Playboy, Inc.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
PLBY$1.29+4.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001628280-26-055279
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001628280-26-071130
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 175 previous paragraphs and 178 current paragraphs.
74 unchanged; 71 reworded; 30 added; 25 removed; 5 previous and 3 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
(Expense) Benefit from Income Taxes
Current report
The increase in licensing net revenues, compared to the prior year comparative period, was primarily due to $1.2 million of higher royalty revenues from our licensing business in China, Hong Kong and Macau, driven by three new licensing agreements in China, partially offset by lower royalty revenues from other licensees in the rest of the world, driven largely by licensee audit payments in the prior year comparative period that did not recur in the current period.
Current report
The increase in corporate revenues for the three months ended September 30, 2026, as compared to the prior year comparative period, was primarily driven by $0.2 million of revenue from paid voting contests pursuant to a collaborative arrangement and sales of the summer and fall 2026 issues of Playboy magazine.
Current report
The decrease in licensing cost of sales, compared to the prior year comparative period, was primarily due to a $0.1 million reduction in licensing commissions expenses. Licensing gross margin remained consistent at 96%.
Current report
All other costs of sales for the three months ended September 30, 2026 and 2025 were immaterial, as our digital subscriptions and content operations were licensed to Byborg pursuant to the LMA, effective as of January 1, 2025.
Current report
The increase in other operating income (expense), net for the three months ended September 30, 2026, as compared to the prior year comparative period, was primarily due to a $0.9 million release of a U.S. sales tax reserve recognized in the third quarter of 2026.
Current report
(Expense) Benefit from Income Taxes
Current report
Comparison of the Nine Months Ended September 30, 2026 and 2025
Current report
The increase in licensing net revenues, compared to the prior year comparative period, was primarily due to $0.9 million of higher royalty revenues from our licensing business in China, Hong Kong and Macau, driven by three new licensing agreements in China in the third quarter of 2026, partially offset by lower royalty revenues from other licensees in the rest of the world, driven largely by licensee audit payments in the prior year comparative period that did not recur in the current period, as well as the expiration of a small number of licensing agreements.
Current report
Expense from Income Taxes
Current report
The following table reconciles Operating Income (Loss) to Adjusted Operating Income (Loss) by reportable segment (in thousands):
Current report
Operating Income (Loss): The change from operating loss to operating income, compared to the prior year comparative period, was primarily due to a $1.5 million increase in gross profit driven by Honey Birdette’s revenue growth and a $0.9 million non-recurring release of a U.S. sales tax reserve, partly offset by a $1.4 million increase in selling and administrative expenses related to the segment, primarily payroll and sales and marketing costs.
Current report
Adjusted Operating Income: The increase in adjusted operating income, compared to the prior year comparative period, was primarily due to the change in operating income (loss) discussed above. “Adjustments” for the three months ended September 30, 2026 and 2025 relate to intercompany expense allocations from our corporate segment to our direct-to-consumer segment, which eliminate in consolidation.
Current report
Adjusted Operating Income: The increase in adjusted operating income, compared to the prior year comparative period, was primarily due to the increase in operating income discussed above.
Current report
Net Revenues and Gross Margin: Refer to “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” for a discussion of changes from 2025 to 2026 in net revenues and gross profit classified as Corporate.
Current report
Operating Loss: The increase in operating loss, compared to the prior year comparative period, was primarily due to a $1.1 million increase in stock-based compensation due to new grant issuances and $0.8 million of higher payroll and payroll-related expenses, partially offset by higher corporate revenues of $0.4 million and the non-recurrence of $0.2 million of impairment charges on our artwork held for sale recognized in the third quarter of 2025.
Current report
Adjusted Operating Loss: The increase in adjusted operating loss, compared to the prior year comparative period, was primarily due to the change in operating loss discussed above. “Adjustments” for the three months ended September 30, 2026 and 2025 primarily relate to intercompany expense allocations from our corporate segment to our direct-to-consumer segment, which eliminate in consolidation.
Current report
Operating Income: The decrease in operating income, compared to the prior year comparative period, was primarily due to lower amortization of deferred revenue balances that existed as of December 31, 2024 (prior to the LMA effective date of January 1, 2025) that pertain to our previously reported digital subscriptions and content operations.
Current report
Adjusted Operating Income: The decrease in adjusted operating income, compared to the prior year comparative period, was due to the decrease in operating income discussed above.
Current report
Comparison of the Nine Months Ended September 30, 2026 and 2025
Current report
The following table reconciles Operating Income (Loss) to Adjusted Operating Income (Loss) by reportable segment (in thousands):
Current report
Adjusted Operating Income: The increase in adjusted operating income, compared to the prior year comparative period, was primarily due to the change in operating income (loss) discussed above. “Adjustments” for the nine months ended September 30, 2026 and 2025 primarily relate to intercompany expense allocations from our corporate segment to our direct-to-consumer segment, which eliminate in consolidation.
Current report
Net Revenues and Gross Margin: Refer to “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” for a discussion of changes in net revenues and gross profit for Corporate from 2025 to 2026.
Current report
In connection with the New China JV, UTG paid us $15.0 million at the New China JV Initial Closing and is obligated to pay $15.0 million at each of the second and third closings, on or before January 4, 2027 and January 4, 2028, respectively. Such Purchase Price proceeds are required to be applied as mandatory prepayments of our A&R Term Loans (see “Debt” below) and, therefore, will not be available to fund our operations. We are also entitled to minimum distributions from the New China JV totaling $67.0 million through 2033, of which $10.0 million related to 2026 have been paid and $57.0 million remains to be paid, including $9.0 million in 2027. We expect to deconsolidate the New China JV upon the third closing. For additional information, refer to Note 9, Variable Interest Entity, of the Notes to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Current report
On November 2, 2026, Playboy MB JV LLC (the “Buyer”), a Delaware limited liability company and an indirect, wholly owned subsidiary of the Company, entered into a Purchase and Sale Agreement (the “PSA”) with Freehand Indian Creek LLC (the “Seller”). Pursuant to the PSA, the Buyer has agreed to acquire from the Seller (the “Acquisition”) property currently operated as a hotel in Miami Beach, Florida (the “Property”). The Company intends to redevelop the Property as a member-only private club.
Current report
The purchase price for the Property is $12.5 million, subject to customary prorations and adjustments (the “Acquisition Price”). Pursuant to the PSA, the Buyer delivered a deposit of $1.25 million (the “Deposit”) upon execution of the PSA, and the balance of the Acquisition Price is payable at closing of the Acquisition. The Deposit will be credited against the Acquisition Price at closing. While we have committed to using a total of approximately $5 million of cash from our balance sheet in connection with the Acquisition, we expect to recoup it from the sale of memberships to the member-only private club in the future.
