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美國
證券和交易委員會
華盛頓特區 20549
表格 10-Q
（標記一）
☒根據1934年證券交易法第13或15(d)節的季度報告
截至季度結束日期的財務報告2024年9月30日
或者
☐根據1934年證券交易法第13或15(d)節的轉型報告書
過渡期從 到
委員會文件號 001-39652
PLAYSTUDIOS, Inc.
(根據其章程規定的註冊人準確名稱)
特拉華州88-1802794
（國家或其他管轄區的
公司成立或組織）
（IRS僱主
（標識號碼）
科文頓十字路10150號
拉斯維加斯市, 內華達州 89144
(725) 877-7000

（註冊者的主要執行辦公室的地址，包括郵政編碼和電話號碼，包括區號）

在法案第12(b)條的規定下注冊的證券：
每個類別的標題交易標的在其上註冊的交易所的名稱
A類普通股MYPS納斯達克證券市場有限責任公司
可贖回的warrants，每股A類普通股的行使價格爲11.50美元MYPSW納斯達克證券市場有限責任公司
請在以下選項中打勾表明報告人是否已提交所有根據證券交易法第13或15（d）條規定在過去12個月（或註冊人需要提交這些報告的更短期限內）提交的報告，並且報告人過去90天一直受到這些提交要求的約束。是 ☒ No ☐
勾選表示註冊人已在過去12個月內（或更短的時間內，註冊人需要提交文件）按照《S-t條例第405條規則》要求提交了所有互動數據文件。是 ☒ No ☐
請在勾選標記中表明發行人是大型加速申報人、加速申報人、非加速申報人、較小報告公司還是新興增長型公司。請參見證券交易所法案規則12b-2中「大型加速申報人」、「加速申報人」、「較小報告公司」和「新興增長型公司」的定義。
大型加速報告人☐加速文件提交人☒
非加速文件提交人☐較小的報告公司☐
新興成長公司☒
如果是新興成長公司，請在覈對標記中註明註冊者選擇不使用根據《證券法》第7(a)(2)(B)條款提供的任何新的或修訂後的財務會計準則的延長過渡期來符合規定。 ☐
請勾選表示註冊者是否爲殼公司（按交易所法規120.2規定定義的殼公司）：是☐ 否☐☒
截至2024年10月31日， 108,226,661每股行權價11.5美元。16,457,769 流通中的B類普通股股份，每股面值爲$0.0001。
1
目錄
目錄

頁面
彙編的綜合資產負債表 截至2024年9月30日和2023年12月31日
合併簡明利潤表 截至2024年9月30日和2023年9月30日的三個月和九個月
簡明彙編的綜合情況表 (損失)截至2024年9月30日和2023年9月30日的三個月和九個月的收入
股東權益簡明合併報表 截至2024年9月30日和2023年9月30日的三個月和九個月
簡明的綜合現金流量表 截至2024年9月30日和2023年9月30日的九個月

2
目錄

關於前瞻性聲明的警示說明
本季度10-Q表格中包含根據1933年證券法第27A條和1934年證券交易法第21E條的定義的前瞻性陳述。我們基於對未來事件的當前預期和預測作出了這些前瞻性陳述。除了本季度報告中包含的現狀或歷史事實陳述外，關於我們未來財務表現、策略、擴張計劃、未來運營、未來運營結果、預計收入、損失、預計成本、前景、計劃和管理目標的所有陳述均爲前瞻性陳述。任何涉及對未來事件或情況的預測、預測或其他表徵，包括任何基本假設的陳述，均爲前瞻性陳述。在某些情況下，您可以通過「可能」、「應該」、「可能」、「會」、「期望」、「計劃」、「預期」、「打算」、「相信」、「估計」、「繼續」、「目標」、「項目」或類似表達方式來識別前瞻性陳述。
本季度10-Q報告中的前瞻性聲明包括但不限於以下陳述：
•我們的業務策略和市場機會;
•我們未來的財務表現，包括我們對營業收入、營業成本、毛利潤或毛利率、營業費用（包括銷售和營銷、研發以及一般和行政費用的變動）以及盈利能力的預期；
•我們遊戲的市場接受度；
•我們未來籌集資金的能力和全球信貸和金融市場；
•與我們的業務、運營、財務表現和子公司相關的因素，包括：
◦我們所運營的競爭和監管行業的變化、競爭對手之間運營表現的差異以及影響我們業務的法律法規的變化，
◦我們能夠執行業務計劃、預測和其他期望，找到並實現額外機會，並
◦一般經濟狀況及其對玩家、我們的獎項合作伙伴和廣告商支出水平的影響，包括通貨膨脹、經濟衰退及其他宏觀經濟狀況的風險；
•我們有能力與蘋果應用商店、谷歌Play商店、亞馬遜應用商店和Facebook等平台保持關係；
•對於我們未行使的購買A類普通股權證的會計處理；
•我們開發、維護和改進財務報告的內部控制的能力；
•我們有能力維護、保護和增強我們的知識產權。
•我們能夠成功抵禦針對我們的訴訟；
•我們能夠識別、完成並整合收購，有助於實現我們的增長目標；
•我們在保留或招聘我們的高管、關鍵員工或董事方面的成功；
•地緣政治條件的影響，包括烏克蘭與俄羅斯之間的戰爭以及以色列國與哈馬斯之間的戰爭，及周邊地區不斷演變的衝突；以及
•公共衛生流行病或大流行（包括COVID-19）對我們業務的影響。

這些前瞻性陳述是基於我們當前的計劃、估算和預測，考慮到我們目前掌握的信息，並且受到已知和未知的風險、不確定性和對我們的假設的影響，包括在本季度10-Q表格的「風險因素」部分和我們不時向證券交易委員會（「SEC」）提交的其他文件中描述的風險，這可能導致我們的實際結果、活動水平、績效或成就與這些前瞻性陳述所表達或暗示的任何未來結果、活動水平、績效或成就有實質性不同。此外，在「風險因素」部分描述的風險是
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目錄
並不全面。新的風險因素時常出現，我們無法預測所有這些風險因素，也無法評估所有這些風險因素對我們的業務的影響，或者任何風險因素或風險因素組合可能導致的實際結果與任何前瞻性陳述的內容之間的重大差異。前瞻性陳述同樣不保證業績。您不應對任何前瞻性陳述過度依賴，這些陳述僅在本文件的日期有效。除非適用法律另有要求，我們否認任何更新前瞻性陳述的責任，所有這些聲明均明確以本節中的陳述爲限，以反映本季度報告（10-Q表格）日期之後的事件或情況，無論是由於新信息、未來事件還是其他原因。
我們打算通過我們的投資者關係網站向公衆發佈重要信息， ir.playstudios.com、SEC文件、新聞稿、公開電話會議和公開網絡直播。我們利用這些渠道以及社交媒體，與我們的投資者、客戶和公衆溝通我們公司、我們的產品以及其他問題。我們在網站或社交媒體上發佈的信息可能被視爲重要信息。因此，我們鼓勵投資者、媒體和其他人關注上述渠道，包括我們的網站和我們投資者關係網站上列出的社交媒體渠道，並查看通過這些渠道披露的信息。任何更新的披露渠道列表將發佈在我們網站的投資者關係頁面上。
4
目錄
第一部分。財務信息
項目1 財務報表
PLAYSTUDIOS，INC。
簡明合併資產負債表
(未經審計，單位爲千，除了面值金額)
9月30日,
2024		2023年12月31日,
2023
資產
流動資產：
現金及現金等價物$105,170 $132,889 
應收款項，淨額
28,775 30,465 
預付費用及其他流動資產10,323 11,529 
總流動資產144,268 174,883 
物業和設備，淨值17,532 17,549 
經營租賃使用權資產10,545 9,369 
無形資產和內部使用軟件的淨值99,778 110,933 
商譽52,222 47,133 
遞延所得稅2,699 2,764 
其他長期資產3,506 3,690 
總非流動資產186,282 191,438 
總資產$330,550 $366,321 
負債和股東權益
流動負債:
應付賬款4,190 1,907 
經營租賃負債，流動3,486 4,236 
應計及其他流動負債
27,010 39,882 
總流動負債34,686 46,025 
最低保證負債18,000 24,000 
遞延所得稅553 1,198 
經營租賃負債，非流動7,513 5,699 
附帶條款考慮
3,255 — 
其他長期負債1,362 1,048 
總非流動負債30,683 31,945 
總負債$65,369 $77,970 
承諾和或有事項（第17注）
股東權益:
優先股，$0.00010.0001每股（ 100,000 授權股數， 沒有 截至2024年9月30日和2023年12月31日，已發行和流通的股份數量
— — 
A類普通股，$0.0005股，截至2024年4月30日和2024年1月31日，授權股票0.0005股；0.0001每股（ 2,000,000 授權股數， 127,007 和 122,923已發行股份爲108,729 和 118,200 截至2024年9月30日和2023年12月31日，流通股份分別爲
11 12 
B類普通股，$0.000030.0001每股（ 25,000 授權股數， 16,457 和 16,457 截至2024年9月30日和2023年12月31日，已發行和流通的股票數分別爲。
2 2 
追加實收資本324,077 310,944 
累積赤字(8,912)(2,637)
已實現其他綜合收益 (損失)(695)124 
截至2024年3月31日和2023年12月31日，公司的庫藏股票分別有2,279,784股和2,693,653股。18,279 和 4,723 分別爲2024年9月30日和2023年12月31日的股份
(49,302)(20,094)
股東權益總額265,181 288,351 
總負債和股東權益$330,550 $366,321 
附帶的說明是這些簡明合併財務報表不可或缺的一部分。
5
目錄
PLAYSTUDIOS，INC。
經簡化的合併利潤及損失表
(未經審計，以千爲單位，每股數據除外)
截至9月30日的三個月截至9月30日的九個月
2024202320242023
淨營業收入$71,229 $75,858 $221,647 $233,774 
運營費用：
營收成本(1)
17,832 19,862 54,851 58,276 
銷售和營銷15,116 18,786 50,756 55,283 
研發16,654 17,367 51,418 53,503 
一般和行政11,581 10,747 35,005 33,688 
折舊和攤銷11,593 11,537 34,813 33,686 
重組及相關費用 3,231 1,280 5,248 7,112 
總營業成本和費用76,007 79,579 232,091 241,548 
營業損失(4,778)(3,721)(10,444)(7,774)
其他收益（費用），淨:
權證負債公允價值變動276 4,216 929 1,381 
利息收入，淨額1,127 1,364 3,921 3,521 
其他（虧損）收入，淨額(256)(198)(626)906 
其他收入總額，淨額1,147 5,382 4,224 5,808 
稅前(損失)收入(3,631)1,661 (6,220)(1,966)
所得稅收益（費用）534 2,139 (55)2,437 
淨利潤（虧損）$(3,097)$3,800 $(6,275)$471 
每股淨虧損歸屬於A類和B類普通股股東:
基本$(0.02)$0.03 $(0.05)$0.00 
攤薄$(0.02)$0.03 $(0.05)$0.00 
普通股權的加權平均股本
基本125,007 133,351 130,997 132,546 
攤薄125,007 149,655 130,997 148,911 
(1)金額不包括折舊和攤銷。
附帶的說明是這些簡明合併財務報表不可或缺的一部分。
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PLAYSTUDIOS，INC。
簡明綜合收益（損失）合併報表
(未經審計，以千爲單位)
截至9月30日的三個月截至9月30日的九個月
2024202320242023
淨利潤（虧損）$(3,097)$3,800 $(6,275)$471 
其他全面收益（損失）：
外幣翻譯調整變動(1)
490 (393)(198)(871)
未實現的衍生金融工具收益（損失）(1)
184 — (837)— 
衍生金融工具結算損失（收益）的重新分類，包括在淨（損失）收入中(1)
185 — 216 — 
總其他全面收益（損失）859 (393)(819)(871)
全面（損失）收益$(2,238)$3,407 $(7,094)$(400)
(1)這些金額均未考慮所得稅影響。相應的所得稅影響微不足道。
附帶的說明是這些簡明合併財務報表不可或缺的一部分。
7
目錄
PLAYSTUDIOS，INC。
股東權益的簡明合併報表
(未經審計，以千爲單位)
A類普通股B類普通股額外的
實收資本
資本		累計其他全面收益虧損總計
股東的
股權
股份金額股份金額保留
收益		庫藏股
截至2023年6月30日的餘額116,004 $11 16,457 $2 $302,528 $(629)$13,427 $(20,094)$295,245 
淨利潤— — — — — — 3,800 — 3,800 
行使股票期權583 — — — 464 — — — 464 
限制性股票歸屬，扣除被扣留的股票
780 1 — — (1,637)— — — (1,636)
基於股票的補償— — — — 4,756 — — — 4,756 
回購普通股— — — — — — — — — 
其他綜合損失— — — — — (393)— — (393)
截至2023年9月30日的餘額117,367 $12 16,457 $2 $306,111 $(1,022)$17,227 $(20,094)$302,236 

