PLAYSTUDIOS, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, in thousands, unless otherwise noted)

NOTE 1—BACKGROUND AND BASIS OF PRESENTATION

Organization and Description of Business

PLAYSTUDIOS, Inc. (the "Company" or "PLAYSTUDIOS"), formerly known as Acies Acquisition Corp. ("Acies"), consummated its business combination (the "Acies Merger") with PlayStudios, Inc. ("Old PLAYSTUDIOS") on June 21, 2021 (the "Closing Date") pursuant to the Agreement and Plan of Merger, dated February 1, 2021 (the "Merger Agreement"). In connection with the Acies Merger, Acies changed its name to PLAYSTUDIOS, Inc. and domesticated from the Cayman Islands to the State of Delaware.

The Company develops and operates mobile and online social gaming applications (“games” or “game”), certain of which incorporate a loyalty program offering “real world” rewards provided by a network of rewards partners. The Company’s games are free-to-play and available through major digital platforms, including the Apple App Store, Google Play Store, and Amazon Appstore (collectively, the "platforms" or "platform operators"), and through the Company's websites and other direct-to-consumer channels. The Company creates games based on its own original content as well as licensed third-party brands. The Company primarily generates revenue from in-game purchases of virtual currency and in-game advertising.

Unless the context otherwise requires, all references herein to “PLAYSTUDIOS,” the “Company,” “we,” “us,” and “our” refer collectively to PLAYSTUDIOS, Inc. and its subsidiaries.

Basis of Presentation and Consolidation

The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements include the accounts of PLAYSTUDIOS, Inc. and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Certain reclassifications in these financial statements have been made to comply with US GAAP applicable to public companies and SEC Regulation S-X.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2025.

The significant accounting policies referenced in the annual consolidated financial statements of the Company as of December 31, 2025 have been applied consistently in these unaudited interim condensed consolidated financial statements. In the opinion of the Company, the accompanying unaudited financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position as of September 30, 2026, its results of operations for the three and nine months ended September 30, 2026, and 2025, and cash flows for the nine months ended September 30, 2026, and 2025. The Condensed Consolidated Balance Sheet as of December 31, 2025 was derived from the audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.

On September 30, 2026, the Company effected a 1-for-10 reverse stock split of its Class A and Class B common stock (the "Reverse Stock Split"). The Reverse Stock Split did not change the authorized number of shares or the par value of either class of common stock. All share and per share amounts in these condensed consolidated financial statements have been adjusted to reflect the reverse stock split for all periods presented, except as otherwise indicated.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and notes thereto. Significant estimates and assumptions reflected in the Company’s condensed consolidated financial statements include the estimated consumption rate of virtual goods that is used in the determination of revenue recognition, useful lives of property and equipment and definite-lived intangible assets, the expensing and capitalization of research and development costs for internal-use software, assumptions used in accounting for income taxes, stock-based compensation, the fair value of derivative financial instruments, the fair value of contingent consideration, and the evaluation of goodwill and long-lived assets for impairment. The Company believes the accounting estimates are appropriate and reasonably determined. Due to the inherent uncertainties in making these estimates, actual amounts could differ materially.

Smaller Reporting Company

As of September 30, 2026, the Company qualified as a Smaller Reporting Company ("SRC") as defined under Rule 12b-2 of the Securities Exchange Act of 1934. As an SRC, we are eligible for and have elected to use certain scaled disclosure accommodations in this Quarterly Report on Form 10-Q. These accommodations allow us to provide reduced executive compensation disclosures, fewer years of audited financial statements, and less extensive narrative disclosures compared to larger reporting companies. The Company reassesses its SRC status annually as of the last business day of its second fiscal quarter, with its next annual determination scheduled for June 30, 2027.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, $6.3 million previously classified within accrued and other current liabilities as of December 31, 2025 has been reclassified to accounts payable to better reflect the nature of those obligations as amounts owed to vendors and suppliers in the ordinary course of business. These reclassifications had no effect on previously reported total current liabilities, total liabilities, or net loss.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies and estimates remained unchanged from 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.

Recently Issued Accounting Standards Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expense. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses. The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses, which includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. The Company is assessing the guidance, noting the adoption impacts disclosure only.

In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which revises the approach to accounting for internal-use software costs by eliminating all references to the stages of software development projects, thereby making the guidance adaptable to a variety of software development methodologies. This guidance is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods, on a prospective, modified or retrospective basis, with early adoption permitted. The Company is currently assessing the effect the guidance will have on the Company's financial condition, results of operations and cash flows.