Current report
The increase in net cash used in operating activities for the nine months ended September 30, 2026, compared to the prior year comparative period, was primarily due to a $12.7 million decrease in cash flows from changes in operating assets and liabilities and a $7.8 million decrease in non-cash reconciling items, partially offset by a $14.4 million decrease in net loss.
Current report
The decrease in cash flows from changes in operating assets and liabilities was primarily driven by deferred revenues and receivables, which reduced cash flows by $11.6 million and $10.0 million, respectively. Deferred revenues decreased by $3.9 million in the nine months ended September 30, 2026, compared with an increase of $7.7 million in the prior year comparative period. The prior year comparative period included $15.0 million of billings under the LMA in advance of revenue recognition, including a $20.0 million invoice issued in July 2025. In contrast, billings in the nine months ended September 30, 2026 equaled the $15.0 million of revenue recognized. The effect of these billings was partially offset by $3.4 million of lower deferred revenue drawdowns in our other businesses, primarily China licensing. Receivables increased in the nine months ended September 30, 2026, using $7.1 million of cash, primarily reflecting billings to our China licensees in excess of collections, compared with $2.9 million of cash provided from the collection of legacy receivables in the prior year comparative period. Inventory provided $1.3 million of cash, compared with $2.1 million in the prior year comparative period, as Honey Birdette built inventory ahead of anticipated revenue growth. Reserves for slow-moving and obsolete inventory increased to $3.7 million as of September 30, 2026 from $3.3 million as of December 31, 2025.
Current report
The decrease in cash flows from changes in operating assets and liabilities was partially offset by other liabilities and accrued expenses, which provided $1.7 million of cash compared with $2.4 million used in the prior year comparative period, representing a $4.1 million increase in cash flows. The 2026 amount primarily reflected a $3.5 million increase in accrued interest, as interest on our senior debt for the third quarter of 2026 was paid in October 2026 following the change to quarterly interest payments, and $1.8 million of accrued foreign withholding taxes, partially offset by the release of $1.7 million of sales tax reserves. Cash flows from prepaid expenses and other current assets, contract assets, and accounts payable also increased by $3.4 million, $2.0 million and $1.8 million, respectively, reflecting the timing of vendor payments.
Current report
The decrease in non-cash reconciling items was primarily due to the non-recurrence of $7.2 million of capitalized paid-in-kind interest and a $2.7 million decrease in deferred income taxes. Such decrease also reflected a $2.1 million decrease in impairment charges, as the prior year comparative period included $1.5 million of impairment charges on right-of-use assets related to our corporate leases and impairment charges of $0.5 million on artwork held for sale. Such decreases were partially offset by a $2.5 million decrease in the net amortization of debt premium and issuance costs due to the A&R Seventh Amendment, as well as a $2.4 million increase in stock-based compensation expense due to new grants made in 2026.
Removed paragraphs (25)
Previous report
Other Operating (Expense) Income, Net
Previous report
The increase in licensing net revenues, compared to the prior year comparative period, was primarily due to higher overage royalty revenues from existing licensing partners.
Previous report
The increase in corporate revenues for the three months ended June 30, 2026 was primarily driven by sales of the 2026 spring issue of Playboy magazine, which launched in April 2026.
Previous report
The decrease in licensing cost of sales and the corresponding increase in gross margin, compared to the prior year comparative period, were primarily due to a $2.0 million reduction in licensing commissions expense. This reduction was driven by the prior year comparative period, which included a one-time $2.4 million settlement to pay current and future commissions to a licensing agent.
Previous report
Other Operating Expense, Net
Previous report
The decrease in other operating expense, net for the three months ended June 30, 2026, as compared to the prior year comparative period, was primarily due to lower losses on the disposal of store and other fixed assets.
Previous report
Comparison of the Six Months Ended June 30, 2026 and 2025
Previous report
The decrease in licensing net revenues, compared to the prior year comparative period, was primarily due to the expiration of a small number of licensing agreements, some of which are expected to be replaced in subsequent quarters, partially offset by higher royalty overages revenue from existing licensees.
Previous report
The decrease in all other revenue, compared to the prior year comparative period, was primarily due to lower amortization of deferred revenue balances that existed as of December 31, 2024 (prior to the LMA effective date of January 1, 2025) that pertain to our previously reported digital subscriptions and content operations.
Previous report
Cost of Sales
Previous report
Other Operating Income (Expense), Net
Previous report
•Transaction expenses for the three months ended June 30, 2026 primarily represent less than $0.1 million of expenses related to the seventh and eighth amendments of our senior secured credit agreement that were incurred in the second quarter of 2026 and less than $0.1 million of additional transaction expenses incurred in the second quarter of 2026 in relation to the formation of the New China JV.
Previous report
•Adjustments for the three and six ended June 30, 2025 are primarily related to the non-cash fair value change related to contingent liabilities fair value remeasurement with respect to potential shares issuable for our 2021 acquisition of GlowUp Digital, Inc. that remained unsettled as of June 30, 2025, loss on the sale of artwork, loss on disposal of assets, consulting, advisory and other costs relating to corporate transactions, as well as reorganization costs resulting from the elimination or rightsizing of specific business activities or operations.
Previous report
The following table reconciles Operating (Loss) Income to Adjusted Operating (Loss) Income by reportable segment (in thousands):
Previous report
Operating Income (Loss): The change from operating loss to operating income, compared to the prior year comparative period, was primarily due to a $3.0 million increase in gross profit related to significant sales growth and tariff refunds, partly offset by a one-time increase in transfer pricing costs.
Previous report
Adjusted Operating Income (Loss): The change from adjusted operating loss to adjusted operating income, compared to the prior year comparative period, was primarily due to the change in operating income (loss) discussed above.
Previous report
The decrease in corporate operating loss, compared to the prior year comparative period, was primarily due to the non-recurrence of $1.5 million of prior-year impairment charges and the non-recurrence of $0.4 million of prior-year asset-disposal losses, $1.5 million of higher transfer price cost allocations to other segments, which eliminate in consolidation, and lower selling and administrative expenses, including $0.3 million of lower professional and outside services and $0.3 million of lower severance. These improvements were partially offset by a $1.1 million increase in costs of sales, primarily related to the 2026 spring issue of Playboy magazine and implementation of a revamped magazine subscription model in the second quarter of 2026 (net of a $1.3 million UTG brand-expense reimbursement applied against cost of sales during the second quarter of 2026, representing a portion of the $4.0 million advance received from UTG under the BSSA) and a $0.9 million increase in stock-based compensation due to new grant issuances.
Previous report
The decrease in adjusted corporate expenses, compared to the prior year comparative period, was primarily due to a $0.8 million favorable non-recurring release of a sales and use tax reserve, $1.5 million of higher intercompany cost allocations to other segments, which eliminate in consolidation, partially offset by a $1.3 million UTG brand-expense reimbursement applied against cost of sales under the BSSA .
