PLBY 10-K & 10-Q changes, risk factors and insider trading

•changing global economic conditions and standards, including with respect to tariffs and international trade tensions;

We rely on social media,media and Playboy magazine, as onetwo of our marketing strategies, to have a positive impact on both our brand value and reputation. Our brand and reputation could be adversely affected if our public image were to be tarnished by negative publicity, which could be amplified by social media, if we fail to deliver innovative and high-quality products and experiences acceptable to our customers, or if we face or mishandle a product recall or customer complaints.

The consumer products, licensing, digital entertainmentcontent and creatorprint content platformmedia markets in which we operate are highly competitive. The ability of our businesses to compete in each of these industries successfully depends on a number of factors, including our ability to consistently supply high quality and popular products and content, adapt to new technologies and distribution platforms, maintain our brand reputation and produce new and successful products and content. There can be no assurance that we will be able to compete successfully in the future against existing or new competitors, or that increasing competition will not result in price reductions, reduced margins or loss of market share, any of which could have a material adverse effect on our business, financial condition or results of operations. Additionally, many of our competitors, including apparel and personal goods brand licensors and retailers, large entertainment and media enterprises and well-established social media and other creatordigital content platforms have greater technical, operational, financial and human resources than we do. We cannot assure you that we can remain competitive with companies that have greater resources or that offer alternative product, entertainment or content offerings.

In addition, online usage and digital media and entertainment isare changing rapidly as technological advancements allow the deployment of more advanced and interactive multimedia website and digital application offerings, and the Internet and mobile device usage have resulted in new digital distribution channels. As a result, we have to rapidly develop new digital business models, including digital content and distribution models, that will allow us to otherwise capitalize on our growing content creator platform and large library of titlesplatforms that we own and license. We have licensed the operation of our main digital businesses and the development and sale of Playboy-branded consumer products, but neither we nor our licensees can guarantee that such arrangements will be successful.

We cannot ensure that our Playboy Club or other digitalcontent businesses, e-commerce platforms for Playboy or Honey Birdette products, strategic partnerships and licensing deals or Honey Birdette physical stores will be well received and achieve intended net sales or profitability levels. If any of our consumer products, licensing or digital businesses fail to achieve, or are unable to sustain, acceptable net sales and profitability levels, our business overall may be adversely impacted and we may incur significant costs associated with such business.

The adult-oriented content of our magazine and websites, including ourthe creator platform,platform we own, may also subject us to obscenity or other legal claims by third parties. We may also be subject to claims based upon the content that is available on our websites through links to other sites and in jurisdictions that we have not previously distributed content in. Implementing measures to reduce our exposure to this liability may require us to take steps that would substantially limit the attractiveness of our websites and other distribution channels and/or their availability in various geographic areas, which could negatively impact their ability to generate revenue.

We had significant net operating losses (“NOLs”) as of December 31, 2024.2025. In the U.S. we had $346.0$378.6 million of federal NOLs available to carry forward to future periods, of which $182.5$182.4 million will expire between 2028 and 2037, and we had $145.9$149.1 million of state and local NOLs available to carry forward to future periods, of which $9.6$9.4 million can be carried forward indefinitely. InAs Australia,of December 31, 2025, we also havehad $8.6Australia NOLs of $11.9 million, United Kingdom (“U.K.”) NOLs of $1.2 million and Hong Kong NOLs of NOLs$0.2 million available to carry forward indefinitely. The statute of limitations for tax years 20202021 and forward remains open to examination by the major U.S. taxing jurisdictions to which we are subject. The statute of limitations for tax year 20182019 and forward remainremains open to examination in Australia. The statute of limitations for tax year 2021 and forward remains open to examinations in the U.K. And the statute of limitations for tax year 2023 and forward remains open to examinations in Hong Kong. In addition, due to NOL carryforward provisions, tax authorities continue to have the ability to adjust the amount of our carryforward. Furthermore, as discussed below, the limitations on the use of NOLs under Internal Revenue Code Section 382 could affect our ability to use NOLs to offset future taxable income.

The debt under our senior secured credit facility accrues interest subject to variable rates of interest, which exposes us to interest rate risk. Reference rates used to determine the applicable interest rates for our variable rate debt began to rise significantly in the second half of fiscal year 2022 and continued through most of fiscal year 2024. The Secured Overnight Financing Rate (“SOFR”), which we use as a benchmark for establishing the interest rate applicable to our debt, was 4.5%3.7% and 5.4%4.5% as of December 31, 20242025 and December 31, 2023,2024, respectively. If interest rates continuewere to increase,increase again, the debt service obligations on such indebtedness willwould continueagain to increaseincrease, even if the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, willwould correspondingly decrease. In addition, while our senior secured debt will continue to be subject to SOFR, other factors may impact SOFR including factors causing SOFR to cease to exist, new methods of calculating SOFR to be established, or the use of an alternative reference rate. Such circumstances are not entirely predictable, but they could have an adverse impact on our financing costs and our financial results.