NOTE 3—SEGMENT REPORTING

The Company has aggregated its operating segments into the following reportable segments: playGAMES and playAWARDS, which represent our different products and services. A detailed discussion regarding the products and services from which each reportable segment derives its revenue is included in our 2025 Annual Report on Form 10-K filed on March 16, 2026 and amended on Form 10-K/A filed on April 3, 2026.

Adjusted EBITDA ("AEBITDA") is the Company’s reportable segment GAAP measure, which management utilizes as the primary profit measure for its reportable segments and underlying operating segments. The Company defines AEBITDA as net income (loss) before interest, income taxes, depreciation and amortization, restructuring and related costs (consisting primarily of severance and other restructuring related costs), stock-based compensation expense, and certain other income and expense items (including special infrequent items, foreign currency gains and losses, and other non-cash items).

Expenses include indirect costs that are allocated to operating segments based on a reasonable allocation methodology, which are generally related to sales and marketing activities, general and administrative overhead, and costs associated with administering the playAWARDS myVIP program in the playGAMES applications. Net revenue excludes transactions between the Company's operating segments. Certain expenses incurred by playAWARDS have been allocated to playGAMES at cost. The chief operating decision maker does not evaluate operating segments using asset information.

The following table presents the Company’s segment information:

(1)Consists of legal, rent, information technology, outside services, marketing, and other general and administrative expenses.

(1)Consists of legal, rent, information technology, outside services, marketing, and other general and administrative expenses.

2026 Reorganization Plan

On March 10, 2026, the Company initiated an internal reorganization plan (the “2026 Reorganization Plan”) intended to enhance efficiency and reduce operating expenses. The 2026 Reorganization Plan provides for a reduction of approximately 27% of the Company’s current total global workforce as of March 10, 2026. The Company expects total charges of approximately $4.5 million to $7.0 million in connection with the 2026 Reorganization Plan, consisting primarily of employee transition costs, severance payments, employee benefits, stock-based compensation, and lease termination and other facility-related costs, substantially all of which are expected to be recognized during 2026.

The following table presents the charges incurred under the 2026 Reorganization Plan, whichare included in “Restructuring and related” in the Condensed Consolidated Statements of Operations:

(1)Lease-related charges primarily represent accelerated amortization of operating lease right of use ("ROU") assets due to a change in useful life. See Note 12—Leases for further discussion.

(2)Asset-related charges primarily represent impairment and loss on disposal of property and equipment.

The following table summarizes the activity related to the liabilities associated with the Company's 2026 Reorganization Plan:

NOTE 4—RELATED-PARTY TRANSACTIONS

The following table is a summary of balance sheet assets and liabilities from related parties:

The Company’s revenues and expenses recognized from related parties were immaterial during the three and nine months ended September 30, 2026 and 2025.

MGM Resorts International (“MGM”)

MGM is a stockholder and owned approximately 1.7 million and 1.7 million shares of the Company's outstanding Class A common stock as of September 30, 2026 and December 31, 2025, respectively.

In April 2011, the Company entered into a joint marketing agreement with MGM (as amended, the “Marketing Agreement”) in exchange for assistance with marketing campaigns and the certain rights to utilize MGM’s licensed marks and licensed copyrights for the development of certain of the Company’s social casino games. The initial term of the Marketing Agreement was forone year from the go-live date of the first such game in July 2012, with automatic renewal provisions based on the games achieving specified performance criteria. The Marketing Agreement was recorded as an indefinite-lived intangible asset.

PLAYSTUDIOS Impact Fund

During the three and nine months ended September 30, 2025, the Company made charitable contributions of $1.3 million and $1.5 million to the PLAYSTUDIOS Impact Fund (the “Fund”), a tax-exempt private foundation established by the Company and administered by certain members of the Company’s management team. No contributions were made during the three and nine months ended September 30, 2026. These individuals serve as officers and directors of the Fund but receive no compensation in such capacities. The Fund supports charitable causes selected based on input from Company employees and customers. The contributions were recorded in "General and administrative" in the accompanying Condensed Consolidated Statements of Operations.

NOTE 5—RECEIVABLES, NET

Receivables, net consist of the following:

Trade receivables generally represent amounts due to the Company from social and mobile platform operators, including Apple, Google, and direct-to-consumer ("DTC") payment processors, including Xsolla and Appcharge. Trade receivables are recorded when the right to consideration becomes unconditional.

