PLAYSTUDIOS, Inc.

Previous wording

•Third-Party Platform Agreements—Historically we derived substantially all of our revenue from in-game purchases of virtual currency that are processed by platform providers such as the Apple App Store, Google Store, Amazon Appstore, and on Facebook. The platform providers charge us a transaction fee to process payments from our players for their purchase of in-game virtual currency. These platform fees are generally set at 30% of the in-game purchase. Each platform provider has broad discretion to set its platform fees and to change and interpret its terms of service and other policies with respect to us and other developers in its sole discretion, and those changes may be unfavorable to us.

Current wording

•Third-Party Platform Agreements—Historically we derived substantially all of our revenue from in-game purchases of virtual currencies that are processed by platform providers such as the Apple App Store, Google Store, Amazon Appstore, and on Facebook. The platform providers charge us a transaction fee to process payments from our players for their purchase of in-game virtual currency. These platform fees are generally set at 30% of the in-game purchase. Each platform provider has broad discretion to set its platform fees and to change and interpret its terms of service and other policies with respect to us and other developers in its sole discretion, and those changes may be unfavorable to us.

Previous wording

•Player Monetization—Our revenue to date has been primarily driven through the sale of virtual currency. Paying players purchase virtual currency in our games because of the perceived value, which is dependent on the relative ease of obtaining equivalent virtual currency by simply playing our game. The perceived value of our virtual currency can be impacted by various actions that we take in our games including offering discounts for virtual currency or giving away virtual currency in promotions. Managing game economies is difficult and relies on our assumptions and judgment. If we fail to manage our virtual economies properly or fail to promptly and successfully respond to any such disruption, our reputation may suffer and our players may be less likely to play our games and to purchase virtual currency from us in the future, which would cause our business, financial condition, and results of operations to suffer.

Current wording

•Player Monetization—Our revenue to date has been primarily driven through the sale of virtual currencies. Paying players purchase virtual currencies in our games because of the perceived value, which is dependent on the relative ease of obtaining equivalent virtual currency by simply playing our game. The perceived value of our virtual currency can be impacted by various actions that we take in our games including offering discounts for virtual currencies or giving away virtual currencies in promotions. Managing game economies is difficult and relies on our assumptions and judgment. If we fail to manage our virtual economies properly or fail to promptly and successfully respond to any such disruption, our reputation may suffer and our players may be less likely to play our games and to purchase virtual currencies from us in the future, which would cause our business, financial condition, and results of operations to suffer.

Previous wording

Comparison of the three months ended March 31, 2025 versus the three months ended March 31, 2024

Current wording

Comparison of the three and six months ended June 30, 2025 versus the three and six months ended June 30, 2024

Previous wording

The following table summarizes our consolidated results of operations for the three months ended March 31, 2025 and 2024 (in thousands, except percentages):

Current wording

The following table summarizes our consolidated results of operations for the three and six months ended June 30, 2025 and 2024 (in thousands, except percentages):

Previous wording

Net revenue decreased $15.3 million, or (19.6)%, to $62.6 million during the three months ended March 31, 2025 compared to $77.8 million during the three months ended March 31, 2024. The decrease was due to a $9.6 million decrease in virtual currency revenue primarily driven by decreases in DPU and a $5.6 million decrease in advertising revenue mainly driven by decreases in DAU.

Current wording

Net revenue decreased $13.5 million, or (18.6)%, to $59.1 million during the three months ended June 30, 2025 compared to $72.6 million during the three months ended June 30, 2024. The decrease was due to a $8.5 million decrease in virtual currency revenue primarily driven by decreases in DPU and a $4.9 million decrease in advertising revenue mainly driven by decreases in DAU.

Previous wording

Cost of revenue decreased by $3.2 million to $15.8 million during the three months ended March 31, 2025 compared to $19.0 million during the three months ended March 31, 2024. The decrease was primarily related to a decrease in virtual currency revenue. As a percentage of revenue, cost of revenue increased from 24.3% for the three months ended March 31, 2024 to 25.2% for the three months ended March 31, 2025.

Current wording

Cost of revenue decreased by $3.5 million to $14.6 million during the three months ended June 30, 2025 compared to $18.1 million during the three months ended June 30, 2024. The decrease was primarily related to a decrease in virtual currency revenue. As a percentage of revenue, cost of revenue decreased from 24.9% for the three months ended June 30, 2024 to 24.5% for the three months ended June 30, 2025.

Previous wording

Selling and marketing expenses decreased by $5.4 million to $13.2 million during the three months ended March 31, 2025 compared to $18.6 million during the three months ended March 31, 2024. The decrease was primarily due to decreases in user acquisition expense of $4.6 million and other selling and marketing expense of $0.8 million.

Current wording

Selling and marketing expenses decreased by $4.0 million to $13.1 million during the three months ended June 30, 2025 compared to $17.1 million during the three months ended June 30, 2024. The decrease was primarily due to a decrease in user acquisition expense of $4.1 million. This was offset by an increase of other selling and marketing expense of $0.1 million.