The international scope of our operations has contributed, and may continue to contribute, to volatile financial results and difficulties in managing our business. For the years ended December 31, 20242025 and 2023,2024, we derived approximately 52%67% and 57%,52%, respectively, of our consolidated revenues from countries outside the U.S., and we experiencedcontinued to experience significant challenges in the China market during those years. Our international operations expose us to numerous challenges and risks, including, but not limited to, the following:

We havepreviously entered into the China JV and a spirits-related joint ventureventure, are pursuing the New China JV, and may enter into further joint ventures and strategic partnerships, in some of which we may not hold controlling interests or operating control. Even if we legally control such ventures (as iswas the case with the China JV, and will initially be the case for the New China JV), there may be circumstances under which we would not exercise sole decision-making authority regarding their business. Joint ventures and strategic partnerships may, under certain circumstances, involve risks that would not otherwise be present if we were in sole control or another party were involved. Joint venture and strategic partners may have economic or other business interests or goals that are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, because neither we nor the partner would have full control over the venture. Disputes between us and joint venture and strategic partners may result in legal action that would increase our expenses and divert management’s attention. In addition, we may in certain circumstances be liable for the actions of our joint venture or strategic partners.

We may consider strategic opportunities outside of our management’s areas of expertise if an attractive transaction or target is presented to us and we determine that it represents an advantageous opportunity for our company. Although our management will endeavor to evaluate the risks inherent in any particular opportunity, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our securities will not ultimately prove to be less favorable to investors than a direct investment, if an opportunity were available, in a strategic transaction counterparty.

Under current GAAP accounting standards, goodwill and indefinite life intangible assets, including some of our trademarks, are not amortized, but instead are subject to impairment evaluation based on related estimated fair values, with such testing to be done at least annually. At the impairment date during the third quarter of 2024, as a result of ongoing impacts to our revenue, including declines in consumer demand, we recorded non-cash asset impairment charges related to the write-down of goodwill.

Our ability to achieve growth in revenue in the future will depend, in large part, upon our ability to attract new customers and subscribers to our offerings, retain existing customers and subscribers of our offerings and reactivate customers and subscribers in a cost-effective manner. Achieving such growth may require us to increasingly engage in sophisticated and costly sales and marketing efforts, some or all of which may not provide a material return on investment. We have used and expect to continue to use a variety of free and paid marketing channels, in combination with compelling offers and opportunities to achieve our objectives. For paid marketing, we intend to leverage a broad array of advertising channels, including billboards, radio, social media platforms, affiliates and paid and organic search, and other digital channels, such as search and mobile display. If the search engines and other digital platforms on which we rely modify their algorithms, change their terms, including with respect to cookies, data and/or privacy controls, or if the prices at which we use such services increase, then our costs could increase, and fewer customers and subscribers may reach ouror use our platforms. If links to our platforms are not displayed prominently in online search results or on social media, if fewer customers or subscribers click through to our platforms, if our other marketing campaigns are not effective, or if the costs of attracting customers and subscribers using any of our current methods significantly increase, then our ability to efficiently attract new customers and subscribers could be reduced, our revenue could decline and our business, financial condition and results of operations could be adversely impacted.

A substantial portion of our licensing revenue is concentrated with a limited number of licensees and retail partners, such that the loss of a licensee or retail partner has in the past decreased, and could continuein tothe future materially decrease, our revenue and cash flows.

In the fourth quarter of 2024, we entered into a licensing agreement with Byborg to license intellectual property and certain Playboy digital assets for $300 million in minimum guaranteed payments over the initial 15-year term of the license, which began as of January 1, 2025. As aof result,December 31, 2025, Byborg is expected to be one of our largest licenseeslicensee and contributecontributes a material amount of our consolidated revenues, with licensing revenues of $20.0 million being recognized in future periods.2025.

There can be no assurances that we will not lose the licensees under our license agreements due to their failure to exercise the option to renew or extend the term of those agreements, the cessation of their business operations (as a result of their financial difficulties or otherwise) without equivalent options for replacement or termination of their license agreements for cause. In October 2023, we terminated licensing agreements with certain Chinese licensees due to ongoing, uncured breaches of their licenses, which comprised $152.2 million of unrecognized licensing revenue under our long-term contracts as of the termination date. Revenue recognized in connection with such contracts that were subsequently terminated was $27.1 million during the year ended December 31, 2023, out of which $5.1 million was attributable to prepaid royalty guarantees recorded as revenue in the fourth quarter of 2023. Such failures by our licensees have reduced, and could continue to reduce, the revenue stream to be generated by our license agreements. In addition, the failure of licensees to meet their production, manufacturing and distribution requirements, or to be able to continue to import goods (including, without limitation, as a result of labor strikes or unrest), could cause a decline in their sales and potentially decrease the amount of royalty payments (over and above the guaranteed minimum royalty payments) due to us. A decrease in royalties for any of the above reasons has had, and could continue to have, a material and adverse impact on our financial condition, results of operations or business.

We may be subject to product liability claims when people or property are harmed by the products we sell or manufacture.sell.