A類普通股B類普通股額外的
實收資本
資本		累計其他全面收益虧損總計
股東的
股權
股份金額股份金額保留
收益		庫藏股
截至2022年12月31日的餘額115,635 $11 16,457 $2 $290,337 $(151)$16,756 $(4,642)$302,313 
淨利潤— — — — — — 471 — 471 
行使股票期權3,234 — — — 2,920 — — — 2,920 
限制性股票歸屬，扣除被扣除的股票2,055 1 — — (2,877)— — — (2,876)
基於股票的補償— — — — 15,731 — — — 15,731 
回購普通股(3,557)— — — — — — (15,452)(15,452)
其他綜合損失— — — — — (871)— — (871)
截至2023年9月30日的餘額117,367 $12 16,457 $2 $306,111 $(1,022)$17,227 $(20,094)$302,236 

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Class A Common StockClass B Common StockAdditional
Paid-In
Capital		Accumulated Other Comprehensive (Loss) IncomeTotal
Stockholders'
Equity
SharesAmountSharesAmountAccumulated DeficitTreasury Stock
Balance as of June 30, 2024108,132 $11 16,457 $2 $319,682 $(1,554)$(5,815)$(48,763)$263,563 
Net loss— — — — — — (3,097)— (3,097)
Exercise of stock options87 — — — 83 — — — 83 
Restricted stock vesting, net of shares withheld851 — — — (630)— — — (630)
Stock-based compensation— — — — 4,942 — — — 4,942 
Repurchase of common stock(341)— — — — — — (539)(539)
Other comprehensive income— — — — — 859 — — 859 
Balance as of September 30, 2024108,729 $11 16,457 $2 $324,077 $(695)$(8,912)$(49,302)$265,181 

Class A Common StockClass B Common StockAdditional
Paid-In
Capital		Accumulated Other Comprehensive Income (Loss) Total
Stockholders'
Equity
SharesAmountSharesAmountAccumulated DeficitTreasury Stock
Balance as of December 31, 2023118,200 $12 16,457 $2 $310,944 $124 $(2,637)$(20,094)$288,351 
Net loss— — — — — — (6,275)— (6,275)
Exercise of stock options203 — — — 197 — — — 197 
Restricted stock vesting, net of shares withheld3,882 — — — (2,498)— — — (2,498)
Stock-based compensation— — — — 15,434 — — — 15,434 
Repurchase of common stock(13,556)(1)— — — — — (29,208)(29,209)
Other comprehensive loss— — — — — (819)— — (819)
Balance as of September 30, 2024108,729 $11 16,457 $2 $324,077 $(695)$(8,912)$(49,302)$265,181 
The accompanying notes are an integral part of these condensed consolidated financial statements
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TABLE OF CONTENTS

PLAYSTUDIOS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Nine Months Ended
September 30,
20242023
Cash flows from operating activities:
Net (loss) income$(6,275)$471 
Adjustments:
Depreciation and amortization34,813 33,686 
Amortization of loan costs120 113 
Stock-based compensation expense14,308 14,391 
Change in fair value of warrant liabilities(929)(1,381)
Change in fair value of contingent consideration— (950)
Asset impairments1,937 2,042 
Deferred income tax expense(508)(6,973)
Other705 (57)
Changes in operating assets and liabilities
Receivables, net
1,456 (3,780)
Prepaid expenses and other current assets791 1,348 
Income tax receivable(2,135)(936)
Accounts payable & accrued liabilities(10,377)(2,269)
Other218 691 
Net cash provided by operating activities34,124 36,396 
Cash flows from investing activities:
Purchase of property and equipment(3,825)(5,114)
Additions to internal-use software(14,587)(16,516)
Assets acquired from business combination(3,400)— 
Other(290)(225)
Net cash used in investing activities(22,102)(21,855)
Cash flows from financing activities:
Proceeds from stock option exercises197 2,922 
Payments for tax withholding of stock-based compensation (2,498)(2,877)
Payment of minimum guarantee liabilities(7,168)(2,360)
Repurchases of treasury stock(29,154)(15,452)
Net cash used in financing activities(38,623)(17,767)
Foreign currency translation(518)(967)
Net change in cash, cash equivalents, and restricted cash
(27,119)(4,193)
Cash and cash equivalents at beginning of period132,889 134,000 
Cash, cash equivalents, and restricted cash at end of period
$105,770 $129,807 
Supplemental cash flow disclosures:
Interest paid$123 $148 
Income taxes paid, net of refunds2,662 2,308 
Non-cash investing and financing activities:
Capitalization of stock-based compensation$1,126 $1,340 
Additions to intangible assets related to licensing agreements4,128 9,832 
Right-of-use assets acquired under operating leases
4,350 — 
Assets acquired from business combination3,355 — 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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TABLE OF CONTENTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, in thousands, unless otherwise noted)
NOTE 1—BACKGROUND AND BASIS OF PRESENTATION
Organization and Description of Business
On June 21, 2021 (the “Closing Date”), Acies Acquisition Corp., a Cayman Islands exempted company (prior to the Closing Date, “Acies”), consummated the previously announced business combination (“Acies Merger”) with PlayStudios, Inc., a Delaware corporation (“Old PLAYSTUDIOS”) pursuant to the Agreement and Plan of Merger, dated as of February 1, 2021 (the “Merger Agreement”), by and among Acies, Old PLAYSTUDIOS, Catalyst Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Acies, and Catalyst Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Acies.
PLAYSTUDIOS, Inc., formerly known as Acies Acquisition Corp. (the "Company” or "PLAYSTUDIOS"), was incorporated on August 14, 2020 as a Cayman Islands exempted company, and domesticated into a Delaware corporation on the Closing Date. The Company's legal name became PLAYSTUDIOS, Inc. following the closing of the Acies Merger.
The Company develops and operates online and mobile social gaming applications (“games” or “game”) most of which incorporate a unique loyalty program offering “real world” rewards provided by a collection of rewards partners. The Company’s games are free-to-play and available via the Apple App Store, Google Play Store, Amazon Appstore, and Facebook (collectively, “platforms” or “platform operators”). The Company creates games based on its own original content as well as third-party licensed brands. The Company generates revenue through the in-game sale of virtual currency and through advertising.
Unless the context indicates otherwise, all references herein to “PLAYSTUDIOS,” the “Company,” “we,” “us,” and “our” are used to refer collectively to PLAYSTUDIOS, Inc. and its subsidiaries.
Basis of Presentation and Consolidation
The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements include the accounts of PLAYSTUDIOS, Inc. and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Certain reclassifications in these financial statements have been made to comply with US GAAP applicable to public companies and SEC Regulation S-X.
The significant accounting policies referenced in the annual consolidated financial statements of the Company as of December 31, 2023 have been applied consistently in these unaudited interim condensed consolidated financial statements. In the opinion of the Company, the accompanying unaudited financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position as of September 30, 2024, and its results of operations for the three and nine months ended September 30, 2024, and 2023, and cash flows for the nine months ended September 30, 2024, and 2023. The Condensed Consolidated Balance Sheet as of December 31, 2023 was derived from the audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and notes thereto. Significant estimates and assumptions reflected in the Company’s condensed consolidated financial statements include the estimated consumption rate of virtual goods that is used in the determination of revenue recognition, useful lives of property and equipment and definite-lived intangible assets, the expensing and capitalization of research and development costs for internal-use software, assumptions used in accounting for income taxes, stock-based compensation, the fair value of derivative financial instruments, the fair value of contingent consideration, and the evaluation of goodwill and long-lived assets for impairment. The Company believes the accounting estimates are appropriate and reasonably determined. Due to the inherent uncertainties in making these estimates, actual amounts could differ materially.
Emerging Growth Company ("EGC")
At September 30, 2024, the Company qualified as an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and the Company has taken and may take advantage of certain exemptions from various reporting requirements that are applicable to other public
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companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has opted to take advantage of such extended transition period available to emerging growth companies which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company can adopt the new or revised standard at the time private companies adopt the new or revised standard. The Company did not lose its emerging growth company status through December 31, 2024. As a result, the Company does not expect to adopt any accounting pronouncements currently deferred based on private company standards until a year subsequent to 2024. The Company will continue to retain its emerging growth company status until the earliest of i) the last day of the fiscal year in which its total annual gross revenues are $1.24 billion or more, ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities of the issuer under an effective Securities Act registration statement as an EGC, iii) the date on which it has issued more than $1 billion in non-convertible debt in the previous three years, or iv) the date on which it becomes a large accelerated filer.
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Our significant accounting policies and estimates remained unchanged from our 2023 Annual Report on Form 10-K filed on March 12, 2024, except for restricted cash discussed below.
Restricted Cash
The Company has restricted cash of $0.6 million and zero as of September 30, 2024 and December 31, 2023. The cash is classified within “Other long-term assets.” Such amounts plus “Cash and cash equivalents” on the Condensed Consolidated Balance Sheets equal “Cash, cash equivalents, and restricted cash” on the Condensed Consolidated Statements of Cash Flows as of September 30, 2024 and September 30, 2023.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-07.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). ASU 2023-09 requires that public business entities expand their annual disclosures related to rate reconciliation and income taxes paid, and provide a disaggregated presentation between domestic and foreign income or loss from continuing operations before income tax expense and income tax expense or benefit from continuing operations. This guidance is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of adopting ASU 2023-09.
NOTE 3—SEGMENT REPORTING
The Company has aggregated its operating segments into the following reportable segments: playGAMES and playAWARDS, which represent our different products and services. A detailed discussion regarding the products and services from which each reportable segment derives its revenue is included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Adjusted EBITDA ("AEBITDA") is the Company’s reportable segment GAAP measure, which management utilizes as the primary profit measure for its reportable segments and underlying operating segments. AEBITDA is a measure defined as net income (loss) before interest, income taxes, depreciation and amortization, restructuring and related costs (consisting
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primarily of severance and other restructuring related costs), stock-based compensation expense, and other income and expense items (including special infrequent items, foreign currency gains and losses, and other non-cash items).
Expenses include indirect costs that are allocated to operating segments based on a reasonable allocation methodology, which are generally related to sales and marketing activities, general and administrative overhead, and costs associated with administering the playAWARDS myVIP program in the playGAMES applications. Net revenue excludes transactions between the Company's operating segments. Certain expenses incurred by playAWARDS have been allocated to playGAMES at cost. The chief operating decision maker does not evaluate operating segments using asset information.
The following table presents the Company’s segment information:
Three months ended September 30,Nine Months Ended September 30,
2024202320242023
Net revenue
playGAMES71,226 75,857 221,642 229,602 
playAWARDS3 1 5 4,172 
Reportable segment net revenue71,229 75,858 221,647 233,774 
AEBITDA
playGAMES23,233 21,640 68,604 65,842 
playAWARDS(3,991)(4,180)(11,089)(6,517)
Reportable segment AEBITDA19,242 17,460 57,515 59,325 
Other operating expense
Corporate and other4,619 3,935 13,440 11,761 
Restructuring expenses3,231 1,280 5,248 7,112 
Other reconciling items(7)85 150 149 
Stock-based compensation4,584 4,344 14,308 14,391 
Depreciation and amortization11,593 11,537 34,813 33,686 
24,020 21,181 67,959 67,099 
Non-operating income
Change in fair value of warrant liabilities276 4,216 929 1,381 
Interest income, net1,127 1,364 3,921 3,521 
Other (expense) income, net(256)(198)(626)906 
1,147 5,382 4,224 5,808 
(Loss) income before income taxes(3,631)1,661 (6,220)(1,966)
Income tax benefit (expense)534 2,139 (55)2,437 
Net (loss) income$(3,097)$3,800 $(6,275)$471 
NOTE 4—BUSINESS COMBINATIONS
Pixode Games Limited ("Pixode Acquisition")
On July 1, 2024, PLAYSTUDIOS US, LLC, a direct wholly-owned subsidiary of the Company entered into an asset purchase agreement to acquire certain tangible and intangible assets and assumed certain liabilities from Pixode Games Limited (“Pixode"), a mobile casual games publisher. The Company expects this acquisition to further diversify revenues into the casual genre, and with a successful relaunch of the product with the Tetris brand, the acquisition will deepen the Company's portfolio of Tetris products.
The purchase price for the Pixode assets was $3.5 million at closing, and the Company agreed to pay additional consideration, contingent upon the satisfaction of certain product and financial milestones, up to a maximum amount of $113.5 million. Subject to meeting certain financial minimum milestones, the Company will pay the sellers of the Pixode assets
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a percentage of an adjusted net revenue for a three year period commencing on the re-launch date of the rebranded Pixode assets, payable at the end of each fiscal year.
The Company recorded the excess of the fair value of the consideration transferred in the acquisition over the fair value of net assets acquired as goodwill. The goodwill reflects our expectations of favorable future growth opportunities and anticipated synergies through the scale of our operations. The Company expects that substantially all of the goodwill will be deductible for federal income tax purposes. The following table summarizes the consideration paid for Pixode and the assets acquired as of the acquisition date:
Consideration:July 1,
2024
Cash consideration$3,500 
Contingent consideration3,255 
Total consideration transferred$6,755 
Identifiable assets acquired:
Developed technology (weighted-average useful life of 5 years)
$1,650 
Property and equipment, net
16 
Total identifiable net assets$1,666 
Goodwill$5,089 
NOTE 5—RELATED-PARTY TRANSACTIONS
The following table is a summary of balance sheet assets and liabilities from related parties:
September 30,
2024		December 31,
2023		Financial Statement Line Item
Marketing Agreement$1,000 $1,000 Intangibles, net
The Company’s revenues and expenses recognized from related parties were immaterial during the three and nine months ended September 30, 2024 and 2023.
MGM Resorts International (“MGM”)
MGM is a stockholder and the President of MGM Resorts Operations also serves on the Company’s Board of Directors. MGM owned approximately 16.6 million and 16.6 million shares of the Company's outstanding Class A common stock as of September 30, 2024 and December 31, 2023, respectively.
In April 2011, the Company entered into a joint marketing agreement with MGM (as amended, the “Marketing Agreement”) in exchange for assistance with marketing campaigns and the certain rights to utilize MGM’s licensed marks and licensed copyrights for the development of certain of the Company’s social casino games. The initial term of the Marketing Agreement was for one year from the go-live date of the first such game in July 2012, with automatic renewal provisions based on the games achieving specified performance criteria. The Marketing Agreement was recorded as an indefinite-lived intangible asset.
Microsoft Corporation ("Microsoft")
On June 7, 2024, and with the approval of the Company's board of directors, the Company repurchased 11.7 million shares of Class A common stock held by Microsoft at a price of $2.11 per share. The total amount paid by the Company for the repurchase of such shares was $24.6 million and was funded with available cash. The repurchase of shares from Microsoft was supplemental to the Company’s previously announced $50.0 million stock repurchase program and did not impact the amount of permitted repurchases thereunder.
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NOTE 6—RECEIVABLES, NET
Receivables, net consist of the following:
September 30,
2024		December 31,
2023
Trade receivables$28,495 $29,952 
Other receivables422 690 
Allowance for uncollectible amounts
(142)(177)
Total receivables, net
$28,775 $30,465 
Trade receivables generally represent amounts due to the Company from social and mobile platform operators, including Apple, Google, and direct-to-consumer ("DTC") payment processors, including Xsolla. Trade receivables are recorded when the right to consideration becomes unconditional.
Concentration of Credit Risk
The following table summarizes the major receivables of the Company as a percentage of the total receivables, net as of the dates indicated:
September 30,
2024		December 31,
2023
Apple, Inc.
44.6 %45.6 %
Google, LLC
17.9 %20.8 %
Xsolla (USA), Inc.
11.6 %2.4 %
As of September 30, 2024 and December 31, 2023, the Company did not have any additional counterparties that exceeded 10% of the Company’s net accounts receivable.
NOTE 7—PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following:
September 30,
2024		December 31,
2023
Prepaid expenses$4,842 5,291 
Income tax receivable5,048 3,426 
Other current assets433 2,812 
Total prepaid expenses other current assets
$10,323 $11,529 
NOTE 8—FAIR VALUE MEASUREMENT
The carrying values of the Company’s cash and cash equivalents, receivables, net, prepaid expenses and other current assets, and accounts payable approximate fair value due to their short maturities.
The following tables present the liabilities measured at fair value on a recurring basis, by input level, in the Condensed Consolidated Balance Sheets at September 30, 2024 and December 31, 2023:
September 30, 2024
Level 1Level 2Level 3Total
Financial liabilities:
Public Warrants$91 — — 91 
Private Warrants— 65 — 65 
Derivative financial instruments
335 — — 335 
Contingent consideration
— — 3,255 3,255 
Total financial liabilities$426 $65 $3,255 $3,746 
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December 31, 2023
Level 1Level 2Level 3Total
Financial liabilities:
Public Warrants$635 — — 635 
Private Warrants— 451 — 451 
Total financial liabilities$635 $451 $— $1,086 
The fair value of our Level 3 contingent consideration liabilities relate to the Pixode Acquisition. This contingent consideration is primarily based on expected payments arising from a percentage of an adjusted net revenue for a three year period commencing on the re-launch date of the rebranded Pixode assets, payable at the end of each fiscal year. The value of these payments are subject to various market and operational risks. Significant unobservable inputs include a discount rate of approximately 13.5% and the probability of revenue growth over the same three year period. See Note 4—Business Combinations for more information on the Pixode Acquisition.
NOTE 9—PROPERTY AND EQUIPMENT, NET
Property and equipment, net consists of the following:
September 30,
2024		December 31,
2023
Land and land improvements$1,680 1,680 
Building and building improvements5,890 6,046 
Computer equipment9,565 9,021 
Leasehold improvements11,248 9,811 
Purchased software1,486 2,115 
Furniture and fixtures3,872 4,331 
Construction in progress23 460 
Total property and equipment33,764 33,464 
Less: accumulated depreciation(16,232)(15,915)
Total property and equipment, net$17,532 $17,549 
The aggregate depreciation expense for property and equipment, net is reflected in “Depreciation and amortization” in the Condensed Consolidated Statements of Operations. During the three months ended September 30, 2024 and 2023, depreciation expense was $1.2 million and $1.2 million, respectively and during the nine months ended September 30, 2024 and 2023, depreciation expense was $3.7 million and $4.2 million, respectively. There were no material impairment charges or material write-offs recorded for the three and nine months ended September 30, 2024 and 2023.
Property and equipment, net by region consists of the following:
September 30,
2024		December 31,
2023
United States$11,699 $13,462 
Europe, Middle East, and Africa
4,566 2,895 
All other countries1,267 1,192 
Total property and equipment, net$17,532 $17,549 

