PLBY Group Inc
For the period ended Dec 31, 2024. Filed Mar 13, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 13, 2025
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-K
Period ended 2023-12-31; filed 2024-03-29.
0001803914-24-000022
Item 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-13.
0001803914-25-000030
Item 7. 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 162 previous paragraphs and 181 current paragraphs.
69 unchanged; 53 reworded; 54 added; 39 removed; 1 previous and 5 current paragraphs rearranged.
Tables are not compared: 5 previous and 8 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 (54)
Current report
We continue to pursue a commercial strategy that relies on a more capital-light business model focused on revenue streams with higher margin, lower working capital requirements and higher growth potential. We are doing this by leveraging our flagship Playboy brand to attract best-in-class operators. In the fourth quarter of 2024, we entered into a licensing agreement with Byborg to license intellectual property and select Playboy digital assets for $300.0 million in minimum guaranteed payments over the initial 15-year term of the license, which began as of January 1, 2025. We are focused on strategically expanding our licensing business into new categories and territories with high quality strategic partners and supporting them with brand marketing in the form of content, experiences and editorial works. We will also continue to use our licensing business as a marketing tool and brand builder, including through high profile collaborations and our large-scale strategic partnerships. For our Honey Birdette business, we intend to focus on the U.S. market, where the brand’s stores, on average, generate more revenue and better margins, and generally have customers that tend to spend more and are less price sensitive.
Current report
Cost of Sales
Current report
Other Operating Expense, Net
Current report
Other operating expense, net consists primarily of losses on disposal of assets and other miscellaneous items, offset by gains recognized from the sale of crypto assets (2023 only).
Current report
Gain on Extinguishment of Debt, Net
Current report
In the second quarter of 2023, we recorded a gain on partial extinguishment of debt in the amount of $8.0 million upon the amendment and restatement of the Credit Agreement (as such term is defined in Note 10, Debt, of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, refer to such Note 10, Debt and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for additional details).
Current report
Other (Expense) Income, Net
Current report
(Expense) Benefit from Income Taxes
Current report
The following table sets forth net revenues by reportable segment (in thousands):
Current report
Cost of Sales and Gross Profit
Current report
The following table sets forth cost of sales and gross margin by reportable segment (in thousands):
Current report
The decrease in direct-to-consumer cost of sales and increase in gross margin, compared to the prior year comparative period, was primarily due to a $8.6 million reduction in cost of sales related to the transition of Playboy’s e-commerce site from an owned-and-operated model to a licensing model in the prior year comparative period, lower inventory reserve charges of $4.3 million for Honey Birdette, and a $2.6 million reduction in Honey Birdette’s product, shipping and fulfillment costs due to lower revenue.
Current report
The increase in licensing cost of sales and decrease in gross margin, compared to the comparable prior year period, was primarily due to a $6.2 million increase in licensing commissions primarily due to a nonrecurring reversal of commission accrual in the prior year comparative period related to the termination of certain Chinese licensing agreements, partly offset by a $1.1 million reduction in licensing product costs due to the termination of Playboy’s e-commerce licensing agreement in the second quarter of 2024 and subsequent licensing agreement with a new licensing partner in the third quarter of 2024.
Current report
The decrease in digital subscriptions and content cost of sales and increase in gross margin, compared to the comparable prior year period, was primarily due to $2.0 million in lower cost of sales related to our creator platform largely as a result of nonrecurring creator platform expenses in 2023 and lower payment processing fees.
Current report
The decrease in selling and administrative expenses, compared to the prior year comparative period, was primarily due to $7.1 million of lower technology costs, primarily due to restructuring charges taken on direct-to-consumer cloud-based software attributable to continuing operations in 2023, lower audit, legal and consulting fees of $4.6 million as a result of business downsizing and cost rationalization, a $2.7 million reduction in severance expense, a $3.1 million decrease in China JV expense due to cost cuts and nonrecurring transaction expenses in 2023, lower stock-based compensation expense of $2.3 million and payroll expense of $0.8 million due to headcount reductions, and a $2.3 million decrease in insurance expense due to the renegotiation of our insurance policies.
Current report
Other Operating Expense, Net
Current report
Gain on Extinguishment of Debt
Current report
Other (Expense) Income, Net
Current report
The change in other income (expense), net from net income in 2023 to net expense in 2024 was primarily due to unrealized foreign exchange losses in relation to Honey Birdette’s foreign operations as well as certain of our Chinese licenses denominated in foreign currency.
Current report
(Expense) Benefit from Income Taxes
Current report
•Impairments for the year ended December 31, 2024 relate to impairment charges on our artwork held for sale, corporate leases and assets related to our Digital Subscriptions and Content business.
Current report
In the fourth quarter of 2024, the Company entered into a License & Management Agreement (the “LMA”) with Byborg to license intellectual property and certain Playboy digital assets for $300.0 million in minimum guaranteed payments over the initial 15-year term of the license, which began January 1, 2025. As a result, Licensing operations will include revenue from the LMA with Byborg as of January 1, 2025.
Current report
Our Chief Executive Officer is our Chief Operating Decision Maker (“CODM”). Segment information is presented in the same manner that our CODM reviews the operating results in assessing performance and allocating resources. Total asset information is not included in the tables below as it is not provided to and reviewed by our CODM. The “All Other” line items in the tables below are miscellaneous in nature and do not relate to the previously identified reportable segments disclosed herein. These segments do not meet the quantitative threshold for determining reportable segments. The “Corporate” line item in the tables below includes certain operating expenses that are not allocated to the reporting segments presented to our CODM. These expenses include legal, human resources, accounting/finance, information technology and facilities. The accounting policies of the reportable segments are the same as those described in Note 1, Basis of Presentation and Summary of Significant Accounting Policies, of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Current report
The following table reconciles Operating (Loss) Income to Adjusted Operating (Loss) Income by reportable segment (in thousands):
Current report
Refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for descriptions of the adjustments to reconcile net income to Adjusted EBITDA, certain of which adjustments are listed in the table above and the descriptions used for the reconciliation of net income to Adjusted EBITDA are also applicable for the table above.
Current report
Net Revenues and Gross Margin: Refer to “Item 7. 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 in our Direct-to-Consumer segment from 2023 to 2024.
Current report
Operating Loss: The decrease in operating loss, compared to the prior year comparative period, was primarily due to non-cash impairment charges in the prior year comparative period of $72.6 million on certain of our intangible assets (including goodwill), a $2.3 million impairment on certain Honey Birdette right-of-use assets and related leasehold improvements, an increase of $7.7 million of gross profit, $7.1 million of lower technology costs, primarily due to restructuring charges taken on direct-to-consumer cloud-based software attributable to continuing operations in 2023, lower payroll expense of $4.0 million, of which $2.2 million was due to the transition of Playboy’s e-commerce site from our ownership and operation to a licensed business model in the third quarter of 2023, and $1.6 million in reduced marketing spend related to our discontinued e-commerce site.
