Playtika Holding Corp.

11/07/2024 | Press release | Distributed by Public on 11/07/2024 07:34

Quarterly Report for Quarter Ending September 30, 2024 (Form 10-Q)

playtika-20240930
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
`
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number: 001-39896
PLAYTIKA HOLDING CORP.
(Exact Name of Registrant as Specified in its Charter)
Delaware 81-3634591
(State of other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
c/o Playtika Ltd.
HaChoshlim St 8
Herzliya Pituach, Israel
972-73-316-3251
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value PLTK The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒
As of November 4, 2024 the registrant had 372,713,159 shares of common stock, $0.01 par value per share, outstanding.
PLAYTIKA HOLDING CORP.
FORM 10-Q
INDEX
Page
PART I.
FINANCIAL INFORMATION
1
ITEM 1.
FINANCIAL STATEMENTS (Unaudited)
1
Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023
1
Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023
2
Consolidated Statements of Stockholders' Deficit for the three and nine months ended September 30, 2024 and 2023
3
Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023
5
Notes to the Consolidated Financial Statements
7
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
26
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
34
ITEM 4.
CONTROLS AND PROCEDURES
35
PART II.
OTHER INFORMATION
37
ITEM 1.
LEGAL PROCEEDINGS
37
ITEM 1A.
RISK FACTORS
37
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
38
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
38
ITEM 4.
MINE SAFETY DISCLOSURES
38
ITEM 5.
OTHER INFORMATION
38
ITEM 6.
EXHIBITS
39
SIGNATURES
CAUTIONARY NOTE ABOUT FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Exchange Act. All statements other than statements of historical facts contained in this quarterly report, including statements regarding our business strategy, plans and our objectives for future operations, are forward-looking statements. Further, statements that include words such as "anticipate," "believe," "continue," "could," "estimate," "future," "expect," "intend," "may," "might," "plan," "potential," "present," "preserve," "project," "pursue," "should," "will," or "would," or the negative of these words or other words or expressions of similar meaning may identify forward-looking statements.
We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. The achievement or success of the matters covered by such forward-looking statements involves significant risks, uncertainties and assumptions, including, but not limited to, the important factors discussed in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 26, 2024. Moreover, we operate in a very competitive and rapidly changing environment and industry. As a result, it is not possible for our management to assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated, predicted or implied in the forward-looking statements.
Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include without limitation:
•actions of our majority shareholder or other third parties that influence us;
•our reliance on third-party platforms, such as the iOS App Store, Facebook, and Google Play Store, to distribute our games and collect revenues, and the risk that such platforms may adversely change their policies;
•our reliance on a limited number of games to generate the majority of our revenue;
•our reliance on a small percentage of total users to generate a majority of our revenue;
•our free-to-play business model, and the value of virtual items sold in our games, is highly dependent on how we manage the game revenues and pricing models;
•our inability to refinance our revolving credit facility which is set to expire in March 2026 or otherwise obtain additional financing, in each case, on favorable terms or at all;
•our inability to identify acquisition targets that fit our strategy or complete acquisitions and integrate any acquired businesses successfully or realize the anticipated benefits of such acquisitions could limit our growth, disrupt our plans and operations or impact the amount of capital allocated to mergers and acquisitions;
•our inability to obtain necessary governmental or other approvals in a timely fashion or at all or our inability to otherwise complete the acquisition of SuperPlay Ltd.;
•our ability to compete in a highly competitive industry with low barriers to entry;
•our ability to retain existing players, attract new players and increase the monetization of our player base;
•we have significant indebtedness and are subject to the obligations and restrictive covenants under our debt instruments;
•the impact of the COVID-19 pandemic or other health epidemics on our business and the economy as a whole;
•the impact of an economic recession or periods of increased inflation, and any reductions to household spending on the types of discretionary entertainment we offer;
•our controlled company status;
•legal or regulatory restrictions or proceedings could adversely impact our business and limit the growth of our operations;
•risks related to our international operations and ownership, including our significant operations in Israel and Ukraine and the fact that our controlling stockholder is a Chinese-owned company;
•geopolitical events, such as the Wars in Israel and Ukraine;
•our reliance on key personnel;
•market conditions or other factors affecting the payment of dividends, including the decision whether or not to pay a dividend;
•uncertainties regarding the amount and timing of repurchases under our stock repurchase program;
•security breaches or other disruptions could compromise our information or our players' information and expose us to liability; and
•our inability to protect our intellectual property and proprietary information could adversely impact our business.
Additional factors that may cause future events and actual results, financial or otherwise, to differ, potentially materially, from those discussed in or implied by the forward-looking statements include the risks and uncertainties discussed in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K filed with the SEC on February 26, 2024. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur, and reported results should not be considered as an indication of future performance. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Except as required by law, we undertake no obligation to update any forward-looking statements for any reason to conform these statements to actual results or to changes in our expectations.
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
1CONSOLIDATED BALANCE SHEETS
(In millions, except par value)
September 30,
2024 		December 31,
2023
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $ 1,145.9 $ 1,029.7
Short-term investments 55.8 -
Restricted cash 1.5 2.0
Accounts receivable 159.6 171.5
Prepaid expenses and other current assets 107.3 147.9
Total current assets 1,470.1 1,351.1
Property and equipment, net 108.8 119.9
Operating lease right-of-use assets 92.0 100.3
Intangible assets other than goodwill, net 263.8 311.2
Goodwill 988.7 987.2
Deferred tax assets, net 100.4 99.3
Investments in unconsolidated entities 19.1 54.4
Other non-current assets 146.2 151.6
Total assets $ 3,189.1 $ 3,175.0
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Current maturities of long-term debt $ 11.7 $ 16.8
Accounts payable 36.5 65.0
Operating lease liabilities, current 19.0 19.5
Accrued expenses and other current liabilities 384.9 438.3
Total current liabilities 452.1 539.6
Long-term debt 2,391.2 2,399.6
Contingent consideration 23.5 20.8
Other long-term liabilities, including employee related benefits 325.3 318.7
Operating lease liabilities, long-term 78.3 88.2
Deferred tax liabilities 16.7 29.6
Total liabilities 3,287.1 3,396.5
Commitments and contingencies (Note 8)
Stockholders' equity (deficit)
Common stock of $0.01 par value; 1,600.0 shares authorized; 372.6 and 370.0 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
4.1 4.1
Treasury stock at cost (51.8 shares at both September 30, 2024 and December 31, 2023)
(603.5) (603.5)
Additional paid-in capital 1,334.7 1,264.9
Accumulated other comprehensive income 7.0 20.6
Accumulated deficit (840.3) (907.6)
Total stockholders' deficit (98.0) (221.5)
Total liabilities and stockholders' deficit $ 3,189.1 $ 3,175.0
The accompanying notes are an integral part of these consolidated financial statements.
-1-
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions, except for per share data)
(Unaudited)
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
Revenues $ 620.8 $ 630.1 $ 1,899.0 $ 1,929.1
Costs and expenses
Cost of revenue 168.1 173.9 513.3 537.9
Research and development 99.2 102.2 306.7 304.9
Sales and marketing 149.9 142.8 509.7 427.7
General and administrative 76.8 79.6 196.7 225.7
Impairment charges 29.3 41.6 36.3 51.3
Total costs and expenses 523.3 540.1 1,562.7 1,547.5
Income from operations 97.5 90.0 336.3 381.6
Interest and other, net 33.8 25.2 77.4 76.9
Income before income taxes 63.7 64.8 258.9 304.7
Provision for income taxes 24.4 26.9 80.0 107.0
Net income 39.3 37.9 178.9 197.7
Other comprehensive income (loss)
Foreign currency translation 7.4 (4.1) 1.9 (1.2)
Change in fair value of derivatives (17.9) 1.1 (15.5) 8.1
Total other comprehensive income (loss) (10.5) (3.0) (13.6) 6.9
Comprehensive income $ 28.8 $ 34.9 $ 165.3 $ 204.6
Net income per share attributable to common stockholders, basic $ 0.11 $ 0.10 $ 0.48 $ 0.54
Net income per share attributable to common stockholders, diluted $ 0.11 $ 0.10 $ 0.48 $ 0.54
Weighted-average shares used in computing net income per share attributable to common stockholders, basic 372.2 366.7 371.4 365.8
Weighted-average shares used in computing net income per share attributable to common stockholders, diluted 372.5 367.6 371.7 366.3
The accompanying notes are an integral part of these consolidated financial statements.
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(In millions, except for per share data)
(Unaudited)
Share capital
Shares Amount Treasury stock
Additional
paid-in
capital
Accumulated
other comprehensive
income
Retained earnings (Accumulated deficit) Total stockholders' equity (deficit)
Balances at January 1, 2024
370.0 $ 4.1 $ (603.5) $ 1,264.9 $ 20.6 $ (907.6) $ (221.5)
Net income - - - - - 53.0 53.0
Cash dividend declared ($0.10 per share)
- - - - - (37.1) (37.1)
Stock-based compensation - - - 24.2 - - 24.2
Issuance of shares upon vesting of RSUs and PSUs 1.0 * - (*) - - -
Income tax withholding related to vesting of restricted stock units and other - - - (0.7) - - (0.7)
Other comprehensive income - - - - 1.7 - 1.7
Balances at March 31, 2024 371.0 4.1 (603.5) 1,288.4 22.3 (891.7) (180.4)
Net income - - - - - 86.6 86.6
Cash dividend declared ($0.10 per share)
- - - - - (37.2) (37.2)
Stock-based compensation - - - 23.5 - - 23.5
Issuance of shares upon vesting of RSUs 0.9 * - (*) - - -
Income tax withholding related to vesting of restricted stock units and other - - - (0.6) - - (0.6)
Other comprehensive loss - - - - (4.8) - (4.8)
Balances at June 30, 2024 371.9 4.1 (603.5) 1,311.3 17.5 (842.3) (112.9)
Net income - - - - - 39.3 39.3
Cash dividend declared ($0.10 per share)
- - - - - (37.3) (37.3)
Stock-based compensation - - - 24.2 - - 24.2
Issuance of shares upon vesting of RSUs 0.7 * - (*) - - -
Income tax withholding related to vesting of restricted stock units and other - - - (0.8) - - (0.8)
Other comprehensive loss - - - - (10.5) - (10.5)
Balances at September 30, 2024 372.6 $ 4.1 $ (603.5) $ 1,334.7 $ 7.0 $ (840.3) $ (98.0)
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Share capital
Shares Amount Treasury stock
Additional
paid-in
capital
Accumulated
other comprehensive income (loss)
Retained earnings (Accumulated deficit) Total stockholders' equity (deficit)
Balances at January 1, 2023
363.6 $ 4.1 $ (603.5) $ 1,155.8 $ 17.6 $ (1,142.6) $ (568.6)
Net income - - - - - 84.1 84.1
Stock-based compensation - - - 29.8 - - 29.8
Issuance of shares upon vesting of RSUs and PSUs 2.0 * - (*) - - -
Income tax withholding related to vesting of restricted stock units and other - - - (1.3) - - (1.3)
Other comprehensive loss - - - - (4.7) - (4.7)
Balances at March 31, 2023 365.6 4.1 (603.5) 1,184.3 12.9 (1,058.5) (460.7)
Net income - - - - - 75.7 75.7
Share-based compensation - - - 26.1 - - 26.1
Issuance of shares upon vesting of RSUs 0.7 * - (*) - - -
Income tax withholding related to vesting of restricted stock units and other - - - (0.6) - - (0.6)
Other comprehensive income - - - - 14.6 - 14.6
Balances at June 30, 2023 366.3 4.1 (603.5) 1,209.8 27.5 (982.8) (344.9)
Net income - - - - - 37.9 37.9
Share-based compensation - - - 28.8 - - 28.8
Issuance of shares upon vesting of RSUs 0.8 * - (*) - - -
Income tax withholding related to vesting of restricted stock units and other - - - (0.7) - - (0.7)
Other comprehensive loss - - - - (3.0) - (3.0)
Balances at September 30, 2023 367.1 $ 4.1 $ (603.5) $ 1,237.9 $ 24.5 $ (944.9) $ (281.9)
_______
* Represents an amount less than 0.1 or $0.1
The accompanying notes are an integral part of these consolidated financial statements.
