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

•our international operations and ownership, including our significant operations in Israel, Ukraine and BelarusPoland and the fact that our controlling stockholder is a Chinese-owned company;

We rely on third-party platforms, such as the iOS App Store, Facebook,Store and Google Play Store, to distribute our games and collect revenues generated on such platforms and rely on third-party payment service providers to collect revenues generated on our own platforms.

Our games are primarily accessed and operated through platforms operated by Apple, FacebookApple and Google. A significant number of the virtual items that we sell to paying players are purchased using the payment processing systems of these platforms and, for the year ended December 31, 2024,2025, 68.6%66.3% of our revenues were generated through transactions processed by the billing systems of iOS App Store, Facebook,Store and Google Play Store. In certain jurisdictions where permitted and subject to applicable platform rules, we also offer alternative payment methods that allow players to complete purchases without using the platform’s payment systems while continuing to access and play our games on these third-party platforms. For the year ended December 31, 2025, approximately 34% of instances in which our players on Apple and Google platforms were presented, where permitted, with a pop-up offering an alternative payment option resulted in the selection of an alternative payment processor. While we continue to expand our Direct-to-Consumer capabilities, substantially all gameplay, including gameplay associated with purchases completed through alternative payment methods, continues to occur on these platforms, and our ability to offer, present, and transact through such channels remains subject to these platforms’ rules, technical requirements, and enforcement practices, which may change or be applied inconsistently over time. Consequently, our expansion and prospects depend on our continued relationships with these providers, and any other emerging platform providers that are widely adopted by our target players. We are subject to the standard terms and conditions that these platform providers have for application developers, which govern the content, promotion, distribution, operation of games and other applications on their platforms, as well as the terms of the payment processing services provided by the platforms, and which the platform providers can change unilaterally on short or without notice. Our business would be harmed if:

If our platform providers do not perform their obligations in accordance with our platform agreements, we could be adversely impacted. For example, in the past, some of these platform providers have been unavailable for short periods of time, unexpectedly changed their terms or conditions, or experienced issues with their features that permit our players to purchase virtual items. Additionally, we rely on third-party online payment service providers to process any payments generated on games accessed and operated on our own Direct-to-Consumer platforms. If any of these third-party service providers is unable to process payments, even for a short period of time, our business would be harmed. These platforms and our third-party online payment service providers may also experience security breaches or other issues with their functionalities. In addition, if we do not adhere to the terms and conditions of our platform providers, the platform providers may take actions to limit the operations of, suspend or remove our games from the platform, and/or we may be exposed to liability or litigation. As jurisdictions in which we operate and their regulatory bodies adopt or modify laws and regulations, our platform providers may adopt restrictive policies or take other adverse action against the Company and its games in connection with their interpretation and implementation of such laws and regulations. For example, in December 2023, the Company was informed that Google was beginning to enforce an existing Play Store policy banning simulated gambling apps in thirteen countries across the Middle East and Asia: Algeria, Iran, Jordan, Libya, Oman, Palestine, Qatar, Saudi Arabia, South Korea, Syria, Tunisia, the United Arab Emirates and Yemen. As a result, Google blocked Slotomania and Caesars Slots in December 2023 and World Series of Poker in January 2024 from these countries. Similarly, in January 2024, Indonesia’s Ministry of Communication and Information Technology reported that it had conducted a broad sweep of online gambling content on the Google and Apple platforms including non-gambling games that contained gambling-related elements. Shortly thereafter, Slotomania was blocked from the Google Play Store in Indonesia, although it has since been reinstated. We were also notified in December 2024 by a third-party platform that it would be challenging the offering of social casino games on its platform in the State of Washington. While we currently only offer certain poker-themed titles through this platform, our business and operating results could be materially impaired if other platforms take similar actions in the State of Washington or in other jurisdictions. Although we are taking steps to oppose and try to reverse these types of actions and have not experienced a material impact on our business, financial condition or results of operations due to limited revenues we currently have on the affected platform or in the affected jurisdictions, if our platform providers, particularly the iOS App Store, Facebook, or Google Play Store, take these actions in jurisdictions that are significant to our operations, it would be harmful to our business.

If any such events described above occur on a short-term or long-term basis, or if these third-party platforms and online payment service providers otherwise experience issues that impact the ability of players to download or access our games, access social features, or make in-game purchases, it wouldcould have a material adverse effect on our brands and reputation, as well as our business, financial condition and results of operations.