Current report
Adjusted Operating Income (Loss): The change from adjusted operating loss in the prior year comparative period to adjusted operating income in 2024 was primarily due to an improvement in Honey Birdette’s gross margin, largely due to a reduction in inventory reserve charges, as well as reductions in selling and administrative expenses, reflecting cost optimization as we continue to pursue a capital-light business model.
Current report
Net Revenues and Gross Margin: Refer to “Item 7. 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 in our Licensing segment from 2023 to 2024.
Current report
Adjusted Operating Income: The decrease in adjusted operating income, compared to the prior year comparative period, was primarily due to a decrease in licensing gross profit, largely due to the termination of two China licensing agreements in the fourth quarter of 2023.
Current report
Net Revenues and Gross Margin: Refer to “Item 7. 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 in our Digital Subscriptions and Content segment from 2023 to 2024.
Current report
Operating Loss: The increase in operating loss, compared to the prior year comparative period, was primarily attributable to impairment charges of $17.0 million on our goodwill in the third quarter of 2024, impairment charges of $4.7 million related to our internally developed software in the third quarter of 2024, a $3.0 million increase in stock-based compensation and a $2.3 million increase in payroll expenses as we recruited a new digital leadership team to revamp our digital business in the first half of 2024, and a $1.7 million increase in selling and administrative expenses related to our creator platform, partly offset by a $3.4 million increase in gross profit.
Current report
Adjusted Operating Income: The decrease in adjusted operating income, compared to the prior year comparative period, was primarily attributable to higher expenses related to our creator platform, as we recruited a new digital leadership team to revamp our digital business in the first half of 2024.
Current report
The decrease in corporate expenses, compared to the prior year comparative period, was primarily due to a $5.3 million decrease in stock-based compensation expense, a decrease of $2.2 million in insurance expense, a decrease of $2.2 million in audit and consulting services as a result of business downsizing and cost rationalization, a $0.7 million decrease in payroll expenses due to headcount reductions, and a $1.0 million decrease in severance costs, partly offset by impairment charges of $2.4 million and $1.4 million on our artwork held for sale in the first and fourth quarters of 2024, respectively, and $0.6 million on our corporate leases in the second quarter of 2024.
Current report
The decrease in adjusted corporate expenses, compared to the prior year comparative period, was primarily due to lower insurance costs and a decrease in audit and consulting expenses, reflecting ongoing cost rationalization.
Current report
On November 5, 2024, we issued 14,900,000 unregistered shares of our common stock in a private placement to a third-party investor, at a price of $1.50 per share, for total proceeds to us of $22.4 million.
Current report
On November 11, 2024, we entered into Amendment No. 3 (“A&R Third Amendment”) to the A&R Credit Agreement (defined below), pursuant to which the terms of the A&R Credit Agreement were amended to, among other things, (a) amend the interest rate margin applicable to the Tranche A and Tranche B loans (each defined below), including that the interest rate margin for both Tranche A and Tranche B loans will be 6.25%, plus a 0.10% credit spread adjustment, above the Secured Overnight Financing Rate), (b) amend the definition of “Financial Covenant Sunset Date” to reduce the dollar threshold therein from $100,000,000 to $75,000,000 and to make certain other changes, (c) provide for quarterly amortization payments for the Tranche A and Tranche B loans, amounting on an annualized basis to 1% of the total outstanding principal balance of such loans as of closing of the A&R Third Amendment, commencing with the quarter ending December 31, 2025, and (d) provide for a reduction in the outstanding principal amount of Tranche A and Tranche B loans to approximately $153.1 million in the aggregate in exchange for 28,000.00001 shares of Series B Convertible Preferred Stock, as described below.
Current report
On December 14, 2024, we entered into a Securities Purchase Agreement (the “December SPA”) with The Million S.a.r.l. (the “Purchaser”), a wholly-owned subsidiary of Byborg, pursuant to which we agreed to sell to the Purchaser 16,956,842 shares of our common stock at a price of $1.50 per share, subject to the approval of such sale and issuance of such shares by our stockholders. The closing of the sale and issuance of shares pursuant to the December SPA is expected to occur by the end of the first quarter of 2025 and result in aggregate proceeds to us of approximately $25.4 million.
Current report
Pursuant to the LMA entered into in December 2024, Byborg agreed to operate our Playboy Plus, Playboy TV (digital and linear) and Playboy Club businesses and to license the right to use certain Playboy trademarks and other intellectual property for related businesses and certain other categories. Pursuant to the LMA, Byborg was also granted exclusive rights to use Playboy trademarks for certain new adult content services and digital products to be developed. The LMA has an initial term of 15 years, with the operations and license rights pursuant to the LMA commencing as of January 1, 2025, and the possibility for up to nine renewal terms of 10 years each, subject to the terms and conditions set forth in the LMA. Pursuant to the LMA, starting in 2025, Playboy will receive minimum guaranteed royalties of $20 million per year of the term, to be paid in installments during each year. In addition, Byborg will prepay the minimum guaranteed amount for the second half of year 15 of the initial term of the LMA. Playboy is also entitled to receive Excess Royalties from the businesses licensed and operated by Byborg, on the terms and conditions set forth in the LMA.
Current report
On February 17, 2023, we entered into Amendment No. 4 (the “Fourth Amendment”) to our senior secured Credit and Guaranty Agreement, dated as of May 25, 2021 (as previously amended on August 11, 2021, August 8, 2022, December 6, 2022, and as further amended by the Fourth Amendment, the “Credit Agreement”), which among other things: (i) required that the mandatory prepayment of 80% of our equity offering proceeds apply only to our $50 million rights offering completed in February 2023 (thereby reducing the applicable prepayment cap to $40 million), (ii) required an additional $5 million prepayment by us as a condition to completing the Fourth Amendment, and (iii) reduced the prepayment threshold for waiving our Total Net Leverage Ratio financial covenant through June 30, 2024 to $70 million (from the prior $75 million prepayment threshold). Such $70 million of prepayments were achieved by us through the combination of a $25 million prepayment in December 2022, a $40 million prepayment made in connection with our rights offering in February 2023, and an additional $5 million prepayment made at the completion of the Fourth Amendment.
Showing the first 40 of 54 passages. Open the source sections for the rest.
Removed paragraphs (39)
Previous report
We are a large, global consumer lifestyle company marketing our brands through a wide range of direct-to-consumer products, licensing initiatives, and digital subscriptions and content. We reach consumers worldwide with products across four key market categories: Style and Apparel, including a variety of apparel and accessories products; Digital Entertainment and Lifestyle, including our creator platform, the Playboy Club, web and television-based entertainment, and our spirits and hospitality products; Sexual Wellness, including lingerie and intimacy products; and Beauty and Grooming, including fragrance, skincare, grooming and cosmetics.
Previous report
Shifting to a Capital-Light Business Model
Previous report
Contingent consideration fair value remeasurement gain consists of non-cash changes in the fair value of contingent consideration recorded in conjunction with the acquisitions of GlowUp Digital Inc. (“GlowUp”) and Honey Birdette.