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NOTE 10—INTANGIBLE ASSETS AND INTERNAL-USE SOFTWARE, NET
Intangible Assets
The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset other than goodwill:
September 30, 2024December 31, 2023
Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount
Amortizable intangible assets:
Licenses$76,287 $(29,874)$46,413 $71,908 $(19,457)$52,451 
Acquired technology16,653 (7,526)9,127 15,003 (3,831)11,172 
Customer relationships12,000 (4,800)7,200 12,000 (3,000)9,000 
Trade names2,740 (1,540)1,200 2,740 (1,428)1,312 
Internal-use software183,945 (149,316)34,629 168,232 (132,375)35,857 
Other
220 (11)209 145 (4)141 
291,845 (193,067)98,778 270,028 (160,095)109,933 
Nonamortizable intangible assets:
Marketing Agreement with a related party1,000 — 1,000 1,000 — 1,000 
Total intangible assets$292,845 $(193,067)$99,778 $271,028 $(160,095)$110,933 
During the three months ended September 30, 2024 and 2023, intangible asset and internal-use software amortization was $10.4 million and $10.3 million, respectively, and during the nine months ended September 30, 2024 and 2023, intangible asset and internal-use software amortization was $31.1 million and $29.5 million, respectively. The aggregate amortization expense for amortizable intangible assets and internal-use software is reflected in “Depreciation and amortization” in the Condensed Consolidated Statements of Operations.
During the three and nine months ended September 30, 2024, the Company changed the useful life of certain definite-lived intangible assets associated with its non-fungible token initiative, resulting in an accelerated amortization of $1.8 million. The amount of accelerated amortization is reported as an asset impairment and reported within "Restructuring and related" in the Condensed Consolidated Statements of Operations. The Company recorded a non-cash impairment charge within "Restructuring and related" in the Condensed Consolidated Statements of Operations of $1.1 million during the three and nine months ended September 30, 2023.
Subsequent to September 30, 2024 and in connection with the Plan, the Company modified its future investment in certain game titles resulting in either (i) a significant reduction in user acquisition expense, (ii) significant reduction in future development expenses, or (iii) termination of game titles. The Company expects to record an estimated impairment charge of $7.1 million during the fourth quarter of 2024. Refer to Note 17—Commitments and Contingencies for more information regarding the Plan.
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As of September 30, 2024, the estimated annual amortization expense is as follows:
Year Ending December 31,Projected Amortization
Expense
Remaining 2024
$11,108 
202533,382 
202622,324 
202715,327 
20289,652 
Thereafter6,985 
Total$98,778 
NOTE 11—GOODWILL
Goodwill
The following table provides the changes in the carrying amount of goodwill for the nine months ended September 30, 2024 and December 31, 2023:
Goodwill, GrossAccumulated ImpairmentGoodwill, Net
Balance as of December 31, 2023
47,133 — 47,133 
Additions from acquisitions5,089 — 5,089 
Measurement period adjustments— — — 
Balance as of September 30, 2024
$52,222 $— $52,222 
NOTE 12—ACCRUED AND OTHER LIABILITIES
Accrued liabilities consist of the following:
September 30,
2024		December 31,
2023
Accrued payroll and vacation9,357 10,261 
Accrued user acquisition3,301 5,687 
Income taxes payable783 1,295 
Warrant liabilities
156 1,086 
Minimum guarantee liability
6,284 7,760 
Other licensing agreements
2,227 7,400 
Other accruals4,902 6,393 
Total accrued liabilities$27,010 $39,882 
Warrant Liabilities
Upon the closing of the Acies Merger, there were approximately 7.2 million publicly-traded redeemable warrants to purchase shares of Class A common stock (the "Public Warrants") and 3.8 million redeemable warrants to purchase shares of Class A common stock initially issued to Acies Acquisition, LLC (the "Sponsor") in a private placement (the "Private Warrants") by Acies. Each whole Public Warrant entitles the registered holder to purchase one whole share of the Company’s Class A common stock at a price of $11.50 in cash per share, subject to adjustment as discussed below, as of October 27, 2021. Pursuant to the Warrant Agreement, a holder of Public Warrants may exercise the Public Warrants only for a whole number of shares of Class A common stock. The Public Warrants will expire 5 years after the completion of the Acies Merger, or earlier upon redemption or liquidation. The Private Warrants are identical to the Public Warrants, except that the Private Warrants and the shares of Class A common stock issuable upon exercise of the Private Warrants were not transferable until after the completion of the Acies Merger, subject to certain limited exceptions. Additionally, the Private Warrants are non-redeemable so long as they are held by the initial holder or any of its permitted transferees. If the Private Warrants are held by someone other than the initial holder or its permitted transferees, the Private Warrants will be redeemable by the Company and
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exercisable by such holders on the same basis as the Public Warrants. The Private Warrants may be exercised on a cashless basis so long as held by the Sponsor or certain permitted transferees.
The Company may redeem the outstanding Public Warrants in whole, but not in part, at a price of $0.01 per Public Warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20-trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the holders of the Public Warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis. In no event will the Company be required to net cash settle the exercise of Public Warrants.
At September 30, 2024, there were approximately 5.4 million Public Warrants and 3.8 million Private Warrants outstanding. Refer to Note 8—Fair Value Measurement for further information. The warrant liabilities are classified within “Accrued and other current liabilities” on the Condensed Consolidated Balance Sheets.
NOTE 13—LEASES
The Company's operating leases primarily consist of real estate leases such as offices. During the three months ended September 30, 2024 and 2023, operating lease expense was $1.1 million and $1.2 million, respectively, and during the nine months ended September 30, 2024 and 2023, operating lease expense was $3.5 million and $3.7 million, respectively. The Company does not have any finance leases. Total variable and short-term lease payments were immaterial for all periods presented.
On June 30, 2024, the Company renewed its lease of office space located in Tel Aviv, Israel. The original lease term was set to expire on December 31, 2024. The renewed lease term extends for an additional three years through December 31, 2027. As a result of the lease renewal, the Company recognized an additional right-of-use asset and lease liability of $3.4 million.
Supplemental balance sheet information related to operating leases are as follows:
September 30, 2024December 31, 2023
Operating lease right-of-use assets, net$10,545$9,369
Operating lease liabilities, current3,4864,236
Operating lease liabilities, noncurrent7,5135,699
Operating lease liabilities, total$10,999$9,935
Weighted average remaining lease term, years3.13.1
Weighted average discount rate5.8 %4.5 %
Operating lease liability maturities:
Year ending December 31, Operating Leases
Remaining 2024$1,028 
20253,948 
20263,710 
20272,900 
2028382 
Thereafter— 
Total undiscounted cash flows$11,968 
Less: imputed interest$(969)
Lease liabilities, total$10,999 
As of September 30, 2024, the Company did not have material additional operating leases that have not yet commenced.

