PLAYSTUDIOS, Inc.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
MYPS$4.680.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-11.
0001823878-26-000052
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001823878-26-000070
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 115 previous paragraphs and 129 current paragraphs.
72 unchanged; 38 reworded; 19 added; 4 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Reverse Stock Split
Current report
At the Company’s 2026 Annual Meeting of Stockholders held on July 10, 2026, stockholders authorized a reverse stock split of the Company’s Class A common stock (“Class A Common Stock”) and Class B common stock (“Class B Common Stock” and, together with the Class A Common Stock, “Common Stock”) at a ratio ranging from 1-for-10 to 1-for-30. On August 25, 2026, the Board approved a 1-for-10 reverse stock split (the “Reverse Stock Split”), which became effective at 5:00 p.m. Eastern Time on September 30, 2026. At that time, every 10 issued and outstanding shares of each class of Common Stock were automatically combined into one share of the same class. The Reverse Stock Split did not change the par value or authorized number of shares of either class of Common Stock or the voting rights of either class. The Class A Common Stock began trading on a split-adjusted basis on the Nasdaq Capital Market on October 1, 2026. Unless otherwise indicated, all share and per-share amounts presented in this Quarterly Report on Form 10-Q have been retrospectively adjusted to reflect the Reverse Stock Split.
Current report
Goodwill impairment
Current report
The Company recorded a goodwill impairment charge of $9.2 million during the three and nine months ended September 30, 2026. Refer to Note 10—Goodwill for more information.
Current report
Other Income (Loss), Net
Current report
(2)Amount reported consists of a charitable contribution.
Current report
During the nine months ended September 30, 2026, investing activities used $11.3 million of net cash as compared to $12.7 million during the nine months ended September 30, 2025. The change in cash used in investing activities was due to $1.3 million less additions to internal-use software and property and equipment during the nine months ended September 30, 2026.
Current report
Goodwill
Current report
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination or asset acquisition. We test goodwill for impairment at the reporting unit level on an annual basis as of October 1, or more frequently when events or circumstances indicate that the carrying value of a reporting unit may exceed its fair value. The determination of fair value requires significant judgment and involves the use of estimates and assumptions that are inherently uncertain.
Current report
During the three months ended September 30, 2026, we identified indicators of impairment for a reporting unit within our playGAMES reportable segment. As a result, we performed an interim quantitative goodwill impairment test as of September 30, 2026.
Current report
To estimate the fair value of the reporting unit, we utilized a weighted combination of the income approach and the market approach. Under the income approach, we applied a discounted cash flow analysis using projected future cash flows discounted at a rate of approximately 20%, which reflects our estimate of the weighted average cost of capital for the reporting unit. Under the market approach, we applied revenue multiples derived from publicly traded companies considered comparable to the reporting unit. The income approach and the market approach were weighted at 50% each in the overall fair value conclusion. The fair value measurement is classified as Level 3 within the fair value hierarchy due to the significant use of unobservable inputs.
Current report
The key assumptions underlying the fair value determination included:
Current report
•A discount rate of 20%, which reflects the risks inherent in the reporting unit’s projected cash flows, including execution risk associated with projected revenue growth, market conditions, and competitive dynamics;
Current report
•Projected revenue over the discrete forecast period, based on management’s estimates of future performance of the casual gaming portfolio;
Current report
•Revenue multiple of 1.5 derived from comparable publicly traded companies.
Current report
Based on the results of the quantitative impairment test, we determined that the carrying value of the reporting unit exceeded its estimated fair value, and accordingly, we recorded a non-cash goodwill impairment charge of $9.2 million during the three months ended September 30, 2026, which is reflected in “Goodwill impairment” in the Condensed Consolidated Statements of Operations. The impairment charge resulted in a reduction of the associated deferred tax liability and a corresponding deferred tax benefit of approximately $0.6 million.
Current report
Following the impairment charge, the remaining goodwill balance allocated to this reporting unit is $7.4 million. As a result of the impairment, the estimated fair value of the reporting unit approximates its carrying value as of September 30, 2026, and the remaining goodwill balance has no cushion against future impairment. The following table illustrates the sensitivity of the fair value conclusion to changes in the key assumptions, holding all other assumptions constant (in thousands):
Current report
The sensitivity analyses above are hypothetical and are not intended to be predictive of future results. The effect of a change in a particular assumption is calculated independently without adjusting any other assumption, and in practice changes in one assumption may be accompanied by offsetting or amplifying changes in other assumptions.