Previous report
Comparison of the Six Months Ended June 30, 2026 and 2025
Previous report
The following table reconciles Operating (Loss) Income to Adjusted Operating (Loss) Income by reportable segment (in thousands):
Previous report
Adjusted Operating Income (loss): The change in adjusted operating income (loss), compared to the prior year comparative period, was primarily due to the change in operating income (loss) discussed above.
Previous report
In the fourth quarter of 2023, we began the sale of our art assets, and we continued the sale of our art assets in 2025. However, in the second quarter of 2026 we made a decision to cease sales of our artwork.
Previous report
During the second quarter of 2026, we terminated certain operating leases for Honey Birdette retail stores prior to their contractual expiration dates. Upon termination of such leases, we derecognized the related right-of-use assets and operating lease liabilities of $0.6 million in our condensed consolidated balance sheet as of June 30, 2026, and we recognized a net loss of $0.1 million in Other income, net in our condensed consolidated statements of operations for the three and six months ended June 30, 2026.
Previous report
The decrease in net cash used in operating activities for the six months ended June 30, 2026, compared to the prior year comparative period, was primarily due to a $13.0 million improvement in net loss, partially offset by a $7.5 million net decrease in non-cash reconciling items and a $2.4 million unfavorable change in operating assets and liabilities. The unfavorable change in working capital was primarily driven by a $6.9 million increase in accounts receivable, mainly reflecting the timing of royalty collections from licensees, and a $2.5 million unfavorable change in accrued agency fees and commissions following the settlement of licensing commissions in the prior year comparative period. Inventory provided $1.5 million of cash in the six months ended June 30, 2026, compared with $2.6 million in the prior year comparative period, a $1.1 million unfavorable change. Honey Birdette drew down its inventory balance less in the six months ended June 30, 2026 as it built stock in preparation for revenue growth, and reserves for slow-moving and obsolete inventory increased to $3.6 million as of June 30, 2026 from $3.3 million as of December 31, 2025. These changes were partially offset by a $3.8 million favorable change in accounts payable, reflecting the timing of vendor payments, and a $3.6 million favorable change in deferred revenues. Deferred revenues used $3.8 million of cash in the six months ended June 30, 2026, compared with $7.4 million in the prior year comparative period, as the prior year comparative period included a larger drawdown of deferred revenue balances that existed as of December 31, 2024 relating to our previously reported digital subscriptions and content operations, which were licensed to Byborg pursuant to the LMA, effective as of January 1, 2025.
Previous report
The net decrease in non-cash charges was primarily driven by the elimination of $5.5 million in capitalized paid-in-kind interest that was present in the prior year comparative period and did not recur in the six months ended June 30, 2026. The decrease of $2.8 million in deferred income taxes was primarily due to the release of a valuation allowance against indefinite-lived deferred tax liabilities recognized in the prior year comparative period, partly offset by an increase in stock-based compensation expense of $1.3 million and a $1.6 million reduction in the amortization of debt premium, net and issuance costs due to the A&R Seventh Amendment.
Reworded paragraphs (71)
Previous wording
You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited interim condensed consolidated financial statements as of and for the three and six months ended June 30, 2026 and 2025 and the related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024 and the related notes thereto included in our Annual Report on Form 10-K filed with the SEC on March 16, 2026. This discussion contains forward-looking statements that involve risks and uncertainties and that are not historical facts, including statements about our beliefs and expectations. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and particularly under the headings “Risk Factors”, “Business” and “Cautionary Note Regarding Forward-Looking Statements” contained in our Annual Report on Form 10-K filed with the SEC on March 16, 2026. As used herein, “we”, “us”, “our”, and the “Company” refer to Playboy, Inc. and its subsidiaries.
Current wording
You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited interim condensed consolidated financial statements as of and for the three and nine months ended September 30, 2026 and 2025 and the related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024 and the related notes thereto included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 16, 2026. This discussion contains forward-looking statements that involve risks and uncertainties and that are not historical facts, including statements about our beliefs and expectations. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and particularly under the headings “Risk Factors”, “Business” and “Cautionary Note Regarding Forward-Looking Statements” contained in our Annual Report on Form 10-K filed with the SEC on March 16, 2026. As used herein, “we”, “us”, “our”, and the “Company” refer to Playboy, Inc. and its subsidiaries.
Previous wording
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on our business. There can be no assurance that future developments affecting us will be those that we anticipated. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from those discussed in the forward-looking statements. Factors that may cause such differences include, but are not limited to: (1) the inability to maintain the listing of the Company’s shares of common stock on Nasdaq; (2) the risk that the Company’s completed or proposed transactions disrupt the Company’s current plans and/or operations, including the risk that the Company does not complete any such proposed transactions or achieve the expected benefits from any transactions; (3) the ability to recognize the anticipated benefits of corporate transactions, commercial collaborations, cost reduction initiatives and proposed transactions, which may be affected by, among other things, competition, the ability of the Company to grow and manage growth profitably, and the Company’s ability to retain its key employees; (4) costs related to being a public company, corporate transactions, commercial collaborations and proposed transactions; (5) changes in applicable laws or regulations; (6) the possibility that the Company may be adversely affected by global hostilities, supply chain delays, inflation, interest rates, foreign currency exchange rates or other economic, business, and/or competitive factors; (7) risks relating to the uncertainty of the projected financial information of the Company, including changes in the Company’s estimates of cash flows and the fair value of certain of its intangible assets, including goodwill; (8) risks related to the organic and inorganic growth of the Company’s businesses, and the timing of expected business milestones; (9) changing demand or shopping patterns for the Company’s products and services; (10) failure of licensees, suppliers or other third-parties to fulfill their obligations to the Company; (11) the Company’s high concentration of licensing revenue from a small number of licensees; (12) the Company’s ability to comply with the terms of its indebtedness and other obligations; (13) changes in financing markets or the inability of the Company to obtain financing on attractive terms; and (14) other risks and uncertainties indicated in this Quarterly Report on Form 10-Q, including those under “Part II—Item 1A. Risk Factors”, and in “Part I—Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We caution that the foregoing list of factors is not exclusive…
Excerpt shortened here; the source contains the full paragraph.