Previous report
Gain on Sale of the Aircraft
Previous report
Gain on sale of the aircraft represents the gain on the sale of our former corporate aircraft (the “Aircraft”).
Previous report
Other Operating (Expense) Income, Net
Previous report
Other operating (expense) income, net primarily consists of gains on the sale of certain digital assets and the loss resulting from the settlement of a secured promissory note.
Previous report
Gain (Loss) on Extinguishment of Debt
Previous report
In September 2022, in connection with the sale of the Aircraft, a related term loan obtained in connection with our acquisition of the Aircraft (the “Aircraft Term Loan”) was repaid in full and all related liens discharged. A loss on early extinguishment of such debt, which was comprised of the write-off of certain deferred financing costs and a prepayment penalty, was $0.2 million.
Previous report
Other Income (Expense), Net
Previous report
Benefit from Income Taxes
Previous report
The decrease in net revenues as compared to the prior year comparative period was primarily due to $27.2 million less of direct-to-consumer revenue, $16.6 million of which was due to changing Playboy’s e-commerce site from owned-and-operated to a licensed business model in the third quarter of 2023, a $16.6 million decrease in licensing revenue (which was net of $5.1 million of prepaid royalty guarantees recognized as revenue in the fourth quarter of 2023 in connection with termination of a licensing agreement), a $1.6 million decrease in TV and cable programming revenue, and a $1.5 million decrease in magazine and digital subscriptions revenue, all due to weaker consumer demand, partly offset by $4.2 million of increased revenue from our creator platform.
Previous report
The decrease in cost of sales as compared to the prior year comparative period was primarily due to a $12.3 million decrease in product costs and lower direct-to-consumer shipping and fulfillment costs of $1.3 million in connection with the Company’s discontinuation of owned-and-operated direct-to-consumer businesses as well as weaker consumer demand, a $13.4 million decrease in licensing royalties and commissions due to weaker consumer demand, $2.0 million less of stock-based compensation expenses, primarily related to the cancellation of independent contractor equity, and $2.6 million lower outside consulting expense, partly offset by a $3.8 million increase in inventory reserve charges.
Previous report
The decrease in selling and administrative expenses as compared to the prior year comparative period was primarily due to a $7.0 million decrease in digital marketing spend related to the Company’s discontinuation of owned-and-operated direct-to-consumer businesses, lower payroll expense of $7.8 million due to headcount reductions, the elimination of $4.3 million in aircraft expenses following the sale of the Aircraft in the third quarter of 2022, a $1.7 million decrease in recruiting costs, a decrease of $5.8 million for outside professional services, a $1.1 million decrease in depreciation and amortization, and a $9.3 million decrease in stock-based compensation expense, net of $2.3 million of additional stock-based compensation expense due to the acceleration of certain equity awards in connection with severance payments, partly offset by $4.8 million of higher technology costs, primarily due to restructuring charges taken on direct-to-consumer cloud-based software attributable to continuing operations in 2023, a $1.2 million increase in expense related to special projects, $3.6 million of costs associated with the formation and operation of the China JV, and $1.3 million of additional salary and related severance charges in connection with headcount reductions.
Previous report
The decrease in contingent consideration fair value remeasurement gain as compared to the prior year comparative period was primarily due to the resolution in 2022 of contingent consideration related to the acquisition of Honey Birdette and partial settlement in the second quarter of 2022 of contingent consideration recorded in connection with our acquisition of GlowUp, the predecessor business for our creator platform.
Previous report
Gain on Sale of the Aircraft
Previous report
The decrease in gain on sale of the Aircraft in 2023 was due to the $5.7 million gain on the sale of the Aircraft recognized in the third quarter of 2022.
Previous report
Other Operating (Expense) Income, Net
Previous report
Gain (Loss) on Extinguishment of Debt
Previous report
Other Income (Expense), Net
Previous report
The decrease in other income (expense), net as compared to the prior year comparative period was primarily due to a $0.7 million increase in interest income, and the amortization of $0.6 million of previously capitalized fees allocated to an issuance of our mandatorily redeemable preferred stock in the third quarter of 2022.
Previous report
Benefit from Income Taxes
Previous report
•Impairments for the year ended December 31, 2022 relate to the impairments of digital assets and other intangible assets, including goodwill.
Previous report
•Contingent consideration fair value remeasurement for the year ended December 31, 2023 relates to non-cash fair value gain due to the fair value remeasurement of contingent liabilities related to our acquisition of GlowUp that remained unsettled as of December 31, 2023.
Previous report
•Contingent consideration fair value remeasurement for the year ended December 31, 2022 relates to non-cash fair value change due to contingent liabilities fair value remeasurement resulting from the acquisition of Honey Birdette and GlowUp.
Previous report
•Gain on sale of the Aircraft for the year ended December 31, 2022 related to its sale in September 2022.
Previous report
•Adjustments for the year ended December 31, 2022 are related to amortization of the previously capitalized fees allocated to the second issuance of our Series A Preferred Stock in August 2022, severance, consulting, advisory and other costs relating to special projects, including the implementation of internal controls over financial reporting and adoption of accounting standards.
Previous report
Direct-to-Consumer
Previous report
The decrease in operating loss as compared to the prior year comparative period was primarily due to a decrease of $87.5 million of non-cash impairment charges on certain of our intangible assets, including goodwill, $6.4 million of reduced digital marketing spend, $3.1 million lower trade name amortization due to accelerated amortization recognized in the prior year period, $5.0 million lower payroll expense as we shift to a capital-light business model, and a $3.1 million decrease in other selling and administrative expenses, partly offset by $14.3 million of lower gross profit as a result of lower revenue in connection with the Company’s discontinuation of owned-and-operated direct-to-consumer businesses, $4.1 million of higher technology costs, primarily due to restructuring charges taken on direct-to-consumer cloud-based software attributable to continuing operations in 2023, a $3.8 million increase in inventory reserve charges, impairment charges of $2.3 million on certain Honey Birdette right-of-use assets and related leasehold improvements, and approximately $1.2 million of severance charges.
Previous report
The decrease in operating loss as compared to the prior year comparative period was primarily attributable to a $2.0 million increase in net revenues, a $2.0 million decrease in expenses related to our creator platform, and the $6.3 million impairment of digital and other assets in the comparable prior year period.
Previous report
All Other
Previous report
The decrease in both revenues and operating income was primarily attributable to the recognized revenues related to the fulfillment of magazine subscription obligations in the first quarter of 2022 that did not reoccur in the subsequent periods, as a result of the cessation of publishing of Playboy magazine.
Previous report
The increase in corporate expenses as compared to the prior year comparative period was primarily due to $28.5 million less in non-cash contingent liabilities fair value remeasurement gain relating to our 2021 acquisitions and a $5.7 million gain on the sale of the Aircraft recorded in September 2022, partly offset by $9.3 million of lower stock-based compensation expense, net of $2.3 million of additional stock-based compensation expense (due to the acceleration of certain equity awards in connection with severance payments), $4.6 million lower professional services costs, the elimination of $4.3 million of Aircraft costs following the sale of the Aircraft in the third quarter of 2022, $1.3 million of lower depreciation expense due to the sale of the Aircraft, the $1.1 million impairment of certain assets in the prior year comparative period, and $1.5 million and $1.7 million of lower payroll and recruiting expenses, respectively.