Our business is dependent on the success of a limited number of games and on our ability to consistently enhance and improve upon games that achieve significant popularity. Historically, we have depended on such games for a majority of our revenues and we expect that this dependency will continue for the foreseeable future. For example, in each of the years ended December 31, 20242025 and 2023,2024, our top two gamesgame by revenue, Slotomania and Bingo Blitz, collectively generated approximately 45%23% and 46%25% of our revenues for each period, respectively.period. For a game to remain popular and to retain players, we must effectively enhance, expand and upgrade the game with new features, offers, and content that players find attractive. We may not be successful in these efforts, including not providing enough new features, offers and content or providing too many new features, offers and content. Each of our games requires significant product development, marketing and other resources to develop, launch and sustain popularity through regular upgrades, expansions and new content, and such costs on average have increased over time. Even with these investments, we may experience sudden declines in the popularity of any of our games and fluctuations in the number of daily average users and monthly average users.users particularly for games that are later in their life cycle. For example, revenues generated by Slotomania declinedhave been in decline in recent years, declining by approximately 35.7% in 2025 and 9.5% in 2024 and 9.0% in 2023.2024. A continued decline in Slotomania or a similar decline in any of our other top games would negatively impact our results of operations.

If we fail to attract and retain a significant number of new and existing players to our games or if we experience a reduction in the number of players of our most popular games or any other adverse developments relating to our most popular games occur, our market share and reputation could be harmed and there could be a material adverse effect on our business, financial condition and results of operations. OurAlthough our average daily active users across our portfolio increased by approximately 4.9% in 2025 largely due to our newly acquired SuperPlay studio, our average daily active users across our portfolio excluding SuperPlay have experienced declines in recent years and our average daily active users (excluding SuperPlay) declined by approximately 6.9%19.7% in 2024 and 7.4% in 2023.2025. While the Company endeavors to attract and retain new and existing players, including by way of acquiring new titles and studios, we cannot assure that these efforts will be successful.

Historically, our social casinocasino-themed games have generally generated higher margins than the majority of our casual games, primarily due to the higher utilization of our Direct-to-Consumer platforms among social casinocasino-themed game users compared to our casual game users.users, and lower relative marketing spend for these titles. In addition, our recent casual game acquisitions, most notably SuperPlay Ltd., are earlier stage studios where the strategic focus is on revenue growth over profitability.

As revenues from our social casinocasino-themed games such as Slotomania have either declined or failed to keep pace with revenues from our existing and newly acquired casual games, our Credit Adjusted EBITDA margin and net income margin have declined. Our Credit Adjusted EBITDA margin declined from 32.4% in 2023 to 29.7% in 2024 to 27.3% in 2025 and our net income margin declined from 9.2% in 2023 to 6.4% in 2024.2024 to (7.5)% in 2025. If our revenue mix continues to shift toward casual games and we are unable to mitigate the discrepancy in margin profiles, our Credit Adjusted EBITDA margin and net income margin could continue to decline.

Furthermore, our strategy includes acquiring early-stage companies that may be primarily focused on revenue growth rather than profitability. These early-stage acquisitions, while potentially offering long-term growth opportunities, often contribute at least initially to lower margins with high levels of marketing and other operational costs relative to their revenues. Continued investment in early-stage companies may compound the downward pressure on our margin profile if our revenue mix continues to trend toward casual games.

Some of our users also depend on our customer support organization to answer questions relating to our games. Our ability to provide high-quality effective customer support is largely dependent on our ability to attract, resource, and retain employees who are not only qualified to support our users, but are also well versed in our games. This ability can be strained after any significant reductions in the Company’s workforce such as the significant reduction in workforce that was announced in January 2026. Any failure to maintain high-quality customer support, or a market perception that we do not maintain high-quality customer support, could harm our reputation and adversely affect our ability to sell virtual items within our games to existing and prospective users.

Our games are available to players for free, and we generate nearly all of our revenues from the sale of virtual items when players make voluntary in-game purchases. For example, for the years ended December 31, 20242025 and 2023,2024, we derived 98.4%97.7% and 98.4%, respectively, of our revenues from in-game purchases.

Paying users usually spend money in our games because of the perceived value of the virtual items that we offer for purchase. The perceived value of these virtual items can be impacted by various actions that we take in the games, such as offering discounts, giving away virtual items in promotions or providing easier non-paid means to secure such virtual items. Managing the game economies can be challenging with certain games containing multiple types of in-game virtual currency and overlapping promotional campaigns or other discounts in effect at the same time. Recently, Slotomania has experienced pervasive game economy issues which led to several quarters of outsized sequential decline. If we fail to manage our game economies properly, players may be less likely to spend money in the games, which could have a material adverse effect on our business, financial condition and results of operations.