Current report
The estimates and assumptions used in our goodwill impairment analysis are inherently uncertain and reflect management’s best judgment at the time of the assessment. Actual results could differ from those estimates, and adverse changes in the business environment, operating performance, macroeconomic conditions, or capital market assumptions could result in additional goodwill impairment charges in future periods. We will continue to monitor the performance of this reporting unit and reassess the carrying value of the remaining goodwill balance if indicators of further impairment arise.
Removed paragraphs (4)
Previous report
Smaller Reporting Company ("SRC") Accommodations
Previous report
As an SRC, we have elected to use scaled disclosure accommodations permitted by the SEC, which means that this section does not include all disclosures required for larger reporting companies. Specifically, we are not required to include the contractual obligations table that larger companies must disclose.
Previous report
Other (Loss) Income, Net
Previous report
During the six months ended June 30, 2026, investing activities used $8.0 million of net cash as compared to $8.0 million during the six months ended June 30, 2025.
Reworded paragraphs (38)
Previous wording
We are a developer and publisher of free-to-play casual games for mobile and social platforms. Over our 13-year history, we developed a portfolio of free-to-play social casino games that are considered to be among the most innovative and unique in the genre. In 2021, we added our Tetris®-branded mobile game and in late 2022 we acquired Brainium, a developer and publisher of free-to-play casual games. Our games include the award-winning POP! Slots, myVEGAS Slots, my KONAMI Slots, MGM Slots Live, myVEGAS Blackjack, myVEGAS Bingo, Tetris®, Solitaire, Spider Solitaire, Jumbline 2, Sudoku, and Mahjong. Our games are based on original content as well as third-party licensed brands and are downloadable and playable for free on multiple social and mobile-based platforms, including the Apple App Store, Google Play Store, Amazon Appstore, and Facebook.
Current wording
We are a developer and publisher of free-to-play casual games for mobile and social platforms. Over our 13-year history, we developed a portfolio of free-to-play social casino games that are considered to be among the most innovative and unique in the genre. In 2021, we added our Tetris®-branded mobile game and in late 2022 we acquired Brainium, a developer and publisher of free-to-play casual games. Our games include the award-winning POP! Slots, myVEGAS Slots, my KONAMI Slots, MGM Slots Live, myVEGAS Blackjack, myVEGAS Bingo, Tetris®, Solitaire, Spider Solitaire, Jumbline 2, Sudoku, and Mahjong. Our games are based on original content as well as third-party licensed brands and are downloadable and playable for free on multiple social and mobile-based platforms, including the Apple App Store, Google Play Store, and Amazon Appstore.
Previous wording
We have primarily generated our revenue from the sale of in-game virtual currencies, which players can choose to purchase at any time to enhance their playing experience. Once purchased, our virtual currency cannot be withdrawn from the game, transferred from one game to another or from one player to another, or be redeemed for monetary value. Players who install our games receive free virtual currencies upon the initial launch of the game, and they may also collect virtual currencies free of charge at periodic intervals or through targeted marketing promotions. Players may exhaust the free virtual currencies and may choose to purchase additional virtual currencies. Additionally, players can send free “gifts” of virtual currencies to their friends on Facebook. Our revenue from virtual currencies has been generated world-wide, but is largely concentrated in North America.
Current wording
We have primarily generated our revenue from the sale of in-game virtual currencies, which players can choose to purchase at any time to enhance their playing experience. Once purchased, our virtual currency cannot be withdrawn from the game, transferred from one game to another or from one player to another, or be redeemed for monetary value. Players who install our games receive free virtual currencies upon the initial launch of the game, and they may also collect virtual currencies free of charge at periodic intervals or through targeted marketing promotions. Players may exhaust the free virtual currencies and may choose to purchase additional virtual currencies. Our revenue from virtual currencies has been generated world-wide, but is largely concentrated in North America.
Previous 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.