Current wording
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on our business. There can be no assurance that future developments affecting us will be those that we anticipated. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from those discussed in the forward-looking statements. Factors that may cause such differences include, but are not limited to: (1) the inability to maintain the listing of the Company’s shares of common stock on Nasdaq; (2) the risk that the Company’s completed or proposed transactions disrupt the Company’s current plans and/or operations, including the risk that the Company does not complete any such proposed transactions or achieve the expected benefits from any transactions; (3) the ability to recognize the anticipated benefits of corporate transactions, commercial collaborations, cost reduction initiatives and proposed transactions, which may be affected by, among other things, competition, the ability of the Company to grow and manage growth profitably, and the Company’s ability to retain its key employees; (4) costs related to being a public company, corporate transactions, commercial collaborations and proposed transactions; (5) changes in applicable laws or regulations; (6) the possibility that the Company may be adversely affected by global hostilities, supply chain delays, inflation, interest rates, tariffs, foreign currency exchange rates or other economic, business, and/or competitive factors; (7) risks relating to the uncertainty of the projected financial information of the Company, including changes in the Company’s estimates of cash flows and the fair value of certain of its intangible assets, including goodwill; (8) risks related to the organic and inorganic growth of the Company’s businesses, and the timing of expected business milestones; (9) changing demand or shopping patterns for the Company’s products and services; (10) failure of licensees, suppliers or other third-parties to fulfill their obligations to the Company; (11) the Company’s high concentration of licensing revenue from a small number of licensees; (12) the Company’s ability to comply with the terms of its indebtedness and other obligations; (13) changes in financing markets or the inability of the Company to obtain financing on attractive terms; and (14) other risks and uncertainties indicated in this Quarterly Report on Form 10-Q, including those under “Part II—Item 1A. Risk Factors”, and in “Part I—Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We caution that the foregoing list of factors is not …
Excerpt shortened here; the source contains the full paragraph.
Previous wording
We believe that our performance and future success depends on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and referenced in this Quarterly Report on Form 10-Q under “Part II—Item 1A. Risk Factors”, and in “Part I—Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K.
Current wording
We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and referenced in this Quarterly Report on Form 10-Q under “Part II—Item 1A. Risk Factors”, and in “Part I—Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K.
Previous wording
After having stabilized Playboy’s China business in 2024 and 2025, in the fourth quarter of 2025, we transitioned our joint venture for the Playboy business in China into a more typical licensing structure, with an affiliate of our former China joint venture partner becoming our licensing agent in China. On February 9, 2026, we terminated such licensing agent in preparation for the New China JV (defined below). Also on February 9, 2026, we entered into a share purchase agreement (the “Purchase Agreement”) with UTG Brands Management Group Limited (“UTG”) for a new joint venture for the Playboy business in China (the “New China JV”), in which UTG is to ultimately own a 50% interest and operate Playboy’s China licensing business. The initial closing pursuant to the Purchase Agreement (the “New China JV Initial Closing”) occurred, and the New China JV was established, on March 20, 2026. As of the New China JV Initial Closing and June 30, 2026, we owned 83.33% of the New China JV and UTG owned 16.67%. While we retain majority control of the New China JV, UTG manages all operational aspects of Playboy’s licensing business in China, Hong Kong and Macau.
Current wording
After having stabilized Playboy’s China business in 2024 and 2025, in the fourth quarter of 2025, we transitioned our joint venture for the Playboy business in China into a more typical licensing structure, with an affiliate of our former China joint venture partner becoming our licensing agent in China. On February 9, 2026, we terminated such licensing agent in preparation for the New China JV (defined below). Also on February 9, 2026, we entered into a share purchase agreement (the “Purchase Agreement”) with UTG Brands Management Group Limited (“UTG”) for a new joint venture for the Playboy business in China, Hong Kong and Macau (the “New China JV”), in which UTG is to ultimately own a 50% interest and operate Playboy’s China licensing business. The initial closing pursuant to the Purchase Agreement (the “New China JV Initial Closing”) occurred, and the New China JV was established, on March 20, 2026. As of the New China JV Initial Closing and September 30, 2026, we owned 83.33% of the New China JV and UTG owned 16.67%. While we retain majority control of the New China JV, UTG manages all operational aspects of Playboy’s licensing business in China, Hong Kong and Macau.
Previous wording
We are in the early stages of building out our media and experiences areas of focus. During the quarter ended June 30, 2026, we published Playboy magazine, featuring Karol G as a cover star, and introduced a new subscription offering across our print and digital content. Subsequent to quarter-end, in July 2026, we featured Cara Delevingne as an additional cover star, continuing our magazine relaunch effort. We are also investing in expanding our social media reach to drive brand engagement, and are planning consumer-facing events designed to bring the Playboy brand to life. Subscriptions and sponsorships represent net new revenue lines for the Company, and we believe these initiatives, together with the integration of licensing and sponsorship opportunities, will support commercial growth and our ability to expand into new licensing verticals and brand categories over time.
Current wording
We are in the early stages of building out our media and experiences areas of focus. During the second quarter of 2026, we published Playboy magazine’s spring 2026 issue, featuring Karol G as a cover star, and introduced a new subscription offering across our print and digital content. In the third quarter of 2026, we featured Cara Delevingne as an additional cover star, continuing our magazine relaunch effort. We are also investing in expanding our social media reach to drive brand engagement, and are planning consumer-facing events designed to bring the Playboy brand to life. Subscriptions and sponsorships represent net new revenue lines for the Company, and we believe these initiatives, together with the integration of licensing and sponsorship opportunities, will support commercial growth and our ability to expand into new licensing verticals and brand categories over time.
Previous wording
We expect our licensing business in China to continue to represent a material part of our overall business. Our licensing revenues from China as a percentage of our total revenues were 10% and 11% for each of the three and six months ended June 30, 2026 and 2025, respectively.
Current wording
We expect our licensing business in China to continue to represent a material part of our overall business. Our licensing revenues from China as a percentage of our total revenues were 14% and 11% for the three months ended September 30, 2026 and 2025, respectively, and 11% for each of the nine months ended September 30, 2026 and 2025.
Previous wording
We continue to monitor ongoing changes in U.S. trade policies, including increasing tariffs on imports, in some cases significantly, and changes to existing international trade agreements. These actions have prompted retaliatory tariffs and other measures by a number of countries. Starting in the second quarter of 2025, the U.S. and certain other countries have taken actions to modify the timing, rates and/or other aspects of certain of these tariffs. However, some of the new tariffs remain in effect, including tariffs between the U.S. and China, where we source the manufacturing of our Honey Birdette products and where many of our licensees source their products. While the impact of such trade policies on our business remains uncertain, we continue to closely monitor such matters and potential impacts, including increased production costs and higher pricing to our customers, either of which could negatively affect our business, results of operations and financial condition. Certain of these tariffs were imposed under the International Emergency Economic Powers Act (“IEEPA”). In February 2026, the U.S. Supreme Court issued a decision that the tariffs imposed under IEEPA were not authorized under such statute, and U.S. Customs and Border Protection has since established a process for claiming refunds of tariffs paid under IEEPA. As of June 30, 2026, we had a determinable claim for $1.1 million of such refunds, which was recorded as a reduction of cost of sales in our condensed consolidated statements of operations for the three and six months ended June 30, 2026. Substantially all of this amount was collected in July 2026, with the remainder received prior to June 30, 2026. We have also submitted claims for additional IEEPA tariffs paid. Such additional claims remain subject to ongoing legal, regulatory, and administrative developments, and the timing, amount, and availability of any further refunds remain uncertain. Accordingly, we have not recognized any additional receivable or reduction of cost of sales relating to such claims because realization is not assured.