Our inability to make acquisitions andor integrate any acquired businesses successfully could limit our growth or disrupt our plans and operations.

Historically, a significant portion of our growth has been as a result of our acquisition of complementary studios and games, rather than in-house development, including our acquisition of Wooga GmbH, or Wooga, in 2018, Supertreat GmbH, or Supertreat, in 2019, Seriously Holding Corp., or Seriously, in 2019, Reworks Oy, or Reworks, in 2021, JustPlay.LOL, or JustPlay, in 2022, the Youda Games’ card game portfolio in 2023, G.S InnPlay Labs Ltd. in 2023, and our largest acquisition to date, SuperPlay Ltd. in 2024. While weare anticipatecurrently thatfocused on ensuring the successful integration and growth of SuperPlay, Ltd. and have recently shifted our strategy toward in-house development of games, acquisitions willhave continue to bebeen an important source of growth in the future,Company’s ourhistory. abilityShould we look to succeedprioritize acquisitions as a growth strategy in implementingthe ourfuture, strategy will depend to some degree upon our ability to identify quality games, applications and businesses and complete commercially viable acquisitions. Wewe cannot assure you that acquisition opportunities will be available on acceptable terms or at all, or that we will be able to obtain necessary financing or regulatory approvals to complete potential acquisitions. Our ability to make acquisitions and successfully growintegrate throughacquired these types of transactions alsobusinesses depends upon our ability to identify, negotiate, complete and integrate suitable target businesses, technologies and products and to obtain any necessary financing, and is subject to numerous risks, including:

In addition, the expected cost synergies associated with such acquisitions may not be fully realized in the anticipated amounts or within the contemplated timeframes, which could result in increased costs and have an adverse effect on our prospects, results of operations, cash flows and financial condition. We would expect to incur incremental costs and capital expenditures related to integration activities. Acquisition transactions may also disrupt our ongoing business, as the integration of acquisitions would require significant time and focus from management and might delay the achievement of our strategic objectives. We have utilized earnouts in acquisition transactions in the past and may do so in future transactions. The use of earnouts and the structure and timing of the associated targets and milestones may result in large fluctuations in our sales and marketing expenses from quarter to quarter. While we employ several different methodologies to assess potential business opportunities, the businesses we have acquired or may acquire may not meet or exceed our expectations. For example, SuperPlay Ltd., had a history of incurring net losses as an early stage company when we acquired the studio in 2024, with net losses of $114 million in 2024. If revenue growth at SuperPlay Ltd. does not increase in future periods enough to offset costs, including marketing expenses, our results of operations will be harmed.

The mobile gaming industry is a rapidly evolving industry with low barriers to entry, and we expect more companies to enter the industry and a wider range of competing games to be introduced. As a result, we are dependent on our ability to successfully compete against a large and growing number of industry participants. Many of our current and potential competitors enjoy substantial competitive advantages, such as greater name recognition, longer operating histories, greater financial, technical and other resources. In particular, certain competitors of our social casino slotslot-themed games also provide real money gambling offerings which may give them an advantage in recognizable slot content. Internationally, local competitors may have greater brand recognition than us in their local country and a stronger understanding of local culture and commerce. They may also offer their products and services in local languages we do not offer. In addition, the market for our games is characterized by rapid technological developments, including the increasing use of AI-driven tools in game development, content creation and performance marketing, frequent launches of new games and enhancements to current games, changes in player needs and behavior, disruption by innovative entrants and evolving business models and industry standards. As a result, our industry is constantly changing games and business models in order to adopt and optimize new technologies, increase cost efficiency and adapt to player preferences. Our competitors may adapt to an emerging technology or business model more quickly or effectively, developing products and games or business models that are technologically superior to ours, more appealing to consumers, or both. The emergence of “sweepstake casino” games which mimic socialslot casinoand bingo-themed games but incorporate sweepstakes as a primary user acquisition and monetization tool in the game could pose a competitive threat to our socialslot casinoand bingo-themed games and harm our results of operations.

Additionally, if our platform providers were to develop competitive offerings, either on their own or in cooperation with one or more competitors, our growth prospects could be negatively impacted. For example, Apple developed its own video game subscription service, Apple Arcade, which may compete further with our games. Netflix, awhich relativelycontinues newto entrantstrengthen its presence in the gaming market, has expanded its offerings by including a growing library of mobile games as part of its subscription service. With its expansive customer base and vast resources, Netflix could pose a material competitive threat to the Company’s business. Increased competition and success of other brands, genres, business models and games could result in, among other things, a loss of players, or negatively impact our ability to acquire new players cost-effectively, which could have a material adverse effect on our business, financial condition and results of operations.