-4-
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Nine months ended
September 30,
2024 2023
Cash flows from operating activities
Net income $ 178.9 $ 197.7
Adjustments to reconcile net income to net cash from operating activities:
Depreciation 34.8 33.2
Amortization of intangible assets 82.3 82.8
Impairment charges 36.3 51.3
Stock-based compensation 70.2 82.5
Amortization of loan discount 5.6 5.2
Change in contingent consideration (15.9) -
Change in deferred taxes, net (9.4) (11.1)
Loss from foreign currency - (1.3)
Non-cash lease expenses (benefit), net (2.2) (0.6)
Changes in operating assets and liabilities:
Accounts receivable 12.1 (23.4)
Prepaid expenses and other current and non-current assets 27.4 4.0
Accounts payable (16.5) (18.1)
Accrued expenses and other current and non-current liabilities (66.6) (65.9)
Net cash provided by operating activities 337.0 336.3
Cash flows from investing activities
Purchase of property and equipment (28.1) (16.8)
Capitalization of internal use software costs
(25.1) (27.8)
Purchase of software for internal use
(15.5) (9.0)
Purchase of short-term investments (256.5) -
Proceeds from short-term investments 200.7 -
Payments for business combination, net of cash acquired - (160.6)
Other investing activities (1.0) (1.1)
Net cash used in investing activities (125.5) (215.3)
Cash flows from financing activities
Dividend paid (74.3) -
Repayments on bank borrowings (19.0) (9.5)
Payment of tax withholdings on stock-based payments (2.1) (2.6)
Net cash out flow for business acquisitions and other (0.7) -
Net cash used in financing activities (96.1) (12.1)
Effect of exchange rate changes on cash and cash equivalents and restricted cash 0.3 0.8
Net change in cash, cash equivalents and restricted cash 115.7 109.7
Cash, cash equivalents and restricted cash at the beginning of the period 1,031.7 770.4
Cash, cash equivalents and restricted cash at the end of the period $ 1,147.4 $ 880.1
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Nine months ended
September 30,
2024 2023
Supplemental cash flow disclosures
Cash paid for income taxes $ 100.2 $ 137.7
Cash paid for interest $ 117.3 $ 114.7
Cash received for interest $ 42.5 $ 26.7
Non-cash financing and investing activities
Accrued dividend $ 37.3 $ -
Right-of-use assets acquired under operating leases $ 5.8 $ 14.5
Contingent consideration related to business acquisition $ - $ 77.4
Accrued purchases of property and equipment and intangible assets $ 5.0 $ -
Capitalization of stock-based compensation costs $ 1.7 $ 2.2
The accompanying notes are an integral part of these consolidated financial statements.
-6-
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In millions, unless specified otherwise)
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of business and organization
Playtika Holding Corp. ("Playtika") and its subsidiaries (together with Playtika, the "Company") is one of the world's leading developers of mobile games creating fun, innovative experiences that entertain and engage its users. It has built best-in-class live game operations services and proprietary technology tools to support its portfolio of games which enable it to drive strong user engagement and monetization. The Company's games are free-to-play, and the Company seeks to provide novel, curated in-game content and offers to its users, at optimal points in their game journeys to drive user engagement and monetization.
Basis of presentation and consolidation
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") and include Playtika and all subsidiaries in which the Company has a controlling financial interest. Control generally equates to ownership percentage, whereby (i) affiliates that are more than 50% owned are consolidated; (ii) investments in affiliates of 50% or less but greater than 20% are generally accounted for using the equity method where the Company has determined that it has significant influence over the entities; and (iii) investments in affiliates of 20% or less are generally accounted for at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
The significant accounting policies referenced in the annual consolidated financial statements of the Company as of December 31, 2023 have been applied consistently in these unaudited interim consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been recorded within the accompanying financial statements, consisting of normal, recurring adjustments, and all intercompany balances and transactions have been eliminated in the consolidation. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 26, 2024.
Use of estimates
The preparation of the interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Share Purchase Agreement - SuperPlay
On September 18, 2024, the Company entered into a Share Purchase Agreement (the "SuperPlay Purchase Agreement") pursuant to which the Company agreed to purchase all of the issued and outstanding share capital of SuperPlay Ltd. ("SuperPlay")(the "Transaction") for an aggregate purchase price equal to (i) $700.0 million, subject to customary closing adjustments, and (ii) earnout payments of up to $1.250 billion, the amounts of which will be based on certain gross revenue growth and Adjusted EBITDA metrics of SuperPlay during the calendar years 2025, 2026 and 2027. The closing of the Transaction is subject to customary closing conditions and the SuperPlay Purchase Agreement includes customary termination rights, including if the closing of the Transaction has not occurred on or before March 31, 2025.
-7-
Amendment to Share Purchase Agreement - InnPlay
On September 14, 2023, the Company entered into a Share Purchase Agreement (the "InnPlay Purchase Agreement") pursuant to which the Company agreed to acquire all of the issued and outstanding share capital of G.S InnPlay Labs Ltd. ("InnPlay"). On June 18, 2024, the Company and InnPlay signed the first amendment to the InnPlay Purchase Agreement which reduces the maximum cap on the total potential earnout consideration from $220 million to $170 million and adjusted certain of the associated underlying performance metrics. The Company recorded $16.2 million of income to general and administrative expense during the quarter ended June 30, 2024 to adjust its recorded earnout liability to the June 30, 2024 estimated fair value of the total amount to be paid under the earnout, as amended.
Concentration of credit risk and significant customers
Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, short-term investments, restricted cash, accounts receivable and derivative contracts. The Company's investment policy imposes certain maturity limits on the Company's portfolio and restricts the permitted investments to the purchase of bank deposits and highly rated fixed income securities.
Apple, Facebook and Google are significant distribution, marketing, promotion and payment platforms for the Company's games. A significant portion of the Company's revenues has been generated from players who accessed the Company's games through these platforms. Therefore, the Company's accounts receivable are derived mainly from sales through these three platforms. The Company performs ongoing credit evaluations of its customers.
The following table summarizes the major accounts receivable of the Company as a percentage of the total accounts receivable as of the dates indicated:
September 30,
2024 		December 31,
2023
Apple 58% 56%
Google 26% 28%
Facebook 3% 4%
Accounts receivable are recorded at their transaction amounts and do not bear interest. The Company bases its allowance for credit losses on management's best estimate of the amount of probable credit losses in the Company's existing accounts receivable based on historical collection experience and current and expected future economic and market conditions.
Cash and cash equivalents and Short-term investments
Cash and cash equivalents consist of cash and highly liquid investments with maturities of three months or less from the date of purchase and are stated at the lower of cost or market value. Cash equivalents include investments in term deposits, commercial papers and money market funds that can be redeemed immediately at the current net asset value.
Investments with maturities of more than three months but less than one year from the date of purchase are included in short-term investments. Such short-term investments include investments in term deposits and commercial papers.
The Company classifies investments in debt securities as available-for-sale ("AFS"). AFS debt securities are carried at fair value, with unrealized gains and losses, net of tax, reported in accumulated other comprehensive income (loss) in stockholders' equity. Realized gains and losses on sale of investments are included in Interest and other, net on the statements of comprehensive income and are derived using the specific identification method for determining the cost of securities sold.
-8-
The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together with interest on securities is included in Interest and other, net.
Employee related benefits
Appreciation and retention plan
In August 2019, the Company adopted the Playtika Holding Corp. Retention Plan (the "2021-2024 Retention Plan") in order to retain key employees and reward them for contributing to the success of the Company. Under the 2021-2024 Retention Plan, eligible employees may be granted retention units that let them receive their pro-rata portion of a retention pool of $25 million per year for each of the plan years, and may also be granted appreciation units, which allow the employee to receive their pro-rata portion of an appreciation pool calculated as a specified percentage of Adjusted EBITDA for each of the plan years.
The value of each unit of the 2021-2024 Retention Plan has been amortized into compensation expense using the straight-line method, which will result in the recognition of compensation costs in the same years as the underlying EBITDA used in the plan measurement is earned.
The Company recognized compensation expenses in respect of retention unit and appreciation unit awards under its appreciation and retention plans of $23.9 million and $27.6 million during the three months ended September 30, 2024 and 2023, respectively, and $70.1 million and $86.5 million during the nine months ended September 30, 2024 and 2023, respectively.
Derivative instruments
The Company uses interest rate swap contracts to reduce its exposure to fluctuating interest rates associated with the Company's variable rate debt, and to effectively increase the portion of debt upon which the Company pays a fixed interest rate. The Company's interest rate swap agreements are designated as cash flow hedges under Accounting Standards Codification ("ASC") 815, Derivatives and Hedging("ASC 815"), involving the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreement, without the exchange of the underlying notional amount. These hedges are highly effective in offsetting changes in the Company's future expected cash flows due to the fluctuation of the Company's variable rate debt.
The Company monitors the effectiveness of its hedges on a quarterly basis, both qualitatively and quantitatively. The Company performed a regression analysis at inception of the hedging relationship and at period end in which it compared the change in the fair value of the swap transaction and the change in fair value of a hypothetical interest rate swap having terms that identically match the terms of the debt's interest rate payments based on historical swap rates. The Company believes that the hedging instruments are expected to be highly effective at offsetting changes in the hedged transactions attributable to the risk being hedged. For each future reporting period, the Company will continue performing retrospective and prospective assessments of hedge effectiveness in a single regression analysis by updating the regression analysis that was prepared at the inception of the hedging relationship.
The Company uses foreign currency derivative contracts to reduce its exposure to fluctuating exchange rates between the United States dollar (as the Company's functional currency) and certain expense lines denominated in Euros ("EUR"), Israeli Shekels ("ILS"), Polish Zloty ("PLN") and Romanian Leu ("RON"). The Company's derivative contracts are designated as cash flow hedges under ASC 815. The Company monitors the effectiveness of its hedges on a quarterly basis, both qualitatively and quantitatively, and expects these hedges to remain highly effective at offsetting fluctuations in exchange rates through their respective maturity dates. See Note 6, Derivative Instruments,for additional discussion.