Current wording
We continue to monitor ongoing changes in U.S. trade policies, including increasing tariffs on imports, in some cases significantly, and changes to existing international trade agreements. These actions have prompted retaliatory tariffs and other measures by a number of countries. Starting in the second quarter of 2025, the U.S. and certain other countries have taken actions to modify the timing, rates and/or other aspects of certain of these tariffs. However, some of the new tariffs remain in effect, including tariffs between the U.S. and China, where we source the manufacturing of our Honey Birdette products and where many of our licensees source their products. While the impact of such trade policies on our business remains uncertain, we continue to closely monitor such matters and potential impacts, including increased production costs and higher pricing to our customers, either of which could negatively affect our business, results of operations and financial condition. Certain of these tariffs were imposed under the International Emergency Economic Powers Act (“IEEPA”). In February 2026, the U.S. Supreme Court issued a decision that the tariffs imposed under IEEPA were not authorized under such statute, and U.S. Customs and Border Protection has since established a process for claiming refunds of tariffs paid under IEEPA. In the second quarter of 2026, we recognized a determinable claim for $1.1 million of such refunds as a reduction of cost of sales, substantially all of which was collected in July 2026. We have also submitted claims for additional IEEPA tariffs paid. Such additional claims remain subject to ongoing legal, regulatory, and administrative developments, and the timing, amount, and availability of any further refunds remain uncertain. Accordingly, we have not recognized any additional receivable or reduction of cost of sales relating to such claims because realization is not assured.
Previous wording
In assessing the performance of our business, we consider a variety of performance and financial measures. The key indicators of the financial condition and operating performance of the business are revenues, salaries and benefits, and selling and administrative expenses. To help assess performance with these key indicators, we use Adjusted EBITDA as a non-GAAP financial measure. We believe this non-GAAP measure provides useful information to investors and expanded insight to measure revenue and cost performance as a supplement to the GAAP consolidated financial statements. See the “EBITDA and Adjusted EBITDA” section below for reconciliations of Adjusted EBITDA to net loss, the closest GAAP measure.
Current wording
In assessing the performance of our business, we consider a variety of performance and financial measures. The key indicators of the financial condition and operating performance of the business are revenues, salaries and benefits, and selling and administrative expenses. To help assess performance with these key indicators, we use Adjusted EBITDA as a financial measure not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). We believe this non-GAAP measure provides useful information to investors and expanded insight to measure revenue and cost performance as a supplement to the GAAP consolidated financial statements. See the “EBITDA and Adjusted EBITDA” section below for reconciliations of Adjusted EBITDA to net income (loss), the closest GAAP measure.
Previous wording
We generate revenue from sales of consumer products sold through our Honey Birdette retail stores or online directly to customers, trademark licenses for third-party consumer products and online and location-based entertainment businesses, and licensing the operation of our digital subscriptions and content businesses, which were previously owned and operated by us, to Byborg pursuant to the LMA.
Current wording
We generate revenue from sales of consumer products sold through our Honey Birdette retail stores or online directly to customers, trademark licenses for third-party consumer products and online and location-based entertainment businesses, and licensing the operation of our digital subscriptions and content businesses, which were previously owned and operated by us, to Byborg pursuant to the LMA. We also generate revenue from sales of Playboy magazine and related subscriptions and, beginning in 2026, from paid voting contests under collaborative arrangements.
Previous wording
We license trademarks under multi-year arrangements to consumer products and online and location-based entertainment businesses. Typically, the initial contract term ranges between one to 15 years. Renewals are separately negotiated through amendments. Under these arrangements, we generally receive an annual non-refundable minimum guarantee that is recoupable against a sales-based royalty generated during the license year. Earned royalties received in excess of the minimum guarantee (“Excess Royalties”) are typically payable quarterly. We recognize revenue for the total minimum guarantee specified in the agreement on a straight-line basis over the term of the agreement and recognize Excess Royalties only when the annual minimum guarantee is exceeded. Generally, Excess Royalties are recognized when they are earned. In the event that the collection of any royalty becomes materially uncertain or unlikely, we recognize revenue from our licensees up to the cash we have received. We also license the operation of our Playboy Plus, Playboy TV (online and linear) and Playboy Club digital businesses, which were previously owned and operated by us, to Byborg pursuant to the LMA.
Current wording
We license trademarks under multi-year arrangements to consumer products and online and location-based entertainment businesses. Typically, the initial contract term ranges from one to 15 years. Renewals are separately negotiated through amendments. Under these arrangements, we generally receive an annual non-refundable minimum guarantee that is recoupable against a sales-based royalty generated during the license year. Earned royalties received in excess of the minimum guarantee (“Excess Royalties”) are typically payable quarterly. We recognize revenue for the total minimum guarantee specified in the agreement on a straight-line basis over the term of the agreement and recognize Excess Royalties only when the annual minimum guarantee is exceeded. Generally, Excess Royalties are recognized when they are earned. In the event that the collection of any royalty becomes materially uncertain or unlikely, we recognize revenue from our licensees up to the cash we have received. We also license the operation of our Playboy Plus, Playboy TV (online and linear) and Playboy Club digital businesses, which were previously owned and operated by us, to Byborg pursuant to the LMA.
Previous wording
Cost of sales primarily consist of merchandise costs, warehousing and fulfillment costs, agency and commission fees, website expenses, marketplace traffic acquisition costs, transition expenses per the TSA (commencing January 1, 2025 through June 30, 2025), credit card processing fees, personnel costs, costs associated with branding activities, including the magazine, net of brand expense reimbursement pursuant to the terms of a Brand Support Services Agreement with UTG (the “BSSA”), customer shipping and handling expenses, fulfillment activity costs and freight-in expenses.
Current wording
Cost of sales primarily consists of merchandise costs, warehousing and fulfillment costs, agency and commission fees, website expenses, marketplace traffic acquisition costs, transition expenses per the transition services agreement with Byborg (the “TSA”) (commencing January 1, 2025 through June 30, 2025), credit card processing fees, personnel costs, costs associated with branding activities, including the magazine, net of brand expense reimbursement pursuant to the terms of a Brand Support Services Agreement with UTG (the “BSSA”), customer shipping and handling expenses, fulfillment activity costs and freight-in expenses.
Previous wording
Impairments consist of the impairments of our artwork held for sale during the 2025 period and right-of-use assets related to our corporate leases during the 2025 period.
Current wording
Impairments consist of impairment charges recognized during the 2025 periods on our artwork held for sale and on right-of-use assets related to our corporate leases.