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, and Amazon Appstore. 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
Daily Payer Conversion is defined as DPU as a percentage of DAU on a particular day. Daily Payer Conversion is also sometimes referred to as "Percentage of Paying Users" or "PPU". The term "Average Daily Payer Conversion" is defined as the
Current wording
Daily Payer Conversion is defined as DPU as a percentage of DAU on a particular day. Daily Payer Conversion is also sometimes referred to as "Percentage of Paying Users" or "PPU". The term "Average Daily Payer Conversion" is defined as the Average DPU divided by Average DAU for a given period. We use Daily Payer Conversion and Average Daily Payer Conversion to help us understand the monetization of our active players.
Previous wording
Comparison of the three and six months ended June 30, 2026 versus the three and six months ended June 30, 2025
Current wording
Comparison of the three and nine months ended September 30, 2026 versus the three and nine months ended September 30, 2025
Previous wording
The following table summarizes our consolidated results of operations for the three and six months ended June 30, 2026 and 2025 (in thousands, except percentages):
Current wording
The following table summarizes our consolidated results of operations for the three and nine months ended September 30, 2026 and 2025 (in thousands, except percentages):
Previous wording
Net revenue decreased $9.6 million, or (7.9)%, to $112.1 million during the six months ended June 30, 2026 compared to $121.7 million during the six months ended June 30, 2025. The decrease was due to a $12.1 million decrease in virtual currency revenue primarily driven by decreases in DPU within certain games, which was partially offset by increased revenue due to our new growth initiatives and a $2.5 million increase in advertising revenue.
Current wording
Net revenue decreased $9.0 million, or (15.6)%, to $48.4 million during the three months ended September 30, 2026 compared to $57.4 million during the three months ended September 30, 2025. The decrease was due to an $8.3 million decrease in virtual currency revenue primarily driven by decreases in DAU and DPU within certain games, and a $0.7 million decrease in advertising revenue.
Previous wording
Net revenue decreased $4.9 million, or (8.3)%, to $54.2 million during the three months ended June 30, 2026 compared to $59.1 million during the three months ended June 30, 2025. The decrease was due to a $6.1 million decrease in virtual currency revenue primarily driven by decreases in DPU within certain games, which was partially offset by increased revenue due to our new growth initiatives and a $1.2 million increase in advertising revenue.
Current wording
Net revenue decreased $18.6 million, or (10.4)%, to $160.5 million during the nine months ended September 30, 2026 compared to $179.0 million during the nine months ended September 30, 2025. The decrease was due to a $20.4 million decrease in virtual currency revenue primarily driven by decreases in DAU and DPU within certain games, which was partially offset by a $1.8 million increase in advertising revenue.
Previous wording
Net revenue increased $0.6 million during the three months ended June 30, 2026 compared to the same period in prior year. The key performance indicators presented above are used by management to assess the playAWARDS segment's operating performance, however, are not indicative revenue metrics.
Current wording
Net revenue increased $0.2 million during the three months ended September 30, 2026 compared to the same period in prior year. The key performance indicators presented above are used by management to assess the playAWARDS segment's operating performance, however, are not indicative revenue metrics.
Previous wording
Net revenue increased $1.0 million during the six months ended June 30, 2026 compared to the same period in prior year. The key performance indicators presented above are used by management to assess the playAWARDS segment's operating performance, however, are not indicative revenue metrics.
Current wording
Net revenue increased $1.2 million during the nine months ended September 30, 2026 compared to the same period in prior year. The key performance indicators presented above are used by management to assess the playAWARDS segment's operating performance, however, are not indicative revenue metrics.
Previous wording
Cost of revenue decreased by $3.7 million to $10.8 million during the three months ended June 30, 2026 compared to $14.6 million during the three months ended June 30, 2025. The decrease was primarily related to a decrease in virtual currency revenue. As a percentage of revenue, cost of revenue decreased from 24.5% for the three months ended June 30, 2025 to 19.7% for the three months ended June 30, 2026 due to an increase in direct to consumer revenue, which incur lower processing fees.
Current wording
Cost of revenue decreased by $4.4 million to $9.2 million during the three months ended September 30, 2026 compared to $13.6 million during the three months ended September 30, 2025. The decrease was primarily related to a decrease in virtual currency revenue. As a percentage of revenue, cost of revenue decreased from 23.6% for the three months ended September 30, 2025 to 18.8% for the three months ended September 30, 2026 due to an increase in direct to consumer revenue, which incur lower processing fees.