Previous report
On May 16, 2022, we issued and sold 25,000 shares of Series A Preferred Stock to Drawbridge DSO Securities LLC (the “Purchaser”) at a price of $1,000 per share, resulting in total gross proceeds to us of $25.0 million, and we agreed to sell to the Purchaser, and the Purchaser agreed to purchase from us, up to an additional 25,000 shares of Series A Preferred Stock on the terms set forth in the securities purchase agreement entered into by us and the Purchaser. We incurred approximately $1.5 million of fees associated with the transaction, $1.0 million of which was netted against the gross proceeds.
Previous report
On August 8, 2022, we issued and sold the remaining 25,000 shares of Series A Preferred Stock to the Purchaser at a price of $1,000 per share (the “Second Drawdown”), resulting in additional gross proceeds to us of $25.0 million. We incurred approximately $0.5 million of fees associated with the Second Drawdown, which were netted against the gross proceeds. As a result of the transaction, all of our authorized shares of Series A Preferred Stock were issued and outstanding as of August 8, 2022.
Previous report
In September 2022, we sold the Aircraft to an unrelated third party and received net proceeds of $16.8 million.
Previous report
We expect our capital expenditures and working capital requirements in 2024 to be largely consistent with 2023, as we continue to invest in our creator platform. We may, however, need additional cash resources, to fund our operations until the creator platform achieves a level of revenue that provides for operating profitability. To the extent that our current resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing, or dispose of additional assets, and there can be no assurance that we will be successful in these efforts. If the financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to decrease our planned level of investment in our creator platform or scale back its operations, which could have an adverse impact on our business and financial prospects.
Previous report
Compliance with the financial covenants as of December 31, 2023 and 2022 was waived pursuant to the terms of the A&R Credit Agreement and the third amendment of the Credit Agreement, respectively.
Previous report
While our significant accounting policies are described in the notes to our consolidated financial statements, we believe that the accounting policies below are most critical to understanding our financial condition and historical and future results of operations.
Reworded paragraphs (53)
Previous wording
We have three reportable segments: Direct-to-Consumer, Licensing and Digital Subscriptions and Content. Our Direct-to-Consumer segment derives its revenue from sales of consumer products sold directly to consumers through our own online channels and retail stores. Our former Lovers and Yandy direct-to-consumer businesses were classified as discontinued operations in the condensed consolidated statements of operations for all periods presented (see Note 3, Assets and Liabilities Held for Sale and Discontinued Operations). Our Licensing segment derives revenue from trademark licenses for third-party consumer products, location-based entertainment businesses and online gaming. Our Digital Subscriptions and Content segment derives revenue from subscriptions to Playboy programming and content, which is distributed through various channels, including websites and domestic and international TV, and sales of creator content offerings and memberships through the Playboy Club onplayboy.com.
Current wording
We are a global consumer lifestyle company marketing our brands through a wide range of direct-to-consumer products, licensing initiatives, digital subscriptions and content, and online and location-based entertainment businesses. We have three reportable segments: Direct-to-Consumer, Licensing, and Digital Subscriptions and Content. The Direct-to-Consumer segment derives revenue from sales of consumer products sold directly to consumers by Honey Birdette online or at its brick-and-mortar stores, with 54 stores in three countries as of December 31, 2024, and in the prior year comparative period included theplayboy.com e-commerce business, which in the third quarter of 2023 fully transitioned from an owned-and-operated model to a licensing model. The Licensing segment derives revenue from trademark licenses for third-party consumer products, primarily for various apparel and accessories categories, hospitality, digital gaming and location-based entertainment businesses. The Digital Subscriptions and Content segment derives revenue from the subscription of Playboy programming that is distributed through various channels, including Playboy websites and domestic and international television, and sales of creator content offerings and memberships to consumers through the Playboy Club onplayboy.com.
Previous wording
See Note 3, Assets and Liabilities Held for Sale and Discontinued Operations for information regarding our business dispositions.
Current wording
Refer to Note 3, Assets and Liabilities Held for Sale and Discontinued Operations, of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our business dispositions.
Previous wording
In pursuit of a commercial strategy that relies on a more capital-light business model focused on revenue streams with higher margin, lower working capital requirements and higher growth potential, we continue to review the cost structure of our businesses and additional cost rationalization. We significantly restructured our technology expenses in the first and fourth quarters of 2023, and cost-excessive and under-utilized software packages were either terminated or not renewed upon expiration of applicable agreements. This resulted in a restructuring charge of $5.1 million for the year ended December 31, 2023, excluding $0.4 million of costs related to discontinued operations. In addition, we reduced headcount within the Playboy Direct-to-Consumer business and our corporate office during fiscal 2023, resulting in a severance charge of $3.5 million and a net increase of $0.1 million of stock-based compensation expenses, which was comprised of a $2.4 million reduction of stock-based compensation expenses due to forfeitures of equity grants during the third quarter of 2023, offset by additional stock-based compensation expense of $2.3 million due to acceleration of certain equity awards during the second quarter of 2023.
Current wording
Pursuing a More Capital-Light Business Model
Previous wording
Our revenues from China (including Hong Kong) as a percentage of our total revenues, excluding revenues from discontinued operations, were 20% and 23% for the years ended December 31, 2023 and 2022, respectively. Due to challenging economic conditions in China, collections from certain of our Chinese licensees slowed significantly, and we had to renegotiate terms of, or terminate, certain licenses. In October 2023, we terminated licensing agreements with certain Chinese licensees due to ongoing, uncured breaches of their licenses, which comprised $152.2 million of unrecognized Licensing revenue under our long-term contracts as of the termination date. Revenue recognized in connection with such contracts that were subsequently terminated was $27.1 million during the year ended December 31, 2023. Future contract modifications and collectability issues could further impact the revenue recognized against our ongoing contract assets. At the end of the first quarter of 2023, we entered into the China JV with Charactopia Licensing Limited, the brand management unit of Fung Group, which operates the Playboy consumer products business in mainland China, Hong Kong and Macau. The China JV is intended to reinvigorate our China-market Playboy apparel business through expanding Playboy’s reach and online storefronts by adding new licensees.