Additional Risks Related to Our DigitalContent-Related Subscriptions and Content BusinessOfferings

Free content on the Internet and competition from free platforms and other social media and content-creator sites is increasing competition for our adult content products and creator platform and is changing the dynamics of the marketplace for our digitaladult content products.

Demand for both our proprietary and licensed paid adult content products and our licensed creator platform is significantly impacted by the availability of free adult entertainment available on the Internet, “YouTube-like” adult video sites (commonly known as “tube sites”), as well as from social media platforms and other subscription-based content-creator sites. Such other sites and platforms feature free adult videos, some of which consist of unlicensed, or pirated, excerpts of professionally produced adult movies (including at times pirated versions of our proprietary videos). Other content-creator sites allow consumers to subscribe for content from specific creators, many of which offer adult-oriented content. The availability of these free adult videos and creator-specific subscriptions may diminish the demand for our paid video offerings on our proprietarylicensed websites,platforms, including our Playboy Club on playboy.com,Club, playboy.tv and playboyplus.com, and for our other content products, and has diluted the market presence of ourthe website.platforms we have licensed to Byborg. The tube sites, social media platforms and other content-creator sites may materially affect the revenues we generate from our websites and other adult content offerings. It is uncertain what effect tube sites, other free internet adult websites and competing content-creator sites will have on our on-goingowned-and-operated operationsand licensed content-related offerings and our future financial results. No assurance can be given that we will be able to effectively compete against theadult tubecontent sites and other internet products.

Consumers are increasingly viewing content on a time-delayed or on-demand basis from traditional distributors and from streaming and social media platforms, connected apps and websites and on a wide variety of screens, such as televisions, tablets, mobile phones and other devices. Additionally, devices that allow users to view television programs on a time-shifted basis and technologies that enable users to fast-forward or skip programming, including commercials, such as DVRs and portable digital devices and systems that enable users to store or make portable copies of content may affect the attractiveness of our offerings to advertisers and could therefore adversely affect our revenues. There is increased demand for short-form, user-generated and interactive content, which we are addressing through our content creator platform, the Playboy Club. Such content is different than our past content offerings. Likewise, distributors are offering smaller programming packages known as “skinny bundles” and content-creator platforms allow for a la carte consumption, both of which are delivered at a lower cost than traditional subscription offerings and sometimes allow consumers to create a customized package of content, that are gaining popularity among consumers. If the Playboy Club does not provide the on-demand content sought by consumers, our networks are not included in on-demand content packagespackages, the relaunch of our magazine is not successful, or consumers favor alternative offerings, we may experience a decline in viewership or content consumption and ultimately the demand for our programming and content, which could lead to lower revenues.

In order to respond to changes in content distribution models in our industry, we have invested in, developed and launched our content creator platform, the Playboy Club. There can be no assurance, however, that our consumers will respond to our digital or print products and services or that our digital strategy will be successful, particularly given the increase in digital products and platforms on the market. Each distribution model has different risks and economic consequences for us, so the rapid evolution of consumer preferences may have an economic impact that is not completely predictable. Distribution windows are also evolving, potentially affecting revenues from other windows. If we cannot ensure that our distribution methods and content are responsive to our target audiences, our business could be adversely affected.

On FebruaryDecember 11,16, 2025, we notified Nasdaq of ourthe Company’s temporary noncompliance with the continued listing requirements as set forth in Nasdaq Listing RuleRules 5605(b) regarding the composition of the Board, because there wasis notno longer a majority of independent directors on the Board as of that date. On February 14, 2025, we received a Nasdaq Staff Deficiency Letter notifying us that we were not in compliance with Nasdaq Listing Rule 5605. We will rely on the cure period set forth in Nasdaq Listing Rule 5605(b)(1)(A) with respectdue to the compositionlack of ourone Board,independent whichdirector. cureFollowing periodNatalia isPremovic’s expectedresignation as an independent director of the Company, the Board has three independent directors, three non-independent directors and one vacant seat to expirebe asfilled of August 11, 2025. We and Byborg are in the process of identifyingby a new independent directordirector. toAs appointMs. toPremovic was not on any committees of the BoardBoard, toall fill the vacancy created by the expansioncommittees of the Board fromremain fivecomposed to seven directors and the appointmentsolely of Gyorgy Gattyan to the Board. We anticipate appointing such additional independent director within the cure period under the Nasdaq rules listed above.directors.

OurEach of our Chairman, Suhail Rizvi, together with entities he controls (“RT”), and our director GyorgyGyörgy Gattyan,Gattyán, together with entities he controls (which are affiliates of Byborg), eachand ownour primary senior secured lender owns a significant percentage of our common stock, and they may effectively control our major corporate decisions, and their interests may conflict with each other’s interests and your interests as an owner of our common stock and with our interests.

