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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)

Delaware81-3634591
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valuePLTKThe 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.
ITEM 1.
ITEM 2.
ITEM 3.
ITEM 4.
PART II.
ITEM 1.
ITEM 1A.
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 5.
ITEM 6.
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 investments55.8 — 
Restricted cash1.5 2.0 
Accounts receivable159.6 171.5 
Prepaid expenses and other current assets107.3 147.9 
Total current assets1,470.1 1,351.1 
Property and equipment, net108.8 119.9 
Operating lease right-of-use assets92.0 100.3 
Intangible assets other than goodwill, net263.8 311.2 
Goodwill988.7 987.2 
Deferred tax assets, net100.4 99.3 
Investments in unconsolidated entities19.1 54.4 
Other non-current assets146.2 151.6 
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 payable36.5 65.0 
Operating lease liabilities, current19.0 19.5 
Accrued expenses and other current liabilities384.9 438.3 
Total current liabilities452.1 539.6 
Long-term debt2,391.2 2,399.6 
Contingent consideration23.5 20.8 
Other long-term liabilities, including employee related benefits325.3 318.7 
Operating lease liabilities, long-term78.3 88.2 
Deferred tax liabilities16.7 29.6 
Total liabilities3,287.1 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 capital1,334.7 1,264.9 
Accumulated other comprehensive income7.0 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,
2024202320242023
Revenues$620.8 $630.1 $1,899.0 $1,929.1 
Costs and expenses
Cost of revenue168.1 173.9 513.3 537.9 
Research and development99.2 102.2 306.7 304.9 
Sales and marketing149.9 142.8 509.7 427.7 
General and administrative76.8 79.6 196.7 225.7 
Impairment charges29.3 41.6 36.3 51.3 
Total costs and expenses523.3 540.1 1,562.7 1,547.5 
Income from operations97.5 90.0 336.3 381.6 
Interest and other, net33.8 25.2 77.4 76.9 
Income before income taxes63.7 64.8 258.9 304.7 
Provision for income taxes24.4 26.9 80.0 107.0 
Net income39.3 37.9 178.9 197.7 
Other comprehensive income (loss)
Foreign currency translation7.4 (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, basic372.2 366.7 371.4 365.8 
Weighted-average shares used in computing net income per share attributable to common stockholders, diluted372.5 367.6 371.7 366.3 
The accompanying notes are an integral part of these consolidated financial statements.
-2-

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(In millions, except for per share data)
(Unaudited)

Share capital
SharesAmountTreasury 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 PSUs1.0 *— (*)— — — 
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, 2024371.0 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 RSUs0.9 *— (*)— — — 
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, 2024371.9 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 RSUs0.7 *— (*)— — — 
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, 2024372.6 $4.1 $(603.5)$1,334.7 $7.0 $(840.3)$(98.0)


-3-

Share capital
SharesAmountTreasury 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 PSUs2.0 *— (*)— — — 
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, 2023365.6 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 RSUs0.7 *— (*)— — — 
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, 2023366.3 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 RSUs0.8 *— (*)— — — 
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, 2023367.1 $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,
20242023
Cash flows from operating activities
Net income$178.9 $197.7 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation34.8 33.2 
Amortization of intangible assets82.3 82.8 
Impairment charges36.3 51.3 
Stock-based compensation70.2 82.5 
Amortization of loan discount5.6 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 receivable12.1 (23.4)
Prepaid expenses and other current and non-current assets27.4 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 investments200.7 — 
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 cash0.3 0.8 
Net change in cash, cash equivalents and restricted cash115.7 109.7 
Cash, cash equivalents and restricted cash at the beginning of the period1,031.7 770.4 
Cash, cash equivalents and restricted cash at the end of the period$1,147.4 $880.1 

-5-


Nine months ended
September 30,
20242023
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
Apple58%56%
Google26%28%
Facebook3%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
-9-


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 costAllowance 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.

-10-


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 expenses83.3 93.9 
Media buy50.7 54.5 
Deferred revenues38.9 46.0 
Dividend payable37.3 — 
Tax accruals32.9 35.4 
Contingent consideration27.4 46.0 
Total accrued expenses and other current liabilities$384.9 $438.3

NOTE 4.    DEBT
September 30, 2024December 31, 2023
(in millions, except interest rates)
Maturity
Interest
rate
Book value
Face value
Book value
Term Loan20288.110%$1,808.5 $1,833.5 $1,822.8 
Senior Notes20294.250%594.4 600.0 593.6 
Revolving Credit Facility2026n/a— — — 
Total debt2,402.9 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, Debt in 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, Debt in 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:

StockWeightedWeighted
OptionsAverageAverageIntrinsic
OutstandingRemainingExerciseValue
(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 years6.1
Expected volatility
52.13% - 52.79%