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NOTE 14—LONG-TERM DEBT
Credit Agreement
On June 24, 2021, in connection with the closing of the Acies Merger, the Company terminated and replaced its previous credit facility. The Company, a subsidiary of the Company, JPMorgan Chase Bank, N.A., as administrative agent and JPMorgan Chase Bank, N.A., Silicon Valley Bank and Wells Fargo Securities, LLC, as joint bookrunners and joint lead arrangers entered into a credit agreement (the “Credit Agreement”) which provides for a five-year revolving credit facility in an aggregate principal amount of $75.0 million. Borrowings under the Credit Agreement may be borrowed, repaid and re-borrowed by the Company, and are available for working capital, general corporate purposes and permitted acquisitions.
Commitment fees and interest rates are determined on the basis of either a Eurodollar rate or an Alternate Base Rate plus an applicable margin. The applicable margins are initially 2.50%, in the case of Eurodollar loans, and 1.50%, in the case of Alternate Base Rate loans. The applicable margin is subject to adjustment based upon the Company's Total Net Leverage Ratio (as defined in the Credit Agreement). Eurodollar rates and the Alternate Base Rate are subject to floors of 0.00% and 1.00%, respectively. The Credit Agreement contains various affirmative and negative financial and operational covenants applicable to the Company and its subsidiaries.
The Credit Agreement includes customary reporting requirements, conditions precedent to borrowing and affirmative, negative and financial covenants. Specific financial covenants include the following, commencing with the quarter ended September 30, 2021:
•Total Net Leverage Ratio of 3.50:1.00 (subject to increase to 4.00:1.00 following consummation of certain material acquisitions)
•Fixed Charge Coverage Ratio of 1.25:1.00.
On August 16, 2023, the Company, a subsidiary of the Company, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, entered into an Amendment No. 3 to Credit Agreement (the “Amendment No. 3”), among other things, exclude from the Restricted Payments covenant certain repurchases of Equity Interests of the Company deemed to occur upon the exercise, settlement or vesting of stock options, warrants or other equity-based awards if and to the extent such Equity Interests represent a portion of the exercise price of, or satisfy any tax withholding obligations with respect to, such options, warrants or other equity-based awards.
On June 7, 2024, the Company, a subsidiary of the Company, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, entered into an Amendment No. 4 to Credit Agreement (the “Amendment No. 4”) to, among other things, (i) modify the definition of “Fixed Charge Coverage Ratio” to exclude from the calculation of Restricted Payments amounts paid for the repurchase, prior to June 30, 2024, of approximately 11.7 million shares of Class A common stock of the Company, and (ii) modify the definition of “Consolidated Fixed Charges” to take into account any tax refunds received in the applicable measurement period.
On July 1, 2024, the Company, a subsidiary of the Company, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, entered into the Amendment No. 5 to Credit Agreement (the “Amendment No. 5”) to, among other things, exclude from the covenant set forth in Section 6.01 of the Credit Agreement regarding the incurrence of Indebtedness (as defined therein) the contingent consideration obligations payable pursuant to the Pixode acquisition.
The Company capitalized a total of $0.8 million in debt issuance costs related to the Credit Agreement and subsequent amendments. As of September 30, 2024, the Company does not have any balances outstanding under the Credit Agreement.
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NOTE 15—REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
The following table summarizes the Company’s revenue disaggregated by type, and by over time or point in time recognition:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Virtual currency (over time)
$57,564 $61,558 $174,288 $187,565 
Advertising (point in time)13,613 14,190 47,061 41,608 
Other revenue (point in time or over time)52 110 298 4,601 
Total net revenue$71,229 $75,858 $221,647 $233,774 

The following table summarizes the Company’s revenue disaggregated by geography:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
United States$60,088 $64,414 $186,946 $200,566 
All other countries11,141 11,444 34,701 33,208 
Total net revenue$71,229 $75,858 $221,647 $233,774 
Contract Balances
Contract assets represent the Company’s ability to bill customers for performance obligations completed under a contract. As of September 30, 2024 and December 31, 2023, there were no contract assets recorded in the Company’s Condensed Consolidated Balance Sheets. The deferred revenue balance related to the purchase of virtual currency was immaterial as of September 30, 2024 and December 31, 2023. Trade receivables are described in Note 6—Receivables, net.
NOTE 16—INCOME TAXES
The Company recorded an income tax benefit of $0.5 million and an income tax benefit of $2.1 million for the three months ended September 30, 2024 and 2023, respectively, and the Company recorded an income tax expense of $0.1 million and an income tax benefit of $2.4 million for the nine months ended September 30, 2024 and 2023, respectively. Our effective tax rate was (14.7%) for the three months ended September 30, 2024 compared to (128.8)% for the three months ended September 30, 2023. Our effective tax rate was (0.9)% for the nine months ended September 30, 2024 compared to 124.0% for the nine months ended September 30, 2023. The effective rate of 14.7% differs from the federal statutory rate of 21% primarily due to the valuation allowance recorded against US deferred tax assets, foreign branch income, nondeductible stock compensation, and discrete tax expense related to uncertain tax benefits on research and development credits.
NOTE 17—COMMITMENTS AND CONTINGENCIES
Minimum Guarantee Liability
The following are the Company’s total minimum guaranteed obligations as of:
September 30,
2024		December 31,
2023
Minimum guarantee liability - current
$6,284 $7,760 
Minimum guarantee liability - noncurrent
18,000 24,000 
Total minimum guarantee obligations$24,284 $31,760 
Weighted-average remaining contractual term (in years)2.42.6
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The following are the Company’s remaining expected future payments of minimum guaranteed obligations as of September 30, 2024:
Year Ending December 31,Minimum Guarantee
Obligations
Remaining 2024
$284 
20256,000 
20266,000 
20276,000 
20286,000 
Total$24,284 
N3TWORK, Inc.
On November 22, 2021, the Company entered into agreements with N3TWORK Inc. and The Tetris Company, LLC pursuant to which the Company acquired the rights to develop and operate Tetris®-branded mobile games for an initial term through August 2024. The Company paid N3TWORK Inc. $13.0 million at closing and agreed to pay up to an additional $34.0 million subject to satisfaction of certain conditions (the "Contingent Payments").
As of September 30, 2024, the Company settled and paid $7.4 million of $17.0 million and paid $8.0 million of $17.0 million of the Contingent Payments due to certain conditions of the Contingent Payments being satisfied. The Company accrued an additional $2.2 million in "Accrued and other current liabilities" within the Condensed Consolidated Balance Sheets due to other conditions of the Contingent Payments being met. The Company recorded an increase in "Intangible assets and internal-use software, net" within the Condensed Consolidated Balance Sheets related to the partial settlement of Contingent Payments.
The remaining amount of Contingent Payments as of September 30, 2024 was approximately $6.8 million.
Pixode
In connection with the Pixode Acquisition, in addition to the $3.5 million paid at closing, and the Company agreed to pay a percentage of an adjusted net revenue for a three year period commencing on the re-launch date of the rebranded Pixode assets, payable at the end of each fiscal year, contingent upon the satisfaction of certain product and financial milestones, up to a maximum amount of $113.5 million. The fair value of the contingent consideration is reassessed at each reporting date, with changes recognized in earnings. The fair value of the contingent consideration as of September 30, 2024 was $3.3 million. Refer to Note 8—Fair Value Measurement for more information.
Legal Proceedings
The Company is party to ordinary and routine litigation incidental to its business. On a case-by-case basis, the Company engages inside and outside counsel to assess the probability of potential liability resulting from such litigation. After making such assessments, the Company makes an accrual for the estimated loss only when the loss is reasonably probable and an amount can be reasonably estimated. The Company does not expect the outcome of any pending litigation to have a material effect on the Company’s Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, or Condensed Consolidated Statements of Cash Flows.
The Company is a party to a litigation matter brought by TeamSava d.o.o. Beograd, or TeamSava, and other related parties. The plaintiffs filed a Statement of Claim in May 2021 in Tel Aviv District Court in Israel, alleging claims, among other things, that we breached the terms of a commercial contract relating to services provided by TeamSava and related parties in connection with the sourcing and administrative management of personnel in Serbia who provided game development services exclusively for us. The litigation sought damages of 27.3 million New Israeli Shekels (NIS) (or approximately $7.4 million based on prevailing exchange rates as of March 31, 2024). On November 30, 2023, we entered into a settlement agreement to resolve and settle all claims brought by the plaintiffs against the Company, its Israeli subsidiary and its employees and former employees, and all claims brought by the Company's affiliates against the plaintiffs. The settlement is contingent upon the confirmation by the respective courts in Israel and Serbia that all related lawsuits have been dismissed. As of September 30, 2024, only one lawsuit in Serbia remained to be dismissed with prejudice. The Company expects to finalize the settlement before December 31, 2024, but cannot make any assurances that it will be completed by that date or that none of the parties withdraw from the settlement.
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On April 6, 2022, a class action lawsuit was filed in the United States District Court, Northern District of California, by a purported Company shareholder in connection with alleged federal securities law violations: Christian A. Felipe et. al. v. PLAYSTUDIOS, Inc. (the “Felipe Complaint”). On July 15, 2022, the Felipe Complaint was transferred to the United States District Court for the District of Nevada, Southern Division. On October 4, 2022, the plaintiffs filed an amendment to the Felipe Complaint. The Felipe Complaint names the Company, several current and former board members of the Company, board members and officers of Acies Acquisition Corp., and Andrew Pascal, the Company’s Chairman and CEO, as defendants. The Felipe Complaint alleges misrepresentations and omissions regarding the state of the Company’s development of the Kingdom Boss game and its financial projections and future prospects in the S-4 Registration Statement filed by Acies that was declared effective on May 25, 2021, the Proxy Statement filed by Acies on May 25, 2021, and other public statements that touted Old PLAYSTUDIOS’ and the Company’s financial performance and operations, including statements made on earnings calls and the Amended S-1 Registration Statement filed by the Company that was declared effective on July 30, 2021. The Felipe Complaint alleges that the misrepresentations and omissions resulted in stock price drops of 13% on August 12, 2021, and 5% on February 25, 2022, following (i) the Company’s release of financial results for the second quarter of 2021, ended on June 30, 2021, and (ii) the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and issuance of a press release summarizing financial results for the fourth quarter and year ended December 31, 2021, respectively. The Felipe Complaint seeks an award of damages for an unspecified amount. The Company believes that the claims are without merit and the Company intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of this litigation. The Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals.
On March 8, 2023, Angel Deann Pilati, a purported adult resident citizen of Franklin County, Alabama, filed a civil lawsuit against PLAYSTUDIOS US, LLC in the Circuit Court of Franklin County Alabama, alleging that PLAYSTUDIOS US, LLC makes available online games and applications across multiple platforms that are games of chance and thus illegal gambling under Alabama law and seeking to recover, under Alabama’s loss recovery act, all sums paid by Alabama residents to PLAYSTUDIOS US, LLC in its online gambling games during the period beginning one year before the filing of the complaint until the case is resolved. On August 23, 2023, the plaintiff amended the complaint to exclude recovery for Alabama residents who lost $75,000 or more during the statute of limitations period. The plaintiff claims to seek this recovery "to go to the benefit of the families" of players who paid money to play the games. The Company believes the claims are without merit and intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of this litigation. The Company is not able to reasonably estimate the probability or amount of loss relating to this litigation and therefore has not made any accruals.
On November 13, 2023, Sandra Tucker Duckworth, a purported citizen of Tennessee, filed a civil lawsuit against PLAYSTUDIOS US, LLC in the Circuit Court for the 14th Judicial District of Tennessee alleging that PLAYSTUDIOS US, LLC makes available online games of chance that constitute illegal gambling under Tennessee law and seeking to recover, under Tennessee's loss recovery act, all sums paid by Tennessee residents to PLAYSTUDIOS US, LLC in its online gambling games during the period beginning one year before the filing of the lawsuit until the case is resolved, excluding recovery of money lost by a Tennessee resident who lost $75,000 or more during the statute of limitations period. The plaintiff claims to seek this recovery for the benefit of each individual player's spouse, or if not spouse, child or children, and if not child or children, the next of kin. The Company believes the claims are without merit and intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of this litigation. The Company is not able to reasonably estimate the probability or amount of loss relating to this litigation and therefore has not made any accruals.
On February 20, 2024, Tyler Kuhk, a purported citizen of Washington, filed a class action lawsuit against PLAYSTUDIOS US, LLC in the Superior Court of the State of Washington for the County of King, alleging that PLAYSTUDIOS US, LLC makes available online games of chance that constitute illegal gambling under Washington law, that PLAYSTUDIOS US, LLC engaged in unfair and deceptive practices by advertising to and soliciting the general public in Washington state to play its unlawful online casino games of chance, and that PLAYSTUDIOS US, LLC was unjustly enriched by this conduct. The plaintiff seeks to recover all sums paid by Washington residents to PLAYSTUDIOS US, LLC in its online gambling games during an unspecified period of time under Washington’s “Recovery of money lost gambling” statute, for treble damages under Washington’s Consumer Protection Act, and for disgorgement and restitution of any money PLAYSTUDIOS US, LLC has retained through unlawful and/or wrongful conduct alleged in the lawsuit. The Company believes the claims are without merit and intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of this litigation. The Company is not able to reasonably estimate the probability or amount of loss relating to this litigation and therefore has not made any accruals.
On August 22, 2024, James Scott Tipmore, a purported citizen of Kentucky, filed a civil lawsuit against PLAYSTUDIOS US, LLC in the United States District Court for the Western District of Kentucky, alleging that PLAYSTUDIOS US, LLC makes available online games of chance that constitute illegal gambling under Kentucky law and
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seeking to recover, under Kentucky's loss recovery act, treble the sums paid by Kentucky residents to PLAYSTUDIOS US, LLC in its online gambling games during the period beginning five years before the filing of the lawsuit until the case is resolved. The Company believes the claims are without merit and intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of this litigation. The Company is not able to reasonably estimate the probability or amount of loss relating to this litigation and therefore has not made any accruals.