Concentration of Credit Risk

The following table summarizes the major receivables of the Company as a percentage of the total trade receivables as of the dates indicated:

As of September 30, 2026 and December 31, 2025, the Company did not have any additional counterparties that exceeded 10% of the Company’s total trade receivables.

NOTE 6—PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

NOTE 7—FAIR VALUE MEASUREMENT

The carrying values of the Company’s cash and cash equivalents, receivables, net, prepaid expenses and other current assets, and accounts payable approximate fair value due to their short maturities.

On July 1, 2024, PLAYSTUDIOS US, LLC, a direct wholly-owned subsidiary of the Company entered into an asset purchase agreement to acquire certain tangible and intangible assets and assumed certain liabilities from Pixode Games Limited (“Pixode"), a mobile casual games publisher ("Pixode Acquisition"). The fair value of our Level 3 contingent consideration liabilities relates to the Pixode Acquisition.

On September 30, 2026, the Company determined to cease operations of Tetris Block Party, the product developed from the assets acquired in the Pixode Acquisition. In connection with this decision and the product’s financial performance, the Company reassessed the fair value of the contingent consideration liability associated with the Pixode acquisition and reduced it tozero as of September 30, 2026. This remeasurement resulted in a gain of $8.0 million and $8.3 million in the Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2026, respectively.

As of December 31, 2025, significant unobservable inputs included a discount rate of approximately 12.1% and the probability of revenue growth over the same three year period.

NOTE 8—PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

The aggregate depreciation expense for property and equipment, net is reflected in “Depreciation and amortization” in the Condensed Consolidated Statements of Operations. During the three months ended September 30, 2026 and 2025, depreciation expense was $0.7 million and $0.9 million, respectively. During the nine months ended September 30, 2026 and

2025, depreciation expense was $2.3 million and $3.0 million, respectively. There wereno material impairment charges recorded for the three and nine months ended September 30, 2026 and 2025.

Property and equipment, net by region consists of the following:

NOTE 9—INTANGIBLE ASSETS AND INTERNAL-USE SOFTWARE, NET

Intangible Assets

The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset other than goodwill:

During the three months ended September 30, 2026 and 2025, intangible asset and internal-use software amortization was $8.6 million and $8.7 million, respectively. During the nine months ended September 30, 2026 and 2025, intangible asset and internal-use software amortization was $26.6 million and $25.7 million, respectively. The aggregate amortization expense for amortizable intangible assets and internal-use software is reflected in “Depreciation and amortization” in the Condensed Consolidated Statements of Operations.

During the three and nine months ended September 30, 2026, intangible assets impairment charges were $6.7 million and $6.7 million, respectively. These charges are reflected in “Restructuring and related” in the Condensed Consolidated Statements of Operations. The impairments were triggered by management's decision to cease operations oftwo products. As a result of these decisions, the Company determined that the carrying values of the associated long-lived asset groups were not recoverable. The Company concluded that the fair value of each asset group waszero because the assets have no alternative use and will generate no future cash flows, and the full carrying values were written off accordingly.

As of September 30, 2026, the estimated annual amortization expense is as follows:

NOTE 10—GOODWILL

Goodwill

During the three months ended September 30, 2026, the Company identified indicators of potential impairment for a reporting unit within the playGAMES reportable segment. As a result, the Company performed an interim quantitative goodwill impairment test for the reporting unit as of September 30, 2026.

To determine the fair value of the reporting unit, the Company utilized a weighted combination of the income approach and the market approach. Under the income approach, the Company estimated fair value using a discounted cash flow analysis, which required significant judgment with respect to forecasted revenue growth rates, operating margins, and a discount rate of approximately 20.0%. Under the market approach, the Company estimated fair value using relevant market multiples derived from publicly traded companies considered comparable to the reporting unit. The fair value measurement is classified as Level 3 within the fair value hierarchy as it is based primarily on unobservable inputs reflecting the Company's own assumptions about the factors that market participants would use in pricing the reporting unit.

Based on the results of the quantitative impairment test, the Company determined that the carrying value of the reporting unit exceeded its estimated fair value, and accordingly, the Company recorded a goodwill impairment charge of $9.2 million during the three and nine months ended September 30, 2026, which is reflected in “Goodwill impairment” in the Condensed Consolidated Statements of Operations.

The goodwill was acquired in connection with an asset acquisition and a portion is amortized over 15 years for income tax purposes pursuant to Section 197 of the Internal Revenue Code. The impairment charge resulted in a reduction of the associated deferred tax liability, and accordingly a deferred tax benefit of approximately $0.6 million was recognized during the three months ended September 30, 2026.