We are a highly leveraged company. In March 2021, we entered into a $1,900.0 million senior secured first lien term loan, which we refer to herein as the Term Loan. We also issued $600.0 million aggregate principal amount of our 4.250% senior notes due 2029 (our “Notes”) in a private offering pursuant to an indenture dated March 11, 2021 (the “Indenture”). As of December 31, 2024,2025, we had $2,428.8$2,409.8 million aggregate principal amount of outstanding indebtedness, in addition to $600.0$550.0 million available for borrowing under a $600.0$550.0 million senior secured revolving credit facility, which we refer to herein as the Revolving Credit Facility. For the year ended December 31, 2024,2025, we made net principal payments of $23.8$19.0 million and paid $146.6$137.2 million for interest (net of hedges). The Credit Facilities were provided pursuant to a credit agreement, which we refer to herein as the Credit Agreement, dated as of December 10, 2019 and amended onfrom Marchtime 11,to 2021,time, by and among us, the lenders party thereto and UBSBank AG,of Stamford BranchAmerica (as successor in interest to UBS AG, Stamford Branch and Credit Suisse AG, Cayman Islands Branch), as administrative agent and collateral agent, and the other parties thereto, as amended.

We may be able to incur substantial additional indebtedness in the future, subject to the restrictions contained in the Credit Agreement and the Indenture. If new indebtedness is added to our current debt levels, the related risks described above could intensify. Additionally, the Term Loan matures in March 2028, the Revolving Credit Facility matures in March 20262027 and the Notes mature in March 2029. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our Credit Agreement or from new indebtedness in an amount sufficient to enable us to pay or refinance our indebtedness or to fund our other liquidity needs. For example, in connection with the acquisition of SuperPlay, Ltd., the Company agreed to make future earnout payments of up to $1.250 billion, in the aggregate, based on the achievement of certain gross revenue growth and SuperPlay Adjusted EBITDA targets for SuperPlay Ltd. during the calendar years 2025, 2026 and 2027, in each case, payable following the end of the applicable measurement period. Depending on the level of earnout achievement, if the earnout payments dramatically exceed our estimates of such payments, it is possible that the Company’s cash flows and available cash will be insufficient to fund these obligations, particularly if we are unable to refinance the Revolving Credit Facility before it matures in March 2026.2027.

Accordingly, we expect that we will need to refinance all or a portion of our indebtedness on or before maturity. We may not be able to refinance any of our indebtedness at comparable interest rates, on commercially reasonable terms or at all. There may also be regulatory filing or registration requirements in China applicable to our controlling shareholder that could delay or prevent us from issuing or materially amending the terms of our indebtedness. See “Risk Factors— Yuzhu Shi controls us through his indirect interest in Playtika Holding UK II Limited and its ownership of our common stock will prevent you and other stockholders from influencing significant decisions.” If such refinancing indebtedness is not available at interest rates comparable to our existing indebtedness our interest expense could materially increase, which would have a negative impact on our results of operations. If we cannot timely refinance our indebtedness, we may have to take actions such as issuing additional equity and reducing, delaying or foregoing capital expenditures, strategic acquisitions and investments. We cannot assure you that any such actions, if necessary, could be implemented on commercially reasonable terms or at all.

While the vast majority of our revenues are generated by in-game purchases, a portion of our revenues are generated from the sale of in-game advertisements. For example, for the years ended December 31, 20242025 and 2023,2024, we derived 2.3% and 1.6% of our revenues from in-game advertising.advertising, respectively. If we are unable to attract and maintain a sufficient player base or otherwise fail to offer attractive in-game advertising models, advertisers may not be interested in purchasing such advertisements in our games, which could adversely affect our revenues from in-game advertising. Alternatively, if our advertising inventory is unavailable and the demand exceeds the supply, this limits our ability to generate further revenues from in-game advertising, particularly during peak hours and in key geographies. Further, a full inventory may divert advertisers from seeking to obtain advertising inventory from us in the future, and thus deprive us of potential future in-game advertising revenues. This could have a material adverse effect on our reputation and our business, financial condition and results of operations.

Each of Apple, Google and Facebook are defendants in class action lawsuits alleging, among other things, that social casinocasino-themed games offered through their respective platforms constitute illegal gambling and in addition to seeking monetary damages, the plaintiffs are also seeking that the platforms remove access to the social casinocasino-themed games. These litigations are still ongoing.