Byborg beneficially owned approximately 15.9%13.0% of our common stock as of March 10, 2025.2026. Under the terms of a securities purchase agreement, dated October 30, 2024 (the “Initial SPA”), entered into between us and Byborg, Byborg has the right to nominate one individual to serve on the Board, and will retain such right until such time as Byborg beneficially owns less than 7,450,000 shares of common stock. In addition to the Initial SPA, on December 14, 2024, we entered into a second securities purchase agreement (the “Additional SPA”) with a Byborg affiliate, pursuant to which we agreed to sell to such affiliate an additional 16,956,842 shares of the our common stock at a price of $1.50 per share, subject to the approval of such sale and issuance of shares by our stockholders, which would increase Byborg’s beneficial ownership of our common stock to approximately 28.8%.

BothEach RTof RT, Byborg and ByborgFortress may have interests that are different from yours (and which may be different from each other’s interest). Each of RT, Byborg and Fortress may vote in a way with which you disagree and that may be adverse to your interests. In addition, each of RT’sRT’s, Byborg’s and Byborg’sFortress’ concentration of ownership could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which could cause the market price of our common stock to decline or prevent our stockholders from realizing a premium over the market price for their common stock.

Additionally, each of RTRT, Byborg and ByborgFortress is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us or supply us with goods and services. RTRT, Byborg and/or ByborgFortress may also pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. Stockholders should consider that the interests of RTRT, Byborg and/or ByborgFortress may differ from their interests and the interests of the Company in material respects.

The trading market for our common stock will be influenced by the research and reports that securities or industry analysts publish about us. If securities or industry analysts initiate coverage and one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our company, our common stock share price would likely decline. If analysts publish target prices for our common stock that are below the historical sales prices for our common stock on a securities exchange or the then-current public price of our common stock, it could cause our stock price to decline significantly. In 2023, multiple investment analysts ceased coverage of our stock. Due to such stoppage of analyst coverage, and if furtherIf analysts cease coverage of us and our common stock or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume to decline.

We also have registered on Forms S-8 a total of 17,062,85821,450,197 shares of common stock underlying awards that we have issued, or may in the future issue, under our employee equity incentive plans.plans, Theseof which only 9,282,200 shares remain reserved for the issuance and/or settlement for such awards. The shares registered on Forms S-8 may be sold freely in the public market upon issuance, or pursuant to the reoffer prospectus in the Forms S-8, as applicable, subject to existing lock-up agreements and relevant vesting schedules, and applicable securities laws. Promptly following the filing of this Annual Report on Form 10-K, we intend to register more than 3.64.5 million new shares of common stock and over 300,000447,000 shares of common stock that were returned to our equity incentive plans (due to their cancellation or forfeiture, which may be reissued under such plans) on another Form S-8 for future issuances under our equity incentive plans, in accordance with the terms thereof. Refer to Note 12,11, Stockholders Equity–Common Stock, of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding our common stock reserved for future issuance as of December 31, 2024.2025.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for: (a) any derivative action or proceeding brought on behalf of the Company, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders, (c) any action asserting a claim against the Company, its directors, officers or employees arising pursuant to any provision of the DGCL or our certificate of amended and restated certificate of incorporation or our bylaws, or (d) any action asserting a claim related to or involving the Company that is governed by the internal affairs doctrine except for, as to each of (a) through (d) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. Our amended and restated certificate of incorporation also provides that the federal district courts of the UnitesUnited States will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities Act of 1933, as amended (the “Securities Act”).

InOur addition,strategic weinitiatives transitionedinclude ouridentifying Playboyand e-commerceimplementing platformactions indesigned Julyto 2023 from an owned-and-operated modelshift to a licensingmore arrangement.capital-light Similarly,business inmodel and significantly reduce our expenses. In the fourth quarter of 2024, we entered into a licensing agreement with Byborg to license intellectual property and certain Playboy digital assets for operation of our digital businesses by ByborgByborg, as of January 1, 2025. Transitioning business operations to licensing arrangements is intended to reduce our operational expenses, but the exact timing and extent of such reductions may not be fully realized by the Company as expected, or at all. TheWe transitioncontinue to review the cost structure of theour Playboy e-commerce business to a licensing arrangement has been completed,businesses and weadditional expectcost the transition of the digital businesses to Byborg’s operational control to be fully completed by the end of 2025, but we can provide no assurance as to when expense reductions and savings for such transition will be fully reflected in our results.rationalization.

Geopolitical risks, such as those associated with Russia’s war with UkraineUkraine, and armed conflictswar in the Middle East, other armed conflicts around the world and the imposition of tariffs, could result in a decline in the outlook for the U.S. and global economies.

The uncertain nature, magnitude, and duration of hostilities stemming from Russia’s ongoing war with UkraineUkraine, and armed conflictswar in the Middle East, includingarmed conflicts in various parts of the potentialworld, effectsthe imposition of tariffs and sanctions, retaliatory attacks (including cyberattacks) and trade disruptions on the world economy and markets, have contributed to increased market volatility and uncertainty, and such geopolitical risks could have an adverse impact on macroeconomic factors which affect our assets and businesses.