The Company received four demands for arbitration during 2023 claiming that the games operated by PLAYSTUDIOS US, LLC constitute illegal gambling under the laws of various states. As of September 30, 2024, three of the demands for arbitration remained active. These demands generally attempt to recover amounts spent by third parties on the Company’s games by relying on state gambling loss recovery statutes and/or by seeking to have the applicable Terms of Service declared invalid. The Company believes that the claims are without merit and the Company intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the arbitration proceedings. The Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals.
On May 24, 2024, the Company received multiple substantively identical pre-arbitration notices from a single law firm purporting to represent 5,264 players, alleging the games operated by the Company violate state gambling statutes, along with various other claims. The Company believes that the claims are without merit and the Company intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of these demands. The Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals.
On September 27, 2024, the Company received multiple substantively identical pre-arbitration notices from a single law firm purporting to represent 2,697 players, alleging the games operated by the Company violate state gambling statutes, along with various other claims. The Company believes that the claims are without merit and the Company intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of these demands. The Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals.
Other
On October 29, 2024, the Company initiated an internal reorganization plan (the “Plan”) which is intended to enhance efficiency and reduce operating expenses. The Plan includes a reduction of the Company’s current total global workforce by approximately 30 percent. The Company expects to substantially complete the personnel reduction by the end of the fourth quarter of fiscal year 2024, but the timing of certain reductions will vary based on job function and location, including local legal requirements.
The Company estimates that it will incur approximately $14.0 million to $16.0 million in charges in connection with the Plan, which will be substantially incurred in the fourth quarter of fiscal year 2024. These charges primarily relate to employee transition, severance payments, employee benefits, stock-based compensation, and impairment of capitalized software and fixed assets. The estimates of the charges and expenditures that the Company expects to incur in connection with the Plan, and the timing thereof, are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual amounts may differ materially from estimates. In addition, the Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur in connection with the implementation of the Plan.
NOTE 18—STOCKHOLDERS’ EQUITY
Common Stock
Subject to the prior rights of the holders of any preferred stock, the holders of common stock are entitled to receive dividends out of the funds legally available at the times and in the amounts determined by the Company's Board of Directors. Each holder of Class A common stock is entitled to one vote for each share of Class A common stock held and each holder of Class B common stock is entitled to twenty votes for each share of Class B common stock held. After the full preferential amounts due to preferred stockholders have been paid or set aside, the remaining assets of the Company available for distribution to its stockholders, if any, are distributed to the holders of common stock ratably in proportion to the number of shares of common stock then held by each such holder. None of the Company’s common stock is entitled to preemptive rights or subject to redemption. With the exception of the conversion of the Class B common stock into Class A common stock as described below, the Company’s common stock is not convertible into any other shares of the Company’s capital stock.
The shares of Class B common stock are subject to a “sunset” provision if any member of the Founder Group transfers shares of Class B common stock outside the Founder Group (except for certain permitted transfers). In the event of such non-permitted transfers, any share transferred will automatically convert into shares of Class A common stock. In addition, the
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outstanding shares of Class B common stock will be subject to a “sunset” provision by which all outstanding shares of Class B common stock will automatically convert into shares of Class A common stock (i) if holders representing a majority of the Class B common stock vote to convert the Class B common stock into Class A common stock, (ii) if the Founder Group and its permitted transferees collectively no longer beneficially own at least 20% of the number of shares of Class B common stock collectively held by the Founder Group as of the closing of the Acies Merger, or (iii) on the nine-month anniversary of the Founder’s death or disability, unless such date is extended by a majority of independent directors of the Company.
Accumulated Other Comprehensive Loss
The following tables shows a summary of changes in accumulated other comprehensive loss:
Foreign Currency Derivative ContractsCurrency
Translation
Adjustment		Total Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2023$286 $(162)$124 
Net losses recognized in other comprehensive income before reclassifications(621)— (621)
Foreign currency translation— (198)(198)
Balance as of September 30, 2024$(335)$(360)$(695)

Foreign Currency Derivative Contracts
Currency
Translation
Adjustment		Total Accumulated Other Comprehensive Loss
Balance as of December 31, 2022$— $(151)$(151)
Net gains recognized in other comprehensive income before reclassifications
— — — 
Foreign currency translation— (871)(871)
Balance as of September 30, 2023$— $(1,022)$(1,022)
Treasury Stock
The following table shows a summary of changes in treasury stock:
Treasury shares
Treasury stock, at cost
Balance as of December 31, 20234,723 $20,094 
Class A common stock repurchased through the Stock Repurchase Program
1,879 4,569 
Class A common stock repurchased outside of the Stock Repurchase Program
11,677 24,639 
Balance as of September 30, 202418,279 $49,302 
Stock Repurchase Program
On November 10, 2021, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to purchase up to $50.0 million of the Company’s Class A common stock over a period of 12 months. On November 2, 2022, the Company's Board of Directors extended such period for an additional 12 months from November 10, 2022 to November 10, 2023. On November 1, 2023, the Company's Board of Directors extended the stock repurchase program through November 10, 2024 and increased the remaining amount authorized to $50.0 million. On November 1, 2024, the Company's Board of Directors extended the repurchase program through November 1, 2025. Subject to applicable rules and regulations, the shares may be purchased from time to time in the open market or in privately negotiated transactions. Such purchases will be at times and in amounts as the Company deems appropriate, based on factors such as market conditions, legal requirements and other business considerations.
Subsequent to September 30, 2024, the Company acquired 0.5 million additional shares of its Class A common stock under this program at an aggregate value of $0.8 million and an average price of $1.51 per share. Repurchased shares were held in treasury. The remaining availability under the stock repurchase program was $44.7 million after the subsequent purchases.
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NOTE 19—STOCK-BASED COMPENSATION
The following table summarizes stock-based compensation expense for the periods shown:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Selling and marketing$355 $205 $972 $585 
General and administrative2,561 1,975 7,940 7,086 
Research and development1,668 2,164 5,396 6,720 
Stock-based compensation expense$4,584 $4,344 $14,308 $14,391 
Capitalized stock-based compensation$358 $412 $1,126 $1,340 
As of September 30, 2024, there was approximately $31.4 million and $0.1 million in unrecognized stock-based compensation expense related to restricted stock units and performance stock units that are expected to be recognized over a weighted-average expected vesting period of 2.2 years and 0.4 years, respectively. The Company granted 2.9 million and 7.8 million restricted stock units during the three and nine months ended September 30, 2024. The Company granted zero performance stock units during the three months ended September 30, 2024 and 0.3 million performance stock units during the nine months ended September 30, 2024.

NOTE 20—NET (LOSS) INCOME PER SHARE
The following table sets forth the computation of basic and diluted net loss attributable to Class A and Class B common stockholders per share (in thousands except per share data):

Three Months Ended September 30, 2024Three Months Ended September 30, 2023
Class AClass BClass AClass B
Numerator
Net (loss) income attributable to common stockholders – basic$(2,689)$(408)$3,331 $469 
Potential dilutive effect of derivative instruments— — 16 (16)
Net (loss) income attributable to common stockholders – diluted$(2,689)$(408)$3,347 $453 
Denominator
Weighted average shares of common stock outstanding - basic108,549 16,458 116,893 16,458 
Potential dilutive effect of stock options
— — 2,773 1,391 
Potential dilutive effect of restricted stock units
— — 12,140 — 
Weighted average shares of common stock outstanding - diluted108,549 16,458 131,806 17,849 
Net (loss) income attributable to common stockholders per share
Basic$(0.02)$(0.02)$0.03 $0.03 
Diluted$(0.02)$(0.02)$0.03 $0.03 

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Nine Months Ended September 30, 2024Nine Months Ended September 30, 2023
Class AClass BClass AClass B
Numerator
Net (loss) income attributable to common stockholders – basic$(5,487)$(788)$413 $58 
Potential dilutive effect of derivative instruments— — 2 (2)
Net (loss) income attributable to common stockholders – diluted$(5,487)$(788)$415 $56 
Denominator
Weighted average shares of common stock outstanding - basic114,539 16,458 116,088 16,458 
Potential dilutive effect of stock options
— — 2,816 1,409 
Potential dilutive effect of restricted stock units
— — 12,140 — 
Weighted average shares of common stock outstanding - diluted114,539 16,458 131,044 17,867 
Net (loss) income attributable to common stockholders per share
Basic$(0.05)$(0.05)$0.00 $0.00 
Diluted$(0.05)$(0.05)$0.00 $0.00 