Previous wording
Cost of revenue decreased by $7.5 million to $22.9 million during the six months ended June 30, 2026 compared to $30.3 million during the six months ended June 30, 2025. 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 six months ended June 30, 2025 to 20.2% for the six months ended June 30, 2026 due to an increase in direct to consumer revenue, which incur lower processing fees.
Current wording
Cost of revenue decreased by $11.9 million to $32.0 million during the nine months ended September 30, 2026 compared to $44.0 million during the nine months ended September 30, 2025. The decrease was primarily related to a decrease in virtual currency revenue. As a percentage of revenue, cost of revenue decreased from 24.5% for the nine months ended September 30, 2025 to 19.7% for the nine months ended September 30, 2026 due to an increase in direct to consumer revenue, which incur lower processing fees.
Previous wording
Selling and marketing expenses increased by $10.1 million to $36.3 million during the six months ended June 30, 2026 compared to $26.3 million during the six months ended June 30, 2025. The increase was primarily due to increases in user acquisition expense of $9.3 million, which is attributable to the Company's investment in our growth initiatives, stock compensation of $0.3 million, outside services of $0.3 million, and brand and other marketing expense of $0.2 million.
Current wording
Selling and marketing expenses decreased by $5.4 million to $8.8 million during the three months ended September 30, 2026 compared to $14.2 million during the three months ended September 30, 2025. The decrease was primarily due to decreases in user acquisition expense of $3.3 million, brand and other marketing expense of $1.7 million, and employee costs of $0.4 million.
Previous wording
Selling and marketing expenses increased by $2.2 million to $15.3 million during the three months ended June 30, 2026 compared to $13.1 million during the three months ended June 30, 2025. The increase was primarily due to increases in user acquisition expense of $2.7 million, which is attributable to the Company's investment in our growth initiatives, and stock compensation of $0.2 million. This was offset by a decrease of brand and other marketing expense of $0.7 million.
Current wording
Selling and marketing expenses increased by $4.7 million to $45.1 million during the nine months ended September 30, 2026 compared to $40.5 million during the nine months ended September 30, 2025. The increase was primarily due to increases in user acquisition expense of $6.0 million, which was attributable to the Company's investment in our growth initiatives, outside services of $0.4 million, and employee costs of $0.4 million. This was offset by a decrease of brand and other marketing expense of $2.1 million.
Previous wording
Research and development expenses increased by $0.9 million to $15.1 million during the three months ended June 30, 2026 compared to $14.2 million during the three months ended June 30, 2025. The increase was primarily due to increases in employee costs of $0.9 million and other research and development expense of $0.6 million. This was offset by a decrease of stock compensation of $0.6 million.
Current wording
Research and development expenses decreased by $0.4 million to $14.4 million during the three months ended September 30, 2026 compared to $14.8 million during the three months ended September 30, 2025. The decrease was primarily due to decreases in facilities of $0.2 million, employee costs of $0.1 million, and other research and development expense of $0.4 million. This was offset by an increase of outside services of $0.3 million.
Previous wording
Research and development expenses increased by $2.0 million to $29.9 million during the six months ended June 30, 2026 compared to $27.9 million during the six months ended June 30, 2025. The increase was primarily due to increases in employee costs of $2.0 million, information technology expense of $0.6 million, facilities expense of $0.5 million, and other research and development expense of $0.2 million. This was offset by a decrease of stock compensation of $1.3 million.
Current wording
Research and development expenses increased by $1.6 million to $44.3 million during the nine months ended September 30, 2026 compared to $42.7 million during the nine months ended September 30, 2025. The increase was primarily due to increases in information technology expense of $0.7 million, outside services of $0.6 million, and employee costs of $0.5 million. This was offset by a decrease of other research and development expense of $0.2 million.
Previous wording
General and administrative expenses decreased by $2.6 million to $8.8 million during the three months ended June 30, 2026 compared to $11.3 million during the three months ended June 30, 2025. The decrease is primarily due to decreases in stock compensation of $1.9 million and other general and administrative cost of $0.7 million.
Current wording
General and administrative expenses decreased by $3.5 million to $8.6 million during the three months ended September 30, 2026 compared to $12.1 million during the three months ended September 30, 2025. The decrease is primarily due to decreases in charitable contributions of $1.3 million, employee costs of $1.1 million, and other general and administrative cost of $1.1 million.