In the event that platform providers such as Apple, Google, or Facebook orchange any of our other platform providers changes itstheir developer terms of service to include more onerous requirements or if any of our platform providers were to prohibit the use of loot boxes in games distributed on its digital platform, we would be required to redesign the economies of the affected games in order to continue distribution on the impacted platforms, which would likely cause a decline in the revenues generated from these games and require us to incur additional costs.

In addition, there are numerous ongoing academic, political and regulatory discussions in the United States, Europe, AustraliaAustralia, Brazil, and other jurisdictions regarding whether certain game mechanics, such as loot boxes, should be subject to a higher level or different type of regulation than other game genres or mechanics to protect consumers, in particular minors and persons susceptible to addiction, and, if so, what such regulation should include. Additionally, loot box game mechanics continuehave toin berecent history been the subject of increased focus sinceby the Federal Trade Commission, or FTC, which released a staff perspective highlighting issues raised at a public workshop on loot boxes,boxes whichand encouraged the industry to continue efforts to provide clear and meaningful information to consumers about in-game loot box and related microtransactions. The FTC continues to monitor developments surrounding loot boxes and may take steps to prevent what it views as unfair or deceptive practices. For example, in January 2025 the FTC recently announced a major enforcement action against a game developer for the sale of loot boxes to children and teens without verifiable parental consent. The complaint was settled with the developer having to, among other things, agree to enter into a ten-year compliance monitoring program and pay a fine of $20 million. Previously, after the United Kingdom’s Department for Digital, Culture, Media and Sport launched a call for evidence into the impact of loot boxes on in-game spending and gambling-like behavior in connection with the UK government’s review of the 2005 Gambling Act (the principal gambling regulation in the United Kingdom), and politicians have cited loot boxes as an example of recent technology innovation where government regulation is needed. Subsequently, the UK government issued a conclusion to the call for evidence and while it did not call for paid loot boxes to be deemed gambling, it called for companies within the industry to engage in self-regulation, including taking actions to protect children and their ability to access and purchase loot boxes. As a result, the trade body, UK Interactive Entertainment, published industry guiding principles on loot boxes which were designed to address the concerns raised by the government. Similar activity relating to loot boxes has also occurred elsewhere in the EU. For instance, the Dutch courts initially ruled FIFA loot boxes violated gambling laws, but the highest court overturned the ruling in 2022. Since 2023, the Dutch Minister of Economic Affairs has pushed for an EU-wide ban on loot boxes, reaffirming in 2024 his intent to include it in the Digital Fairness Act. The Digital Fairness Act will focus on strengthening consumer protections including in regard to the use of dark patterns with the first set of proposals under the Act expected to be released by end of 20252026, or early 2026. In February 2023, an Austrian court ruled that loot boxes in FIFA Ultimate Team packs constitute illegal gambling due toalthough the existencescope ofand atiming secondaryremain market for these virtual items. The court deemed this secondary market activity as giving the loot boxes a financial value, in combination with these randomized reward mechanisms, fulfilling a key criterion for gambling under the Austrian law.uncertain.

There is significant opposition in some jurisdictions to social gaming, including social casinocasino-themed games. The World Health Organization includes “gaming disorder” as an International Classification of Diseases, defining the disorder as a pattern of behavior characterized by impaired control over gaming and an increase in the priority of gaming over other interests and daily activities. Some states or countries have anti-gaming groups that specifically target social casinocasino-themed games. Such opposition could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern interactive social gaming or social casinocasino-themed games specifically. These could result in a prohibition on interactive social gaming or social casinocasino-themed games altogether, restrict our ability to advertise our games, or substantially increase our costs to comply with these regulations, all of which could have an adverse effect on our results of operations, cash flows and financial condition. We cannot predict the likelihood, timing, scope or terms of any such legislation or regulation or the extent to which they may affect our business. In December 2025, access to the Slotomania.com domain was blocked in Ukraine pursuant to an order issued by a national communications authority, which classified the domain among restricted casino-related internet resources. This restriction affected access to our direct-to-consumer website but not to platforms such as Apple or Google.

The U.S. Court of Appeals for the Ninth Circuit decided that a social casinocasino-themed game produced by one of our competitors should be considered illegal gambling under Washington state law. Similar lawsuits and arbitration proceedings have been filed against other defendants, including us. For example, in April 2018, a putative class action lawsuit was filed in federal district court in Washington alleging substantially the same causes of action against our social casinocasino-themed games. In August 2020, we entered into a settlement agreement to settle this matter, which was approved by the court in February 2021. High Five Games, a social casino game company that was also sued in federal district court for substantially the same causes of action, opted to continue litigation rather than settle following the Ninth Circuit’s ruling. After several years of legal proceedings, in September 2024, a court ruled that two of High Five Games’ slot-themed games constituted illegal gambling under Washington law. As a result, the company was ordered to pay $24.9 million in February 2025. In January 2025, the Washington State Gambling Commission (WSGC) issued a public memo referencing both the Ninth Circuit ruling and another federal district court ruling on the High Five Games case.subject. The memo warned that games of chance involving virtual currency are likely to be classified as illegal gambling under Washington law. It also encouraged companies offering virtual casino-style games to Washington residents to review their games and ensure compliance with state gambling regulations.