For the periods presented above, the net loss per share amounts are the same for Class A and Class B common stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with the Certificate of Incorporation. The undistributed losses for each period are allocated based on the contractual participation rights of the Class A and Class B common stock as if the losses for the period had been distributed. As the liquidation and dividend rights are identical, the undistributed losses are allocated on a proportionate basis.
The following equity awards outstanding at the end of each period presented have been excluded from the computation of diluted net loss per share of common stock for the periods presented due to their anti-dilutive effect:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Stock options5,163 128 5,163 100 
Restricted stock units13,622 — 13,622 — 
Performance stock units
86 — 86 — 
Public Warrants5,382 5,382 5,382 5,382 
Private Warrants3,822 3,822 3,822 3,822 
Earnout Shares15,000 15,000 15,000 15,000 
43,075 24,332 43,075 24,304 
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Item 2.        Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we”, “us”, “our”, and “the Company” are intended to mean the business and operations of PLAYSTUDIOS, Inc. and its consolidated subsidiaries.
Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a discrepancy include, but are not limited to, those discussed elsewhere in this Quarterly Report on Form 10-Q, particularly in the section titled “Risk Factors” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q. All forward-looking statements in this report are based on information available to us as of the date hereof, and we assume no obligation to update any such forward-looking statements to reflect future events or circumstances, except as required by law.
Overview
We are a developer and publisher of free-to-play casual games for mobile and social platforms. Over our twelve-year history, we developed a portfolio of free-to-play social casino games that are considered to be among the most innovative and unique in the genre. In 2021 we added our Tetris®-branded mobile game and in late 2022 we acquired Brainium, a developer and publisher of free-to-play casual games. Our games include the award-winning POP! Slots, myVEGAS Slots, my KONAMI Slots, MGM Slots Live, myVEGAS Blackjack, myVEGAS Bingo, Tetris®, Tetris Block Puzzle, Solitaire, Spider Solitaire, Jumbline 2, Sudoku, and Mahjong. Our games are based on original content as well as third-party licensed brands and are downloadable and playable for free on multiple social and mobile-based platforms, including the Apple App Store, Google Play Store, Amazon Appstore, and Facebook.
Each of our legacy social casino games and our Tetris®-branded mobile games are powered by our proprietary playAWARDS program and incorporates loyalty points that are earned by players as they engage with our games. The rewards are provided by our collection of rewards partners, with the majority of rewards partners providing their rewards at no cost to us, in exchange for product integration, marketing support, and participation in our loyalty program. The program is enabled by our playAWARDS platform which consists of a robust suite of tools that enable our rewards partners to manage their rewards in real time, measure the value of our players’ engagement, and gain insight into the effectiveness and value they derive from the program. Through our self-service platform, rewards partners can launch new rewards, make changes to existing rewards, and in real time see how players are engaging with their brands. The platform tools also provide rewards partners with the ability to measure the off-line value our players generate as consumers and patrons of their real-world establishments.
Our playAWARDS platform embodies all of the features, tools, and capabilities needed to deliver loyalty programs tailored for the games industry. Our consumer-facing brand for our loyalty program is myVIP. The myVIP program is an aspirational benefits framework, with in-game mechanics and rewards features, along with a player development and hosting program. The program dynamically ranks and assigns players to tiers based on their accumulation of tier points, which are a proxy for their overall engagement with our games. The tier points are separate from and are not interchangeable with the loyalty points earned in the playAWARDS program. Qualified players are provided access to enhanced benefits that increase with each tier. Higher tiers provide access to a myVIP player portal where players can view and purchase special chip bundles, redeem loyalty points for a curated set of rewards, and communicate directly with a dedicated personal host. The VIP player portal, concierge, and host programs enhance the in-game and real-world reward experience with both in-game and in-person, invitation-only special events. We believe that the myVIP program drives increased player engagement and retention, and therefore extends each game's life cycle and revenue potential.
We generate revenue from the sale of in-game virtual currency, which players can choose to purchase at any time to enhance their playing experience. Once purchased, our virtual currency cannot be withdrawn from the game, transferred from one game to another or from one player to another, or be redeemed for monetary value. Players who install our games receive free virtual currency upon the initial launch of the game, and they may also collect virtual currency free of charge at periodic intervals or through targeted marketing promotions. Players may exhaust the free virtual currency and may choose to purchase additional virtual currency. Additionally, players can send free “gifts” of virtual currency to their friends on Facebook. Our revenue from virtual currency has been generated world wide, but is largely concentrated in North America.
We also generate revenue from in-game advertising. Advertisements can be in the form of an impression, click-throughs, banner ads, or offers, where players are rewarded with virtual currency or loyalty points for watching a short video. While we
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historically have derived most of our revenue from the sale of in-game virtual currency, we introduced in-game advertising as a limited pilot program and expanded it throughout 2021 and 2022. In addition, our Tetris®-branded mobile game and our Brainium games generate most of their revenue through in-game advertising.
Key Factors Affecting Our Performance
There are a number of factors that affect the performance of our business, and the comparability of our results from period to period, including:
•Third-Party Platform Agreements—Historically we derived substantially all of our revenue from in-game purchases of virtual currency that are processed by platform providers such as the Apple App Store, Google Store, Amazon Appstore, and on Facebook. The platform providers charge us a transaction fee to process payments from our players for their purchase of in-game virtual currency. These platform fees are generally set at 30% of the in-game purchase. Each platform provider has broad discretion to set its platform fees and to change and interpret its terms of service and other policies with respect to us and other developers in its sole discretion, and those changes may be unfavorable to us.
•Player Acquisition—Establishing and maintaining a loyal network of players and paying players is vital for our success. As such, we spend a significant amount on advertising and other forms of player acquisition, such as traditional marketing and advertising, email and push notifications, and cross promoting between our games in order to grow our player base. These expenditures are generally related to new content launches, game enhancements, and ongoing programs to drive new player acquisition and the reactivation of lapsed player engagement. Our player acquisition strategy is centered on a payback period methodology, and we strive to optimize spend between the acquisition of new players and the reactivation of inactive players.
•Player Monetization—Our revenue to date has been primarily driven through the sale of virtual currency. Paying players purchase virtual currency in our games because of the perceived value, which is dependent on the relative ease of obtaining equivalent virtual currency by simply playing our game. The perceived value of our virtual currency can be impacted by various actions that we take in our games including offering discounts for virtual currency or giving away virtual currency in promotions. Managing game economies is difficult and relies on our assumptions and judgment. If we fail to manage our virtual economies properly or fail to promptly and successfully respond to any such disruption, our reputation may suffer and our players may be less likely to play our games and to purchase virtual currency from us in the future, which would cause our business, financial condition, and results of operations to suffer.
•Investment in Game Development—In order to maintain interest from existing players and add new players and achieve our desired revenue growth, we must continually improve the content, offers, and features in our existing games and the release of new games. As a result, we invest a significant amount of our technological and creative resources to ensure that we support an appropriate cadence of innovative content that our players will find appealing. These expenditures generally occur in advance of the release of new content or the launch of a new game, and the resulting revenue may not exceed the development costs, or the game or feature may be abandoned in its entirety.
•Investment in our playAWARDS and myVIP programs—In order to drive player engagement and retention we invest a significant amount of resources to enhance the playAWARDS and myVIP programs. We continually evaluate these programs through an iterative feedback process with our players and rewards partners and update them so that both our players and rewards partners are able to optimize their personalized experience. As a result, we continuously incur expenses to enhance and update these programs. However, the results may not generate revenue and the enhancements may require additional significant modifications or be abandoned in their entirety.
•Real-World Rewards—We currently offer real-world rewards relating to, among other things, dining, live entertainment shows, and hotel rooms, and we plan to continue to expand and diversify our rewards loyalty program in order to maintain and enhance the perceived value offering to our players. Our players’ willingness to make in-game purchases is directly impacted by our ability to provide desirable rewards. The real-world rewards we offer to
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our players are provided at no cost to us by our rewards partners, and there is no obligation for us to pay or otherwise compensate either our rewards partners or players for any player redemptions under our rewards partner agreements.

Key Performance Indicators
We manage our business by regularly reviewing several key operating metrics to track historical performance, identify trends in player activity, and set strategic goals for the future. Our key performance metrics are impacted by several factors that could cause them to fluctuate on a quarterly basis, such as platform providers’ policies, seasonality, player connectivity, and the addition of new content to games. We believe these measures are useful to investors for the same reasons. In addition, we also present certain non-GAAP performance measures. These performance measures are presented as supplemental disclosure and should not be considered superior to or as a substitute for the consolidated financial statements prepared under U.S. GAAP. The non-GAAP measures presented in this Quarterly Report on Form 10-Q should be read together with the unaudited condensed consolidated financial statements and the respective related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. The key performance indicators and non-GAAP measures presented in this Quarterly Report on Form 10-Q may differ from similarly titled measures presented by other companies and are not a substitute for financial statements prepared in accordance with U.S. GAAP.
Key Performance Indicators - playGAMES
Daily Active Users (“DAU”)
DAU is defined as the number of individuals who played a game on a particular day. For Tetris and our free-to-play social casino games, we track DAU by the player ID, which is assigned for each game installed by an individual. As such, an individual who plays two of these games on the same day is counted as two DAU while an individual who plays the same game on two different devices is counted as one DAU. For our Brainium suite of casual games, we track DAU by app instance ID, which is assigned to each installation of a game on a particular device. As such, an individual who plays two different Brainium games on the same day is counted as two DAU and an individual who plays the same Brainium game on two different devices is also counted as two DAU. The term "Average DAU" is defined as the average of the DAU, determined as described above, for each day during the period presented. We use DAU and Average DAU as measures of audience engagement to help us understand the size of the active player base engaged with our games on a daily basis.
Monthly Active Users (“MAU”)
MAU is defined as the number of individuals who played a game in a particular month. As with DAU, an individual who plays two different non-Brainium games in the same month is counted as two MAU while an individual who plays the same non-Brainium game on two different devices is counted as one MAU, and an individual who plays two different Brainium games on the same day is counted as two MAU while an individual who plays the same Brainium game on two different devices is also counted as two MAU. The term "Average MAU" is defined as the average of the MAU, determined as described above, for each calendar month during the period presented. We use MAU and Average MAU as measures of audience engagement to help us understand the size of the active player base engaged with our games on a monthly basis.
Daily Paying Users (“DPU”)
DPU is defined as the number of individuals who made a purchase in a game during a particular day. As with DAU and MAU, we track DPU based on account activity. As such, an individual who makes a purchase in two different games in a particular day is counted as two DPU while an individual who makes purchases in the same game on two different devices is counted as one DPU. The term "Average DPU" is defined as the average of the DPU, determined as described above, for each day during the period presented. We use DPU and Average DPU to help us understand the size of our active player base that makes in-game purchases. This focus directs our strategic goals in setting player acquisition and pricing strategy.
Daily Payer Conversion
Daily Payer Conversion is defined as DPU as a percentage of DAU on a particular day. Daily Payer Conversion is also sometimes referred to as "Percentage of Paying Users" or "PPU". The term "Average Daily Payer Conversion" is defined as the Average DPU divided by Average DAU for a given period. We use Daily Payer Conversion and Average Daily Payer Conversion to help us understand the monetization of our active players.
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Average Daily Revenue Per DAU (“ARPDAU”)
ARPDAU is defined for a given period as the average daily revenue per Average DAU and is calculated as game and advertising revenue for the period, divided by the number of days in the period, divided by the Average DAU during the period. We use ARPDAU as a measure of overall monetization of our active players.
Key Performance Indicators - playAWARDS
Available Rewards
Available Rewards is defined as the monthly average number of unique rewards available in our applications’ rewards stores. A reward appearing in more than one application’s reward store is counted only once. A reward is counted only once irrespective of the inventory available through that reward. For example, one reward for a free night in a hotel room with ten rooms available for such free night is counted as one reward. Available Rewards only include real-world partner rewards and exclude PLAYSTUDIOS digital rewards. We use Available Rewards as a measure of the value and potential impact of the program for an interested player. It is assumed that the greater the variety and breadth of rewards offered, the more likely players will be to ascribe value to the program.
Purchases
Purchases is defined as the total number of rewards purchased for the period identified in which a player exchanges loyalty points for a reward. Purchases are net of refunds. Purchases only include purchases of real-world partner rewards and exclude any PLAYSTUDIOS digital rewards. Purchases are redeemed by the player directly with the rewards partner within the specified terms and conditions of the reward. The Company does not receive any compensation or revenue from Purchases. We use Purchases as a measure of audience interest and engagement with our playAWARDS platform.
Retail Value of Purchases
Retail Value of Purchases is defined as the cumulative retail value of all rewards listed as Purchases for the period identified. The retail value of each reward listed as Purchases is the retail value as determined by the partner upon creation of the reward. In the case where the retail value of a reward adjusts depending on time of redemption, the average retail value is used. Retail Value of Purchases only include the retail value of real-world partner rewards and exclude the cost of any PLAYSTUDIOS branded merchandise. We use Retail Value of Purchases to help us understand the real-world value of the rewards that are purchased by our players.

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Results of Operations
Comparison of the three and nine months ended September 30, 2024 versus the three and nine months ended September 30, 2023
The following table summarizes our consolidated results of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands, except percentages):
Three Months Ended September 30,Nine Months Ended September 30,
20242023$ Change% Change20242023$ Change% Change
Net revenue$71,229 $75,858 $(4,629)(6.1)%$221,647 $233,774 $(12,127)(5.2)%
Operating expenses76,007 79,579 (3,572)(4.5)%232,091 241,548 (9,457)(3.9)%
Operating loss(4,778)(3,721)(1,057)28.4 %(10,444)(7,774)(2,670)34.3 %
Net (loss) income
(3,097)3,800 (6,897)(181.5)%(6,275)471 (6,746)(1432.3)%
Net (loss) income margin
(4.3)%5.0 %
(9.3)pp
(186.0)%(2.8)%0.2 %(3.0)(1500.0)%
pp = percentage points
Net Revenue by Segment
Three Months Ended September 30,Nine Months Ended September 30,
20242023Change% Change20242023Change% Change
Net revenue
playGAMES$71,226 $75,857 $(4,631)(6.1)%$221,642 $229,602 $(7,960)(3.5)%
playAWARDS3 1 2 200.0 %5 4,172 (4,167)(99.9)%
Net revenue$71,229 $75,858 $(4,629)(6.1)%$221,647 $233,774 $(12,127)(5.2)%
Revenue information by geography is summarized as follows (in thousands, except percentages):
Three Months Ended September 30,Nine Months Ended September 30,
20242023Change% Change20242023Change% Change
United States$60,088 $64,414 $(4,326)(6.7)%$186,946 $200,566 $(13,620)(6.8)%
All other countries
11,141 11,444 (303)(2.6)%34,701 33,208 1,493 4.5 %
Net revenue$71,229 $75,858 $(4,629)(6.1)%$221,647 $233,774 $(12,127)(5.2)%
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playGAMES
The following table shows net revenues and key performance indicators for our playGAMES division (in thousands, except percentages and ARPDAU):
Three Months Ended September 30,Nine Months Ended September 30,
20242023Change% Change20242023Change% Change
Virtual currency$57,564 $61,558 $(3,994)(6.5)%$174,288 $187,565 $(13,277)(7.1)%
Advertising13,613 14,190 (577)(4.1)%47,061 41,608 5,453 13.1 %
Other revenue49 109 (60)(55.0)%293 429 (136)(31.7)%
Net revenue$71,226 $75,857 $(4,631)(6.1)%$221,642 $229,602 $(7,960)(3.5)%
Average DAU2,961 3,520 (559)(15.9)%3,225 3,579 (354)(9.9)%
Average MAU12,658 13,712 (1,054)(7.7)%13,669 13,557 112 0.8 %
Average DPU23 26 (3)(11.5)%25 27 (2)(7.4)%
Average Daily Payer Conversion0.8 %0.8 %— pp— %0.8 %0.8 %— pp— %
ARPDAU (in dollars)$0.26 $0.23 $0.03 13.0 %$0.25 $0.24 $0.01 4.2 %
pp = percentage points
Net revenue decreased $4.6 million, or (6.1)%, to $71.2 million during the three months ended September 30, 2024 compared to $75.9 million during the three months ended September 30, 2023. The decrease was due to a $4.0 million decrease in virtual currency revenue primarily driven by decreases in DPU.
Net revenue decreased $8.0 million, or (3.5)%, to $221.6 million during the nine months ended September 30, 2024 compared to $229.6 million during the nine months ended September 30, 2023. The decrease was due to a $13.3 million decrease in virtual currency revenue primarily driven by decreases in DPU. The decrease was offset by growth in advertising revenue.
playAWARDS
The following table shows net revenues and key performance indicators for our playAWARDS division (in thousands, except for available rewards):
Three Months Ended September 30,Nine Months Ended September 30,
20242023Change% Change20242023Change% Change
Net revenue$3 $1 $2 200.0 %$5 $4,172 $(4,167)(99.9)%
Available Rewards (in units)547 598 (51)(8.5)%543 578 (35)(6.1)%
Purchases (in units)451 433 18 4.2 %1,472 1,338 134 10.0 %
Retail Value of Purchases$24,980 $24,165 $815 3.4 %$96,977 $78,145 $18,832 24.1 %
Net revenue remained flat during the three months ended September 30, 2024 compared to the same period in prior year. The key performance indicators presented above are used by management to assess the playAWARDS segment's operating performance, however are not indicative revenue metrics.
Net revenue decreased by $4.2 million during the nine months ended September 30, 2024, compared to the same period in prior year, due to the non-renewal of a licensing arrangement with a customer. The key performance indicators presented above are used by management to assess the playAWARDS segment's operating performance, however are not indicative revenue metrics.
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Operating Expenses
The following table summarizes our consolidated operating expenses for each applicable period (in thousands, except percentages):
Three Months Ended September 30,% of Revenue
20242023$ Change% Change20242023
Operating expenses:
Cost of revenue$17,832 $19,862 $(2,030)(10.2)%25.0 %26.2 %
Selling and marketing15,116 18,786 (3,670)(19.5)%21.2 %24.8 %
Research and development16,654 17,367 (713)(4.1)%23.4 %22.9 %
General and administrative11,581 10,747 834 7.8 %16.3 %14.2 %
Depreciation and amortization11,593 11,537 56 0.5 %16.3 %15.2 %
Restructuring expenses3,231 1,280 1,951 152.4 %4.5 %1.7 %
Total operating expenses$76,007 $79,579 $(3,572)(4.5)%106.7 %104.9 %