Current wording
Our revenues from China (including Hong Kong) as a percentage of our total revenues from continuing operations were 10% and 20% for the years ended December 31, 2024 and 2023, respectively. At the end of the first quarter of 2023, we entered into the China JV with CT Licensing Limited, a brand management unit of Fung Group. The China JV owns and operates the Playboy consumer products business in mainland China, Hong Kong and Macau. In 2023, due to challenging economic conditions in China, collections from certain of our Chinese licensees slowed significantly, and we had to renegotiate terms of, or terminate, certain licenses, resulting in $152.2 million of unrecognized Licensing revenue under our long-term contracts as of the applicable termination dates. Revenue recognized in connection with such terminated contracts was $27.1 million during the year ended December 31, 2023, out of which $5.1 million was attributable to prepaid royalty guarantees recorded as revenue in the fourth quarter of 2023. Future contract modifications and collectability issues could further impact the revenue recognized against our ongoing contract assets. Nonetheless, in 2024, our China JV stabilized our business in China, and we expect our licensing activity in China to increase slightly in 2025 and continue to represent a modest but meaningful part of our overall business in future periods.
Previous wording
Our indefinite-lived intangible assets, including trademarks and goodwill, that are not amortized, and the carrying amounts of our long-lived assets, including property and equipment, stores, acquired intangible assets and right-of-use operating lease assets, may continue to be subject to impairment testing and impairments which reduce their value on our balance sheet. We periodically review for impairments whenever events or changes in our circumstances indicate that such assessment would be appropriate. We experienced further declines in revenue and profitability (including due to discontinued operations) during the year ended December 31, 2023, which caused us to test the recoverability of our indefinite-lived and long-lived assets and resulted in the impairments set forth in our consolidated financial statements. If we continue to experience declines in revenue or profitability, which could occur upon further declines in consumer demand or additional discontinued operations, we may record further non-cash asset impairment charges as of the applicable impairment testing date.
Current wording
Our indefinite-lived intangible assets, including trademarks and goodwill, that are not amortized, and the carrying amounts of our long-lived assets, including property and equipment, stores, acquired intangible assets and right-of-use operating lease assets, may continue to be subject to impairment testing and impairments which reduce their value on our balance sheet. We periodically review for impairments whenever events or changes in our circumstances indicate that such assessment would be appropriate. We experienced further declines in revenue and profitability during the year ended December 31, 2024, which caused us to test the recoverability of our indefinite-lived and long-lived assets and resulted in the impairments set forth in our consolidated financial statements for the year ended December 31, 2024. However, if we continue to experience declines in revenue or profitability, which could occur upon further declines in consumer demand or additional discontinued operations, we may record further non-cash asset impairment charges as of the applicable impairment testing date.
Previous wording
While we receive revenue throughout the year, our businesses have experienced, and may continue to experience, seasonality. For example, our licensing business historically experienced higher receipts in its first and third fiscal quarters due to the licensing fee structure in our licensing agreements, which typically require advance payment of such fees during those quarters, but such payments can be subject to variations, extensions or delays. Our direct-to-consumer business has historically experienced higher sales in the fourth quarter due to the U.S. holiday season, but changing market conditions and demand could affect such sales. Historical seasonality of revenues may be subject to change as increasing pressure from competition and changes in consumer trends and economic conditions impact our licensees and consumers. Transitioning to a capital-light business model with a more streamlined consumer products business may further impact the seasonality of our business in the future.
Current wording
While we receive revenue throughout the year, our Honey Birdette direct-to-consumer business has experienced, and may continue to experience, seasonality. Historical seasonality of revenues may be subject to change as increasing pressure from competition and economic conditions impact our licensees and consumers. The further transition of our business to a capital-light business model may further impact the seasonality of our business in the future.
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 EBITDA and Adjusted EBITDA as non-GAAP financial measures. We believe these non-GAAP measures provide useful information to investors and expanded insight to measure revenue and cost performance as a supplement to the GAAP consolidated financial statements. Refer to the “EBITDA and Adjusted EBITDA” section below for reconciliations of EBITDA and Adjusted EBITDA to net loss, the closest GAAP measure.
Previous wording
We generate revenue from sales of consumer products sold through our retail stores or online direct-to-customer, trademark licenses for third-party consumer products, online gaming and location-based entertainment businesses, and sales of creator offerings to consumers on our creator-led platform onplayboy.com, in addition to subscriptions to our programming, which is distributed through various channels, including websites and domestic and international television.
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 sales of creator content offerings and memberships to consumers on our content creator platform onplayboy.com, in addition to subscriptions to our programming, which is distributed through various channels, including websites and domestic and international television.
Previous wording
We license trademarks under multi-year arrangements to consumer products, online gaming and location-based entertainment businesses. Typically, the initial contract term ranges between one to ten 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 on a cash basis.
Current wording
We license trademarks under multi-year arrangements to third-party consumer products and online and location-based entertainment businesses. Typically, the initial contract term ranges between one to ten 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.
Previous wording
Revenues generated from the sales of creator offerings to consumers via our creator platform onplayboy.com are recognized at the point in time when the sale is processed. Revenues generated from subscriptions to our creator platform are recognized ratably over the subscription period.
Current wording
Revenues generated from the sales of creator content offerings to consumers via our creator platform onplayboy.com are recognized at the point in time when the sale is processed. Revenues generated from subscriptions to our creator platform and memberships to consumers are recognized ratably over the subscription/membership period. Revenues generated from events and sponsorships are recognized when the event occurs.
Previous wording
Cost of sales primarily consist of merchandise costs, warehousing and fulfillment costs, agency fees, website expenses, digital platform expenses, marketplace traffic acquisition costs, credit card processing fees, personnel and affiliate costs, including stock-based compensation, costs associated with branding events, customer shipping and handling expenses, fulfillment activity costs and freight-in expenses.
Current wording
Cost of sales primarily consist of merchandise costs, warehousing and fulfillment costs, agency fees, website expenses, digital platform expenses, marketplace traffic acquisition costs, credit card processing fees, personnel and affiliate costs, including stock-based compensation and costs associated with branding events, customer shipping and handling expenses, fulfillment activity costs and freight-in expenses.
Previous wording
Selling and administrative expenses primarily consist of corporate office and retail store occupancy costs, personnel costs, including stock-based compensation, and contractor fees for accounting/finance, legal, human resources, information technology and other administrative functions, general marketing and promotional activities and insurance.
Current wording
Selling and administrative expenses primarily consist of corporate and retail store occupancy costs, personnel costs, including stock-based compensation and contractor fees for accounting/finance, legal, human resources, information technology and other administrative functions, general marketing and promotional activities, and insurance, offset by a reversal of related selling and administrative expenses due to settlement at a discount of certain account payable balances in 2024.
Previous wording
Impairments consist of the impairments of certain licensing contracts, Playboy-branded trademarks, trade names and goodwill and certain digital assets.
Current wording
Impairments consist of the impairments of our artwork held for sale, internally developed software, certain licensing contracts, right-of-use assets, Playboy-branded trademarks, Honey Birdette’s trade names and goodwill.
Previous wording
Interest expense consists of interest on our long-term debt and the amortization of deferred financing costs and debt discount.
Current wording
Interest expense consists of interest on our long-term debt and the amortization of deferred financing costs and debt premium/discount.