In addition, on May 17, 2022, a motion for approval of a class action lawsuit was filed in district court in Tel Aviv-Jaffa Israel against Playtika Group Israel Ltd. (PGI) alleging that certain of the Company’s slot, poker and solitaire-themed games constitute illegal gambling and are misleading under Israeli consumer protection laws, seeking damages of NIS 50 million. In the United States, twowe have several pending lawsuits were filed against us in 2023 in Alabama and Tennessee and one lawsuit was filed against us in 2024 in Kentucky, allarbitrations alleging that our social casino-themed games constitute illegal gambling under applicable state laws and seeking to recover amounts paid by the residents of the applicable state in connection with such games. InOn addition,February we3, received2026, seventhe demandsAttorney forGeneral arbitrationof inthe lateState 2022of andWashington earlyinitiated 2023a andsimilar twolawsuit demandsagainst forthe massCompany arbitration in 2024, all alleging, among other things,alleging that certain of our games constituteviolate illegalstate gambling underand applicableconsumer stateprotection law.laws. See “—Legal proceedings may materially adversely affect our business and our results of operations, cash flows and financial condition” and “Business—Legal Proceedings.Proceedings”.

In 2018, sixteen gambling regulators signed a declaration expressing concern over the blurring of lines between gambling and video game products, including social casinocasino-themed gaming. The regulators committed to work together to analyze the characteristics of video games and social gaming, and to engage in an informed dialogue with the video game and social gaming industries to ensure the appropriate and efficient implementation of applicable laws and regulations. The regulators also indicated they would work closely with their consumer protection enforcement agencies. In 2019, the regulators presented their conclusions and encouraged national consumer protection authorities to continue to be involved in the debate over the blurring of lines between gambling and video game products, while recognizing that ultimately whether these activities trigger the implementation of gambling regulation would depend on each nation’s gambling definition. Many other similar cases have been filed in the United States related to allegations regarding legality of loot boxes and purported gambling within video games products. For example, since 2020, there have been many cases filed against social casinocasino-themed game developers, or our third-party platform providers, alleging that social casinocasino-themed games violate various state’s gambling laws, including cases in California, Washington, Mississippi, Alabama, Connecticut, Georgia, New York, Tennessee, Kentucky, Ohio and New Mexico.

More recently, inIn August 2024, a class action complaint was filed in the State of Washington against Dream Games, the developer of the mobile game “Royal Match”, alleging that its game violates Washington State gambling laws and consumer protection laws. Generally, in the past, illegal gambling lawsuits in the games industry have focused on certain genres such as slots, poker, bingo, and card games. The inclusion of a “Match 3” puzzle game such as “Royal Match” in these legal actions representsrepresented an expansion of these types of casescases. and,In ifDecember this2025, a similar class action complaint was filed in the State of Washington against SuperPlay Ltd. alleging that Dice Dreams, a “Luck Battle” game, violates Washington State gambling laws and consumer protection laws. If the expansion of these types of cases beyond social casino-themed games and broadly into casual games continues, it could materially adversely impact our casual games and our results of operations.

Consumer protection concerns regarding games such as ours have been raised in the past and may again be raised in the future. These concerns include: (i) whether social casinocasino-themed games may be shown to serve as a gateway for adolescents to real money gambling; (ii) methods to limit the ability of children to make in-game purchases, and (iii) a concern that mobile game companies are using big data and advanced technology to predict and target “vulnerable” users who may spend significant time and money on mobile games in lieu of other activities. This has resulted in governmental action against another gaming company. In December 2022, Epic Games and the U.S. Federal Trade Commission, or the FTC, announced a settlement, in which Epic Games agreed to pay a $245 million to the FTC relating to in-game purchases in Epic Game’s popular Fortnite game. Such concerns could lead to increased scrutiny over the manner in which our games are designed, developed, distributed and presented.