Unless otherwise indicated or the context otherwise requires, references to the “Company”, “PLBYPlayboy”, “we”, “us”, “our” and other similar terms refer to PLBY Group,Playboy, Inc. and its consolidated subsidiaries.

We are a global consumer lifestyle company marketing our brands through a wide range of licensing initiatives, direct-to-consumer products, licensingPlayboy initiatives,magazine, digital subscriptions and content, and online and location-based entertainmententertainment. businesses.As Weof January 1, 2025, we licensed certain intellectual property and our Playboy Plus, Playboy TV (online and linear) and Playboy Club digital businesses to Byborg pursuant to a License & Management Agreement. As a result, we have threetwo reportable segments: Direct-to-Consumer, Licensing,Direct-to-Consumer and DigitalLicensing. Subscriptions and Content. TheOur Direct-to-Consumer segment derives revenue from sales of consumer products sold directly to consumers by Honey Birdette online or at its brick-and-mortar stores, with 5451 stores in three countries as of December 31, 2024,2025. and in the prior year comparative period included the playboy.com e-commerce business, which in the third quarter of 2023 fully transitioned from an owned-and-operated model to a licensing model. TheOur Licensing segment derives revenue from trademark licenses for third-party consumer products, primarily for various apparel and accessories categories, hospitality, digital gaming and location-based entertainment businesses. The Digital Subscriptionsbusinesses, and Contentstarting segmentJanuary derives1, 2025, revenue from thelicensing subscriptionour ofdigital Playboy programming that is distributed through various channels, including Playboy websitessubscriptions and domestic and international television, and sales of creator content offerings and membershipsoperations to consumers through the Playboy Club on playboy.com.Byborg.

We continue to pursue a commercial strategy that relies on a more capital-light business model focused on revenue streams with higher margin, lower working capital requirements and higher growth potential. We are doing this by leveraging our flagship Playboy brand to attract best-in-class operators. In the fourth quarter of 2024, we entered into a licensing agreement with Byborg to license intellectual property and select Playboy digital assets for $300.0 million in minimum guaranteed payments over the initial 15-year term of the license, which began as of January 1, 2025. We are focused on strategically expanding our licensing business into new categories and territories with high quality strategic partners and supporting them with brand marketing in the form of content, experiences and editorial works. We will also continue to use our licensing business as a marketing tool and brand builder, including through high profile collaborations and our large-scale strategic partnerships. For our Honey Birdette business, we intend to focus on the U.S. market, where the brand’s stores, on average, generate more revenue and better margins, and generally have customers that tend to spend more and are less price sensitive.

Our indefinite-lived intangible assets, including trademarks and goodwill, that are not amortized, and the carrying amounts of our long-lived assets, including property and equipment, stores, acquired intangible assets and right-of-use operating lease assets, may continue to be subject to impairment testing and impairments which reduce their value on our balance sheet. We periodically review for impairments whenever events or changes in our circumstances indicate that such assessment would be appropriate. We experienced further declines in revenue and profitability duringDuring the yearyears ended December 31, 2024, which caused us to test the recoverability of our indefinite-lived2025 and long-lived assets and resulted in the impairments set forth in our consolidated financial statements for the year ended December 31, 2024. However, if2024, we continue to experience declines in revenue or profitability, which could occur upon further declines in consumer demand or additional discontinued operations, we may record furtherrecorded non-cash asset impairment charges as of the$0.5 applicablemillion impairmentand testing$3.8 date.million on our artwork held for sale and $1.5 million and $0.6 million on our corporate leases, respectively.

Seasonality of RevenuesOur Consumer Product Sales

We generate revenue from sales of consumer products sold through our Honey Birdette retail stores or online directly to customers, trademark licenses for third-party consumer products and online and location-based entertainment businesses, and salesstarting January 1, 2025, licensing the operation of creatorour digital subscriptions and content offeringsbusinesses, which were owned and membershipsoperated toby consumers on our content creator platform on playboy.com,us in additionthe toprior subscriptionsyear tocomparative our programming, which is distributed through various channels, including websites and domestic and international television.period.

Revenue from sales of online apparel and accessories, including sales through third-party sellers,accessories is recognized upon delivery of the goods to the customer. Revenue from sales of apparel at our retail stores is recognized at the time of transaction. Revenue is recognized net of incentives and estimated returns. We periodically offer promotional incentives to customers, which include basket promotional code discounts and other credits, which are recorded as a reduction of revenue.

We license trademarks under multi-year arrangements to third-party consumer products and online and location-based entertainment businesses. Typically, the initial contract term ranges between one to ten15 years. Renewals are separately negotiated through amendments. Under these arrangements, we generally receive an annual or quarterly non-refundable minimum guarantee that is recoupable against a sales-based royalty generated during the license year. Earned royalties received in excess of the minimum guarantee (“Excess Royalties”) are typically payable quarterly. We recognize revenue for the total minimum guarantee specified in the agreement on a straight-line basis over the term of the agreement and recognize Excess Royalties only when the annual minimum guarantee is exceeded. Generally, Excess Royalties are recognized when they are earned. In the event that the collection of any royalty becomes materially uncertain or unlikely, we recognize revenue from our licensees up to the cash we have received.

