) Free Cash Flow for the first six months of 2025 was **$119.6 million**, a slight decrease YoY | Metric | Six months ended June 30, 2025 ($ million) | Six months ended June 30, 2024 ($ million) | YoY Change ($ million) | | :-------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------- | | Free Cash Flow | 119.6 | 122.1 | (2.5) | [Non-GAAP Financial Measures Reconciliation](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) This section reconciles non-GAAP measures like Adjusted EBITDA and Adjusted Net Income to GAAP equivalents [Non-GAAP Measures Explanation](index=8&type=section&id=Non-GAAP%20Measures%20Explanation) Adjusted EBITDA and Adjusted Net Income are non-GAAP measures used to assess operating performance, not GAAP substitutes - Adjusted EBITDA and Adjusted Net Income are non-GAAP measures used to indicate operating performance and should not be seen as alternatives to GAAP net income or cash flow from operating activities[25](index=25&type=chunk) - Adjusted EBITDA is defined as net income before interest expense/income, taxes, depreciation, amortization, impairment, stock-based compensation, contingent consideration, acquisition expenses, and other items[26](index=26&type=chunk) - Adjusted Net Income is defined as net income before impairment charges and contingent consideration[27](index=27&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA](index=8&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 decreased to **$167.0 million** due to lower net income and higher interest expenses | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | YoY Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------- | | Net income | $33.2M | $86.6M | $(53.4)M | | Interest expense and other, net | $64.6M | $20.4M | $44.2M | | Depreciation and amortization | $61.0M | $38.7M | $22.3M | | Stock-based compensation | $17.5M | $22.9M | $(5.4)M | | Changes in estimated value of contingent consideration | $(33.0)M | $(16.3)M | $(16.7)M | | Adjusted EBITDA | $167.0M | $191.0M | $(24.0)M | | Adjusted EBITDA margin | 24.0% | 30.5% | (6.5)% pts | [Reconciliation of Net Income to Adjusted Net Income](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) Adjusted Net Income for Q2 2025 significantly decreased to **$6.5 million**, primarily due to lower net income | Metric | Three months ended June 30, 2025 ($ million) | Three months ended June 30, 2024 ($ million) | YoY Change ($ million) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------- | | Net income | 33.2 | 86.6 | (53.4) | | Impairment charge | 0.4 | 0 | 0.4 | | Changes in estimated value of contingent consideration | (33.0) | (16.3) | (16.7) | | Income tax impact of adjustments | 5.9 | 5.7 | 0.2 | | Adjusted Net Income | 6.5 | 76.0 | (69.5) | [Contacts](index=9&type=section&id=Contacts) This section provides contact information for investor relations [Investor Relations Contact](index=9&type=section&id=Investor%20Relations%20Contact) Investor Relations contact details are provided for inquiries - Investor Relations contact is Tae Lee at Tael@playtika.com[34](index=34&type=chunk)

Core Insights - Playtika Holding Corp. reported a revenue of $696.0 million for Q2 2025, reflecting a sequential decrease of 1.4% but an increase of 11.0% year over year [1][9] - Direct-to-Consumer (DTC) revenue was $175.9 million, showing a sequential decrease of 1.8% and a year-over-year increase of 1.3% [1][9] - The company announced a quarterly dividend of $0.10 per share, payable on October 10, 2025 [5] Financial Performance - GAAP Net Income for Q2 2025 was $33.2 million, an increase of 8.5% sequentially but a decrease of 61.7% year over year [9] - Adjusted Net Income was $6.5 million, down 82.0% sequentially and 91.4% year over year [9] - Adjusted EBITDA for the quarter was $167.0 million, a slight decrease of 0.2% sequentially and a decrease of 12.6% year over year [9] Operational Metrics - Average Daily Paying Users (DPUs) were 378,000, a decrease of 3.1% sequentially but an increase of 26.8% year over year [10] - Bingo Blitz generated revenue of $160.2 million, a sequential decrease of 1.3% but an increase of 2.9% year over year [10] - Slotomania revenue was $86.5 million, reflecting a significant sequential decrease of 22.7% and a year-over-year decrease of 35.4% [10] Strategic Initiatives - The company is increasing its long-term target for DTC revenue to 40%, up from 30%, to enhance margin balance amid competitive pressures in mobile gaming [3] - The successful launch of Disney Solitaire has achieved a $100 million annual run-rate revenue, highlighting the effectiveness of collaboration with Disney & Pixar Games [3] Financial Outlook - Playtika revised its revenue guidance for the year to a range of $2.70 to $2.75 billion while maintaining Adjusted EBITDA guidance between $715 and $740 million [6]

Core Viewpoint - Playtika Holding (PLTK) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended June 2025, which could significantly influence its stock price depending on the actual results compared to estimates [1][2]. Earnings Expectations - The upcoming earnings report is scheduled for August 7, and if the reported figures exceed expectations, the stock may rise; conversely, a miss could lead to a decline [2]. - The consensus estimate for Playtika's quarterly earnings is projected at $0.15 per share, reflecting a year-over-year decrease of 34.8%, while revenues are expected to reach $710.65 million, marking a 13.3% increase from the previous year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 1.08%, indicating a collective reassessment by analysts regarding the company's earnings prospects [4]. - The Most Accurate Estimate for Playtika is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.64%, suggesting a bearish outlook from analysts [12]. Historical Performance - In the last reported quarter, Playtika was expected to post earnings of $0.11 per share but only achieved $0.09, resulting in a surprise of -18.18% [13]. - Over the past four quarters, Playtika has only beaten consensus EPS estimates once [14]. Predictive Indicators - A positive Earnings ESP is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3; however, Playtika currently holds a Zacks Rank of 3, making it challenging to predict a beat [10][12]. - The predictive power of the Earnings ESP model is significant primarily for positive readings, and a negative Earnings ESP does not necessarily indicate an earnings miss [9][11].

Company Overview - Playtika Holding Corp. is a leader in mobile gaming entertainment and technology, with a diverse portfolio of game titles [3] - Founded in 2010, Playtika was one of the pioneers in offering free-to-play social games on social networks and mobile platforms [3] - The company is headquartered in Herzliya, Israel, and has a global workforce [3] Financial Results Announcement - Playtika will release its financial results for the second quarter of 2025 before U.S. markets open on August 7, 2025 [1] - A conference call to discuss the results will be held on the same day at 5:30 AM Pacific Time, 8:30 AM Eastern Time [1] Investor Relations - A live webcast of the conference call and earnings release materials will be available on Playtika's Investor Relations website [2]

Core Insights - Playtika Holding Corp. (NASDAQ: PLTK) is characterized as a high-margin and cash-flow generative company, with a liveops model that allows its legacy games to remain profitable for years, evidenced by a trailing twelve months (TTM) EBITDA margin of 23.3% [1] Company Overview - The company has a strong cash flow generation capability, which is crucial for sustaining its operations and growth [1] - Playtika's liveops model is a key factor in maintaining profitability over an extended period for its legacy games [1] Financial Performance - The TTM EBITDA margin of 23.3% indicates a solid profitability level, reflecting the company's effective cost management and revenue generation strategies [1]