Additionally, new laws and regulations, or new interpretations or applications of existing laws and regulations in a manner inconsistent with our practices, have restricted, and may continue to restrict, our games, limit our ability to pursue certain business models,models or AI-enabled functionalities, require us to incur substantial costs, expose us to civil or criminal liability, or cause us to change our business practices. These laws and regulations are evolving and involve matters relating to our business, including, among others, online safety regulations such as the EU Digital Services Act, requiring a yearly transparency report, the UK Online Safety Act, requiring all in scope services to complete, at least once a year, a number of risk assessments, and the Australia Online Safety Act, competition laws such as the EU Digital Markets Act, consumer protection laws such as Australia’s Guidelines for the Classification of Computer Games 2023, the EU’s New Deal for Consumers, EU’s Digital Fairness Act, advertising laws such as the UK’s CAP Code andCode, whistleblowing laws, such as the EU Whistleblower Directive, and artificial intelligence regulations such as the EU Artificial Intelligence Act and thevarious U.S. Executivestate-level Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence,legislation, which could result in monetary penalties and create a range of new compliance obligations.

Within the mobile games industry there has been an increase in recent years in the use of a user acquisition channel called incentivized marketing. Incentivized marketing offers generally involve third-party marketing companies promoting mobile games and offering an incentive to the players, such as gift cards or real money or in-app currency, for certain actions, such as downloading a game, completing consumer surveys or reaching certain milestones in a game. We have recently increasedincorporated the use of incentivized marketing and, in 2024, this channel accounted for over fifty percent of the user acquisition activity within certain of our games. Incentivized marketing is also used heavily by our recently acquired subsidiary, SuperPlay Ltd.

While we believe our use of incentivized marketing to be a legally permissible promotional activity, there are increasing legal requirements and restrictions relating to such and if the use of incentivized marketing were deemed to affect the legality of our games, we may be required to restructure our marketing activities in a manner that could impair our revenues or reduce the effectiveness of our marketing expenses. We may also be subject to enforcement actions by federal or state regulators, as well as private litigation, which could materially affect our business and results of operations.

Furthermore, our games may be implicated in lawsuits where we are not the named defendants. For example, plaintiffs in several U.S. states have previously sued Apple and/or Google alleging that the platforms violated state gambling laws by allowing the plaintiffs to download and play social casinocasino-themed games, including certain of our social casinocasino-themed games. The issue continues to be litigated and these lawsuits, or similar suits in the future, could cause Google, Apple, or other third-party platform providers to deny our socialslot, casinobingo and poker themed games access to their platforms or the platforms could seek to pass on liability, including defense costs, for these suits to us under the indemnity provisions in our agreements with such platforms, which could have a material adverse effect on our results of operations, cash flows, or financial condition.

Although we have players across the globe, we derive a significant portion of our revenues from a limited number of countries and are dependent on access to those markets. For example, for the year ended December 31, 2024,2025, 66.7%63.2% of our revenues were derived from users located in the United States and 94.5%93.2% from users located in the United States, Canada, Europe and Australia. Our ability to retain paying players depends on our success in these geographies, and if we were to lose access to these markets or experience a decline in players in these geographies for any reason, it would have a material adverse effect on our business, financial condition and results of operations. For example, the pending lawsuit involving the Attorney General of the State of Washington seeks, among other things, to prevent our social casino-themed and bingo-themed games from being available to play in the State of Washington and if we are unable to successfully defend against this action we could lose access to the State of Washington for certain of our games.

In-game purchases involve discretionary spending on the part of consumers. Consumers are generally more willing to make discretionary purchases, including purchases of games and services like ours, during periods in which favorable economic conditions prevail. As a result, our games may be sensitive to general economic conditions and economic cycles. A reduction or shift in domestic or international consumer spending could result in an increase in our marketing and promotional expenses, in an effort to offset that reduction, and could negatively impact our business. Discretionary spending on entertainment activities could further decline for reasons beyond our control, such as natural disasters, acts of war, pandemics, terrorism, transportation disruptions, climate change or the results of adverse weather conditions. Additionally, disposable income available for discretionary spending may be reduced by unemployment, higher housing, energy, interest, or other costs, or where the actual or perceived wealth of customers has decreased because of circumstances such as lower residential real estate values, increased foreclosure rates, inflation, increased tax rates, or other economic disruptions. Moreover, during periods of increased inflation, such as the oneperiod thatbetween began2021 and 2023 in mid-2021,the United States, rising costs for essentials like gasoline, home heating and cooling fuels, housing and groceries, are likely to reduce household spending on the types of discretionary entertainment we offer and may limit our ability to forecast future demand for our games. Any prolonged or significant decrease in consumer spending on entertainment activities could result in reduced play levels and decreased spending on our games, and could adversely impact our results of operations, cash flows and financial condition. The Company’s total revenues declinedincreased by 0.7%8.1% during 2024,2025, with revenues from our social casinocasino-themed games portfolio declining by 5.6%.23.2%. In particular, total revenues from Slotomania declined by 9.5%35.7% during 20242025 which we believe to have underperformed other top social casinocasino-themed games over the same period. If the larger mobile games industry or other subsets of that industry in which we operate, such as social casinocasino-themed games, decline or continue to decline and our revenues decline or continue to decline faster than the industry, it could have a material adverse effect on our business, financial condition and results of operations.