Previous wording
General and administrative expenses decreased by $5.0 million to $18.2 million during the six months ended June 30, 2026 compared to $23.2 million during the six months ended June 30, 2025. The decrease is primarily due to decreases in stock compensation of $3.2 million, a charitable donation of $0.3 million, information technology expense of $0.3 million, facilities expense of $0.3 million, and other general and administrative costs of $0.9 million.
Current wording
General and administrative expenses decreased by $8.5 million to $26.8 million during the nine months ended September 30, 2026 compared to $35.3 million during the nine months ended September 30, 2025. The decrease is primarily due to decreases in employee costs of $4.0 million, charitable donations of $1.6 million, outside services of $0.5 million, information technology expense of $0.4 million, and other general and administrative costs of $2.0 million.
Previous wording
Depreciation and amortization expenses increased by $0.2 million to $9.7 million during the three months ended June 30, 2026 compared to $9.5 million during the three months ended June 30, 2025.
Current wording
Depreciation and amortization expenses decreased by $0.2 million to $9.3 million during the three months ended September 30, 2026 compared to $9.6 million during the three months ended September 30, 2025.
Previous wording
Depreciation and amortization expenses increased by $0.4 million to $19.5 million during the six months ended June 30, 2026 compared to $19.2 million during the six months ended June 30, 2025.
Current wording
Depreciation and amortization expenses increased by $0.1 million to $28.9 million during the nine months ended September 30, 2026 compared to $28.7 million during the nine months ended September 30, 2025.
Previous wording
Restructuring expenses increased by $4.7 million to $4.8 million during the three months ended June 30, 2026 compared to $0.1 million during the three months ended June 30, 2025. The increase was primarily due to increases in internal reorganization costs of $3.0 million, non-recurring legal expense of $1.6 million, and costs related to various merger and acquisition opportunities of $0.1 million.
Current wording
Restructuring expenses increased by $7.9 million to $9.2 million during the three months ended September 30, 2026 compared to $1.3 million during the three months ended September 30, 2025. The increase was primarily due to increases in internal reorganization costs of $9.0 million. This was offset by a decrease in costs related to various merger and acquisition opportunities of $1.1 million.
Previous wording
Restructuring expenses increased by $8.0 million to $9.4 million during the six months ended June 30, 2026 compared to $1.4 million during the six months ended June 30, 2025. The increase was primarily due to increases in internal reorganization costs of $5.3 million, costs related to various merger and acquisition opportunities of $1.4 million, non-recurring legal expense of $1.2 million, and other restructuring activities of $0.1 million.
Current wording
Restructuring expenses increased by $16.0 million to $18.6 million during the nine months ended September 30, 2026 compared to $2.6 million during the nine months ended September 30, 2025. The increase was primarily due to increases in internal reorganization costs of $14.3 million, non-recurring legal expense of $1.2 million, costs related to various merger and acquisition opportunities of $0.3 million, and other restructuring activities of $0.2 million.
Previous wording
The change in fair value of contingent consideration is related to the Pixode Acquisition discussed in Note 7—Fair Value Measurement. 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 12—Long-Term Debt to our condensed consolidated financial statements herein. Other (loss) income primarily relates to gains or (losses) from equity investments, gains or (losses) from foreign currency transactions with our foreign subsidiaries, and the change in fair value of warrant liabilities is related to the warrants discussed in Note 10—Accrued and Other Current Liabilities to our condensed consolidated financial statements herein.
Current wording
The change in fair value of contingent consideration is related to the Pixode Acquisition discussed in Note 7—Fair Value Measurement. 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 (loss) 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 $1.5 million for the three months ended June 30, 2026, compared to a tax expense of $0.2 million for the three months ended June 30, 2025.
Current wording
Provision for income taxes resulted in a tax expense of an immaterial amount for the three months ended September 30, 2026, compared to a tax expense of $0.3 million for the three months ended September 30, 2025.
Previous wording
Provision for income taxes resulted in a tax expense of $2.1 million for the six months ended June 30, 2026, compared to a tax expense of $0.6 million for the six months ended June 30, 2025.
Current wording
Provision for income taxes resulted in a tax expense of $2.1 million for the nine months ended September 30, 2026, compared to a tax expense of $0.9 million for the nine months ended September 30, 2025.