Previous wording
In the first quarter of 2023, we recorded a loss on partial extinguishment of debt in the amount of $1.8 million related to the write-off of unamortized debt discount and deferred financing costs as a result of $45 million in prepayments of our debt pursuant to amendments of our senior secured credit agreement in December 2022 and February 2023. In the second quarter of 2023, we recorded a gain on partial extinguishment of debt in the amount of $8.0 million upon the amendment and restatement of our senior secured credit agreement (the “A&R Credit Agreement”). See Liquidity and Capital Resources section for definitions and additional details.
Current wording
In the first quarter of 2023, we recorded a loss on partial extinguishment of debt in the amount of $1.8 million related to the write-off of unamortized debt discount and deferred financing costs as a result of $45 million in prepayments of our debt pursuant to amendments of our senior secured credit agreement in December 2022 and February 2023.
Previous wording
Other income (expense), net consists primarily of other miscellaneous nonoperating items, such as bank charges and foreign exchange gains or losses as well as non-recurring transaction fees.
Current wording
Other (expense) income, net consists primarily of other miscellaneous nonoperating items, such as foreign exchange realized and unrealized transaction gains or losses, bank charges as well as nonrecurring transaction fees.
Previous wording
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 U.S. federal and state deferred tax assets, as well as Australia, U.K. and China 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 U.S. federal and state deferred tax assets, as well as Australia, U.K. and China deferred tax assets.
Previous wording
The decrease in net revenues as compared to the prior year comparative period was primarily due to a $10.6 million decrease in Honey Birdette revenue as a result of a decline in consumer demand and a $16.6 million decrease in revenue from playboy.com e-commerce related to our completion of the transition from an owned-and-operated model to a licensing model in the third quarter of 2023.
Current wording
The decrease in direct-to-consumer net revenues, compared to the prior year comparative period, was primarily due to a $5.0 million decrease in revenue from playboy.com e-commerce related to our completion of the transition from an owned-and-operated model to a licensing model in the third quarter of 2023 and a $3.2 million decrease in Honey Birdette revenue as a result of a 30% reduction in days on sale and weaker consumer demand.
Previous wording
The decrease in net revenues as compared to the prior year comparative period was primarily due to the decline in contractual revenue and overages from our licensing partners due to weaker consumer demand, net of $5.1 million of prepaid royalty guarantees recognized as revenue in the fourth quarter of 2023 in connection with the termination of a licensing contract.
Current wording
The decrease in licensing net revenues, compared to the prior year comparative period, was primarily due to the termination of licensing agreements with certain Chinese licensees in the fourth quarter of 2023 due to material, uncured breaches resulting in collectability issues, $5.1 million of prepaid royalty guarantees recognized as revenue in the fourth quarter of 2023 in connection with the termination of one such licensing contract, the decline in contractual revenue and overages from our licensing partners due to weaker consumer demand, as well as lower licensee audit revenues.
Previous wording
The increase in net revenues as compared to the prior year comparative period was primarily due to a $4.2 million increase in net revenues from our creator platform, partly offset by a $2.2 million decrease in other digital subscriptions and content revenue.
Current wording
The increase in digital subscriptions and content net revenues, compared to the prior year comparative period, was primarily due to a $1.7 million increase in net revenues from our creator platform, partly offset by a $0.6 million decrease in other digital subscriptions and content revenue.
Previous wording
The decrease in impairments as compared to the prior year comparative period was primarily due to lower impairment charges of $132.3 million on Playboy-branded trademarks, Honey Birdette’s trade names and goodwill, $4.9 million of higher impairment charges related to our digital assets during the year ended December 31, 2022 as a result of their fair value decreasing below their carrying value, and the $2.4 million impairment of certain other assets in the second quarter of 2022, partly offset in 2023 by $8.7 million in impairments of certain licensing contracts and $2.3 million in impairments of certain Honey Birdette right-of-use assets and related leasehold improvements.
Current wording
The decrease in impairments, compared to the prior year comparative period, was primarily due to impairment charges in the prior year comparative period of $143.9 million on Playboy-branded trademarks, Honey Birdette’s trade names and goodwill, $8.7 million in impairments of certain licensing contracts, and $2.3 million in impairments of certain Honey Birdette right-of-use assets and related leasehold improvements, partly offset by impairment charges of $2.4 million and $1.4 million on our artwork held for sale in the first and fourth quarters of 2024, respectively, $0.6 million on our corporate leases in the second quarter of 2024, $17.0 million on our goodwill for Digital Subscriptions and Content and $4.7 million of impairment charges related to our internally developed software in the third quarter of 2024.
Previous wording
The change in other operating (expense) income, net as compared to the prior year comparative period was primarily due to a $0.7 million loss from settlement of a promissory note recognized in the third quarter of 2023, and $0.2 million higher gain on the sale of crypto assets during the year ended December 31, 2022.
Current wording
The decrease in other operating expense, net, compared to the prior year comparative period, was primarily due to a $0.4 million loss on sale of assets, including our artwork held for sale, in 2024, and a $0.3 million gain on the sale of crypto assets during the year ended December 31, 2023, partly offset by a $0.7 million loss from settlement of a promissory note recognized in 2023 and other miscellaneous items.
Previous wording
The increase in interest expense as compared to the prior year comparative period was primarily due to the higher interest rates on our senior secured debt in 2023 and a decrease in amortization payments in the second half of 2023.
Current wording
The increase in interest expense, compared to the prior year comparative period, was primarily due to higher interest rates on our senior secured debt in 2024 compared to the prior year comparative period.
Previous wording
Gain (loss) on extinguishment of debt for the year ended December 31, 2023 represents a $6.1 million gain due to the partial extinguishment of debt upon the amendment and restatement of our senior secured debt credit agreement in the second quarter of 2023, net of a $1.8 million loss recorded in the first quarter of 2023 due to the partial extinguishment of debt related to $45 million of prepayments of such senior debt. Gain (loss) on extinguishment of debt for the year ended December 31, 2022 was a loss of $1.1 million on the partial extinguishment of debt related to a $25 million prepayment in the fourth quarter of 2022 and $0.2 million of loss on early extinguishment of the Aircraft Term Loan in the third quarter of 2022.
Current wording
Gain on extinguishment of debt for the year ended December 31, 2023 represents a $6.1 million gain due to the partial extinguishment of debt upon the amendment and restatement of our senior secured debt credit agreement in 2023, net of a $1.8 million loss recorded in 2023 due to the partial extinguishment of debt related to $45 million of prepayments of such senior debt.
Previous wording
The decrease in fair value remeasurement gain as compared to the prior year comparative period was due to the remeasurement of our mandatorily redeemable preferred stock liability to its fair value in 2023 upon its exchange (and thereby elimination) in connection with the A&R Credit Agreement in the second quarter of 2023.
Current wording
Fair value remeasurement gain for the year ended December 31, 2023 represented the remeasurement of our mandatorily redeemable preferred stock liability to its fair value in 2023, which was exchanged (and thereby eliminated) in connection with our A&R Credit Agreement for our senior secured debt in the second quarter of 2023.