DigitalPrior to January 1, 2025, digital subscription revenue iswas derived from subscription sales of playboyplus.com and playboy.tv, which are online content platforms. We receivereceived fixed consideration shortly before the start of the subscription periods from these contracts, which arewere primarily sold in monthly, annual, or lifetime subscriptions. Revenues from lifetime subscriptions arewere recognized ratably over a five-year period, representing the estimated period during which the customer accesses the platforms. Revenues from digital subscriptions were recognized ratably over the subscription period. Revenues generated from the sales of creator content offerings and memberships to consumers via our Playboy Club creator platform were recognized at the point in time when the sale is processed. Revenues generated from subscriptions to our creator platform are recognized ratably over the subscription period.

WePrior licenseto January 1, 2025, we also licensed programming content to certain cable television operators and direct-to-home satellite television operators who paypaid royalties based on monthly subscriber counts and pay-per-view and video-on-demand buys for the right to distribute our programming under the terms of affiliation agreements. Royalties arewere generally collected monthly and recognized as revenue as earned.

Cost of sales primarily consist of merchandise costs, warehousing and fulfillment costs, agency and commission fees, website expenses, digital platform expenses, marketplace traffic acquisition costs, digital platform expenses (prior to January 1, 2025), transition expenses per the TSA (commencing January 1, 2025 through June 30, 2025), credit card processing fees, personnel and affiliate costs, including stock-based compensation andcompensation, costs associated with branding events,activities, customer shipping and handling expenses, fulfillment activity costs and freight-in expenses.

Selling and administrative expenses primarily consist of corporate office and retail store occupancy costs, personnel costs, including stock-based compensationcompensation, transition expenses per the TSA (commencing January 1, 2025 through June 30, 2025), brand marketing costs, and contractor fees for accounting/finance, legal, human resources, information technology and other administrative functions, general marketing and promotional activities,activities and insurance, offset by a reversal of related selling and administrative expenses due to settlement at a discount of certain account payable balances in 2024.insurance.

Impairments consist of the impairments of our artwork held for sale, right-of-use assets related to our corporate leases, internally developed software, certain licensing contracts, right-of-use assets, Playboy-branded trademarks, Honey Birdette’s trade namessoftware and goodwill.

Other operating expense,income (expense), net consists primarily of gains and losses on disposal of assets and other miscellaneous items, offset by gains recognized from the sale of crypto assets (2023 only).items.

Other Income (Expense) Income,, Net

Other income (expense) income,, net consists primarily of other miscellaneous nonoperating items, such as nonrecurring transaction fees, foreign exchange realized and unrealized transaction gains or losses, debt related costs, bank charges asand wellinterest as nonrecurring transaction fees.income.

(Expense) Benefit from Income Taxes (Expenseexpense) benefit from income taxes consists of an estimate for U.S. federal, state, and foreign income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. Due to cumulative losses, we maintain a valuation allowance against our U.S. federal and state deferred tax assets, as well as Australia, U.K. and China deferred tax assets.

The following table summarizes key components of our results of operations for the periods indicated (in thousandsthousands, except percentages):

The increase in digital subscriptions and contentdirect-to-consumer net revenues, compared to the prior year comparative period, was primarily due to acontinued $1.7 million increaseimprovement in netconsumer revenuesperception fromof ourthe creatorHoney platform,Birdette brand, which resulted in increased sales of full-price products, partly offset by alower $0.6sales millionof decreasediscounted in other digital subscriptions and content revenue.products.

Cost of Sales and Gross ProfitMargin

The increase in licensing cost of sales and the decrease in gross margin, compared to the comparable prior year period, was primarily due to a $6.2$2.2 million increase in licensing commission expense, net, reflecting a one-time settlement amount of $2.4 million to pay current and future commissions primarily due to a nonrecurringlicensing reversalagent. ofWithout commissionsuch accrualsettlement, inlicensing thegross priormargin yearwould comparativehave period relatedincreased to the termination of certain Chinese licensing agreements, partly offset by a $1.1 million reduction in licensing product costs due to the termination of Playboy’s e-commerce licensing agreement in the second quarter of 2024 and subsequent licensing agreement with a new licensing partner in the third quarter of 2024.95%.

The decrease in digitalall subscriptions and contentother cost of sales and the increase in gross margin, compared to the comparable prior year comparative period, was primarily due to $2.0 million in lower cost of sales related to the licensing of our creatordigital platformsubscriptions largelyand content operations to Byborg pursuant to the LMA, effective as a result of nonrecurringJanuary creator1, platform expenses in 2023 and lower payment processing fees.2025.

You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited interim condensed consolidated financial statements as of and for the three and six months ended MarchJune 31,30, 2026 and 2025 and the related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024 and the related notes thereto included in our Annual Report on Form 10-K filed with the SEC on March 16, 2026. This discussion contains forward-looking statements that involve risks and uncertainties and that are not historical facts, including statements about our beliefs and expectations. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and particularly under the headings “Risk Factors”, “Business” and “Cautionary Note Regarding Forward-Looking Statements” contained in our Annual Report on Form 10-K filed with the SEC on March 16, 2026. As used herein, “we”, “us”, “our”, and the “Company” refer to Playboy, Inc. and its subsidiaries.