The fair value of derivative financial instruments is recognized as an asset or liability at each balance sheet date, with changes in fair value recorded in other comprehensive income on the consolidated statements of comprehensive income until the future underlying transactions occur. The fair value approximates the amount the Company would pay or receive if these contracts were settled at the respective valuation dates. The inputs used to measure the fair value of the Company's interest rate swap agreements and foreign currency derivative contracts are categorized as Level 2 in the fair value hierarchy as
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established by ASC 820, Fair Value Measurement("ASC 820"). See Note 7, Fair Value Measurements,for additional discussion.
Investment in unconsolidated entities
The Company holds certain equity investments in various unconsolidated entities that, based upon the structure of the investment, are not within the scope of equity investment accounting that would lead to the consolidation conclusions above. Instead, these investments fall within the scope of ASC 321, Investments - Equity Securities. As permitted within that guidance, the Company has elected to account for these investments at cost less impairment, adjusted for changes in fair value from observable transactions for identical or similar investments of the same issuer as of the respective transaction dates. Due to poor performance of certain of these investments leading to significant uncertainty regarding their future viability, the Company recorded impairments of $29.3 million and $36.3 million related to these certain investments during the three months and nine months ended September 30, 2024, respectively. No change to the carrying amounts were recorded in the three or nine month periods ended September 30, 2023.
Net income per share attributable to common stockholders
For all periods presented herein, basic net income per share is calculated by dividing net income by the weighted-average common shares outstanding. Diluted net income per share reflects the effect of all potentially dilutive common shares outstanding by dividing net income by the weighted-average of all common and potentially dilutive shares outstanding. Performance Stock Units ("PSUs") are considered potentially dilutive as of the first day of the reporting period in which the underlying performance metric is achieved. In the event of a loss, diluted shares are not considered because of their anti-dilutive effect. The Company uses the treasury stock method on a grant-by-grant basis as the method for determining the dilutive effect of options, RSUs and PSUs. Under this method, it is assumed that the hypothetical proceeds received upon settlement are used to repurchase common shares at the average market price during the period.
NOTE 2. SHORT-TERM INVESTMENTS
Short-term investments at September 30, 2024 are as follows (in millions):
September 30, 2024
Amortized cost Allowance for credit losses
Unrealized gains
Unrealized losses
Commercial papers $ 55.8 $ - $ - $ -
Total short-term investments $ 55.8 $ - $ - $ -
The Company did not hold short-term investments at December 31, 2023.
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NOTE 3. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities at September 30, 2024 and December 31, 2023 were as follows (in millions):
September 30,
2024 		December 31,
2023
Employees and related expenses $ 114.4 $ 162.5
Accrued expenses 83.3 93.9
Media buy 50.7 54.5
Deferred revenues 38.9 46.0
Dividend payable 37.3 -
Tax accruals 32.9 35.4
Contingent consideration 27.4 46.0
Total accrued expenses and other current liabilities $ 384.9 $ 438.3
NOTE 4. DEBT
September 30, 2024 December 31, 2023
(in millions, except interest rates)
Maturity
Interest
rate
Book value
Face value
Book value
Term Loan 2028 8.110% $ 1,808.5 $ 1,833.5 $ 1,822.8
Senior Notes 2029 4.250% 594.4 600.0 593.6
Revolving Credit Facility 2026 n/a - - -
Total debt 2,402.9 2,433.5 2,416.4
Less: Current portion of long-term debt (11.7) (19.0) (16.8)
Long-term debt $ 2,391.2 $ 2,414.5 $ 2,399.6
Book value of debt in the table above is reported net of deferred financing costs and original issue discount of $30.6 million and $36.1 million at September 30, 2024 and December 31, 2023, respectively.
Credit Agreement
The Company has a $1.9 billion senior secured first lien term loan (the "Term Loan") and a $600 million revolving credit facility (the "Revolving Credit Facility") (together, the "Credit Agreement"), maturing on March 11, 2028 and March 11, 2026, respectively. The Term Loan requires quarterly principal payments equal to 0.25% of the original aggregate principal amount of the Term Loan with balance due at maturity.
The Revolving Credit Facility includes a maximum first-priority net senior secured leverage ratio financial maintenance covenant of 6.25 to 1.0. At September 30, 2024, the Company's first-priority net senior secured leverage ratio was 0.83 to 1.0.
The Company was in compliance with its financial and other covenants under the Credit Agreement as of September 30, 2024.
The other significant terms and conditions of the Credit Agreement have not changed from what was disclosed in Note 12, Debtin our Annual Report on Form 10-K filed with the SEC on February 26, 2024.
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Offering of 4.250% Senior Notes due 2029
Indenture
On March 11, 2021, the Company issued $600.0 million aggregate principal amount of its 4.250% senior notes due 2029 (the "Notes") under an indenture, dated March 11, 2021 (the "Indenture"), among the Company, the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee (the "Trustee").
Maturity and Interest
The Notes mature on March 15, 2029. Interest on the Notes will accrue at a rate of 4.250% per annum. Interest on the Notes is payable semi-annually in cash in arrears on March 15 and September 15 of each year.
The significant terms and conditions of the Notes have not changed from what was disclosed in Note 12, Debtin our Annual Report on Form 10-K filed with the SEC on February 26, 2024.
NOTE 5. EQUITY TRANSACTIONS AND STOCK INCENTIVE PLAN
Overview of Stock Incentive Plan
On May 26, 2020, the Board of Directors of the Company approved the Playtika Holding Corp. 2020 Incentive Award Plan (the "Plan").
As of September 30, 2024, a total of 47,633,739 shares of the Company's common stock had been allocated to awards granted under the Plan and 15,767,918 shares remained available for future grants.
Cash Dividend
On April 5 and July 5, 2024, in accordance with approval by the Board of Directors of the Company ("the Board"), the Company paid cash dividends of $0.10 per shares of the Company's outstanding common stock. Additionally, the Board declared a cash dividend of $0.10 per share of the Company's outstanding common stock, that was paid on October 4, 2024 to stockholders of record as of the close of business on September 20, 2024. The dividend amount of $37.3 million is recorded in accrued expenses and other current liabilities at September 30, 2024.
Stock Repurchase Program
On May 9, 2024, the Company announced that its Board of Directors authorized a stock repurchase program for up to $150 million of the Company's common stock. Under the repurchase program, repurchases can be made using a variety of methods, which may include open market purchases, privately negotiated transactions or otherwise, all in accordance with the rules of the Securities and Exchange Commission and other applicable legal requirements. The specific timing, price and size of purchases will depend on prevailing stock prices, general economic and market conditions, and other considerations. The repurchase program does not obligate the Company to acquire any particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at the Company's discretion.
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Stock Options
The following table summarizes the Company's stock option activity during the nine months ended September 30, 2024:
Stock Weighted Weighted
Options Average Average Intrinsic
Outstanding Remaining Exercise Value
(in millions) Term (in years) Price (in millions)
Outstanding at January 1, 2024
1.7 7.6 $ 17.72
Granted - $ -
Exercised -
Cancelled (0.4) $ 18.88
Expired - $ -
Outstanding at September 30, 2024
1.3 6.9 $ 17.41 $ -
Exercisable at September 30, 2024
1.0 6.7 $ 18.67 $ -
The Company used the Black-Scholes option pricing model for determining the estimated fair value of stock-based compensation related to stock options. The table below summarizes the assumptions used for the options granted in the nine months ended September 30, 2023. There were no options granted in the nine months ended September 30, 2024.
Nine months ended September 30,
2023
Risk-free interest rate
3.34% - 3.79%
Expected dividend yield -
Expected term in years 6.1
Expected volatility
52.13% - 52.79%
RSUs
The following table summarizes the Company's RSU activity during the nine months ended September 30, 2024:
Weighted Total Fair
Average Value of
Shares Grant Date Shares Vested
(in millions) Fair Value (in millions)
Outstanding at January 1, 2024
21.3 $ 12.24
Granted
1.4 $ 7.26
Vested
(2.8) $ 16.70 $ 21.4
Cancelled
(3.0) $ 11.61
Outstanding at September 30, 2024
16.9 $ 11.17
PSUs
As of September 30, 2024, the Company estimated achievement of a target less than 100% for the PSUs associated with the 2024 and 2025 tranches, consistent with the Company's current forecasted performance for 2024 and 2025. For purposes of forecasting PSU achievement, future results of the SuperPlay transaction are not considered until the quarter in which the transaction closes.
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The following table summarizes the Company's PSU activity during the nine months ended September 30, 2024:
Weighted Total Fair
Average Value of
Shares(1)
Grant Date Shares Vested
(in millions) Fair Value (in millions)
Outstanding at January 1, 2024
2.2 $ 9.72
Granted
- $ -
Vested
* $ 9.72 *
Cancelled
(0.7) $ 9.72
Outstanding at September 30, 2024
1.5 $ 9.72
________
(1) The number of PSUs outstanding represent the total number of PSUs granted to each recipient eligible to vest if the Company meets its highest specified performance goals for the applicable period.
* Represents an amount less than 0.1 or $0.1
Stock-Based Compensation
The following table summarizes stock-based compensation costs as reported by award type (in millions):
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
Stock options $ 0.7 $ 1.0 $ 2.4 $ 2.4
RSUs 23.5 27.1 73.6 81.1
PSUs - 0.7 (4.1) 1.2
Total stock-based compensation costs $ 24.2 $ 28.8 $ 71.9 $ 84.7
The following table summarizes stock-based compensation costs, net of amounts capitalized, as reported on the Company's consolidated statement of comprehensive income (in millions):
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
Research and development expenses $ 7.1 $ 9.6 $ 23.0 $ 28.6
Sales and marketing expenses 1.5 2.3 4.9 7.1
General and administrative expenses 15.0 16.1 42.3 46.8
Total stock-based compensation costs, net of amounts capitalized $ 23.6 $ 28.0 $ 70.2 $ 82.5
During the three months ended September 30, 2024 and 2023, the Company capitalized $0.6 million and $0.8 million of stock-based compensation cost, respectively. During the nine months ended September 30, 2024 and 2023, the Company capitalized $1.7 million and $2.2 million of stock-based compensation cost, respectively.
As of September 30, 2024, the Company's total unrecognized stock-based compensation expenses related to stock options and RSUs was approximately $2.2 million and $149.6 million, respectively. There was no unrecognized expense for PSUs at September 30, 2024. The expense related to stock options and RSUs are expected to be recognized over a weighted average period of 1.3 years and 2.8 years, respectively.
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NOTE 6. DERIVATIVE INSTRUMENTS
Interest Rate Swap Agreements
In March 2021, the Company entered into two interest rate swap agreements, each with a notional value of $250 million. Each of these swap agreements is with a different financial institution as the counterparty to reduce the Company's counterparty risk. The initial terms of each swap required the Company to pay a fixed interest rate of 0.9275% in exchange for receiving one-month LIBOR. In June 2023 these two interest rate swap agreements were amended so that effective July 31, 2023, the Company will pay a fixed interest rate of 0.85% in exchange for receiving one-month Term Secured Overnight Financing Rate ("SOFR"). The amendment did not impact the hedge effectiveness.