Previous wording
Comparison of the three and six months ended June 30, 2026 versus the three and six months ended June 30, 2025
Current wording
Comparison of the three and nine months ended September 30, 2026 versus the three and nine months ended September 30, 2025
Previous wording
playGAMES AEBITDA was $20.1 million for the six months ended June 30, 2026 compared to $34.8 million for the six months ended June 30, 2025, a decrease of $14.6 million. playGAMES AEBITDA margin was 18.0% for the six months ended June 30, 2026 compared to 28.6% for the six months ended June 30, 2025. The decrease to playGAMES AEBITDA was a result of decreased virtual currency revenue, primarily driven by decreases in DPU, and an increase of user acquisition expense. This was partially offset by an increase in direct-to-consumer sales which incurs lower processing fees, driving a reduction in cost of sales.
Current wording
playGAMES AEBITDA was $14.5 million for the three months ended September 30, 2026 compared to $13.4 million for the three months ended September 30, 2025, an increase of $1.1 million. playGAMES AEBITDA margin was 29.9% for the three months ended September 30, 2026 compared to 23.3% for the three months ended September 30, 2025. The increase to playGAMES AEBITDA was a result of decreased operating expense as a result of the 2026 Reorganization Plan, decreased user acquisition expense, and an increase in direct-to-consumer sales which incur lower processing fees, driving a reduction in cost of sales.
Previous wording
playGAMES AEBITDA was $11.5 million for the three months ended June 30, 2026 compared to $16.5 million for the three months ended June 30, 2025, a decrease of $5.0 million. playGAMES AEBITDA margin was 21.2% for the three months ended June 30, 2026 compared to 27.9% for the three months ended June 30, 2025. The decrease to playGAMES AEBITDA was a result of decreased virtual currency revenue, primarily driven by decreases in DPU, and an increase of user acquisition expense. This was partially offset by an increase in direct-to-consumer sales which incurs lower processing fees, driving a reduction in cost of sales.
Current wording
playGAMES AEBITDA was $34.6 million for the nine months ended September 30, 2026 compared to $48.2 million for the nine months ended September 30, 2025, a decrease of $13.6 million. playGAMES AEBITDA margin was 21.6% for the nine months ended September 30, 2026 compared to 26.9% for the nine months ended September 30, 2025. The decrease to playGAMES AEBITDA was a result of decreased virtual currency revenue, primarily driven by decreases in DPU, and an increase of user acquisition expense. This was partially offset by a reduction in cost of sales as a result of decreased revenue and an increase in direct-to-consumer sales which incur lower processing fees.
Previous wording
playAWARDS AEBITDA was $(0.9) million for the three months ended June 30, 2026 compared to $(2.4) million for the three months ended June 30, 2025. The increase in AEBITDA can be attributed to an increase in revenue and a decrease in employee and other costs.
Current wording
playAWARDS AEBITDA was $(1.1) million for the three months ended September 30, 2026 compared to $(2.4) million for the three months ended September 30, 2025. The increase in AEBITDA can be attributed to an increase in revenue and a decrease in operating expense as a result of the 2026 Reorganization Plan.
Previous wording
playAWARDS AEBITDA was $(2.4) million for the six months ended June 30, 2026 compared to $(4.7) million for the six months ended June 30, 2025. The increase in AEBITDA can be attributed to an increase in revenue and a decrease in employee and other costs.
Current wording
playAWARDS AEBITDA was $(3.5) million for the nine months ended September 30, 2026 compared to $(7.1) million for the nine months ended September 30, 2025. The increase in AEBITDA can be attributed to an increase in revenue and a decrease in operating expense as a result of the 2026 Reorganization Plan.
Previous wording
Consolidated Adjusted EBITDA, or Consolidated AEBITDA, as used herein, is a non-GAAP financial performance measure that is presented as a supplemental disclosure and is reconciled to net loss and net loss margin as the most directly comparable GAAP measures. We define Consolidated AEBITDA as net income before interest, income taxes, depreciation and amortization, restructuring and related costs (consisting primarily of severance and other restructuring related costs), stock-based compensation expense, changes in fair value of warrant liabilities, and other income and expense items (including special infrequent items, foreign currency gains and losses, and other non-cash items). We also use Consolidated AEBITDA Margin, another non-GAAP measure, which we calculate as the percentage of Consolidated AEBITDA to revenue.