We are a global consumerlifestyle, lifestylemedia and licensing company marketingbuilt on the Playboy brand—one of the world’s most recognizable and enduring consumer brands, with Playboy-branded products and content available in over 100 countries. We pursue a capital-light business model in which the Playboy brand serves as the foundation for three brand-powered activities, licensing, media and experiences, and hospitality, which is further complemented by Honey Birdette, our brandspremium throughdirect-to-consumer lingerie business, which operates as a wide range of licensing initiatives,separate direct-to-consumer products,growth Playboy magazine, digital subscriptions and content, and online and location-based entertainment.engine. We havereport our operations in two reportable segments: Direct-to-Consumer and Licensing. Our Direct-to-Consumer segment derives revenue from sales of consumer products sold directly to consumers by Honey Birdette online orand atthrough its brick-and-mortar stores, with 5048 stores in three countries as of MarchJune 31,30, 2026. Our Licensing segment derives revenue from trademark licenses for third-party consumer products,products primarily foracross various apparel and accessories categories, as well as hospitality, digital gaming and location-based entertainmententertainment. businesses.Effective January 1, 2025, we license our adult businesses, including Playboy Club, Playboy Plus, and Playboy TV digital assets to Byborg Enterprises SA (“Byborg”) pursuant to a License & Management Agreement (the “LMA”). We continue to directly publish editorial and Playmate content in support of our brand and licensing, media and experiences activities.

In the fourth quarter of 2024, we entered into a License & Management Agreement (the “LMA”) with Byborg Enterprises SA (“Byborg”) to license intellectual property and select Playboy digital assets for $300.0 million in minimum guaranteed payments over the initial 15-year term of the license, which began January 1, 2025.

After having stabilized Playboy’s China business in 2024 and 2025, in the fourth quarter of 2025, we transitioned our joint venture for the Playboy business in China into a more typical licensing structure, with an affiliate of our former China joint venture partner becoming our licensing agent in China. On February 9, 2026, we terminated such licensing agent in preparation for the New China JV (defined below). Also on February 9, 2026, we entered into a share purchase agreement (the “Purchase Agreement”) with UTG Brands Management Group Limited (“UTG”) for a new joint venture for the Playboy business in China (the “New China JV”), in which UTG is to ultimately own a 50% interest and operate Playboy’s China licensing business. The initial closing pursuant to the Purchase Agreement (the “New China JV Initial Closing”) occurred, and the New China JV was established, on March 20, 2026. As of the New China JV Initial Closing,Closing and June 30, 2026, we owned 83.33% of the New China JV and UTG owned 16.67%. While we retain majority control of the New China JV, UTG manages all operational aspects of Playboy’s licensing business in China, Hong Kong and Macau.

We expect our licensing business in China to continue to represent a material part of our overall business. Our licensing revenues from China as a percentage of our total revenues were 10% and 11% for each of the three and six months ended MarchJune 31,30, 2026 and 2025, respectively.

We continue to monitor ongoing changes in U.S. trade policies, including increasing tariffs on imports, in some cases significantly, and changes to existing international trade agreements. These actions have prompted retaliatory tariffs and other measures by a number of countries. Starting in the second quarter of 2025, actions were taken by the U.S. and certain other countries have taken actions to modify the timing, rates and/or other aspects of certain of these tariffs. However, some of the new tariffs remain in effect, including tariffs between the U.S. and China, where we source the manufacturing of our Honey Birdette products and where many of our licensees source their products. While the impact of such trade policies on our business remains uncertain, we continue to closely monitor such matters and potential impacts, including increased production costs and higher pricing to our customers, either of which could negatively affect our business, results of operations and financial condition. WeCertain areof alsothese pursuingtariffs were imposed under the International Emergency Economic Powers Act (“IEEPA”). In February 2026, the U.S. Supreme Court issued a decision that the tariffs imposed under IEEPA were not authorized under such statute, and U.S. Customs and Border Protection has since established a process for claiming refunds of tariffs paid tounder IEEPA. As of June 30, 2026, we had a determinable claim for $1.1 million of such refunds, which was recorded as a reduction of cost of sales in our condensed consolidated statements of operations for the U.S.three government,and six months ended June 30, 2026. Substantially all of this amount was collected in July 2026, with the remainder received prior to June 30, 2026. We have also submitted claims for additional IEEPA tariffs paid. Such additional claims remain subject to ongoing legal, regulatory, and administrative developments, and the extenttiming, amount, and availability of any further refunds remain uncertain. Accordingly, we have not recognized any additional receivable or reduction of cost of sales relating to such tariffsclaims arebecause determinedrealization tois benot refundable by the U.S. government.assured.