The interest rate swap agreements settle monthly commencing in April 2021 through their termination dates on April 30, 2026. The estimated fair value of the Company's interest rate swap agreements is derived from a discounted cash flow analysis.
In January 2023, the Company entered into two additional interest rate swap agreements, each with a notional value of $250 million. Each of these swap agreements is with a different financial institution, and each swap requires the Company to pay a fixed interest rate of 3.435% in exchange for receiving one-month LIBOR for six months and one-month Term SOFR afterwards. The interest rate swap agreements settle monthly commencing in February 2023 through their termination dates on February 28, 2028. The estimated fair value of the Company's interest rate swap agreements is derived from a discounted cash flow analysis.
The aggregate fair value of the Company's interest rate swap agreements was a net asset of $17.4 million as of September 30, 2024. and was recorded in prepaid expenses and other current assets, other non-current assets, accrued expenses and other current liabilities and other long-term liabilities in the accompanying consolidated balance sheets based upon the timing of the underlying expected cash flows.
Foreign currency hedge agreements
At September 30, 2024, the Company had outstanding derivative contracts to purchase certain foreign currencies, including EUR, ILS, RON, and PLN at future dates. The amount of future salary expenses the Company had hedged was approximately $200.4 million, and all contracts are expected to mature during the upcoming 12 months. The aggregate fair value of the Company's derivative contracts was a net assets of $2.1 million as of September 30, 2024 and was recorded in prepaid expenses and other current assets and accrued expenses and other current liabilities in the accompanying consolidated balance sheets.
The following table summarizes the volume of derivative instrument activity (in millions):
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
Derivative instruments - foreign currency derivative contracts $ 46.0 $ 146.8 $ 151.4 $ 240.1
Derivative instruments - interest rate swaps - - - 500.0
Derivative instruments - others (non-hedging) - - - 1.6
NOTE 7. FAIR VALUE MEASUREMENTS
The Company accounts for fair value in accordance with ASC 820. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of
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unobservable inputs. The Company uses a three-tier hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1- Quoted prices in active markets for identical assets or liabilities.
Level 2- Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3- Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The carrying value of accounts receivable and payables and the Company's restricted cash approximates fair value due to the short time to expected payment or receipt of cash.
The following table summarizes the fair value measurement of the Company's long-term debt (in millions):
September 30, 2024
Face Value Fair Value Fair Value Hierarchy
Term Loan $ 1,833.5 $ 1,819.7 Level 2
Senior Notes 600.0 547.5 Level 2
Total debt $ 2,433.5 $ 2,367.2
December 31, 2023
Face Value Fair Value Fair Value Hierarchy
Term Loan $ 1,852.5 $ 1,847.9 Level 2
Senior Notes 600.0 525.8 Level 2
Total debt $ 2,452.5 $ 2,373.7
The estimated fair value of the Company's term loan is based upon the prices at which the Company's debt traded in the days immediately preceding the balance sheet date. As the trading volume of the Company's debt is low relative to the overall debt balance, the Company does not believe that the associated transactions represent an active market, and therefore this indication of value represents a level 2 fair value input.
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The following table sets forth the assets and liabilities measured at fair value on a recurring basis in the Company's consolidated balance sheets at September 30, 2024 and December 31, 2023 (in millions):
Fair Value at
Fair Value Hierarchy September 30, 2024 December 31, 2023
Cash equivalents
Money market funds Level 1 $ 477.4 $ 524.4
Term deposits Level 1 319.6 290.3
Commercial papers Level 2 139.9 104.8
Short-term investments
Commercial papers Level 2 55.8 -
Prepaid expenses and other current assets
Derivative instruments - interest rate swaps Level 2 $ 16.8 $ 25.3
Derivative instruments - foreign currency derivative contracts Level 2 3.4 4.3
Other non-current assets
Derivative instruments - interest rate swaps Level 2 $ 5.9 $ 15.2
Accrued expenses and other current liabilities
Derivative instruments - interest rate swaps Level 2 $ 0.4 $ -
Derivative instruments - foreign currency derivative contracts Level 2 $ 1.3 $ 0.9
Other long-term liabilities, including employee related benefits
Derivative instruments - interest rate swaps Level 2 $ 4.9 $ 4.4
The change in fair value of contingent consideration payable was valued using significant unobservable inputs (Level 3), was included in the general and administrative expenses in the Company's consolidated statements of comprehensive income and consisted of the following (in millions):
Balance as of January 1, 2024 $ 66.8
Fair value adjustments based upon post-acquisition performance (15.9)
Balance as of September 30, 2024
$ 50.9
The carrying values of the Company's cash equivalents and short-term investments approximate fair value because of the short duration of these financial instruments.
The Company estimates the fair value of interest rate swap contracts by discounting the future cash flows of both the fixed rate and variable rate interest payments based on market yield curves. The inputs used to measure the fair value of the Company's interest rate swap contracts are categorized as Level 2 in the fair value hierarchy as established by ASC 820. The inputs used to measure the fair value of the Company's foreign currency contracts are categorized as Level 2 in the fair value hierarchy as established by ASC 820.
The Company estimated the fair value of its contingent consideration liabilities using a Monte Carlo simulation to model components of cash flow analyses. These fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements as defined in ASC 820. The extent to which the actual results differ from assumptions made within the Monte Carlo simulation cash flow analysis will result in adjustments to this liability in future periods.
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NOTE 8. COMMITMENTS AND CONTINGENCIES
In November 2013, the Company's subsidiary, Playtika, Ltd., sent an initial demand letter to Enigmatus s.r.o., a game developer in the Czech Republic, which owns various U.S. trademark registrations that resemble the Company's Sloto-formative trademark names, demanding that it cease use of the trademark Slotopoly. In response, Enigmatus s.r.o. asserted that it was the owner of the Sloto-formative trademarks and denied that its game title infringed upon the Company's trademarks. Enigmatus s.r.o. applied to register one of the Company's trademarks in the United Kingdom and European Union, and the Company successfully opposed its applications. In December 2016, Enigmatus s.r.o., filed a trademark infringement lawsuit, Enigmatus, s.r.o. v. Playtika LTD and Caesars Interactive Entertainment, Inc., against Playtika, Ltd. and Caesars Interactive Entertainment LLC in the Federal Court of Canada asserting that the Company's use of the Slotomania trademarks violates its proprietary and trademark rights. The plaintiff sought injunctive relief and monetary damages. On May 17, 2024, the Company's motion for summary trial was granted. However, the plaintiffs subsequently filed a notice of appeal. On October 4, 2024, the Court issued an order dismissing the plaintiff's appeal and the Company considers this matter to be concluded.
On November 23, 2021, the Company, its directors and certain of its officers were named in a putative class action lawsuit filed in the United States District Court for the Eastern District of New York (Bar-Asher v. Playtika Holding Corp. et al.). The complaint is allegedly brought on behalf of a class of purchasers of the Company's securities between January 15, 2021 and November 2, 2021, and alleges violations of federal securities laws arising out of alleged misstatements or omissions by the defendants during the alleged class period. On March 10, 2022, the court appointed LBMotion Ltd as lead plaintiff, and the plaintiff filed an amended complaint on May 6, 2022. The amended complaint alleges violations of Section 11 and 15 of the Securities Act of 1933 and seeks, among other things, damages and attorneys' fees and costs on behalf of the putative class. The amended complaint also added the companies that served as underwriters for the Company's IPO as defendants in the lawsuit. On September 15, 2022, in accordance with local rules of the Court, the Company and other defendants in the case filed a letter notifying the Court of defendants' service upon plaintiffs of, among other things, a notice of motion to dismiss plaintiffs' amended complaint and a memorandum of law in support of the defendants' motion to dismiss plaintiffs' amended complaint. On November 30, 2022, the Company filed with the Court a motion to dismiss. The Company's motion to dismiss was granted with prejudice on March 18, 2024. However, on April 15, the plaintiffs filed a notice of appeal. The plaintiffs' appeal has been briefed and is currently pending. As the Company is awaiting a ruling on the appeals process, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. The Company has defended this case vigorously and will continue to do so.
On November 4, 2022, the Company and certain of its directors were named in a derivative action lawsuit filed in the United States District Court for the Eastern District of New York (Bushansky v. Antokol., et al.). The complaint was brought on behalf of the Company by a putative stockholder alleging that the named directors were negligent in their oversight of the preparation of the Company's Proxy Statement in alleged violation of federal securities laws and that those directors breached their fiduciary duties upon related allegations. The complaint also asserts claims for contribution and indemnification, and aiding and abetting. The complaint seeks, among other things, damages, disgorgement and restitution by the director defendants, and attorneys' fees and costs. Based upon an agreement of plaintiff, the Company, and the other defendants, on February 13, 2023, the Court stayed this action until the resolution of the motion to dismiss in the class action case of Bar-Asher v. Playtika Holding Corp. When the motion to dismiss in the class action case of Bar-Asher v. Playtika Holding Corp. was granted as discussed above, this action was administratively closed. The Company does not expect this action to move forward until after the appeal of the class action case of Bar-Asher v. Playtika Holding Corp. has been decided. As this stage, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. The Company intends to vigorously defend this case.
On May 17, 2022, Guy David Ben Yosef filed a Motion for Approval of a class action lawsuit in district court in Tel Aviv-Jaffa Israel against Playtika Group Israel Ltd. ("PGI"), on behalf of all of PGI's customers who made game token purchases in Israel as part of games marketed by PGI during the seven years preceding the filing of the motion and for all subsequent customers of such games who purchase tokens until the resolution of the claim. The Motion alleges that certain of the Company's slot, poker and solitaire-themed games, including Slotomania, Caesars Slots, Solitaire Grand Harvest, House of Fun and Poker Heat, constitute illegal gambling and are prohibited under Israeli law and are misleading under Israeli consumer protection laws and alleges unjust enrichment. The Motion asserts damages of NIS 50 million. On January 12, 2023, PGI filed its response to the Motion for Approval. On March 5, 2023, the applicant submitted his reply to PGI's
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response. A pre-trial hearing was held on May 4, 2023. The parties agreed to appoint a mediator to try and resolve the dispute. The first mediation meeting was held on August 16, 2023 and the second mediation meeting was held on January 7, 2024. The parties agreed upon a settlement which was published for review by certain third parties The Office of the Attorney General filed its position on the settlement on behalf of certain professional authorities noting certain concerns regarding the proposed settlement. A hearing on the settlement has been scheduled for December 15, 2024. The expected range of loss is not material to the Company's financial statements as a whole. If a mediated resolution is not reached the Company will continue defending this case vigorously.
On April 10, 2023, Playtika Holding UK II Limited, the Company's controlling shareholder, and certain officers of the Company were sued (Kormos v Playtika Holding UK II Limited, et al.) in the Delaware Chancery Court. The lawsuit alleges generally that the defendants breached fiduciary duties owed to the Company and its stockholders with respect to the controlling shareholder's indication of an interest in selling some or all of its shares, and the resulting strategic review process and self-tender offer. On August 18, 2023, defendants filed with the Court motions to dismiss the claims. A hearing on the motions to dismiss was held on November 21, 2023. On January 18, 2024, the court denied Playtika Holding UK II Limited's motion to dismiss in an oral ruling. The court issued a written opinion on May 3, 2024 granting the motion to dismiss the claims against the Company's officers. As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows.