Nine Months Ended September 30,% of Revenue
20242023$ Change% Change20242023
Operating expenses:
Cost of revenue$54,851 $58,276 $(3,425)(5.9)%24.7 %24.9 %
Selling and marketing50,756 55,283 (4,527)(8.2)%22.9 %23.6 %
Research and development51,418 53,503 (2,085)(3.9)%23.2 %22.9 %
General and administrative35,005 33,688 1,317 3.9 %15.8 %14.4 %
Depreciation and amortization34,813 33,686 1,127 3.3 %15.7 %14.4 %
Restructuring expenses5,248 7,112 (1,864)(26.2)%2.4 %3.0 %
Total operating expenses$232,091 $241,548 $(9,457)(3.9)%104.7 %103.3 %
Cost of Revenue
Cost of revenue decreased by $2.0 million to $17.8 million during the three months ended September 30, 2024 compared to $19.9 million during the three months ended September 30, 2023. The decrease was primarily related to a decrease in virtual currency revenue. As a percentage of revenue, cost of revenue decreased from 26.2% for the three months ended September 30, 2023 to 25.0% for the three months ended September 30, 2024.
Cost of revenue decreased by $3.4 million to $54.9 million during the nine months ended September 30, 2024 compared to $58.3 million during the nine months ended September 30, 2023. The decrease was primarily related to a decrease in virtual currency revenue. As a percentage of revenue, cost of revenue decreased from 24.9% for the nine months ended September 30, 2023 to 24.7% for the nine months ended September 30, 2024.
Selling and Marketing
Selling and marketing expenses decreased by $3.7 million to $15.1 million during the three months ended September 30, 2024 compared to $18.8 million during the three months ended September 30, 2023. The decrease was primarily due to decreases in user acquisition expense of $5.3 million. This was offset by increases of other selling and marketing expenses of $1.6 million. As a percentage of revenue, selling and marketing expenses decreased from 24.8% for the three months ended September 30, 2023 to 21.2% for the three months ended September 30, 2024.
Selling and marketing expenses decreased by $4.5 million to $50.8 million during the nine months ended September 30, 2024 compared to $55.3 million during the nine months ended September 30, 2023. The decrease was primarily due to decreases in user acquisition expense of $7.0 million. This was offset by increases to marketing expenses of $1.2 million, IT software of $0.6 million, outside service costs of $0.5 million, and $0.2 million of other expenses. As a percentage of revenue, selling and marketing expenses decreased from 23.6% for the nine months ended September 30, 2023 to 22.9% for the nine months ended September 30, 2024.
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Research and Development
Research and development expenses decreased by $0.7 million to $16.7 million during the three months ended September 30, 2024 compared to $17.4 million during the three months ended September 30, 2023. The decrease was primarily due to a decrease of stock compensation of $0.5 million and a decrease of employee costs of $0.4 million. This was offset by an increase of $0.2 million of other research and development costs.
Research and development expenses decreased by $2.1 million to $51.4 million during the nine months ended September 30, 2024 compared to $53.5 million during the nine months ended September 30, 2023. The decrease was primarily due to a decreases of stock compensation of $1.3 million, employee costs of $0.8 million, and facilities expenses of $0.4 million. This was offset by an increase of other research and development costs of $0.4 million.
General and Administrative
General and administrative expenses increased by $0.8 million to $11.6 million during the three months ended September 30, 2024 compared to $10.7 million during the three months ended September 30, 2023. The increase is primarily due to increases of stock compensation of $0.6 million and employee costs of $0.5 million. This was offset by a reduction of $0.3 million of other general and administrative costs.
General and administrative expenses increased by $1.3 million to $35.0 million during the nine months ended September 30, 2024 compared to $33.7 million during the nine months ended September 30, 2023. The increase is primarily due to increases to employee costs of $1.1 million, IT expenses of $1.1 million, and stock compensation of $0.9 million. This was offset by decreases in insurance expense of $0.9 million and $0.9 million of other general and administrative costs.
Depreciation and Amortization
Depreciation and amortization expenses increased by $0.1 million to $11.6 million during the three months ended September 30, 2024 compared to $11.5 million during the three months ended September 30, 2023. The increase was primarily due to increased amortization of intangible assets related to the acquisition of Pixode assets.
Depreciation and amortization expenses increased by $1.1 million to $34.8 million during the nine months ended September 30, 2024 compared to $33.7 million during the nine months ended September 30, 2023. The increase was primarily due to the increased amortization of intangible assets related to the acquisition of Pixode assets, as well as increased amortization as a result of other license renewals.
Restructuring Expenses
Restructuring expenses increased by $2.0 million from the three months ended September 30, 2023 to the three months ended September 30, 2024. The increase was primarily due to an increase of $0.7 million for non-cash impairment charges, an increase of $0.7 million related to legal fees and other costs incurred in connection with litigation arising out of the Acies Merger transaction, and an increase of $0.6 million related to other restructuring costs.
Restructuring expenses decreased by $1.9 million from the nine months ended September 30, 2023 to the nine months ended September 30, 2024. The decrease was primarily due to decreases of $1.6 million related to management restructurings and severance, a decrease of $0.9 million related to fees for various merger and acquisition opportunities, a decrease of $0.3 million related to the Tender Offer, and a decrease of $0.2 million for non-cash impairment charges. This was offset by an increase of $1.1 million related to other restructuring costs.
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Other Income, Net
The following table summarizes our consolidated non-operating expense for each applicable period (in thousands, except percentages):
Three Months Ended September 30,
20242023$ Change% Change
Change in fair value of warrant liabilities$276 $4,216 $(3,940)(93.5)%
Interest income, net1,127 1,364 (237)(17.4)%
Other expense, net(256)(198)(58)29.3 %
Total other income, net$1,147 $5,382 $(4,235)(78.7)%

Nine Months Ended September 30,
20242023$ Change% Change
Change in fair value of warrant liabilities$929 $1,381 $(452)(32.7)%
Interest income, net3,921 3,521 400 11.4 %
Other (expense) income, net(626)906 (1,532)(169.1)%
Total other income, net$4,224 $5,808 $(1,584)(27.3)%
The change in fair value of warrant liabilities is related to the warrants discussed in Note 12—Accrued and Other Liabilities to our condensed consolidated financial statements herein. Interest income, net is related to interest earned on cash and cash equivalents offset by fees and expenses associated with the Credit Agreement as discussed in Note 14—Long-Term Debt to our condensed consolidated financial statements herein. Other income primarily relates to gains or (losses) from equity investments and gains or (losses) from foreign currency transactions with our foreign subsidiaries.

Provision for Income Taxes
Provision for income taxes resulted in a tax benefit of $0.5 million for the three months ended September 30, 2024, compared to a tax benefit of $2.1 million for the three months ended September 30, 2023. Our effective tax rate was 14.7% for the three months ended September 30, 2024 compared to our statutory tax rate of 21%. Our effective tax rate was increased by the valuation allowance recorded against our US deferred tax assets, foreign branch income, and other nondeductible expenses including officer compensation. Our effective tax rate was decreased by nondeductible stock compensation, research and development credits that we can utilize on our federal and state tax returns, and tax expense related to uncertain tax benefits on research and development credits.
Provision for income taxes resulted in a tax expense of $0.1 million for the nine months ended September 30, 2024, compared to a tax benefit of $2.4 million for the nine months ended September 30, 2023. Our effective tax rate was (0.9)% for the nine months ended September 30, 2024 compared to our statutory tax rate of 21%. Our effective tax rate was increased by the valuation allowance recorded against our US deferred tax assets, the fair value adjustment to the warrant liability, and lower foreign tax rates in significant jurisdictions. Our effective tax rate was decreased by nondeductible stock compensation, foreign branch income, and other nondeductible expenses including officer compensation.
Comparison of our Segment Results of Operations
The following table presents adjusted earnings before interest, taxes, depreciation, and amortization ("AEBITDA"). AEBITDA is our reportable segment GAAP measure, which we utilize as the primary profit measure for our reportable
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segments. See Note 3—Segment Reporting in the accompanying condensed consolidated financial statements for additional information. Consolidated AEBITDA is a non-GAAP measure, discussed within “Non-GAAP Measures” below.
Comparison of the three and nine months ended September 30, 2024 versus the three and nine months ended September 30, 2023
Three Months Ended September 30,
20242023Change% Change
AEBITDA
playGAMES$23,233 $21,640 $1,593 7.4 %
playAWARDS(3,991)(4,180)189 (4.5)%
Corporate and other(4,619)(3,935)(684)17.4 %
Consolidated AEBITDA
$14,623 $13,525 $1,098 8.1 %
Segment AEBITDA Margin:
playGAMES
32.6 %28.5 %4.1 %14.4 %
playAWARDS
nmnmnmnm
nm - not meaningful
Nine Months Ended September 30,
20242023Change% Change
AEBITDA
playGAMES$68,604 $65,842 $2,762 4.2 %
playAWARDS(11,089)(6,517)(4,572)70.2 %
Corporate and other(13,440)(11,761)(1,679)14.3 %
Consolidated AEBITDA
$44,075 $47,564 $(3,489)(7.3)%
Segment AEBITDA Margin:
playGAMES
31.0 %28.7 %2.3 %8.0 %
playAWARDS
nm(156.2)%nmnm
nm - not meaningful
playGAMES
playGAMES AEBITDA was $23.2 million for the three months ended September 30, 2024 compared to $21.6 million for the three months ended September 30, 2023, an increase of $1.6 million. playGAMES AEBITDA margin was 32.6% for the three months ended September 30, 2024 compared to 28.5% for the three months ended September 30, 2023. The current period benefited from an increase in direct-to-consumer sales which incurs lower processing fees, driving a reduction in cost of sales, as well as a reduction of user acquisition costs.
playGAMES AEBITDA was $68.6 million for the nine months ended September 30, 2024 compared to $65.8 million for the nine months ended September 30, 2023, an increase of $2.8 million. playGAMES AEBITDA margin was 31.0% for the nine months ended September 30, 2024 compared to 28.7% for the nine months ended September 30, 2023. The current period benefited from an increase in advertising revenue, which does not incur platform fees, and an increase in direct-to-consumer sales which incurs lower processing fees, driving a reduction in cost of sales, and a reduction of user acquisition costs.
playAWARDS
playAWARDS AEBITDA was $(4.0) million for the three months ended September 30, 2024 compared to $(4.2) million for the three months ended September 30, 2023. The increase in AEBITDA can be attributed to a decrease in employee costs associated with the myVIP program and the further advancement of the playAWARDS platform.
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playAWARDS AEBITDA was $(11.1) million for the nine months ended September 30, 2024 compared to $(6.5) million for the nine months ended September 30, 2023. The decrease in AEBITDA can be attributed to lower net revenue and an increase in employee costs associated with the myVIP program and the further advancement of the playAWARDS platform.
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Non-GAAP Measures
Consolidated Adjusted EBITDA and Consolidated AEBITDA Margin
Consolidated Adjusted EBITDA, or Consolidated AEBITDA, as used herein, is a non-GAAP financial performance measure that is presented as a supplemental disclosure and is reconciled to net (loss) income and net (loss) income margin as the most directly comparable GAAP measures. We define Consolidated AEBITDA as net income before interest, income taxes, depreciation and amortization, restructuring and related costs (consisting primarily of severance and other restructuring related costs), stock-based compensation expense, changes in fair value of warrant liabilities, and other income and expense items (including special infrequent items, foreign currency gains and losses, and other non-cash items). We also use Consolidated AEBITDA Margin, another non-GAAP measure, which we calculate as the percentage of Consolidated AEBITDA to revenue.
We use Consolidated AEBITDA and Consolidated AEBITDA Margin to monitor and evaluate the performance of our business operations, facilitate internal comparisons of our operating performance, and to analyze and evaluate decisions regarding future budgets and initiatives. We believe that both measures are useful because they provide investors with information regarding our operating performance that is used by our management in its reporting and planning processes. Consolidated AEBITDA and Consolidated AEBITDA Margin as calculated herein may not be comparable to similarly titled measures and disclosures reported by other companies.
The following table sets forth the reconciliation of Consolidated AEBITDA and Consolidated AEBITDA Margin to net (loss) income and net (loss) income margin, the most directly comparable GAAP measure (in thousands, except percentages).
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Revenue
$71,229 $75,858 $221,647 $233,774 
Net (loss) income$(3,097)$3,800 $(6,275)$471 
Net (loss) income margin(4.3)%5.0 %(2.8)%0.2 %
Adjustments:
Depreciation & amortization11,593 11,537 34,813 33,686 
Income tax (expense) benefit
(534)(2,139)55 (2,437)
Stock-based compensation expense4,584 4,344 14,308 14,391 
Change in fair value of warrant liability(276)(4,216)(929)(1,381)
Change in fair value of contingent consideration
— — — (950)
Restructuring and related(1)
3,231 1,280 5,248 7,112 
Other, net(2)
(878)(1,081)(3,145)(3,328)
Consolidated AEBITDA
14,623 13,525 44,075 47,564 
Consolidated AEBITDA Margin
20.5 %17.8 %19.9 %20.3 %
(1)Amounts reported during the three and nine months ended September 30, 2023 relate to non-cash impairment charges related to certain investments and fees related to evaluating various merger, acquisition and restructuring opportunities. Amounts reported during the three and nine months ended September 30, 2024 relate to internal reorganization costs, including severance-related costs, fees related to evaluating various merger and acquisition opportunities, and legal fees and other costs incurred in connection with litigation arising out of the Acies Merger transaction.
(2)Amounts reported in “Other, net” include interest expense, interest income, gains/losses from equity investments, foreign currency gains/losses, and non-cash gains/losses on the disposal of assets.