Previous wording
Other operating (expense) income, net consists primarily of losses on the disposal of assets and other miscellaneous items.
Current wording
Other operating income (expense), net consists primarily of gains and losses on the disposal of assets and other miscellaneous items.
Previous wording
Other income (expense), net consists primarily of other miscellaneous nonoperating items, such as nonrecurring transaction fees, foreign exchange realized and unrealized transaction gains or losses, early termination gains, debt related costs, bank charges and interest income.
Current wording
Other income (expense), net consists primarily of other miscellaneous nonoperating items, such as nonrecurring transaction fees, foreign exchange realized and unrealized transaction gains or losses, early termination gains, bank charges and interest income.
Previous wording
Expense from income taxes consists of an estimate for U.S. federal, state, and foreign income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. Due to cumulative losses, we maintain a valuation allowance against our definite-lived U.S. federal and state deferred tax assets, as well as our Australia and U.K. deferred tax assets.
Current wording
(Expense) benefit from income taxes consists of an estimate for U.S. federal, state, and foreign income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. Due to cumulative losses, we maintain a valuation allowance against our definite-lived U.S. federal and state deferred tax assets, as well as our Australia and U.K. deferred tax assets.
Previous wording
The increase in direct-to-consumer net revenues, compared to the prior year comparative period, was driven by continued strong performance of Honey Birdette products, both full price and discounted items, particularly e-commerce sales in the United States and retail sales in Australia.
Current wording
The increase in direct-to-consumer net revenues, compared to the prior year comparative period, was primarily driven by continued strong performance of Honey Birdette products, reflecting full price sales, particularly e-commerce sales in the United States, and retail sales in Australia.
Previous wording
The slight decrease in direct-to-consumer cost of sales, compared to the prior year comparative period, was primarily due to a $0.8 million increase in Honey Birdette’s product, shipping and fulfillment costs driven by higher revenues, offset by tariff refunds. The improvement in gross margin reflects continued revenue growth, outpacing the increase in product, shipping and fulfillment costs, as well as improvement in quality of inventory and related reserves.
Current wording
The increase in direct-to-consumer cost of sales, compared to the prior year comparative period, was primarily due to a $0.2 million increase in Honey Birdette’s product, shipping and fulfillment costs driven by higher revenues and $0.2 million of inventory reserve reversal in the prior year comparative period that did not recur in the current period. The increase in gross profit and gross margin reflects continued revenue growth outpacing the increase in product, shipping and fulfillment costs.
Previous wording
The increase in corporate cost of sales and the corresponding decrease in gross margin, compared to the prior year comparative period, primarily related to the 2026 spring issue of the Playboy magazine and implementation of a revamped magazine subscription model in the second quarter of 2026. As the magazine is in an early relaunch phase, its production costs currently exceed its revenues, resulting in a negative gross margin. The increase was partially offset by $1.3 million of brand expense reimbursement applied against the cost of sales during the second quarter of 2026, representing a portion of the $4.0 million advance received from UTG under the BSSA. In the prior year comparative period, corporate revenues related primarily to payments from sales of access to our iPlayboy archives and carried a de minimis cost of sales.
Current wording
Corporate cost of sales for the three months ended September 30, 2026, which primarily related to the summer and fall 2026 issues of Playboy magazine and our revamped magazine subscription model launched in the second quarter of 2026, was fully offset by $1.3 million of brand expense reimbursement applied against the cost of sales, representing a portion of the $4.0 million advance received from UTG under the BSSA. As a result, corporate gross margin was 100% for the three months ended September 30, 2026. In the prior year comparative period, corporate revenues related primarily to payments from sales of access to our iPlayboy archives and carried a de minimis cost of sales.
Previous wording
The decrease in selling and administrative expenses for the three months ended June 30, 2026, as compared to the prior year comparative period, was primarily due to lower payroll and payroll related expenses of $1.1 million, lower professional and other outside services costs of $0.3 million, a $0.9 million decrease in legal expenses, lower China operating costs of $0.4 million, and a number of offsetting changes in other accounts.
Current wording
The increase in selling and administrative expenses for the three months ended September 30, 2026, as compared to the prior year comparative period, was primarily due to higher payroll and payroll-related expenses of $1.1 million, including severance, and higher stock-based compensation expense of $1.1 million due to new grants made in 2026, partially offset by a $1.7 million decrease in legal expenses for ongoing litigations.
Previous wording
The decrease in impairments for the three months ended June 30, 2026, as compared to the prior year comparative period, was due to impairment charges of $1.5 million related to our right-of-use assets for corporate leases that were recognized in the prior year comparative period and did not recur.
Current wording
The decrease in impairments for the three months ended September 30, 2026, as compared to the prior year comparative period, was due to the non-recurrence of $0.2 million of impairment charges on our artwork held for sale recognized in the third quarter of 2025.
Previous wording
The increase in interest expense, net for the three months ended June 30, 2026, as compared to the prior year comparative period, was primarily due to lower amortization of debt premium, net, partially offset by lower interest expense on our borrowings, reflecting senior secured debt repaid with proceeds from the New China JV transaction.
Current wording
The increase in interest expense, net for the three months ended September 30, 2026, as compared to the prior year comparative period, was primarily due to $0.9 million of lower amortization of debt premium, net, and $0.4 million of interest expense accreted on our liability under the stock repurchase agreement with certain sellers, all of whom are affiliates of Fortress Investment Group (the “Repurchase Agreement”), partially offset by $0.6 million of lower interest expense on our borrowings, reflecting senior secured debt repaid with proceeds from the New China JV transaction.
Previous wording
The decrease in other income, net for the three months ended June 30, 2026, as compared to the prior year comparative period, was primarily due to lower unrealized gains and losses related to foreign currency transactions.
Current wording
The increase in other income, net for the three months ended September 30, 2026, as compared to the prior year comparative period, was primarily due to higher net unrealized gains related to foreign currency transactions.
Previous wording
The increase in income taxes for the three months ended June 30, 2026, as compared to the prior year comparative period, was primarily driven by the change in valuation allowance due to the reduction in net indefinite-lived deferred tax liabilities in the three months ended June 30, 2026.
Current wording
The change from benefit from income taxes to tax expense for the three months ended September 30, 2026, compared to the prior year comparative period, was primarily driven by the tax impact from pretax book loss to pretax book income and the change in valuation allowance due to the reduction in net indefinite-lived deferred tax liabilities in the three months ended September 30, 2026.
Previous wording
The increase in direct-to-consumer net revenues, compared to the prior year comparative period, was primarily due to continued over-performance of full price Honey Birdette products.
Current wording
The increase in direct-to-consumer net revenues, compared to the prior year comparative period, was primarily due to continued strong performance of full price Honey Birdette products, particularly e-commerce sales in the United States and United Kingdom, as well as retail sales in Australia.