The following table provides the changes in the carrying amount of goodwill for the playGAMES reportable segment for the nine months ended September 30, 2026 and December 31, 2025:

NOTE 11—ACCRUED AND OTHER CURRENT LIABILITIES

Accrued liabilities consist of the following:

Accrued Litigation

On November 13, 2023, Sandra Tucker Duckworth, a purported citizen of Tennessee, filed a civil lawsuit against PLAYSTUDIOS US, LLC in the Circuit Court for the 14th Judicial District of Tennessee (the "Duckworth Lawsuit") alleging that PLAYSTUDIOS US, LLC makes available online games of chance that constitute illegal gambling under Tennessee law and seeking to recover, under Tennessee's loss recovery act, all sums paid by Tennessee residents to PLAYSTUDIOS US, LLC in its online gambling games during the period beginning one year before the filing of the lawsuit until the case is resolved, excluding recovery of money lost by a Tennessee resident who lost $75,000 or more during the statute of limitations period. The plaintiff claims to seek this recovery for the benefit of each individual player's spouse, or if not spouse, child or children, and if not child or children, the next of kin. As of September 30, 2026, the Duckworth Lawsuit is stayed pending the "Settlement" described below. The Company believes the claims are without merit and if the Settlement is not completed, intends to vigorously defend against them; however, there can be no assurance that the Company would be successful in the defense of this litigation.

On August 22, 2024, James Scott Tipmore, a purported citizen of Kentucky, filed a civil lawsuit against PLAYSTUDIOS US, LLC in the United States District Court for the Western District of Kentucky (the "Tipmore Lawsuit"), alleging that PLAYSTUDIOS US, LLC makes available online games of chance that constitute illegal gambling under Kentucky law and seeking to recover, under Kentucky's loss recovery act, treble the sums paid by Kentucky residents to PLAYSTUDIOS US, LLC in its online gambling games during the period beginning five years before the filing of the lawsuit until the case is resolved. As of September 30, 2026, the Tipmore Lawsuit is stayed pending the "Settlement" described below. The Company believes the claims are without merit and if the Settlement is not completed, intends to vigorously defend against them; however, there can be no assurance that the Company would be successful in the defense of this litigation.

The Company received four demands for arbitration during 2023 claiming that the games operated by PLAYSTUDIOS US, LLC constitute illegal gambling under the laws of various states. As of September 30, 2026, three of the demands for arbitration have been stayed pending the "Settlement" described below (the "State Arbitration Demands"). These demands generally attempt to recover amounts spent by third parties on the Company’s games by relying on state gambling loss recovery statutes and/or by seeking to have the applicable Terms of Service declared invalid. The Company believes that the claims are without merit and if the Settlement is not completed, the Company intends to vigorously defend against them; however, there can be no assurance that the Company would be successful in the arbitration proceedings.

In January 2025, the Company reached an agreement in principle to settle the Pilati Lawsuit, Duckworth Lawsuit, Tipmore Lawsuit, and State Arbitration Demands in the form of a six-state class action (the "Settlement"). As of February 17, 2025, the Pilati Lawsuit, Duckworth Lawsuit, Tipmore Lawsuit, and State Arbitration Demands had been stayed. The parties are currently in the process of drafting settlement documentation and related court filings. The settlement will be subject to approval by the court in which the class action case is filed. It is not currently known when the settlement will be finalized.

As of September 30, 2026 and December 31, 2025 the Company accrued $4.7 million and $3.2 million, respectively, in connection with the Pilati Lawsuit, Duckworth Lawsuit, Tipmore Lawsuit, and State Arbitration Demands.

Warrants

Upon the closing of the Acies Merger, there were approximately 7.2 million publicly-traded redeemable warrants to purchase shares of Class A common stock (the "Public Warrants") and 3.8 million redeemable warrants to purchase shares of Class A common stock initially issued to Acies Acquisition, LLC (the "Sponsor") in a private placement (the "Private Warrants") by Acies. Each whole Public Warrant entitled the registered holder to purchaseone whole share of the Company’s Class A common stock at a price of $11.50 in cash per share, subject to adjustment. The share and exercise price amounts in this paragraph reflect the historical terms of the Warrants prior to their expiration and have not been adjusted to reflect the Reverse Stock Split.