We generate revenue from sales of consumer products sold through our Honey Birdette retail stores or online directly to customers, trademark licenses for third-party consumer products and online and location-based entertainment businesses, and licensing the operation of our digital subscriptions and content businesses, which were previously owned and operated by us, to Byborg pursuant to the LMA.

Cost of sales primarily consist of merchandise costs, warehousing and fulfillment costs, agency and commission fees, website expenses, marketplace traffic acquisition costs, transition expenses per the TSA (commencing January 1, 2025 through June 30, 2025), credit card processing fees, personnel costs, costs associated with branding events,activities, including the magazine, net of brand expense reimbursement pursuant to the terms of a Brand Support Services Agreement with UTG (the “BSSA”), customer shipping and handling expenses, fulfillment activity costs and freight-in expenses.

Impairments consist of the impairments of our artwork held for sale during the 2025 period and right-of-use assets related to our corporate leases during the 2025 period.

Other Operating Income (Expense), Income, Net

Other operating income (expense), income, net consists primarily of gains and losses on the disposal of assets and other miscellaneous items.

Other Income,Income (Expense), Net

Other income,income (expense), net consists primarily of other miscellaneous nonoperating items, such as nonrecurring transaction fees, foreign exchange realized and unrealized transaction gains or losses, early termination fees,gains, debt related costs, bank charges and interest income.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

The increase in direct-to-consumer net revenues, compared to the prior year comparative period, was driven by continued strong salesperformance of full price Honey Birdette products, both full price and discounted items, particularly e-commerce sales in the United States.States and retail sales in Australia.

The decreaseincrease in licensing net revenues, compared to the prior year comparative period, was primarily due to thehigher expirationoverage ofroyalty arevenues smallfrom number ofexisting licensing agreements, some of which are expected to be replaced in subsequent quarters.partners.

The decreaseincrease in corporate revenues for the three months ended MarchJune 31,30, 2026 was primarily duedriven toby asales decreaseof the 2026 spring issue of Playboy magazine, which launched in corporateApril branding activities, primarily sponsorship events, as a result of changes in brand strategy.2026.

The increaseslight decrease in direct-to-consumer cost of sales, compared to the prior year comparative period, was primarily due to a $0.4$0.8 million increase in Honey Birdette’s product, shipping and fulfillment costs asdriven aby resulthigher ofrevenues, offset by tariff refunds. The improvement in gross margin reflects continued revenue growth, outpacing the increase in product, shipping and higherfulfillment costs, as well as improvement in quality of inventory reserves and related write-offs of $0.7 million due to an increase in Honey Birdette’s inventory balance as it prepares for growth. The increase in gross profit was due to higher revenue, particularly driven by sales of full-price products, partly offset by an increase in inventory reserves.

The increasedecrease in licensing cost of sales and the corresponding decreaseincrease in gross margin, compared to the prior year comparative period, waswere primarily due to a $0.9$2.0 million licensingreduction commission payment to our Chinain licensing agentcommissions asexpense. comparedThis toreduction nowas commissiondriven inby the prior year comparative periodperiod, whenwhich the agent was insteadincluded a jointone-time venture$2.4 partner.million Furthermore,settlement thereto waspay current and future commissions to a $0.3 million payment to the China licensing agent as a result of the termination of our agency relationship.agent.

The decrease in all other cost of sales and therelated increase in the related gross margin, compared to the prior year comparative period, was primarily related to the licensing of our digital subscriptions and content operations to Byborg pursuant to the LMA, effective as of January 1, 2025, and the inclusion of transition expenses incurred pursuant to the TSA during the three months ended MarchJune 31,30, 2025.2025, which did not recur in 2026.

The decrease in impairments for the three months ended MarchJune 31,30, 2026, as compared to the prior year comparative period, was due to impairment charges of $0.3$1.5 million related to our artworkright-of-use heldassets for sale,corporate whichleases wasthat were recognized in the prior year comparative period and did not recur in the first quarter of 2026.recur.

Other Operating Income (Expense),Expense, Net

The changedecrease fromin other operating expense, net to other operating income, net for the three months ended MarchJune 31,30, 2026, as compared to the prior year comparative period, was primarily due to alower losslosses on the disposal of assetsstore thatand didother notfixed recur in the first quarter of 2026.assets.

The increase in interest expense, net for the three months ended MarchJune 31,30, 2026, as compared to the prior year comparative period, was primarily due to lower amortization of debt premium.premium, net, partially offset by lower interest expense on our borrowings, reflecting senior secured debt repaid with proceeds from the New China JV transaction.

The increasedecrease in other income, net for the three months ended MarchJune 31,30, 2026, as compared to the prior year comparative period, was primarily due to a $0.5 million fee to vacate a leased store space early andlower unrealized gains and losses related to foreign currency transactions.

The decreaseincrease in expense from income taxes for the three months ended MarchJune 31,30, 2026, as compared to the prior year comparative period, was primarily driven by the decrease in pretax book loss and a change in valuation allowance due to athe reduction in net indefinite-lived deferred tax liabilities.liabilities in the three months ended June 30, 2026.