Liquidity and Capital Resources
As of September 30, 2024, we had cash and cash equivalents of $105.2 million, which consisted of cash on hand and money market mutual funds. As of September 30, 2024 we had restricted cash of $0.6 million. Historically, we have funded our operations, including capital expenditures, primarily through cash flow from operating activities. We believe that our existing cash and cash equivalents, the cash generated from operations, and the borrowing capacity under our Credit
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Agreement as described below will be sufficient to fund our operations and capital expenditures for at least the next twelve (12) months. However, we intend to continue to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new games and features or enhance our existing games, improve our operating infrastructure, or acquire complementary businesses, personnel and technologies. Accordingly, we may need to engage in equity or debt financing to secure additional funds or we may decide to do so opportunistically.
Debt
For a description of the Credit Agreement, see Note 14—Long-Term Debt in our Condensed Consolidated Financial Statements and Liquidity and Capital Resources in our Annual Report on Form 10-K for the year ended December 31, 2023.
As of September 30, 2024, we do not have any outstanding amounts under the Credit Agreement.
Cash Flows
The following tables present a summary of our cash flows for the periods indicated (in thousands):
Nine Months Ended September 30,
20242023
Net cash provided by operating activities$34,124 $36,396 
Net cash used in investing activities(22,102)(21,855)
Net cash used in financing activities(38,623)(17,767)
Effect of exchange rate on cash and cash equivalents(518)(967)
Decrease in cash and cash equivalents(27,119)(4,193)
Operating Activities
During the nine months ended September 30, 2024, operating activities provided $34.1 million of net cash as compared to $36.4 million during the nine months ended September 30, 2023. The decrease in cash provided from operating activities was primarily due to a decrease in net revenue.
Investing Activities
During the nine months ended September 30, 2024, investing activities used $22.1 million of net cash as compared to $21.9 million during the nine months ended September 30, 2023. The change in cash used in investing activities was due to the cash payment of $3.4 million for the Pixode Acquisition, offset by lower purchases of property and equipment during the nine months ended September 30, 2024.
Financing Activities
During the nine months ended September 30, 2024, financing activities used $38.6 million of net cash as compared to $17.8 million during the nine months ended September 30, 2023. The change in cash used in financing activities was due to an additional $13.7 million of share repurchases, $4.8 million in increased minimum guarantee payments made, and $2.7 million of less proceeds received from stock option exercises. This was offset by $0.4 million less of payments for tax withholding of stock-based compensation.
Contractual Obligations, Commitments, and Contingencies
As of September 30, 2024, there had been no material changes to our aggregated indebtedness and other contractual obligations previously reported in our Annual Report on Form 10-K for the year ended December 31, 2023, except for the operating lease liability maturities described in Note 13—Leases.
Critical Accounting Policies and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our
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estimates are based on our historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about items that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Except as described in Note 2—Summary Of Significant Accounting Policies, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in our 2023 Annual Report on Form 10-K, filed with the SEC on March 12, 2024.

Item 3.        Quantitative and Qualitative Disclosures About Market Risk
Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates. We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate risk, investment risk, and foreign currency risk as follows:
Interest Rate Risk
Our exposures to market risk for changes in interest rates relate primarily to our Credit Agreement. The Credit Agreement and our Revolver are floating rate facilities. Therefore, fluctuations in interest rates will impact the amount of interest expense we incur and have to pay. We did not have any borrowings outstanding under our Credit Agreement at September 30, 2024 and December 31, 2023, respectively
We do not purchase or hold any derivative financial instruments for trading purposes.
Investment Risk
We had cash and cash equivalents totaling $105.2 million and $132.9 million as of September 30, 2024 and December 31, 2023, respectively. Our investment policy and strategy primarily attempt to preserve capital and meet liquidity requirements without significantly increasing risk. Our cash and cash equivalents primarily consist of cash on hand and money market mutual funds. We have not entered into investments for trading or speculative purposes. Changes in rates would primarily impact interest income due to the relatively short-term nature of our investments. A hypothetical 100 basis point change in interest rates would have increased or decreased our interest income for a twelve-month period by an immaterial amount.
Foreign Currency Risk
Our functional currency is the U.S. Dollar and our revenues and expenses are primarily denominated in U.S. Dollars. Our indirect foreign currency transaction exposure results mainly from the sale of our virtual currency to players outside of the U.S. While players outside of the U.S. make purchases in currencies other than the U.S. Dollar, we are paid by platform providers and record revenue in U.S. Dollars pursuant to the terms of the relevant contracts. While we have the ability to change the foreign currency pricing of our virtual currency, sudden and significant changes in the exchange rates of the Canadian and Australian Dollars and Pound Sterling to the U.S. Dollar could have a material impact on our results of operations.
However, a significant portion of our headcount related expenses, consisting principally of salaries and related personnel expenses, as well as leases and certain other operating expenses, are denominated in New Israeli Shekels, or NIS. We also have foreign currency risks related to our operating expenses denominated in currencies other than the U.S. Dollar, including the Hong Kong Dollar, Euro, Mexican Peso, Chilean Peso, Serbian Dinar, Singapore Dollar and Vietnamese Dong. Accordingly, changes in exchange rates in the future may negatively affect our future operating results as expressed in U.S. Dollars.
We have experienced and will continue to experience fluctuations in our net income as a result of transaction gains or losses related to remeasurement of our asset and liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded.
As of September 30, 2024, we held derivative contracts to purchase certain foreign currencies, including the NIS, at future dates. The notional value of amounts hedged was approximately $10.0 million, and all contracts are expected to mature during the upcoming 12 months.
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Item 4.        Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, the Company's CEO and CFO have concluded that, as of the period covered by this report, the Company's disclosure controls and procedures were effective, at the reasonable assurance level, in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and were effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including the Company's CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II.    OTHER INFORMATION
Item 1.        Legal Proceedings
From time to time, we are a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these matters will not have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. For information regarding legal proceedings and other claims in which we are involved, see Note 17—Commitments and Contingencies.
Item 1A.    Risk Factors
A description of certain factors that may affect our future results and risk factors is set forth in our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to those factors previously disclosed in our 2023 Annual Report on Form 10-K.
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Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information about share repurchases made by us of our Class A common stock during the quarter ended September 30, 2024:
Period
Total Number of Shares Purchased1
Average Price Paid per Share2
Total Number of Shares Purchased as Part of a Publicly Announced Program
Dollar Value of Shares that May Yet be Purchased Under the Program3
(In thousands)
July 1, 2024 - July 31, 2024156 $2.14 — $46,000 
August 1, 2024 - August 31, 2024396,112 $1.58 — $46,000 
September 1, 2024 - September 30, 2024342,835 $1.56 341,210 $45,468 

1.These amounts include shares surrendered to satisfy tax withholding obligations upon the vesting of equity awards under our 2021 Equity Incentive Plan (as amended, the “Plan”). Under the Plan and applicable award agreements, the Company has the discretionary right to collect payment of mandatory tax withholding obligations by deducting from the shares otherwise deliverable to a participant upon vesting and settlement of an award under the Plan a number of shares having a fair market value equal or less than such participant’s tax withholding obligations. All shares so deducted from shares that otherwise would be deliverable to participants under the Plan are considered repurchased pursuant to the terms of the Plan and applicable award agreements and not pursuant to any publicly announced share repurchase program. June amounts include only shares repurchased from Microsoft Corporation. See Note 5—Related-Party Transactions of the notes to condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for additional information relating to the share repurchase.
2.Average price paid per share includes shares surrendered to satisfy tax withholding obligations, and excludes costs associated with the repurchases. Average price paid per share purchased as part of the publicly announced program was $1.56 from September 1, 2024 to September 30, 2024.
3.The repurchases are being executed from time to time, subject to general business and market conditions, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 trading plans, pursuant to a stock repurchase program. On November 10, 2021, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to repurchase, within a 12 month period, up to $50.0 million of the Company’s Class A common stock at such times and in such amounts as the Company’s Board of Directors deems appropriate, based on factors such as market conditions, legal requirements, and other business considerations. The Company publicly announced the approval of such stock repurchase program on November 12, 2021. On November 2, 2022, the Company’s Board of Directors approved an extension of the time period for repurchases under the stock repurchase program for an additional 12 months from November 10, 2022 to November 10, 2023. On November 1, 2023, the Company's Board of Directors extended the stock repurchase program through November 10, 2024 and increased the remaining amount authorized to $50.0 million. The Company publicly announced such extension and increase on November 2, 2023. See Note 18—Stockholders’ Equity of the notes to condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for additional information relating to share repurchases.
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Item 3.        Defaults Upon Senior Securities
None
Item 4.        Mine Safety Disclosures
Not applicable
Item 5.        Other Information
None
Item 6.        Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
Exhibit NumberDescription
3.1
3.2
3.3
10.2
31.1*
31.2*
32.1*
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 Definition Linkbase Document
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase Document
104Cover Page Interactive Data File formatted in Inline XBRL and contained in Exhibit 101.
*Filed herewith
**The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
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SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PLAYSTUDIOS, Inc.
Date:November 5, 2024By:/s/ Andrew Pascal
Name:Andrew Pascal
Title:Chairman and Chief Executive Officer
(Principal Executive Officer)
Date:November 5, 2024By:/s/ Scott Peterson
Name:Scott Peterson
Title:Chief Financial Officer
(Principal Financial and Accounting Officer)
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