Previous wording
Corporate revenues for the six months ended June 30, 2026 were substantially consistent with the prior year comparative period. The composition shifted toward magazine subscriptions, with the release of the spring 2026 issue of Playboy magazine in April 2026, and away from sponsorship events that occurred in the prior year comparative period, as a result of changes in brand strategy.
Current wording
Corporate revenues for the nine months ended September 30, 2026 increased $0.4 million compared to the prior year comparative period. The composition shifted toward magazine sales and subscriptions, with the release of the spring 2026 issue of Playboy magazine in April 2026, the summer 2026 issue in July 2026 and the fall 2026 issue in September 2026, and away from sponsorship events that occurred in the prior year comparative period, as a result of changes in brand strategy. Corporate revenues for the nine months ended September 30, 2026 also included $0.2 million of revenue from paid voting contests in the third quarter of 2026 pursuant to a collaborative arrangement.
Previous wording
The increase in direct-to-consumer cost of sales, compared to the prior year comparative period, was primarily due to $1.0 million of higher Honey Birdette product, shipping and fulfillment costs associated with Honey Birdette’s revenue growth, partially offset by $1.1 million of tariff refunds, together with a $0.9 million increase in inventory reserves and related write-offs (of which approximately $0.7 million was recognized in the first quarter of 2026) as Honey Birdette increased its inventory balance in preparation for such growth. Gross margin improved to 61%, as higher full-price product sales outpaced the increase in inventory reserves.
Current wording
The increase in direct-to-consumer cost of sales, compared to the prior year comparative period, was primarily due to $1.6 million of higher Honey Birdette product, shipping and fulfillment costs associated with Honey Birdette’s revenue growth and a $1.2 million increase in inventory reserves and related write-offs (of which approximately $0.7 million was recognized in the first quarter of 2026) as Honey Birdette increased its inventory balance in preparation for revenue growth, partially offset by $1.1 million of tariff refunds recognized in the second quarter of 2026. Gross margin improved to 62%, as higher full price product sales outpaced the increase in inventory reserves.
Previous wording
The decrease in licensing cost of sales and the corresponding increase in gross margin, compared to the prior year comparative period, was primarily due to $2.0 million of lower commissions in the second quarter of 2026, as a result of the prior year comparative period having included a one-time $2.4 million commission settlement, partially offset by a $0.9 million commission payment and a $0.3 million agency-termination payment to our former China licensing agent recognized in the first quarter of 2026.
Current wording
The decrease in licensing cost of sales and corresponding increase in gross margin, compared to the prior year comparative period, was primarily due to the non-recurrence of a one-time $2.4 million commission settlement recognized in the second quarter of 2025, partially offset by a $0.9 million commission payment and a $0.3 million agency-termination payment to our former China licensing agent recognized in the first quarter of 2026.
Previous wording
The increase in corporate cost of sales and the corresponding decrease in gross margin, compared to the prior year comparative period, primarily related to the 2026 spring issue of Playboy magazine and implementation of a revamped magazine subscription model in the second quarter of 2026. As the magazine is in an early relaunch phase, its production costs currently exceed its revenues, resulting in a negative gross margin. Corporate cost of sales for the six months ended June 30, 2026 was partially offset by $1.3 million of brand expense reimbursement applied against cost of sales during the second quarter of 2026, representing a portion of the $4.0 million advance received from UTG under the BSSA.
Current wording
The increase in corporate cost of sales and the corresponding decrease in gross margin, compared to the prior year comparative period, primarily related to the spring, summer and fall 2026 issues of Playboy magazine and implementation of a revamped magazine subscription model launched in the second quarter of 2026. As the magazine is in an early relaunch phase, its production costs currently exceed its revenues, resulting in a negative gross margin. Corporate cost of sales for the nine months ended September 30, 2026 was partially offset by $2.6 million of brand expense reimbursement applied against cost of sales during the nine months ended September 30, 2026, representing a portion of the $4.0 million advance received from UTG under the BSSA.
Previous wording
The decrease in all other cost of sales and related increase in gross margin, compared to the prior year comparative period, was primarily related to the licensing of our digital subscriptions and content operations to Byborg pursuant to the LMA, effective as of January 1, 2025, and the inclusion of transition expenses incurred pursuant to the TSA during the three months ended June 30, 2025, which did not recur in 2026.
Current wording
The decrease in all other cost of sales, compared to the comparable prior year period, was primarily related to the licensing of our digital subscriptions and content operations to Byborg pursuant to the LMA, effective as of January 1, 2025, and the inclusion of transition expenses incurred pursuant to the TSA during the nine months ended September 30, 2025, which did not recur in 2026.
Previous wording
The decrease in selling and administrative expenses for the six months ended June 30, 2026, compared to the prior year comparative period, was primarily due to lower payroll and payroll-related expenses, including severance cost of $5.7 million, mainly due to the transition of our digital operations into a licensing model during the prior year comparative period, lower professional and other outside services of $1.2 million, lower China operating costs of $0.7 million, lower legal expenses of $0.4 million, partially offset by $2.9 million of transaction expenses related to the formation of the New China JV and a $1.3 million increase in stock-based compensation expense due to new grant issuances in 2026.
Current wording
The decrease in selling and administrative expenses for the nine months ended September 30, 2026, compared to the prior year comparative period, was primarily due to lower payroll and payroll-related expenses of $4.6 million, including severance, mainly due to the transition of our digital operations into a licensing model during the prior year comparative period, lower professional and other outside services of $1.1 million, lower China operating costs of $1.4 million, excluding legal costs, and lower legal expenses of $2.2 million, partially offset by $2.9 million of transaction expenses related to the formation of the New China JV and a $2.4 million increase in stock-based compensation expense due to new grant issuances in 2026.
Previous wording
The decrease in impairments for the six months ended June 30, 2026, as compared to the prior year comparative period, was primarily due to the non-recurrence of prior-year impairment charges recognized on our artwork held for sale of $0.3 million and on right-of-use assets related to our corporate leases of $1.5 million.
Current wording
The decrease in impairments for the nine months ended September 30, 2026, as compared to the prior year comparative period, was primarily due to the non-recurrence of prior-year impairment charges recognized on our artwork held for sale of $0.5 million and on our right-of-use assets related to our corporate leases of $1.5 million.
Previous wording
The change from other operating expense, net in prior year comparative period to other operating income, net was primarily due to a $0.9 million non-recurring release of an aged value-added tax (VAT) provision recognized in the first quarter of 2026 and $0.7 million lower net losses on the disposal and write-off of certain fixed assets.