Previous wording

Research and development expenses decreased by $4.3 million to $13.7 million during the three months ended March 31, 2025 compared to $18.0 million during the three months ended March 31, 2024. The decrease was primarily due to decreases in employee costs of $3.0 million, stock compensation of $0.8 million, facilities of $0.3 million, and other research and development expense of $0.2 million as a result of the 2024 Reorganization Plan.

Current wording

Research and development expenses decreased by $2.5 million to $14.2 million during the three months ended June 30, 2025 compared to $16.7 million during the three months ended June 30, 2024. The decrease was primarily due to decreases in employee costs of $2.2 million and stock compensation of $0.6 million as a result of the 2024 Reorganization Plan. This was offset by an increase of other research and development expense of $0.3 million.

Previous wording

General and administrative expenses increased by $0.1 million to $11.9 million during the three months ended March 31, 2025 compared to $11.8 million during the three months ended March 31, 2024. The increase is primarily due to increases in stock compensation of $0.3 million, facilities of $0.3 million, and other general and administrative expense of $0.1 million. This was offset by a reduction of employee costs of $0.6 million as a result of the 2024 Reorganization Plan.

Current wording

General and administrative expenses decreased by $0.2 million to $23.2 million during the six months ended June 30, 2025 compared to $23.4 million during the six months ended June 30, 2024. The decrease is primarily due to decreases in employee costs of $0.4 million and other general and administrative costs of $0.6 million. This was offset by an increase to stock compensation of $0.8 million as a result of the 2024 Reorganization Plan.

Previous wording

Depreciation and amortization expenses decreased by $1.9 million to $9.6 million during the three months ended March 31, 2025 compared to $11.6 million during the three months ended March 31, 2024. The decrease was primarily due to decreases of internal-use software amortization in connection with write-downs of certain assets during the second half of the year ended December 31, 2024 as a result of the 2024 Reorganization Plan.

Current wording

Depreciation and amortization expenses decreased by $2.1 million to $9.5 million during the three months ended June 30, 2025 compared to $11.7 million during the three months ended June 30, 2024. The decrease was primarily due to decreases of internal-use software amortization in connection with write-downs of certain assets during the second half of the year ended December 31, 2024 as a result of the 2024 Reorganization Plan, as well as the renewal of a licensing agreement.

Previous wording

Restructuring expenses increased by $0.7 million from the three months ended March 31, 2024 to the three months ended March 31, 2025. The increase was primarily due to increases in non-recurring legal expense of $0.4 million and various merger and acquisition opportunities of $0.3 million.

Current wording

Restructuring expenses decreased by $1.3 million to $0.1 million during the three months ended June 30, 2025 compared to $1.4 million during the three months ended June 30, 2024. The decrease was primarily due to decreases to non-recurring legal expense of $0.5 million, costs related to various merger and acquisition opportunities of $0.3 million, internal reorganization costs of $0.3 million, and other restructuring and related costs of $0.2 million.

Previous wording

The change in fair value of warrant liabilities is related to the warrants discussed in Note 11—Accrued and Other Liabilities to our condensed consolidated financial statements herein. Interest income, net is related to interest earned on cash and cash equivalents offset by fees and expenses associated with the Credit Agreement as discussed in Note 13—Long-Term Debt to our condensed consolidated financial statements herein. Other income primarily relates to gains or (losses) from equity investments and gains or (losses) from foreign currency transactions with our foreign subsidiaries.

Current wording

The change in fair value of warrant liabilities is related to the warrants discussed in Note 11—Accrued and Other Current Liabilities to our condensed consolidated financial statements herein. Interest income, net is related to interest earned on cash and cash equivalents offset by fees and expenses associated with the Credit Agreement as discussed in Note 13—Long-Term Debt to our condensed consolidated financial statements herein. Other income primarily relates to gains or (losses) from equity investments and gains or (losses) from foreign currency transactions with our foreign subsidiaries.

Previous wording

Provision for income taxes resulted in a tax expense of $0.3 million for the three months ended March 31, 2025, compared to a tax expense of $0.1 million for the three months ended March 31, 2024.

Current wording

Provision for income taxes resulted in a tax expense of $0.2 million for the three months ended June 30, 2025, compared to a tax expense of $0.5 million for the three months ended June 30, 2024.

Previous wording

Comparison of the three months ended March 31, 2025 versus the three months ended March 31, 2024

Current wording

Comparison of the three and six months ended June 30, 2025 versus the three and six months ended June 30, 2024

Previous wording

playGAMES AEBITDA was $18.3 million for the three months ended March 31, 2025 compared to $23.5 million for the three months ended March 31, 2024, a decrease of $5.1 million. playGAMES AEBITDA margin was 29.3% for the three months ended March 31, 2025 compared to 30.1% for the three months ended March 31, 2024. The decrease to playGAMES AEBITDA was a result of decreased virtual currency revenue primarily driven by decreases in DPU. This was offset by an increase in direct-to-consumer sales which incurs lower processing fees, driving a reduction in cost of sales, as well as a reduction of user acquisition costs.