All outstanding Public Warrants and Private Warrants ("Warrants") expired in accordance with their terms on June 21, 2026. No shares of Class A common stock were issued in connection with the Warrants. Upon expiration, all outstanding Warrants were automatically cancelled, and the Company derecognized the related warrant liability. The resulting gain recognized upon derecognition of the warrant liability was immaterial.

Prior to expiration, the Warrants were classified as liabilities and remeasured to fair value at each reporting date, with changes in fair value recognized in other income (expense), net. As of September 30, 2026, there were no Warrants outstanding and no warrant liability recorded on the condensed consolidated balance sheet.

NOTE 12—LEASES

During the three months ended March 31, 2026, the Company committed to a plan to vacate three leased facilities in connection with the 2026 Reorganization Plan discussed in Note 3—Segment Reporting. Upon approval of the 2026 Reorganization Plan, the Company determined that the remaining useful lives of the related ROU assets were shortened to reflect the revised period over which the assets are expected to provide economic benefit. Accordingly, the Company revised the amortization period of the ROU assets to end on the expected vacate dates.

During the nine months ended September 30, 2026, the Company terminated allthree facilities, effective April 30, 2026, June 30, 2026, and August 31, 2026. In connection with the terminations, the Company derecognized the remaining lease liabilities and right-of-use assets associated with the premises and settled its remaining lease payment obligations under the leases. As a result of these transactions, the Company recognized a net gain of $1.2 million during the nine months ended September 30, 2026, which is reflected in “Restructuring and related” in the Condensed Consolidated Statements of Operations, and in “Other” adjustments within the operating activities in the Condensed Consolidated Statements of Cash Flows. As of September 30, 2026, the Company has no remaining lease payment obligations under any of thethree terminated leases.

The Company's operating leases primarily consist of real estate leases such as offices. During the three months ended September 30, 2026 and 2025, operating lease expense was $0.9 million and $1.0 million, respectively. During the nine months ended September 30, 2026 and 2025, operating lease expense was $4.4 million and $3.1 million, respectively. Included in operating lease expense for the nine months ended September 30, 2026 is $1.3 million of accelerated amortization of ROU assets related to thethree facilities terminated under the 2026 Reorganization Plan. This accelerated amortization is non-cash and is reflected in “Restructuring and related” in the Condensed Consolidated Statements of Operations.

The Company does not have any finance leases. Total variable and short-term lease payments were immaterial for all periods presented. As of September 30, 2026, the Company did not have any material additional operating leases that have not yet commenced.

Supplemental balance sheet information related to operating leases are as follows:

Operating lease liability maturities:

NOTE 13—LONG-TERM DEBT

Credit Agreement

On June 24, 2021, the Company entered into a credit agreement (the “Credit Agreement”) providing for afive-year revolving credit facility with an aggregate commitment of $75.0 million, which was subsequently increased to $81.0 million. Borrowings under the Credit Agreement were available for working capital, general corporate purposes and permitted acquisitions.

The Credit Agreement was amended from time to time to, among other things, replace the LIBOR interest rate benchmark with SOFR and make certain covenant and other technical modifications.

The Credit Agreement matured in accordance with its terms on June 24, 2026. No borrowings were outstanding at maturity, and the facility expired without being renewed or replaced. The Company had capitalized approximately $0.8 million of debt issuance costs related to the Credit Agreement and its amendments, all of which had been fully amortized as of the maturity date.

NOTE 14—REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

The following table summarizes the Company’s revenue disaggregated by type, and by over time or point in time recognition:

The following table summarizes the Company’s virtual currency revenue disaggregated by platform:

The following table summarizes the Company’s revenue disaggregated by geography:

Contract Balances

Contract assets represent the Company’s ability to bill customers for performance obligations completed under a contract. As of September 30, 2026 and December 31, 2025, there wereno contract assets recorded in the Company’s Condensed Consolidated Balance Sheets. The deferred revenue balance related to the purchase of virtual currencies was $0.5 million and $0.4 million as of September 30, 2026 and December 31, 2025, respectively. Trade receivables are described in Note 5—Receivables, net.

NOTE 15—INCOME TAXES

The Company recorded an income tax expense of an immaterial amount and an income tax expense of $0.3 million for the three months ended September 30, 2026 and 2025, respectively. Our effective tax rate was (0.3)% for the three months ended September 30, 2026 compared to (3.3)% for the three months ended September 30, 2025.

The Company recorded an income tax expense of $2.1 million and an income tax expense of $0.9 million for the nine months ended September 30, 2026 and 2025, respectively. Our effective tax rate was (6.5)% for the nine months ended September 30, 2026 compared to (6.0)% for the nine months ended September 30, 2025.