Current wording
The change from other operating expense, net in the prior year comparative period to other operating income, net was primarily due to a $0.9 million release of an aged value-added tax (VAT) provision recognized in the first quarter of 2026, a $0.9 million release of a U.S. sales tax reserve recognized in the third quarter of 2026 and $0.7 million of lower net losses on the disposal and write-off of certain fixed assets for the nine months ended September 30, 2026. Other operating expense, net in the prior year comparative period was attributable to the write-off of certain property and equipment items in the second quarter of 2025 in connection with our decision to sublease certain of our office space and a loss on the sale of certain artwork in the first quarter of 2025.
Previous wording
The increase in interest expense, net for the six months ended June 30, 2026, as compared to the prior year comparative period, was primarily due to lower amortization of debt premium and discount, partially offset by lower interest expense on our borrowings, reflecting senior secured debt repaid with proceeds from the New China JV transaction.
Current wording
The increase in interest expense, net for the nine months ended September 30, 2026, as compared to the prior year comparative period, was primarily due to $2.5 million of lower amortization of debt premium and discount, net, and $0.4 million of interest expense accreted on our liability under the Repurchase Agreement, partially offset by $1.4 million of lower interest expense on our senior secured debt, reflecting senior secured debt repaid with proceeds from the New China JV transaction.
Previous wording
The increase in other income, net for the six months ended June 30, 2026, as compared to the prior year comparative period, was primarily due to a $0.5 million fee to vacate a leased store space early in the first quarter of 2026, partially offset by lower net unrealized gains on foreign currency transactions.
Current wording
The increase in other income, net for the nine months ended September 30, 2026, as compared to the prior year comparative period, was primarily due to $0.5 million we received to vacate a leased store space early in the first quarter of 2026 and higher net gains on foreign currency transactions.
Previous wording
The decrease in expense from income taxes for the six months ended June 30, 2026, as compared to the prior year comparative period, was primarily driven by the change in valuation allowance due to a reduction in net indefinite-lived deferred tax liabilities in the six months ended June 30, 2026.
Current wording
The increase in expense from income taxes for the nine months ended September 30, 2026, as compared to the prior year comparative period, was primarily driven by the change in valuation allowance due to a reduction in net indefinite-lived deferred tax liabilities in the nine months ended September 30, 2026.
Previous wording
In addition to adjusting for non-cash stock-based compensation, non-cash charges for the fair value remeasurements of certain liabilities, non-recurring non-cash impairments and asset write-downs, we typically adjust for non-operating expenses and income, such as nonrecurring special projects, including related consulting expenses, transition expenses, settlements, nonrecurring gain or loss on the sale of assets, expenses associated with financing activities, and reorganization and severance expenses that result from the elimination or rightsizing of specific business activities or operations.
Current wording
In addition to adjusting for non-cash stock-based compensation, non-cash charges for the fair value remeasurements of certain liabilities, non-recurring non-cash impairments and asset write-downs, we typically adjust for certain other items, such as nonrecurring special projects, including related consulting expenses, transition expenses, settlements, nonrecurring gain or loss on the sale of assets, expenses associated with financing activities, and reorganization and severance expenses that result from the elimination or rightsizing of specific business activities or operations.
Previous wording
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis. Investors should review the reconciliation of net loss to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.
Current wording
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis. Investors should review the reconciliation of net income (loss) to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.
Previous wording
•Transaction expenses for the six months ended June 30, 2026 primarily represent $2.9 million related to the formation of the New China JV, termination expenses of $0.3 million related to our former China joint venture arrangements, and $0.4 million of expenses related to the seventh and eighth amendments of our senior secured credit agreement.
Current wording
•Transaction expenses for the nine months ended September 30, 2026 represent $2.9 million related to the formation of the New China JV, termination expenses of $0.3 million related to our former China joint venture arrangements, and expenses related to the A&R Sixth Amendment, A&R Seventh Amendment and A&R Eighth Amendment (each as defined below).
Previous wording
•Licensing commissions settlement for thethree and six months ended June 30, 2025 represents a one-time settlement amount of $2.4 million to pay current and future commissions to a licensing agent, which were paid in the third quarter of 2025.
Current wording
•Licensing commissions settlement for the nine months ended September 30, 2025 represents a one-time settlement amount of $2.4 million to pay current and future commissions to a licensing agent, which was paid by the end of 2025.
Previous wording
•Transition expenses for the three and six months ended June 30, 2025 represent costs associated with the digital operations licensed to Byborg pursuant to the TSA.
Current wording
•Transition expenses for the nine months ended September 30, 2025 represent costs associated with the digital operations licensed to Byborg, solely during the transition period pursuant to the TSA.
Showing the first 40 of 71 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The decrease in all other net revenues, compared to the prior year comparative period, was primarily due to lower amortization of deferred revenue balances that existed as of December 31, 2024 (prior to the LMA effective date of January 1, 2025) that pertain to our previously reported digital subscriptions and content operations.
Current report — wording carried from elsewhere
Cost of Sales and Gross Margin
Current report — wording carried from elsewhere
Adjusted Operating Income: The decrease in adjusted operating income, compared to the prior year comparative period, was due to lower amortization of deferred revenue balances that existed as of December 31, 2024 (prior to the LMA effective date of January 1, 2025) that pertain to our previously reported digital subscriptions and content operations.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
The decrease in all other cost of sales and the corresponding increase in gross margin, compared to the prior year comparative period, was primarily related to the licensing of our digital subscriptions and content operations to Byborg pursuant to the LMA, effective as of January 1, 2025, and the inclusion of transition expenses incurred pursuant to the TSA during the six months ended June 30, 2025, which did not recur in 2026.
Previous report — wording carried elsewhere
Adjusted Operating Income: Adjustments to licensing operating income for the three months ended June 30, 2025 related to a one-time settlement amount of $2.4 million to pay current and future commissions to a licensing agent. There were no adjustments to licensing operating income for the three months ended June 30, 2026, and the change in adjusted operating income was the same as the change in operating income above.
Previous report — wording carried elsewhere
Adjusted Operating Income: The decrease in adjusted operating income, compared to the prior year comparative period, was primarily due to lower amortization of deferred revenue balances that existed as of December 31, 2024 (prior to the LMA effective date of January 1, 2025) that pertain to our previously reported digital subscriptions and content operations.
Previous report — wording carried elsewhere
Operating Income (Loss): The change from operating loss in the prior year comparative period to operating income, was due to the transition of our digital operations into a licensing model pursuant to the LMA and inclusion of $5 million of transition expenses pursuant to the TSA in the prior year comparative period, partly offset by lower amortization of deferred revenue balances that existed as of December 31, 2024 (prior to the LMA effective date of January 1, 2025) that pertain to our previously reported digital subscriptions and content operations.
Previous report — wording carried elsewhere
Adjusted Operating Income: The decrease in adjusted operating income, compared to the prior year comparative period, was primarily due to lower amortization of deferred revenue balances that existed as of December 31, 2024 (prior to the LMA effective date of January 1, 2025) that pertain to our previously reported digital subscriptions and content operations.