Current wording

playGAMES AEBITDA was $16.5 million for the three months ended June 30, 2025 compared to $21.9 million for the three months ended June 30, 2024, a decrease of $5.4 million. playGAMES AEBITDA margin was 27.9% for the three months ended June 30, 2025 compared to 30.2% for the three months ended June 30, 2024. The decrease to playGAMES AEBITDA was a result of decreased virtual currency revenue primarily driven by decreases in DPU. This was offset by an increase in direct-to-consumer sales which incurs lower processing fees, driving a reduction in cost of sales, as well as a reduction of user acquisition costs.

Previous wording

playAWARDS playAWARDS AEBITDA was $(2.3) million for the three months ended March 31, 2025 compared to $(3.6) million for the three months ended March 31, 2024. The increase in AEBITDA can be attributed to a decrease in employee costs as a result of the 2024 Reorganization Plan.

Current wording

playAWARDS AEBITDA was $(2.4) million for the three months ended June 30, 2025 compared to $(3.5) million for the three months ended June 30, 2024. The increase in AEBITDA can be attributed to a decrease in employee costs as a result of the 2024 Reorganization Plan.

Previous wording

(1)Amounts reported during the three months ended March 31, 2024 relate to internal reorganization costs, including severance-related costs, and fees related to evaluating various merger, acquisition and restructuring opportunities. Amounts reported during the three months ended March 31, 2025 relate to internal reorganization costs, including severance-related costs, fees related to evaluating various merger and acquisition opportunities, and non-recurring legal costs.

Current wording

(1)Amounts reported during the three and six months ended June 30, 2024 relate to internal reorganization costs, including severance-related costs, fees related to evaluating various merger, acquisition and restructuring opportunities, and legal fees and others costs incurred in connection with litigation arising out of the Acies Merger transaction. Amounts reported during the three and six months ended June 30, 2025 relate to internal reorganization costs, including severance-related costs, fees related to evaluating various merger and acquisition opportunities, and non-recurring legal costs.

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $107.1 million, which consisted of cash on hand and money market mutual funds. As of March 31, 2025 we had restricted cash of $0.6 million. Historically, we have funded our operations, including capital expenditures, primarily through cash flow from operating activities. We believe that our existing cash and cash equivalents, the cash generated from operations, and the borrowing capacity under our Credit Agreement as described below will be sufficient to fund our operations and capital expenditures for at least the next twelve (12) months. However, we intend to continue to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new games and features or enhance our existing games, improve our operating infrastructure, or acquire complementary businesses, personnel and technologies. Accordingly, we may need to engage in equity or debt financing to secure additional funds or we may decide to do so opportunistically.

Current wording

As of June 30, 2025, we had cash and cash equivalents of $112.9 million, which consisted of cash on hand and money market mutual funds. As of June 30, 2025 we had restricted cash of $0.6 million. Historically, we have funded our operations, including capital expenditures, primarily through cash flow from operating activities. We believe that our existing cash and cash equivalents, the cash generated from operations, and the borrowing capacity under our Credit Agreement as described below will be sufficient to fund our operations and capital expenditures for at least the next twelve (12) months. However, we intend to continue to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new games and features or enhance our existing games, improve our operating infrastructure, or acquire complementary businesses, personnel and technologies. Accordingly, we may need to engage in equity or debt financing to secure additional funds or we may decide to do so opportunistically.

Previous wording

During the three months ended March 31, 2025, operating activities provided $3.3 million of net cash as compared to $5.0 million during the three months ended March 31, 2024. The decrease in cash provided from operating activities was primarily due to a decrease in net revenue, which was offset by a reduction in cost of sales, less employee costs due to a reduced headcount, and favorable change in operating assets and liabilities due to timing fluctuations in receivables being collected.

Current wording

During the six months ended June 30, 2025, operating activities provided $16.9 million of net cash as compared to $19.5 million during the six months ended June 30, 2024. The decrease in cash provided from operating activities was primarily due to a decrease in net revenue, which was offset by a reduction in cost of sales, less employee costs due to a reduced headcount, and a favorable change in operating assets and liabilities due to timing fluctuations in receivables being collected.

Previous wording

During the three months ended March 31, 2025, investing activities used $3.6 million of net cash as compared to $6.5 million during the three months ended March 31, 2024. The change in cash used in investing activities was due to less additions to internal-use software and property and equipment during the three months ended March 31, 2025.

Current wording

During the six months ended June 30, 2025, investing activities used $8.0 million of net cash as compared to $13.1 million during the six months ended June 30, 2024. The change in cash used in investing activities was due to less additions to internal-use software and property and equipment during the six months ended June 30, 2025.

Previous wording

During the three months ended March 31, 2025, financing activities used $2.5 million of net cash as compared to $4.3 million during the three months ended March 31, 2024. The change in cash used in financing activities was due to $1.3 million less in share repurchases and $0.3 million less in payments made for minimum guarantees.

Current wording

During the six months ended June 30, 2025, financing activities used $7.0 million of net cash as compared to $32.4 million during the six months ended June 30, 2024. The change in cash used in financing activities was due to $25.2 million less in share repurchases and $0.2 million less in payments made for tax withholding on stock-based compensation.