On June 7, 2024, the Company received a demand letter from counsel for Scott G. Kormos, one of the plaintiffs in the litigation matter described in the immediately preceding paragraph, pursuant to Section 220 of the Delaware General Corporation Law ("DGCL"), seeking disclosure of certain of the Company's books and records. The Company has responded to the demand, stating its belief that the demand letter fails to fully comply with the requirements of Section 220 of the DGCL. However, in the interest of resolution and while preserving all rights, the Company has engaged in negotiations with Mr. Kormos' counsel regarding the production of materials in relation to the demand.
On November 13, 2023, plaintiff Gina v. Burt filed a lawsuit against the Company and its subsidiary, Playtika Ltd., in the Circuit Court of Coffee County, Tennessee, alleging that the Company's social casino-themed games are unlawful gambling under Tennessee law. The lawsuit seeks to recover all amounts paid by Tennessee residents to the Company in connection with its games during the period beginning one year before the filing of the lawsuit until the case is resolved but excluding any residents who spent $75,000 or more during such time period. After the Company removed the case to the U.S. District Court for the Eastern District of Tennessee, plaintiff filed a motion to remand the case back to the Coffee County Circuit Court which the Company opposed. The Company also filed a motion to dismiss and a motion to compel arbitration. The U.S. District Court for the Eastern District of Tennessee issued an order to remand on September 26, 2024 and the Company has filed a petition to appeal the order. The other motions to dismiss and compel arbitration have been briefed and are currently pending. As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. The Company intends to defend this case vigorously.
On March 8, 2023, plaintiff Gayla Hamilton Mills filed a lawsuit against the Company and its subsidiary, Playtika Ltd., in the Circuit Court of Franklin County, Alabama, alleging that the Company's casino-themed social games are unlawful gambling under Alabama law. The lawsuit seeks to recover all amounts paid by Alabama residents to the Company in connection with its games during the period beginning one year before the filing of the lawsuit until the case is resolved. After the Company removed the case to the U.S. District Court for the Northern District of Alabama, plaintiff dismissed the complaint and filed a very similar new complaint in the Circuit Court of Franklin County, Alabama on August 25, 2023. The new complaint asserted the same cause of action and bases for relief, but limited the requested recovery to the amounts paid to the Company in connection with its games only by those Alabama residents who spent less than $75,000 during the one year before the filing of the lawsuit until the case is resolved. The Company timely removed the new complaint to the same U.S. district court on September 28, 2023. On October 20, 2023, the plaintiff filed a motion to remand the case back to the Franklin County Circuit Court which the Company opposed. A hearing on the motion to remand was held on March 20, 2024 and the parties are awaiting a ruling. As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. The Company intends to defend this case vigorously.
On August 22, 2024, plaintiff Dianne Fuqua filed a lawsuit against the Company and its subsidiary, Playtika Ltd., in the District Court for the Western District of Kentucky, alleging that the Company's casino-themed social games are unlawful
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gambling under Kentucky law. The lawsuit seeks to recover three times the amount paid by Kentucky residents to the Company from its games during the period from August 2019 through June 2023 plus interest, costs and any other relief plaintiff is entitled to. The parties are negotiating a schedule for responsive briefing and have agreed, subject to court approval, to a response date of January 31, 2025. As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. The Company intends to defend this case vigorously.
On February 27, 2023, the company received a deficit notice from the Ben Gurion Airport Customs House concerning the purchase of a private aircraft. The deficit notice claims that the company's acquisition of the aircraft is an import into Israel, and, as a result, it was obliged to pay purchase tax and VAT for the acquisition. The company disputes that any tax or VAT is owed. On July 26, 2023, the Customs House's definitive response was received, with the deficit notice still intact. The current claimed amount of the deficit notice is approximately $3.6 million. The Company paid the deficit notice under protest and filed a claim with the district court on December 12, 2023. The Customs House submitted its statement of defense on April 17, 2024 and the Company submitted its response to the statement of defense on June 16. A pre-trial meeting has been scheduled with the court for November 14, 2024. The Company intends to pursue this case vigorously.
On June 1, 2024, the Company received pre-arbitration notices from a law firm purporting to represent 5,264 claimants who have played the Company's games and intend to file arbitration demands alleging that the Company's games are unlawful or that they otherwise have suffered harm for which recovery is available. On July 26, 2024, the law firm filed arbitration demands on behalf of 4,549 claimants. On September 13, 2024, the arbitrator requested that the Company waive certain dispute resolution provisions in its terms of service as a condition to its administering the arbitration. The Company declined to waive such provisions and, as a result, the arbitration was closed on October 3, 2024. On September 16, 2024, the Company received pre-arbitration notices from the same law firm purporting to represent an additional 2,560 claimants alleging the same claims as the other claimants. As of the date hereof, the Company lacks adequate information to assess the nature or validity of these claims. As such, the Company cannot estimate what impact, if any, these claims may have on its results of operations, financial condition or cash flows. The Company intends to defend these claims vigorously.
On October 17, 2024, the Company received pre-arbitration notices from a different law firm purporting to represent 798 claimants who have played the Company's games and intend to file arbitration demands alleging that the Company's games are unlawful and that the claimants made purchases in the Company's games which were the result of unfair and deceptive practices that violate consumer protection laws. As these claims are in preliminary stages, the Company cannot estimate what impact, if any, they may have on its results of operations, financial condition or cash flows. The Company intends to defend these claims vigorously.
NOTE 9. REVENUE FROM CONTRACTS WITH CUSTOMERS
The following table provides information about disaggregated revenue by geographic location of the Company's players and type of platform (in millions):
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
Geographic location
USA $ 410.9 $ 433.9 $ 1,276.1 $ 1,348.1
EMEA 121.4 107.0 358.8 314.1
APAC 45.2 45.1 131.9 136.0
Other 43.3 44.1 132.2 130.9
Total $ 620.8 $ 630.1 $ 1,899.0 $ 1,929.1
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Revenues through third-party platforms and through the Company's own direct-to-consumer platforms were as follows (in millions):
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
Third-party platforms $ 446.4 $ 469.1 $ 1,379.4 $ 1,451.3
Direct-to-consumer platforms 174.4 161.0 519.6 477.8
Total revenues $ 620.8 $ 630.1 $ 1,899.0 $ 1,929.1
Contract balances
Payments from players for virtual items are collected by platform providers or payment processors and remitted to the Company (net of the platform or clearing fees) generally within 30 days after the player transaction. The Company's right to receive the payments collected by the platform providers or payment processors is recorded as an accounts receivable as the right to receive payment is unconditional. Deferred revenues, which represent a contract liability, represent mostly unrecognized fees billed for virtual items which have not yet been consumed at the balance sheet date. Platform fees paid to platform providers or payment processors and associated with deferred revenues represent a contract asset.
Balances of the Company's contract assets and liabilities are as follows (in millions):
September 30,
2024 		December 31,
2023
Accounts receivable $ 159.6 $ 171.5
Contract assets (1)
10.3 12.5
Contract liabilities (2)
38.9 46.0
_______
(1) Contract assets are included within prepaid expenses and other current assets in the Company's consolidated balance sheets.
(2) Contract liabilities are included within accrued expenses and other current liabilities as "deferred revenues" in the Company's consolidated balance sheets.
During the three and nine months ended September 30, 2024, the Company recognized $6.7 million and $40.4 million, respectively, of its contract liabilities that were outstanding as of December 31, 2023.
Unsatisfied performance obligations
Substantially all of the Company's unsatisfied performance obligations relate to contracts with an original expected length of one year or less.
NOTE 10. SEGMENT INFORMATION
The Company operates its business as one operating segment and one reportable segment.
The Company's long-lived assets, net, by country of domicile are as follows (in millions):
September 30,
2024 		December 31,
2023
Israel $ 86.9 $ 94.0
USA 59.7 64.8
Ukraine 16.9 21.8
Other 37.3 39.6
Total long-lived assets, net $ 200.8 $ 220.2
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NOTE 11. INTEREST AND OTHER, NET
Interest and other, net are as follows (in millions):
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
Interest expense $ 38.7 $ 39.4 $ 116.6 $ 114.5
Interest income (18.4) (11.9) (45.1) (31.3)
Foreign currency translation differences, net 13.0 (2.6) 5.4 (6.8)
Other 0.5 0.3 0.5 0.5
Total interest and other, net $ 33.8 $ 25.2 $ 77.4 $ 76.9
NOTE 12. INCOME TAXES
Three months ended
September 30, 		Nine months ended
September 30,
(in millions, except tax rate) 2024 2023 2024 2023
Income before income taxes $ 63.7 $ 64.8 $ 258.9 $ 304.7
Provision for income taxes $ 24.4 $ 26.9 $ 80.0 $ 107.0
Effective tax rate 38.3 % 41.5 % 30.9 % 35.1 %
The effective tax rates were determined using a worldwide estimated annual effective tax rate and took discrete items into consideration. The difference between the effective tax rate and the 21% U.S. federal statutory rate for the nine months ended September 30, 2024 was primarily due to tax positions that do not meet the more likely than not standard, the inclusion of Global Intangible Low-Taxed Income, and non-deductible stock-based compensation expense, partially offset by a non-recurring favorable impact of reversal of accruals related to undistributed earnings. The difference between the effective tax rate and the 21% U.S. federal statutory rate for the nine months ended September 30, 2023 was primarily due to tax provisions that do not meet the more likely than not standard and the inclusion of Global Intangible Low-Taxed Income.