The effective tax rate for the three and nine months ended September 30, 2026 and 2025 differed from the U.S. statutory rate of 21% primarily due to the valuation allowance on deferred tax assets, U.S. state taxes, non-US based income taxes, nondeductible items and includes specific costs associated with shortfalls in tax-deductible equity compensation compared to amounts recognized in the financial statements.

In July 2025, the U.S. Congress enacted the One Big Beautiful Bill Act (“OBBBA”), which included a range of tax reform measures, including modifications effective in 2026 to certain international tax provisions originally enacted under the Tax Cuts and Jobs Act. The Company does not expect the changes enacted under OBBBA to materially affect its effective tax rate or cash flows in the current fiscal year.

NOTE 16—COMMITMENTS AND CONTINGENCIES

Minimum Guarantee Liability

The Company is subject to minimum guarantee royalty payments associated under certain content license agreements. The following are the Company’s total minimum guaranteed royalty payment obligations related to licensing agreements as of:

The following are the Company’s remaining expected future payments of minimum guaranteed royalty payment obligations related to licensing agreements as of September 30, 2026:

Legal Proceedings

The Company is party to ordinary and routine litigation incidental to its business. On a case-by-case basis, the Company engages inside and outside counsel to assess the probability of potential liability resulting from such litigation. After making such assessments, the Company makes an accrual for the estimated loss only when the loss is reasonably probable and an amount can be reasonably estimated. The Company does not expect the outcome of any of the below pending litigation to have a material effect on the Company’s Consolidated Balance Sheets, Consolidated Statements of Operations, or Consolidated Statements of Cash Flows.

On February 20, 2024, Tyler Kuhk, a purported citizen of Washington, filed a class action lawsuit against PLAYSTUDIOS US, LLC in the Superior Court of the State of Washington for the County of King, alleging that PLAYSTUDIOS US, LLC makes available online games of chance that constitute illegal gambling under Washington law, that PLAYSTUDIOS US, LLC engaged in unfair and deceptive practices by advertising to and soliciting the general public in Washington state to play its unlawful online casino games of chance, and that PLAYSTUDIOS US, LLC was unjustly enriched by this conduct. The plaintiff seeks to recover all sums paid by Washington residents to PLAYSTUDIOS US, LLC in its online gambling games during an unspecified period of time under Washington’s “Recovery of money lost gambling” statute, for treble damages under Washington’s Consumer Protection Act, and for disgorgement and restitution of any money PLAYSTUDIOS US, LLC has retained through unlawful and/or wrongful conduct alleged in the lawsuit. The Company believes the claims are without merit and intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of this litigation. The Company is not able to reasonably estimate the probability or amount of loss relating to this litigation and therefore has not made any accruals.

On May 24, 2024, the Company received multiple substantively identical pre-arbitration notices from a single law firm purporting to represent 5,264 players, alleging the games operated by the Company violate state gambling statutes, along with various other claims. The Company believes that the claims are without merit and the Company intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of these demands. The Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals.

On September 27, 2024, the Company received multiple substantively identical pre-arbitration notices from a single law firm purporting to represent 2,697 players, alleging the games operated by the Company violate state gambling statutes, along with various other claims. The Company believes that the claims are without merit and the Company intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of these demands. The Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals.

On February 10, 2025, Britt Englund and Brett Chapin, purported citizens of California andtwo of the named claimants in the May 24, 2024 pre-arbitration notices referenced above, filed a civil lawsuit against PLAYSTUDIOS US, LLC in the Superior Court of the State of California for the County of Los Angeles, alleging that PLAYSTUDIOS US, LLC breached an agreement to arbitrate a dispute arising out of plaintiffs’ engagement with games operated by the Company, and seeking an order to compel the Company to arbitrate. The complaint was dismissed by the plaintiffs on April 25, 2025 as part of an agreement to arbitrate the matter. The claimants filed arbitration proceedings in August of 2025. The matter was settled for a nominal amount in July 2026.

On March 18, 2026, the Company received multiple substantively identical pre-arbitration notices from a single law firm purporting to represent several hundred players, alleging the games operated by the Company violate state gambling statutes, along with various other claims. On June 25, 2026, the single law firm filed a Mass Arbitration with the American Arbitration Association ("AAA"), on behalf of 400 individual claimants purporting to be players of PLAYSTUDIOS social casino mobile apps, alleging the games operated by the Company violate state gambling statutes, along with various other claims. The Company believes that the claims are without merit and the Company intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of these demands. The Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals.