Previous wording
The change in benefit from income taxes as compared to the prior year comparative period was primarily due to a loss on the sale of a subsidiary, a shortfall of stock-based compensation and a change in valuation allowance due to a reduction in net indefinite-lived deferred tax liabilities, offset by increased foreign income taxes in the year ended December 31, 2023.
Current wording
The change from benefit from income taxes to income tax expense as compared to the prior year comparative period was primarily driven by lower pretax book loss, a change in valuation allowance due to a reduction in net indefinite-lived deferred tax liabilities, and increased foreign Subpart F income in the year ended December 31, 2024.
Previous wording
In addition to adjusting for non-cash stock-based compensation, non-cash charges for the fair value remeasurements of certain liabilities and non-recurring non-cash impairments, asset write-downs and inventory reserve charges, we typically adjust for nonoperating expenses and income, such as non-recurring special projects, including the implementation of internal controls, non-recurring gain 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 and non-recurring non-cash impairments, asset write-downs and inventory reserve charges, we typically adjust for nonoperating expenses and income, such as nonrecurring special projects, including for related consultant expenses, nonrecurring gain 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
•Mandatorily redeemable preferred stock fair value remeasurement for the years ended December 31, 2023 and 2022 relates to the fair value remeasurement, non-cash fair value gain of the liability for our Series A Preferred Stock.
Current wording
•Mandatorily redeemable preferred stock fair value remeasurement for the year ended December 31, 2023 relates to the fair value remeasurement, non-cash fair value gain of the liability for such preferred stock.
Previous wording
•Write-down of capitalized software for the year ended December 31, 2023 relates to restructuring charges taken on direct-to-consumer cloud-based software in the first and fourth quarters of 2023, excluding $0.4 million of costs related to discontinued operations.
Current wording
•Write-down of capitalized software for the year ended December 31, 2023 relates to restructuring charges taken on direct-to-consumer cloud-based software in the first and fourth quarters of 2023, excluding costs related to discontinued operations.
Previous wording
•Adjustments for the year ended December 31, 2023 are primarily related to consulting, advisory and other costs relating to corporate transactions and other strategic opportunities, as well as reorganization and severance costs resulting in the elimination or rightsizing of specific business activities or operations.
Current wording
•Adjustments for the year ended December 31, 2023 are related to non-cash fair value change related to contingent liabilities fair value remeasurement with respect to potential shares issuable with respect to a past acquisition that remained unsettled as of December 31, 2023, consulting, advisory and other costs relating to corporate transactions and other strategic opportunities, as well as reorganization and severance costs resulting in the elimination or rightsizing of specific business activities or operations.
Previous wording
Our Chief Executive Officer is our Chief Operating Decision Maker (“CODM”). Our segment disclosure is based on our intention to provide the users of our consolidated financial statements with a view of the business from our perspective. We operate our business in three primary operating and reportable segments: Direct-to-Consumer, Licensing and Digital Subscriptions and Content. Direct-to-Consumer operations include consumer products sold through brick-and-mortar retail stores and e-commerce sites. Licensing operations include the licensing of one or more of our trademarks, our Playboy retail platform operations effective July 2023, and/or images for consumer products and location-based entertainment businesses. Digital Subscriptions and Content operations include the production, marketing and sales of programming under the Playboy brand name, which is distributed through various channels, including domestic and international television, sales of tokenized digital art and collectibles, and sales of creator content offerings to consumers through the Playboy Club onplayboy.com.
Current wording
During the year ended December 31, 2024 and as of December 31, 2024, we had three reportable segments: Direct-to-Consumer, Licensing, and Digital Subscriptions and Content. The Direct-to-Consumer segment derives revenue from sales of consumer products sold online direct-to-customer or at brick-and-mortar retail stores through our lingerie business, Honey Birdette, with 54 stores in three countries as of December 31, 2024. The TLA and Yandy direct-to-consumer businesses met the criteria for discontinued operations classification as of December 31, 2023 (refer to Note 3, Assets and Liabilities Held for Sale and Discontinued Operations, of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details). Therefore, they were excluded from the table below and classified as discontinued operations in our consolidated statements of operations for the year ended December 31, 2023. Our Licensing segment includes the licensing of one or more of our trademarks, our Playboy retail platform operations effective July 2023, and/or images for consumer products and online and location-based entertainment businesses. Our Digital Subscriptions and Content segment includes the production, marketing and sales of programming under the Playboy brand name, which is distributed through various channels, including domestic and international television, sales of creator content offerings and memberships to consumers through the Playboy Club onplayboy.com, as well as events and sponsorships.
Previous wording
The decrease in operating loss as compared to the prior year comparative period was primarily due to $44.7 million lower non-cash impairment charges on our trademarks, partly offset by a $3.5 million decrease in licensing gross profit, the $8.7 million impairment of certain licensing contracts, $3.6 million of costs associated with the formation and operation of the China JV, and a $1.9 million increase in legal fees and special projects.
Current wording
Operating Income: The change from operating loss in the prior year comparative period to operating income in 2024 was primarily due to $71.3 million of non-cash impairment charges on our trademarks and the $8.7 million impairment of certain licensing contracts in the prior year comparative period, a $3.1 million decrease in China JV expenses, out of which $1.5 million was due to organizational expenses incurred in the prior year comparative period, and a $3.0 million reduction in legal expenses, partly offset by a $24.8 million decrease in licensing gross profit, resulting from lower revenues and commission accrual reversals in the prior period.
Previous wording
Our sources of liquidity are cash generated from operating activities, which primarily includes cash derived from revenue generating activities, from financing activities, including proceeds from our issuance of debt, and proceeds from stock offerings (as described further below), and from investing activities, which included the sale of assets in 2022 and 2023 (as described further below). As of December 31, 2023, our principal source of liquidity was our unrestricted cash in the amount of $28.1 million which is primarily held in operating and deposit accounts.
Current wording
Our sources of liquidity are cash generated from operating activities, which primarily includes cash derived from revenue generating activities, from financing activities, including proceeds from our issuance of debt and stock offerings (as described further below), and from investing activities, which included the sale of assets (as described further below). As of December 31, 2024, our principal source of liquidity was unrestricted cash in the amount of $30.9 million, which is primarily held in operating and deposit accounts.
Previous wording
On April 4, 2023, we completed the Yandy Sale to an unaffiliated, third-party buyer. The consideration we received for the Yandy Sale consisted of $1.0 million in cash and a $2.0 million secured promissory note payable over three years (which note was then settled in the third quarter of 2023 for a cash payment to us of $1.3 million).
Current wording
On April 4, 2023, we completed the sale of our wholly-owned subsidiary, Yandy Enterprises, LLC (the “Yandy Sale”) to an unaffiliated, third-party buyer. The consideration we received for the Yandy Sale consisted of $1.0 million in cash and a $2.0 million secured promissory note payable over three years (which note was then settled in the third quarter of 2023 for a cash payment to us of $1.3 million).