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NOTE 13. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following tables show a summary of changes in accumulated other comprehensive income (loss), net of tax, by component for the three and nine months ended September 30, 2024 and 2023 (in millions):
Foreign Currency Translation Interest Rate Swaps Foreign Currency Derivative Contracts Total
Balance as of January 1, 2024 $ (10.0) $ 27.8 $ 2.8 $ 20.6
Other comprehensive income (loss) before reclassifications (4.0) 14.5 (2.5) 8.0
Amounts reclassified from accumulated other comprehensive income (loss) - (6.2) (0.1) (6.3)
Balance as of March 31, 2024 (14.0) 36.1 0.2 22.3
Other comprehensive income (loss) before reclassifications (1.5) 5.1 (3.5) 0.1
Amounts reclassified from accumulated other comprehensive income - (6.3) 1.4 (4.9)
Balance as of June 30, 2024 (15.5) 34.9 (1.9) 17.5
Other comprehensive income (loss) before reclassifications 7.4 (15.3) 4.0 (3.9)
Amounts reclassified from accumulated other comprehensive income (loss) - (6.1) (0.5) (6.6)
Balance as of September 30, 2024 $ (8.1) $ 13.5 $ 1.6 $ 7.0
Foreign Currency Translation Interest Rate Swaps Foreign Currency Derivative Contracts Total
Balance as of January 1, 2023 $ (15.6) $ 37.7 $ (4.5) $ 17.6
Other comprehensive income (loss) before reclassifications 3.1 (4.0) (2.0) (2.9)
Amounts reclassified from accumulated other comprehensive income (loss) - (4.2) 2.4 (1.8)
Balance as of March 31, 2023 (12.5) 29.5 (4.1) 12.9
Other comprehensive income (loss) before reclassifications (0.2) 20.5 (2.4) 17.9
Amounts reclassified from accumulated other comprehensive income - (5.5) 2.2 (3.3)
Balance as of June 30, 2023 (12.7) 44.5 (4.3) 27.5
Other comprehensive income (loss) before reclassifications (4.1) 11.9 (6.7) 1.1
Amounts reclassified from accumulated other comprehensive income (loss) - (6.2) 2.1 (4.1)
Balance as of September 30, 2023 $ (16.8) $ 50.2 $ (8.9) $ 24.5
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The amounts in the summary of changes in accumulated other comprehensive income (loss) tables, above, are net of tax expense/(benefits) as follows (in millions):
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
Interest rate swaps $ (6.5) $ 1.8 $ (4.3) $ 3.8
Foreign currency derivative contracts 0.7 (0.9) (0.2) (0.9)
Amounts reclassified from accumulated other comprehensive income for interest rate swaps and foreign currency derivative contracts were reclassified to interest expense and operating expenses, respectively, in the Company's consolidated statements of comprehensive income during the three and nine months ended September 30, 2024 and 2023.
NOTE 14. NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
The following table sets forth the computation of basic and diluted net income per share attributable to common stockholders (in millions, except per share data):
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
Numerator:
Net income $ 39.3 $ 37.9 $ 178.9 $ 197.7
Denominator:
Weighted-average shares used in computing net income per share attributable to common stockholders, basic 372.2 366.7 371.4 365.8
Stock-based compensation awards 0.3 0.9 0.3 0.5
Weighted-average shares used in computing net income per share attributable to common stockholders, diluted 372.5 367.6 371.7 366.3
Net income per share, basic $ 0.11 $ 0.10 $ 0.48 $ 0.54
Net income per share, diluted $ 0.11 $ 0.10 $ 0.48 $ 0.54
The Company uses the treasury stock method on a grant-by-grant basis as the method for determining the dilutive effect of options, RSUs and PSUs. Under this method, it is assumed that the hypothetical proceeds received upon settlement are used to repurchase common shares at the average market price during the period. The following outstanding employee equity awards were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive for the periods presented (in millions):
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
Stock options 1.4 1.8 1.5 2.3
RSUs 12.0 9.9 17.3 10.9
Total 13.4 11.7 18.8 13.2
In addition, 1.5 million PSUs were excluded from the calculation of diluted net income per share for each of the three and nine months ended September 30, 2024 and 2.2 million PSUs were excluded from the calculation of diluted net income per share for each of the three and nine months ended September 30, 2023, because the minimum performance measures were not yet met.
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NOTE 15. SUBSEQUENT EVENTS
The Company performed a review for subsequent events through the date of these financial statements. No material items were noted for disclosure.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
We are one of the world's leading developers of mobile games creating fun, innovative experiences that entertain and engage our users. We have built best-in-class live game operations services and proprietary technology tools to support our portfolio of games which enable us to drive strong user engagement and monetization. Our games are free-to-play, and we are experts in providing novel, curated in-game content and offers to our users, at optimal points in their game journeys. Our players love our games because they are fun, creative, engaging, and kept fresh through a release of new features that are customized for different player segments. As a result, we have retained paying users over long periods of time.
Recent Events
On October 7, 2023, the State of Israel was attacked by Hamas, and the State of Israel subsequently declared war on Hamas. Since that time, Israel has been engaged in armed conflict with combatants located in Gaza, the West Bank, Syria, Iran, Lebanon and Yemen. While these war and conflicts have not had a direct material financial impact on the Company as of the date of this filing, the Company's headquarters are located in Israel, and the Company employs approximately 1,040 professionals in Israel, including the majority of the Company's senior leadership team. The Company is actively monitoring the developments in this geographic region.
Components of our Results of Operations
Revenues
We primarily derive revenue from the sale of virtual items associated with online games.
We distribute our games to the end customer through various web and mobile platforms, such as Apple, Facebook, Google and other web and mobile platforms plus our own direct-to-consumer platforms. Through these platforms, users can download our free-to-play games and can purchase virtual items to enhance their game-playing experience. Players can purchase virtual items through various widely accepted payment methods offered in the games. Payments from players for virtual items are non-refundable and relate to non-cancellable contracts that specify our obligations and cannot be redeemed for cash nor exchanged for anything other than virtual items within our games.
Our games are played on various third-party platforms for which the platform providers collect proceeds from our customers and pay us an amount after deducting platform fees. For purchases made through both the third-party and Direct-to-Consumer platforms, we are primarily responsible for fulfilling the virtual items, have the control over the content and functionality of games and have the discretion to establish the virtual items' prices. Therefore, we are the principal and, accordingly, revenues are recorded on a gross basis. Payment processing fees paid to platform providers are recorded within cost of revenue.
Cost of revenue
Cost of revenue includes payment processing fees, customer support, hosting fees and depreciation and amortization expenses associated with assets directly involved in the generation of revenues, including servers and internal use software. Platform providers (such as Apple, Facebook and Google) charge a transactional payment processing fee to accept payments from our players for the purchase of in-app virtual goods. Payment processing fees and other related expenses for in-app purchases made through our Direct-to-Consumer platforms are typically 3-4%, compared to a 30% platform fee for third party platforms. We generally expect cost of revenue to fluctuate proportionately with revenues.
Research and development
Research and development consists of salaries, bonuses, benefits, other compensation, including stock-based compensation and allocated overhead, related to engineering, research, and development. In addition, research and development expenses include depreciation and amortization expenses associated with assets associated with our research and development efforts.
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We expect that research and development expenses specifically associated with new game development will fluctuate over time.
Sales and marketing
Sales and marketing consists of costs related to advertising and user acquisition, including costs related to salaries, bonuses, benefits, and other compensation, including stock-based compensation and allocated overhead. In addition, sales and marketing expenses include depreciation and amortization expenses associated with assets related to our sales and marketing efforts. We plan to continue to invest in sales and marketing to retain and acquire users. However, sales and marketing expenses may fluctuate as a percentage of revenues depending on the timing and efficiency of our marketing efforts.
General and administrative
General and administrative expenses consist of salaries, bonuses, benefits, and other compensation, including stock-based compensation, for all our corporate support functional areas, including our senior leadership. In addition, general and administrative expenses include outsourced professional services such as consulting, legal and accounting services, taxes and dues, insurance premiums, and costs associated with maintaining our property and infrastructure. General and administrative expenses also include depreciation and amortization expenses associated with assets not directly attributable to any of the expense categories above. We also record adjustments to contingent consideration payable recorded after the acquisition date, and legal settlement expenses, as components of general and administrative expense.
Impairment charges
Impairment charges in 2024 reflect impairments related to our investments in unconsolidated entities. We hold certain equity investments in various unconsolidated entities that fall within the scope of ASC 321, Investments - Equity Securities. As permitted within that guidance, we have elected to account for these investments at cost less impairment, adjusted for changes in fair value from observable transactions for identical or similar investments of the same issuer as of the respective transaction dates. Impairment charges in 2023 reflect charges recorded for the excess of the carrying amount over estimated fair value of our identifiable intangible assets
Interest and other, net
Our interest expense includes interest incurred under our December 2019 Credit Agreement, as amended, and amortization of deferred financing costs. We expect to continue to incur interest expense under our Credit Agreement, although such interest expense will fluctuate based upon the underlying variable interest rates. We entered into multiple interest rate swap agreements in March 2021 and in January 2023, accumulating to a total notional amount of $1.0 billion, reducing our overall exposure to variable interest rates.
Interest income consists of interest earned on cash, cash equivalents and short-term investments.
Foreign currency translation adjustments, net, include gains and losses resulting from remeasurement of certain non-USD denominated balance sheet items.
Provision for income taxes
The provision for income taxes consists of current income taxes in the various jurisdictions where we are subject to taxation, primarily the United States, the United Kingdom, Israel, Germany, and Austria, as well as deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities in each of these jurisdictions for financial reporting purposes and the amounts used for income tax purposes. Under current U.S. tax law, the federal statutory tax rate applicable to corporations is 21%. Our effective tax rate can fluctuate based on various factors, including our financial results and the geographic mix to which they relate, the applicability of special tax regimes, changes in our business or operations, examination-related developments and uncertain tax positions, and changes in tax law.
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Net Income
We calculate net income as revenue minus cost of revenues, research and development, sales and marketing and general and administrative expenses, interest and taxes.
Consolidated Operating Results of Playtika Holding Corp
We measure the performance of our business by using several key financial metrics, including revenue and operating income, and operating metrics, including Daily Active Users, Average Revenue per Daily Active User, Paying Users, and Average Revenue per Paying User. These operating metrics help our management to understand and measure the engagement levels of our players, the size of our audience and our reach. See "Basis of Presentation" and "Summary Consolidated Financial and Other Data" for additional information of these measures.
Daily Active Users
We define Daily Active Users, or DAUs, as the number of individuals who played one of our games during a particular day on a particular platform. Under this metric, an individual who plays two different games on the same day is counted as two DAUs. Similarly, an individual who plays the same game on two different platforms (e.g., web and mobile) or on two different social networks on the same day would be counted as two DAUs. Average DAUs for a particular period is the average of the DAUs for each day during that period. We believe that Daily Active Users is a useful metric to measure the scale and usage of our game platform.
Daily Paying Users
We define Daily Paying Users, or DPUs, as the number of individuals who purchased, with real world currency, virtual currency or items in any of our games on a particular day. Under this metric, an individual who makes a purchase of virtual currency or items in two different games on the same day is counted as two DPUs. Similarly, an individual who makes a purchase of virtual currency or items in any of our games on two different platforms (e.g., web and mobile) or on two different social networks on the same day could be counted as two DPUs. Average DPUs for a particular period is the average of the DPUs for each day during that period. We believe that Daily Paying Users is a useful metric to measure game monetization.
Daily Payer Conversion
We define Daily Payer Conversion as the total number of DPUs divided by the number of DAUs on a particular day. Average Daily Payer Conversion for a particular period is the average of the Daily Payer Conversion rates for each day during that period. We believe that Daily Payer Conversion is a useful metric to describe the monetization of our users.
Average Revenue per Daily Active User
We define Average Revenue per Daily Active User, or ARPDAU, as (i) the total revenue in a given period, (ii) divided by the number of days in that period, (iii) divided by the average DAUs during the period. We believe that ARPDAU is a useful metric to describe monetization.
Monthly Active Users
We define Monthly Active Users, or MAUs, as the number of individuals who played one of our games during a calendar month on a particular platform. Under this metric, an individual who plays two different games in the same calendar month is counted as two MAUs. Similarly, an individual who plays the same game on two different platforms (e.g., web and mobile) or on two different social networks during the same month would be counted as two MAUs. Average MAUs for a particular period is the average of the MAUs for each month during that period. We believe that MAUs is a useful metric to measure the scale and reach of our platform, but we base our business decisions primarily on daily performance metrics, which we believe more accurately reflect user engagement with our games.