Current wording
Consolidated Adjusted EBITDA, or Consolidated AEBITDA, and Consolidated AEBITDA Margin are non-GAAP financial performance measures presented as supplemental disclosures and reconciled to net loss and net loss margin, respectively, the most directly comparable GAAP measures. We define Consolidated AEBITDA as net income before interest, income taxes, depreciation and amortization, restructuring and related costs (consisting primarily of severance and other restructuring related costs), stock-based compensation expense, changes in fair value of warrant liabilities, and other income and expense items (including special infrequent items, foreign currency gains and losses, and other non-cash items). We define Consolidated AEBITDA Margin as the percentage of Consolidated AEBITDA to revenue.
Previous wording
We use Consolidated AEBITDA and Consolidated AEBITDA Margin to monitor and evaluate the performance of our business operations, facilitate internal comparisons of our operating performance, and to analyze and evaluate decisions regarding future budgets and initiatives. We believe that both measures are useful because they provide investors with information regarding our operating performance that is used by our management in its reporting and planning processes. Consolidated AEBITDA and Consolidated AEBITDA Margin as calculated herein may not be comparable to similarly titled measures and disclosures reported by other companies.
Current wording
We use Consolidated AEBITDA and Consolidated AEBITDA Margin to monitor and evaluate the performance of our business operations, facilitate internal comparisons of our operating performance, and to analyze and evaluate decisions regarding future budgets and initiatives. We believe that both measures are useful because they provide investors with information regarding our operating performance that is used by our management in its reporting and planning processes. Consolidated AEBITDA and Consolidated AEBITDA Margin as calculated herein may not be comparable to similarly titled measures and disclosures reported by other companies. These measures should be considered in addition to, and not as substitutes for, net income (loss), net income (loss) margin or other measures prepared in accordance with GAAP.
Previous wording
(1)Amounts reported during the three and six months ended June 30, 2026 and 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.
Current wording
(1)Amounts reported during the three and nine months ended September 30, 2026 and September 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
(2)Amounts reported in “Other, net” include the change in fair value of the Warrants, interest expense, interest income, gains/losses from equity investments, foreign currency gains/losses, and non-cash gains/losses on the disposal of assets.
Current wording
(3)Amounts reported in “Other, net” include the change in fair value of the Warrants, interest expense, interest income, gains/losses from equity investments, foreign currency gains/losses, and non-cash gains/losses on the disposal of assets.
Previous wording
As of June 30, 2026, we had cash and cash equivalents of $102.7 million, which consisted of cash on hand and money market mutual funds. As of June 30, 2026 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, and cash generated from operations, 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 September 30, 2026, we had cash and cash equivalents of $95.9 million, which consisted of cash on hand and money market mutual funds. As of September 30, 2026 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, and cash generated from operations, 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 six months ended June 30, 2026, operating activities provided $9.4 million of net cash as compared to $16.9 million during the six months ended June 30, 2025. The decrease in cash provided from operating activities was primarily due to a decrease in revenue, primarily driven by decreases in DPU.
Current wording
During the nine months ended September 30, 2026, operating activities provided $17.4 million of net cash as compared to $22.6 million during the nine months ended September 30, 2025. The decrease in cash provided from operating activities was primarily due to a decrease in revenue, driven by decreases in DPU.
Previous wording
During the six months ended June 30, 2026, financing activities used $3.5 million of net cash as compared to $7.0 million during the six months ended June 30, 2025. The change in cash used in financing activities was due to $1.9 million less in share repurchases, $1.0 million less in payments made for tax withholding on stock-based compensation, and $0.7 million less in payments for minimum guarantee liabilities.
Current wording
During the nine months ended September 30, 2026, financing activities used $14.9 million of net cash as compared to $14.5 million during the nine months ended September 30, 2025. The change in cash used in financing activities was due to $2.3 million more in share repurchases, which was offset by $1.2 million less in payments made for tax withholding on stock-based compensation and $0.8 million less in payments for minimum guarantee liabilities during the nine months ended September 30, 2026.
Previous wording
There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in our 2025 Annual Report on Form 10-K filed on March 16, 2026 and amended on Form 10-K/A filed on April 3, 2026.
Current wording
Other than goodwill described below, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in our 2025 Annual Report on Form 10-K filed on March 16, 2026 and amended on Form 10-K/A filed on April 3, 2026.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Average DPU divided by Average DAU for a given period. We use Daily Payer Conversion and Average Daily Payer Conversion to help us understand the monetization of our active players.