RSUs

The following table summarizes the Company’s RSU activity during the nine months ended September 30, 2024:
WeightedTotal Fair
AverageValue of
SharesGrant DateShares 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:
WeightedTotal Fair
AverageValue of
Shares(1)
Grant DateShares 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,
2024202320242023
Stock options$0.7 $1.0 $2.4 $2.4 
RSUs23.5 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,
2024202320242023
Research and development expenses$7.1 $9.6 $23.0 $28.6 
Sales and marketing expenses1.5 2.3 4.9 7.1 
General and administrative expenses15.0 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,
2024202320242023
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 ValueFair ValueFair Value Hierarchy
Term Loan$1,833.5 $1,819.7 Level 2
Senior Notes600.0 547.5 Level 2
Total debt$2,433.5 $2,367.2 

December 31, 2023
Face ValueFair ValueFair Value Hierarchy
Term Loan$1,852.5 $1,847.9 Level 2
Senior Notes600.0 525.8 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 HierarchySeptember 30, 2024December 31, 2023
Cash equivalents
Money market fundsLevel 1$477.4 $524.4 
Term depositsLevel 1319.6 290.3 
Commercial papersLevel 2139.9 104.8 
Short-term investments
Commercial papersLevel 255.8 — 
Prepaid expenses and other current assets
Derivative instruments - interest rate swapsLevel 2$16.8 $25.3 
Derivative instruments - foreign currency derivative contractsLevel 23.4 4.3 
Other non-current assets
Derivative instruments - interest rate swapsLevel 2$5.9 $15.2 
Accrued expenses and other current liabilities
Derivative instruments - interest rate swapsLevel 2$0.4 $— 
Derivative instruments - foreign currency derivative contractsLevel 2$1.3 $0.9 
Other long-term liabilities, including employee related benefits
Derivative instruments - interest rate swapsLevel 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,
2024202320242023
Geographic location
USA$410.9 $433.9 $1,276.1 $1,348.1 
EMEA121.4 107.0 358.8 314.1 
APAC45.2 45.1 131.9 136.0 
Other43.3 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,
2024202320242023
Third-party platforms$446.4 $469.1 $1,379.4 $1,451.3 
Direct-to-consumer platforms174.4 161.0 519.6 477.8 
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 
USA59.7 64.8 
Ukraine16.9 21.8 
Other37.3 39.6 
Total long-lived assets, net$200.8 $220.2 

-21-

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,
2024202320242023
Interest expense$38.7 $39.4 $116.6 $114.5 
Interest income(18.4)(11.9)(45.1)(31.3)
Foreign currency translation differences, net13.0 (2.6)5.4 (6.8)
Other0.5 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)2024202320242023
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 rate38.3 %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.

-22-

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 TranslationInterest Rate SwapsForeign Currency Derivative ContractsTotal
Balance as of January 1, 2024$(10.0)$27.8 $2.8 $20.6 
Other comprehensive income (loss) before reclassifications(4.0)14.5 (2.5)8.0 
Amounts reclassified from accumulated other comprehensive income (loss)— (6.2)(0.1)(6.3)
Balance as of March 31, 2024(14.0)36.1 0.2 22.3 
Other comprehensive income (loss) before reclassifications(1.5)5.1 (3.5)0.1 
Amounts reclassified from accumulated other comprehensive income— (6.3)1.4 (4.9)
Balance as of June 30, 2024(15.5)34.9 (1.9)17.5 
Other comprehensive income (loss) before reclassifications7.4 (15.3)4.0 (3.9)
Amounts reclassified from accumulated other comprehensive income (loss)— (6.1)(0.5)(6.6)
Balance as of September 30, 2024$(8.1)$13.5 $1.6 $7.0 
                                                                                                                                                    
Foreign Currency TranslationInterest Rate SwapsForeign Currency Derivative ContractsTotal
Balance as of January 1, 2023$(15.6)$37.7 $(4.5)$17.6 
Other comprehensive income (loss) before reclassifications3.1 (4.0)(2.0)(2.9)
Amounts reclassified from accumulated other comprehensive income (loss)— (4.2)2.4 (1.8)
Balance as of March 31, 2023(12.5)29.5 (4.1)12.9 
Other comprehensive income (loss) before reclassifications(0.2)20.5 (2.4)17.9 
Amounts reclassified from accumulated other comprehensive income— (5.5)2.2 (3.3)
Balance as of June 30, 2023(12.7)44.5 (4.3)27.5 
Other comprehensive income (loss) before reclassifications(4.1)11.9 (6.7)1.1 
Amounts reclassified from accumulated other comprehensive income (loss)— (6.2)2.1 (4.1)
Balance as of September 30, 2023$(16.8)$50.2 $(8.9)$24.5 
-23-


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,
2024202320242023
Interest rate swaps$(6.5)$1.8 $(4.3)$3.8 
Foreign currency derivative contracts0.7 (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,
2024202320242023
Numerator:
Net income$39.3 $37.9