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Results of Operations
The table below shows the results of our key financial and operating metrics for the periods indicated. Unless otherwise indicated, financial metrics are presented in millions of U.S. Dollars, user statistics are presented in millions of users, and ARPDAU is presented in U.S. Dollars.
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
(in millions, except percentages, Average DPUs and ARPDAU) (Unaudited)
Revenues $ 620.8 $ 630.1 $ 1,899.0 $ 1,929.1
Total cost and expenses $ 523.3 $ 540.1 $ 1,562.7 $ 1,547.5
Operating income $ 97.5 $ 90.0 $ 336.3 $ 381.6
Net income $ 39.3 $ 37.9 $ 178.9 $ 197.7
Credit Adjusted EBITDA $ 197.2 $ 205.6 $ 573.8 $ 643.3
Non-financial performance metrics
Average DAUs 7.6 8.4 8.1 8.7
Average DPUs (in thousands) 301 299 303 311
Average Daily Payer Conversion 4.0 % 3.6 % 3.7 % 3.6 %
ARPDAU $ 0.89 $ 0.81 $ 0.85 $ 0.81
Average MAUs 26.4 28.4 29.0 29.0
Comparison of the three and nine months ended September 30, 2024 versus the three nine months ended September 30, 2023
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
(in millions) (Unaudited)
Revenues $ 620.8 $ 630.1 $ 1,899.0 $ 1,929.1
Cost of revenue $ 168.1 $ 173.9 $ 513.3 $ 537.9
Research and development 99.2 102.2 306.7 304.9
Sales and marketing 149.9 142.8 509.7 427.7
General and administrative 76.8 79.6 196.7 225.7
Impairment charges 29.3 41.6 36.3 51.3
Total costs and expenses $ 523.3 $ 540.1 $ 1,562.7 $ 1,547.5
Revenues
Revenues for the three and nine months ended September 30, 2024 decreased by $9.3 million and $30.1 million, respectively when compared with the comparable period of 2023. Incremental revenues from the acquired studios were more than offset by the decrease in revenues due to reduced monetization.
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Cost of revenue
Cost of revenue for the three and nine months ended September 30, 2024 decreased by $5.8 million and $24.6 million, respectively, when compared with the comparable periods of 2023. The decreases in cost of revenue includes an approximate $7.5 million and $25.7 million decrease in platform fees, respectively, associated with reduced revenues and a greater percentage of revenue generated from our Direct-To-Consumer platforms for the three and nine months ended September 30, 2024, as well as a $1.2 million and $2.6 million decrease in depreciation and amortization expenses, respectively.
Research and development expenses
Research and development expenses for the three months ended September 30, 2024 decreased by $3.0 million and for the nine months ended September 30, 2024, increased by $1.8 million when compared with the comparable periods of 2023. Recent headcount reductions have reduced employee compensation costs, including decreased stock-based compensation expense, however, a significant decrease in research and development expenses has not occurred due to the shift in our workforce composition towards higher-cost locations, combined with merit-based compensation increases and an increased spend in outsourcing. These factors were offset by decreases in the amount of expenses capitalized as projects conclude.
Sales and marketing expenses
Sales and marketing expenses for the three and nine months ended September 30, 2024 increased by $7.1 million and $82.0 million, respectively, when compared with the comparable periods of 2023. The increases in sales and marketing expenses were due largely to increased media buy expenses driven by the acquisitions of InnPlay and Youda that were not present in the first half of 2023, accompanied by moderately higher media buy spending across the Company.
General and administrative expenses
General and administrative expenses for the three and nine months ended September 30, 2024, decreased by $2.8 million and $29.0 million, respectively, when compared with the comparable period of 2023.
The decrease in general and administrative expenses for the nine months ended September 30, 2024 includes an adjustment to reduce expense by $16.2 million related to the change in fair value of the contingent consideration associated with the 2023 acquisition of InnPlay. Without the amendment to the Stock Purchase Agreement for InnPlay, the likelihood of InnPlay reaching the thresholds for payment of the contingent consideration would likely have been significantly lower.
In addition, the decreases in general and administrative expenses for the three and nine months ended September 30, 2024 includes an approximate $1.6 million and $20.9 million impact, respectively, of recent headcount reductions that reduced employee compensation costs, including decreased stock-based compensation expense.
Impairment charge
During the three and nine months ended September 30, 2024, we recorded an impairment charge of $29.3 million and $36.3 million, respectively, related to our investments in unconsolidated affiliates. During the three and nine months ended September 30, 2023, we recorded an impairment charge of $41.6 million related to the Redecor game title., Also included in the nine months ended September 30, 2023 is a $9.7 million write-off of JustPlay.LOL Ltd's game title.
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Other Factors Affecting Net Income
Three months ended
September 30, 		Nine months ended
September 30,
2024 2023 2024 2023
(in millions) (Unaudited)
Interest expense $ 38.7 $ 39.4 $ 116.6 $ 114.5
Interest income (18.4) (11.9) (45.1) (31.3)
Foreign currency exchange, net 13.0 (2.6) 5.4 (6.8)
Other 0.5 0.3 0.5 0.5
Provision for income taxes 24.4 26.9 80.0 107.0
Interest
Interest expense for the three months ended September 30, 2024 was largely consistent with the same period of 2023. Interest expense for the nine months ended September 30, 2024 increased $2.1 million when compared with the same period of 2023 as a result of higher average interest rates on our variable rate debt.
Interest income for the three and nine months ended September 30, 2024 increased by $6.5 million and $13.8 million, respectively, when compared with the same period of 2023 as a result of higher balances held in interest bearing cash, cash equivalents and short-term investments, and higher average interest rates earned on those instruments, as well as the recognition of $3.5 million of income associated with a tax refund received in the third quarter of 2024.
Provision for income taxes
The effective income tax rate for the three months ended September 30, 2024 was 38.3% compared to 41.5% for the three months ended September 30, 2023. The effective income tax rate for the nine months ended September 30, 2024 was 30.9% compared to 35.1% for the nine months ended September 30, 2023. The effective tax rates were determined using a worldwide estimated annual effective tax rate and took discrete items into consideration. The difference between the effective tax rate and the 21% U.S. federal statutory rate for the nine months ended September 30, 2024 was primarily due to tax provisions that do not meet the more likely than not standard, the inclusion of Global Intangible Low-Taxed Income, and non-deductible stock-based compensation expense, partially offset by a non-recurring favorable impact of reversal of accruals related to undistributed earnings. The difference between the effective tax rate and the 21% U.S. federal statutory rate for the nine months ended September 30, 2023 was primarily due to tax provisions that do not meet the more likely than not standard and the inclusion of Global Intangible Low-Taxed Income.
Net income
Upon aggregating all of the components of our results of operations above, net income for the three and nine months ended September 30, 2024, increased $1.4 million and $18.8 million, respectively, when compared with the same periods of 2023.
Reconciliation of Credit Adjusted EBITDA to Net Income
Credit Adjusted EBITDA is a non-GAAP financial measure and should not be construed as an alternative to net income as an indicator of operating performance, nor as an alternative to cash flow provided by operating activities as a measure of liquidity, or any other performance measure in each case as determined in accordance with GAAP.
Below is a reconciliation of Credit Adjusted EBITDA to net income, the closest GAAP financial measure. Our Credit Agreement defines Adjusted EBITDA (which we call "Credit Adjusted EBITDA") as net income before (i) interest expense, (ii) interest income, (iii) provision for income taxes, (iv) depreciation and amortization expense, (v) impairment charges, (vi) stock-based compensation, (vii) contingent consideration, (viii) acquisition and related expenses, and (ix) certain other items. We calculate Credit Adjusted EBITDA Margin as Credit Adjusted EBITDA divided by revenues.
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Credit Adjusted EBITDA and Credit Adjusted EBITDA Margin as calculated herein may not be comparable to similarly titled measures reported by other companies within the industry and are not determined in accordance with GAAP. Our presentation of Credit Adjusted EBITDA and Credit Adjusted EBITDA Margin should not be construed as an inference that our future results will be unaffected by unusual or unexpected items.
Three months ended
September 30, 		Nine months ended
September 30,
(in millions) 2024 2023 2024 2023
Net income $ 39.3 $ 37.9 $ 178.9 $ 197.7
Provision for income taxes 24.4 26.9 80.0 107.0
Interest expense and other, net 33.8 25.2 77.4 76.9
Depreciation and amortization 39.2 38.4 117.1 116.0
EBITDA 136.7 128.4 453.4 497.6
Stock-based compensation(1)
23.6 28.0 70.2 82.5
Impairment charge 29.3 41.6 36.3 51.3
Changes in estimated value of contingent consideration (2.4) - (15.8) -
Acquisition and related expenses(2)
7.0 5.6 9.7 8.7
Other items(3)
3.0 2.0 20.0 3.2
Credit Adjusted EBITDA $ 197.2 $ 205.6 $ 573.8 $ 643.3
Net income margin 6.3 % 6.0 % 9.4 % 10.2 %
Credit Adjusted EBITDA margin 31.8 % 32.6 % 30.2 % 33.3 %
_______
(1) Reflects, for all periods, stock-based compensation expense related to the issuance of equity awards to our employees.
(2) Includes costs incurred to evaluate and pursue acquisition activities as well as costs incurred by the Company in connection with the evaluation of strategic alternatives.
(3) The amounts for the three and nine months ended September 30, 2024 consists primarily of $2.0 million and $16.7 million, respectively, incurred by the Company for severance. The amount for the nine months ended September 30, 2024 also includes $6.2 million for incurred by the Company related to restructuring activities. The amounts for the three and nine months ended September 30, 2023 consists primarily of $0.8 million and $1.5 million, respectively, incurred by the Company for severance and, for the three and nine months ended September 30, 2023, $1.0 million for tax assessment paid under protest.
Liquidity and Capital Resources
Capital spending
We incur capital expenditures in the normal course of business and perform ongoing enhancements and updates to our social and mobile games to maintain our quality standards. Cash used for capital expenditures in the normal course of business is typically made available from cash flows generated by operating activities. We may also pursue acquisition opportunities for additional businesses or social or mobile games that meet our strategic and return on investment criteria. Capital needs are evaluated on an individual opportunity basis and may require significant capital commitments. Payments of initial consideration for the SuperPlay transaction will be made from cash on the balance sheet. Cash for earnout consideration to be
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paid in future years is expected to be paid through operating cash flows, or, if necessary, borrowings under our Revolving Credit Facility or, if necessary, additional financing alternatives.
Liquidity
Our primary sources of liquidity are the cash flows generated from our operations, currently available unrestricted cash and cash equivalents, short-term investments, and borrowings under our Credit Facility and Revolver. Our cash and cash equivalents and short-term investments totaled $1,201.7 million and $1,029.7 million at September 30, 2024 and December 31, 2023, respectively. As of both September 30, 2024 and December 31, 2023, we had $600 million in additional borrowing capacity pursuant to our Revolving Credit Facility. Payments of short-term debt obligations and other commitments are expected to be made from cash on the balance sheet and operating cash flows. Long-term obligations are expected to be paid through operating cash flows, or, if necessary, borrowings under our Revolving Credit Facility or, if necessary, additional term loans or issuances of equity.