On July 9, 2026, Steven Horn (the "Plaintiff"), individually and on behalf of all others similarly situated, filed an Unopposed Motion for Preliminary Approval of Class Action Settlement against Amazon, Inc. in the United States District Court Western District of Washington at Seattle, Case No.2: 23-cv-01727-RSL (the "Proposed Settlement"). Under the initial Complaint filed in the lawsuit, Horn alleges that Amazon conspired with social casino app developers and violated Washington State’s gambling laws and Consumer Protection Act and asserts claims for violations of RCW 4.24.070 (the “Recovery of Money Lost at Gambling Act” or “RMLGA”), violations of RCW 19.86.010 et seq. (the “Washington Consumer Protection Act” or “CPA”), violations of 18 U.S.C. Sections 1962(c) and (d) for conspiring to engage in racketeering activities and collection of unlawful debts, and unjust enrichment. Under the Proposed Settlement, Amazon agreed to (i) the filing of a Covenant Judgment in the amount of $201.4 million, (ii) to pay $2.5 million to be used for settlement administration expenses, and (iii) to assign to the Edelson PC Amazon Social Casino Litigation Trust all of its rights to indemnification by certain named app developers under the Amazon Developer Services Agreement (available athttps://developer.amazon.com/support/legal/da). In exchange, Mr. Horn, as a Class Representative, agreed to execute a Covenant Not to Execute against Amazon's assets. The Proposed Settlement identifies PLAYSTUDIOS US, LLC as a named app developer and attributes to it a pro rata sub-judgment amount of approximately $4.3 million based on an allocation methodology agreed to by Amazon and the settling plaintiffs. The Company was not a party to the Proposed Settlement, does not agree with the allocation methodology or the resulting amount, and disputes any liability relating to the claims asserted. The Company intends to vigorously defend its interests, including by seeking to intervene in the underlying litigation, if appropriate. However, there can be no assurance that the Company will be successful in the defense of these demands. The Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals.

NOTE 17—STOCKHOLDERS’ EQUITY

Reverse Stock Split

On September 30, 2026, the Company effectuated a one-for ten reverse stock split of its Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), and Class B common stock, par value $0.0001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”). As a result of the reverse stock split, every 10 shares of Class A common stock issued and outstanding immediately prior to the 5:00 p.m. Eastern Time on September 30, 2026 (the "Effective Time") automatically combined into one share of Class A Common Stock, and every 10 shares of Class B Common Stock issued and outstanding immediately prior to the Effective Time automatically combined into one share of Class B Common Stock. The Reverse Stock Split did not change the par value of the Common Stock or the number of authorized shares of Class A Common Stock or Class B Common Stock. The Reverse Stock Split applied equally to both classes of Common Stock and did not change the relative voting rights of the holders of Class A Common Stock and Class B Common Stock. The par value per share of Common Stock remained unchanged as a result of the Reverse Stock Split. The Company’s Class A Common Stock began trading on a split-adjusted basis on the Nasdaq at market open on October 1, 2026. All share and per-share amounts have been retrospectively adjusted to reflect the impact of the Reverse Stock Split, except as otherwise indicated.

Common Stock

Subject to the prior rights of the holders of any preferred stock, the holders of common stock are entitled to receive dividends out of the funds legally available at the times and in the amounts determined by the Company's Board of Directors.

Each holder of Class A common stock is entitled toone vote for each share of Class A common stock held and each holder of Class B common stock is entitled totwenty votes for each share of Class B common stock held. After the full preferential amounts due to preferred stockholders have been paid or set aside, the remaining assets of the Company available for distribution to its stockholders, if any, are distributed to the holders of common stock ratably in proportion to the number of shares of common stock then held by each such holder. None of the Company’s common stock is entitled to preemptive rights or subject to redemption. With the exception of the conversion of the Class B common stock into Class A common stock as described below, the Company’s common stock is not convertible into any other shares of the Company’s capital stock.

The shares of Class B common stock are subject to a “sunset” provision if any member of the Founder Group transfers shares of Class B common stock outside the Founder Group (except for certain permitted transfers). In the event of such non-permitted transfers, any share transferred will automatically convert into shares of Class A common stock. In addition, the outstanding shares of Class B common stock will be subject to a “sunset” provision by which all outstanding shares of Class B common stock will automatically convert into shares of Class A common stock (i) if holders representing a majority of the Class B common stock vote to convert the Class B common stock into Class A common stock, (ii) if the Founder Group and its permitted transferees collectively no longer beneficially own at least 20% of the number of shares of Class B common stock collectively held by the Founder Group as of the closing of the Acies Merger, or (iii) on thenine-month anniversary of the Founder’s death or disability, unless such date is extended by a majority of independent directors of the Company.