Previous wording
On November 3, 2023, we completed the sale of TLA to an unaffiliated, third-party buyer for approximately $13.5 million in cash (the “Purchase Price”). Approximately $2.1 million of the Purchase Price was placed into a short-term escrow account at the closing of the TLA sale in connection with a post-closing working capital adjustment, certain possible indemnification claims payable by us and for certain post-closing items to be completed by us. As of the date of this Annual Report on Form 10-K, $1.3 million of such escrow funds had been released to us.
Current wording
On November 3, 2023, we completed the sale of TLA Acquisition Corp. (“TLA”) to an unaffiliated, third-party buyer for approximately $13.5 million in cash (the “Purchase Price”). Approximately $2.1 million of the Purchase Price was placed into a short-term escrow account at the closing of the TLA sale in connection with a post-closing working capital adjustment, certain possible indemnification claims payable by us and for certain post-closing items to be completed by us. As of the date of this Annual Report on Form 10-K, such escrow funds had been released to us in full.
Previous wording
In November 2023, we also sold a small amount of our art assets. We expect to continue the sale of our art assets in 2024.
Current wording
In November 2023, we also sold a small amount of our art assets, and we continued the sale of our art assets in 2024.
Previous wording
Due to challenging economic conditions in China, collections from certain of our Chinese licensees have slowed significantly, and we have renegotiated terms of certain agreements. In October 2023, we also terminated licensing agreements with certain Chinese licensees, which comprised $152.2 million of the unrecognized trademark licensing revenue under our long-term contracts as of the termination date. Revenue recognized in connection with such contracts that were terminated was $27.1 million during the year ended December 31, 2023. Future contract modifications and collectability issues could further impact the revenue recognized against our ongoing contract assets.
Current wording
Due to challenging economic conditions in China, collections from certain of our Chinese licensees slowed significantly in 2022 and 2023, leading us to renegotiate terms of, or terminate, certain licenses in October 2023. We have replaced certain terminated licensees with new licensees in China. Future contract modifications and collectability issues could further impact the revenue recognized against our ongoing contract assets.
Previous wording
Since going public in 2021, we have yet to generate operating income from our core business operations and have incurred significant operating losses of $190 million for the year ended December 31, 2023. We expect to continue to incur operating losses for the foreseeable future.
Current wording
Since going public in 2021, we have yet to generate operating income from our core business operations and have incurred significant operating losses, including $50.8 million of operating losses for the year ended December 31, 2024. We expect our capital expenditures and working capital requirements in 2025 to be largely consistent with 2024.
Previous wording
We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern over the next twelve months from the date of filing this Annual Report on Form 10-K. Although consequences of ongoing macroeconomic uncertainty could adversely affect our liquidity and capital resources in the future, and cash requirements may fluctuate based on the timing and extent of many factors, such as those discussed above, we believe our existing sources of liquidity, along with proceeds from asset dispositions and savings from cost reductions initiatives, will be sufficient to meet our obligations as they become due under the A&R Credit Agreement and our other obligations for at least one year following the date of the filing of this Annual Report on Form 10-K. We may seek additional equity or debt financing in the future to satisfy capital requirements, respond to adverse developments such as changes in our circumstances or unforeseen events or conditions, or fund organic or inorganic growth opportunities. However, in the event that additional financing is required from third-party sources, we may not be able to raise it on acceptable terms or at all.
Current wording
Although consequences of ongoing macroeconomic uncertainty could adversely affect our liquidity and capital resources in the future, and cash requirements may fluctuate based on the timing and extent of many factors, such as those discussed above, we believe our existing sources of liquidity will be sufficient to meet our obligations as they become due under the A&R Credit Agreement and our other obligations for at least one year following the date of the filing of this Annual Report on Form 10-K. We may seek additional equity or debt financing in the future to satisfy capital requirements, respond to adverse changes in our circumstances or unforeseen events, or fund growth opportunities. However, in the event that additional financing is required from third-party sources, we may not be able to raise it on acceptable terms or at all.
Previous wording
On April 4, 2023, we entered into Amendment No. 5 (the “Fifth Amendment”) to our senior secured Credit and Guaranty Agreement, dated as of May 25, 2021 (as previously amended on August 11, 2021, August 8, 2022, December 6, 2022 and February 17, 2023, and as further amended by the Fifth Amendment, the “Credit Agreement”) to permit, among other things, the sale of our wholly-owned subsidiary, Yandy Enterprises, LLC (the “Yandy Sale”), and that the proceeds of such sale would not be required to prepay the loans under the Credit Agreement (as amended through the Fifth Amendment); provided that at least 30% of the consideration for the Yandy Sale was paid in cash.
Current wording
On April 4, 2023, we entered into Amendment No. 5 to the Credit Agreement (the “Fifth Amendment”) to permit, among other things, the Yandy Sale, and that the proceeds of such sale would not be required to prepay the loans under the Credit Agreement (as amended through the Fifth Amendment); provided that at least 30% of the consideration for the Yandy Sale was paid in cash.
Showing the first 40 of 53 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
•Adjustments for the year ended December 31, 2024 are primarily related to non-cash fair value change related to contingent liabilities fair value remeasurement with respect to potential shares issuable with respect to a past acquisition that remained unsettled as of December 31, 2024, loss on the sale of artwork, consulting, advisory and other costs relating to corporate transactions and other strategic opportunities as well as reorganization and severance costs resulting in the elimination or rightsizing of specific business activities or operations.
Current report — wording carried from elsewhere
“Adjusted Operating Income (Loss)” is defined as operating income or loss adjusted for stock-based compensation and other special items determined by management. Adjusted operating loss is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. We believe that the use of adjusted operating loss provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, investors should be aware that when evaluating adjusted operating loss, we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Our computation of adjusted operating loss may not be comparable to other similarly titled measures computed by other companies, because not all companies may calculate adjusted operating loss in the same fashion.
Current report — wording carried from elsewhere
In addition to adjusting for non-cash stock-based compensation, non-cash charges for the fair value remeasurements of certain liabilities and nonrecurring non-cash impairments, asset write-downs and inventory reserve charges, we typically adjust for nonrecurring special projects, including for related consultant expenses, nonrecurring gain 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 report — wording carried from elsewhere
Because of the limitations described above, adjusted operating loss 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 adjusted operating loss on a supplemental basis. Investors should review the reconciliation of operating loss to adjusted operating loss below and not rely on any single financial measure to evaluate our business.
Current report — wording carried from elsewhere
The stated interest rate of Tranche A and Tranche B term loans as of December 31, 2024 was 11.01%. The stated interest rate of Tranche A and Tranche B term loans as of December 31, 2023 was 11.41% and 9.41%, respectively. The effective interest rate of Tranche A and Tranche B A&R Term Loans as of December 31, 2024 was 1.05% and 4.93%, respectively. The effective interest rate of Tranche A and Tranche B A&R Term Loans as of December 31, 2023 was 12.03% and 13.27%, respectively.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
•Inventory reserve charges for the year ended December 31, 2022 relate to non-cash inventory reserve charges, excluding certain ordinary inventory reserve items, recorded in the third and fourth quarters of 2022 to reflect the restructuring of the Playboy Direct-to-Consumer business.