Our ability to fund our operations, pay our debt obligations and fund planned capital expenditures depends, in part, upon economic and other factors that are beyond our control, and disruptions in capital markets could impact our ability to secure additional funds through financing activities. We believe that our cash and cash equivalents balance, short-term investments and borrowing capacity under our Revolving Credit Facility and our cash flows from operations will be sufficient to meet our normal operating requirements during the next 12 months and the foreseeable future and to fund capital expenditures.
Cash flows
The following tables present a summary of our cash flows for the periods indicated (in millions):
Nine months ended
September 30,
2024 2023
Net cash flows provided by operating activities $ 337.0 $ 336.3
Net cash flows used in investing activities (125.5) (215.3)
Net cash flows used in financing activities (96.1) (12.1)
Effect of foreign exchange rate changes on cash and cash equivalents 0.3 0.8
Net change in cash, cash equivalents and restricted cash $ 115.7 $ 109.7
Operating activities
Net cash flows provided by operating activities for the nine months ended September 30, 2024 was $337.0 million compared with $336.3 million for the same period of 2023. Net cash flows provided by operating activities for each period primarily consisted of net income generated during the period, exclusive of non-cash expenses such as depreciation, amortization, stock-based compensation and changes in the fair value of contingent consideration payable, with changes in working capital impacted by the payment of annual and incentive bonuses and payment of long-term cash compensation during the first quarter and other normal working-capital timing differences.
Investing activities
Net cash flow used in investing activities for the nine months ended September 30, 2024 was $125.5 million when compared with $215.3 million for the same period of 2023. Cash flows used in investing activities generally includes outflows related to the purchase and capitalization of assets and, in 2023, includes $160.6 million of cash outflow for a business acquisition.
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Financing activities
Net cash flows used in financing activities for the nine months ended September 30, 2024 was $96.1 million, compared with $12.1 million for the same period of 2023. Financing activity cash flows for the nine months ended September 30, 2024 primarily relates to a cash dividend paid, and in both 2024 and 2023 includes repayments on our bank borrowings.
Capital resources
We have a $1.9 billion senior secured first lien term loan (the "Term Loan") and a $600 million revolving credit facility (the "Revolving Credit Facility") (together, the "Credit Agreement"), maturing on March 11, 2028 and March 11, 2026, respectively. The Term Loan requires quarterly principal payments equal to 0.25% of the original aggregate principal amount of the Term Loan with balance due at maturity.
On March 11, 2021, we issued $600.0 million aggregate principal amount of our 4.250% senior notes due 2029 (the "Notes"). The Notes mature on March 15, 2029. Interest on the Notes will accrue at a rate of 4.250% per annum. Interest on the Notes is payable semi-annually in cash in arrears on March 15 and September 15 of each year, commencing on September 15, 2021.
Significant terms of the Credit Facilities, the New Term Loan and the Notes, including balances outstanding, interest and fees, mandatory and voluntary prepayment requirements, collateral and guarantors and restrictive covenants are detailed in Note 4, Debt, to the accompanying consolidated financial statements and in Note 12, Debt, in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 26, 2024.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate risk, investment risk, and foreign currency risk as follows:
Interest rate risk
Our exposures to market risk for changes in interest rates relate primarily to our Term Loan and our Revolving Credit Facility. The Term Loan and our Revolving Credit Facility are floating rate facilities. Therefore, fluctuations in interest rates will impact the amount of interest expense we incur and have to pay.
In March 2021, we entered into two interest rate swap agreements, each with a notional value of $250 million. Each of these swap agreements is with a different financial institution as the counterparty to reduce our counterparty risk. Each swap requires us to pay a fixed interest rate of 0.9275% in exchange for receiving one-month LIBOR. The interest rate swap agreements settle monthly commencing in April 2021 through their termination dates on April 30, 2026. In June 2023 these two interest rate swap agreements were amended, so that effective July 31, 2023 the Company will pay a fixed interest rate of 0.85% in exchange for receiving one-month Term SOFR.
In January 2023, we entered into two interest rate swap agreements, each with a notional value of $250 million. Each of these swap agreements is with a different financial institution, and each swap requires us to pay a fixed interest rate of 3.435% in exchange for receiving one-month LIBOR for six months and one-month Term SOFR afterwards. The interest rate swap agreements settle monthly commencing in February 2023 through their termination dates on February 28, 2028.
The estimated fair value of the our interest rate swap agreements is derived from a discounted cash flow analysis.
We had borrowings outstanding under our Term Loan with book values of $1,808.5 million and $1,822.8 million at September 30, 2024 and December 31, 2023, respectively, which were subject to a weighted average interest rate of 8.19% and 7.84% for the nine months ended September 30, 2024 and the year ended December 31, 2023, respectively. There were no borrowings against our Revolving Credit Facility at September 30, 2024 or December 31, 2023.
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A hypothetical 100 basis point increase or decrease in weighted average interest rates under our Term Loan and Revolving Credit Facility would have increased or decreased our interest expense by $8.3 million over a twelve-month period, including consideration of the impact the hypothetical basis point change would have had on our interest rate swap agreements.
The fair value of our Credit Facilities will generally fluctuate with movements of interest rates, increasing in periods of declining rates of interest and declining in periods of increasing rates of interest. We are unable to estimate the impact on the fair value of our debt of a hypothetical 100 basis point increase or decrease in weighted average interest rates.
Investment risk
We had cash and cash equivalents including restricted cash totaling $1,147.4 million and $1,031.7 million as of September 30, 2024 and December 31, 2023, respectively. We also had short-term investments of $55.8 million as of September 30, 2024. Our investment policy and strategy primarily attempts to preserve capital and meet liquidity requirements without significantly increasing risk. Our cash and cash equivalents and short-term investments primarily consist of commercial papers, bank deposits and money market funds. We do not enter into investments for trading or speculative purposes. Changes in rates would primarily impact interest income due to the relatively short-term nature of our investments. A hypothetical 100 bps increase or decrease in interest rates would have an immaterial impact on fair value of our short-term investments as of September 30, 2024.
Foreign currency risk
Our functional currency is the U.S. Dollar and most of our revenues are denominated in U.S. Dollars. However, we have foreign currency risks related to a significant portion of our operating expenses, consisting of headcount related expenses as well as leases and certain other operating expenses, denominated in currencies other than the U.S. Dollar, primarily the Euro ("EUR"), Israeli Shekel ("ILS"), British Pound, Euro, Polish Zloty ("PLN") and Romanian Leu ("RON"). Accordingly, changes in exchange rates in the future may negatively affect our future revenues and other operating results as expressed in U.S. Dollars. Our foreign currency risk is partially mitigated as our revenues recognized in currencies other than the U.S. Dollar is diversified across geographic regions and we incur expenses in the same currencies in these regions.
We have experienced and will continue to experience fluctuations in our net income as a result of transaction gains or losses related to remeasurement of our asset and liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded.
As of September 30, 2024, we had entered into derivative contracts to purchase certain foreign currencies, including EUR, ILS, RON, and PLN, at future dates. The approximate amount of hedges was equal to $200.4 million, and all contracts are expected to mature during the upcoming 12 months.
Item 4. CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the requirements of the SEC's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by SEC Rule 13a-15(b), we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of September 30, 2024, the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2024.
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In July 2024, the Company went live on a new general ledger software solution for certain of its legal entities. The Company expects the remaining entities to go live on this same solution between October 1, 2024 and January 1, 2025. There were no other changes in internal control that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarter ended September 30, 2024,
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Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
For a description of our legal proceedings, see Note 8, Commitments and Contingencies, included in Part I. Item I of this quarterly report on Form 10-Q.
Item 1A. RISK FACTORS
We have offices and other significant operations located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel, including the ongoing War in Israel.
While we maintain offices in the United States, we maintain offices and conduct significant operations in Israel, and most of our senior management is based in Israel. In addition, many of our employees and officers are residents of Israel. Accordingly, political, economic and military conditions in Israel directly affect our business. For example, the current political situation in Israel where the ruling parties are attempting to implement laws that essentially allow the parliament to enact laws that are preemptively immune to judicial review could adversely affect our business and results of operations. In addition, any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our business and results of operations. Since the establishment of the State of Israel, a number of armed conflicts have taken place between Israel and its neighboring countries, as well as terrorist acts committed within Israel by hostile elements. In addition, recent political uprisings and conflicts in various countries in the Middle East are affecting the political stability of those countries. In addition, the tensions between Israel and Iran and certain extremist groups in the region may escalate in the future and turn violent, which could affect the Israeli economy in general and us in particular. Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions, could harm our results of operations and could make it more difficult for us to raise capital. Parties with whom we do business may sometimes decline to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary in order to meet our business partners face to face. In addition, the political and security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements. Our commercial insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East, with limited exceptions. Although the Israeli government has in the past covered the reinstatement value of certain damages that were caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or, if maintained, will be sufficient to compensate us fully for damages incurred. Any losses or damages incurred by us could cause a significant disruption in our employees' lives and possibly put their lives at risk, which would have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions generally and could harm our results of operations. Further, in the past, the State of Israel and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our results of operations, financial conditions or the expansion of our business. A campaign of boycotts, divestment and sanctions has been undertaken against Israel, which could also adversely impact our business.
On October 7, 2023, the State of Israel was attacked by Hamas, a group designated as a terrorist organization by the United States, and the State of Israel subsequently declared war on Hamas. Since that time, Israel has been engaged in armed conflict with combatants located in Gaza, the West Bank, Syria, Iran, Lebanon and Yemen. We cannot predict the outcome of developments in the War in Israel or the reaction to such developments by other countries or international authorities particularly as the conflict has triggered diplomatic rifts and protests around the world. An escalation or continuation of the conflict could result in additional military reserve duty call-ups, damage to infrastructure in Israel and other ramifications that could have a material adverse effect on our operations.
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023, which factors could materially affect our business, financial condition, liquidity or future results. There have been no material changes to the risk factors described in the "Risk Factors" section in our Annual Report on Form 10-K for the year ended December 31, 2023. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and
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uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, liquidity, results of operations, prospects or stock price.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
During the three months ended September 30, 2024, none of our officers or directors adopted or terminated any "Rule 10b5-1 trading arrangement" or any "non-Rule 10b5-1 trading arrangement," in each case, as such terms are defined in Item 408 of Regulation S-K.
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Item 6. EXHIBITS
Exhibit
Number 		Exhibit Description Filed or Furnished Herewith
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Calculation Definition Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
__________
# Indicates management contract or compensatory plan.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.
PLAYTIKA HOLDING CORP.
Registrant
By: /s/ Robert Antokol
Robert Antokol
Chief Executive Officer and Chairperson of the Board
By: /s/ Craig Abrahams
Craig Abrahams
President and Chief Financial Officer
Dated as of November 7, 2024
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