In connection with the Acies Merger,0.9 million shares of Class A common stock issued to the Sponsor were subject to forfeiture unless specified stock price targets were achieved within five years following the closing of the Acies Merger. The earnout period expired on June 21, 2026 without the applicable stock price targets being achieved, and the 0.9 million unvested shares were automatically forfeited, cancelled and returned to the Company's authorized but unissued shares. No compensation expense was recognized in connection with the forfeiture, and the cancellation had no effect on the Company's results of operations. The share amounts in this paragraph reflect the historical terms prior to their expiration and have not been adjusted to reflect the Reverse Stock Split.

Accumulated Other Comprehensive Income (Loss)

The following tables show a summary of changes in accumulated other comprehensive income (loss), which is attributable only to currency translation adjustments during the current period:

Treasury Stock

On October 31, 2025, the Company’s Board of Directors approved aone-year extension of the Company's existing stock repurchase program. The remaining amount authorized under the program was $35.5 million as of September 30, 2026 and $40.0 million as of December 31, 2025. Subject to applicable rules and regulations, the shares may be purchased from time to time in the open market or in privately negotiated transactions. Such purchases will be at times and in amounts as the Company deems appropriate, based on factors such as market conditions, legal requirements and other business considerations.

The following table shows a summary of changes in treasury stock:

Treasury stock at cost includes commissions, excise taxes, and other transaction costs incurred in connection with such repurchases.

During the three months ended September 30, 2026, the Company repurchased 0.2 million shares of its Class A common stock in a privately negotiated transaction for $2.4 million. This repurchase was separate from, and did not reduce the remaining authorization under, the Company’s stock repurchase program. Of the total consideration, $1.1 million, representing the fair value of the shares repurchased, was recorded as treasury stock. The remaining $1.3 million was allocated to the fair value of contractual rights acquired, whichis reflected in “Restructuring and related” in the Condensed Consolidated Statements of Operations during the three months ended September 30, 2026.

On October 30, 2026, the Company’s Board of Directors approved aone-year extension of the Company's existing stock repurchase program and adjusted the remaining amount authorized under the program up to $50.0 million less the amount used under the repurchase program between November 1, 2025 and the close of the market on November 1, 2026. Subsequent to September 30, 2026, the Company acquired 0.2 million additional shares of its Class A common stock under its stock repurchase program at an aggregate value of $0.9 million and an average price of $4.29 per share. Repurchased shares were held in treasury. The remaining availability under the stock repurchase program was $44.6 million after the subsequent purchases and adjustment to the amount authorized.

NOTE 18—STOCK-BASED COMPENSATION

The following table summarizes stock-based compensation expense for the periods shown:

The following is a summary of outstanding stock-based compensation as of September 30, 2026 (in thousands, except weighted-average vesting period):

The following is a summary of awards granted for the periods shown:

NOTE 19—NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss attributable to Class A and Class B common stockholders per share (in thousands except per share data):

For the periods presented above, the net loss per share amounts are the same for Class A and Class B common stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with the Certificate of Incorporation. The undistributed losses for each period are allocated based on the contractual participation rights of the Class A and Class B common stock as if the losses for the period had been distributed. As the liquidation and dividend rights are identical, the undistributed losses are allocated on a proportionate basis.

The following equity awards outstanding at the end of each period presented have been excluded from the computation of diluted net loss per share of common stock for the periods presented due to their anti-dilutive effect:

On June 21, 2026, all outstanding Warrants expired in accordance with their terms and were automatically cancelled. See Note 11—Accrued and Other Current Liabilities for additional information.

In connection with the Acies Merger, the Company could have been required to issue up to 1.5 million shares of Class A common stock as earnout consideration to former stockholders of PlayStudios, Inc. (the "Earnout Shares") upon the achievement of certain stock price targets. The earnout period expired on June 21, 2026, five years after the closing of the Acies Merger, without the applicable stock price targets being achieved. As a result, the Company's contingent obligation to issue the Earnout Shares was extinguished, and no shares of Class A common stock were issued in connection with the earnout. The expiration of the Earnout Shares had no impact on the Company's results of operations, financial position, or total stockholders' equity.