We have in the past and may continue to experience disruption as a result of catastrophic events. For example, we previously maintained offices in Crimea, but were forced to close and relocate our personnel in Crimea as a result of Crimea’s annexation by Russia in 2014. In addition, we previously maintained a development center in Belarus but decided to close and relocate our personnel in Belarus due to the challenging operating environment caused by sanctions and export controls that resulted from the Russian invasion of Ukraine in 2022. Additionally, our primary offices are located in Israel and we have a large office in Ukraine, and are therefore subject to a heightened risk of military and political instability. For more information on risks related to our operations in Israel, see “—We have offices and other significant operations located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel, including the ongoing war in Israel.” For more information on risks related to our operations in Ukraine, see “—Our operations may be adversely affected by ongoing developments in Belarus, Ukraine, GeorgiaGeorgia, Romania or Romania.Poland.”

We primarily rely on our highly skilled, technically trained and creative employees to develop new technologies and create innovative content for our games. Such employees, particularly game designers, engineers and project managers with desirable skill sets are in high demand, and we devote significant resources to identifying, hiring, training, successfully integrating and retaining these employees. We have historically hired a number of key personnel through acquisitions, and as competition with several other game companies increases, we may incur significant expenses in continuing this practice. The loss of employees or the inability to hire additional skilled employees as necessary could result in significant disruptions to our business, and the integration of replacement personnel could be time-consuming and expensive and cause additional disruptions to our business. In addition, the Company has experienced several rounds of layoffs in the recent pastpast, highlighted by the significant reduction in workforce that was announced in January 2026, which could negatively affect its reputation and its ability to recruit new employees in the future. Any future layoffs could similarly harm the Company’s reputation and hinder its recruitment efforts. Layoffs could also result in a significant loss of institutional knowledge and operational capacity potentially harming the Company’s ability to execute against its strategic initiatives. For example, the most recently announced reduction in workforce was part of a larger adjustment to the Company’s cost structure and reallocation of resources within its portfolio of games. While the Company expects to reinvest a portion of the resulting expense reductions to advance growth initiatives, the reduction in employees is also expected to result in reductions in new feature development and promotion activity and delays in feature launches in various studios.

Although we experienced strong growth in priorour years,first year as a public company, our growth rate moderated in 2022 and our revenue has experienced declinesfluctuations in recent years, with total revenues downincreasing 8.1% year-over-year in 2025, decreasing 0.7% year-over-year in 2024 and decreasing 1.9% year-over-year in 2023 and down 0.7% year-over-year in 2024.2023. As we continue to operate and work to grow our business, our revenue growth rates may decline or our revenue may decline compared to prior fiscal years due to a number of reasons, which may include a decrease in the growth of our overall market or market saturation, slowing demand for our games, our inability to continue to acquire games or game studios, and our inability to capitalize on growth opportunities. In addition, our growth rates may experience increased volatility due to global societal and economic disruption, such as those related to global conflicts or public health crises such as the COVID-19 pandemic and related government responses thereto.conflicts.

Based on our current plans and market conditions, we believe that cash flows generated from our operations, together with the cash on our balance sheet and the borrowing capacity under our Revolving Credit Facility, will be sufficient to satisfy our anticipated cash requirements in the ordinary course of business for the foreseeable future. It is important to note, however, that our Revolving Credit Facility expires in March 20262027 and, if we are unable to refinance or extend our Revolving Credit Facility, it is possible that we will not have adequate cash to make the earnout payments from the acquisition of SuperPlay Ltd., particularly if the earnout payments dramatically exceed our estimates of the earnout payments.estimates. We also intend to continue to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new games and features or enhance our existing games, improve our operating infrastructure or acquire complementary businesses, personnel and technologies, or if we decide to return free cash flow to shareholders as we did, for example, through the $600 million self-tender in the fall of 2022, through the payment of dividends or through the repurchase of our stock. Accordingly, we may need to engage in equity or debt financings in addition to our Revolving Credit Facility to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing we secure in the future could include restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.

In June 2024, our general liability carrier declined to renew our policy due to cited industry concerns. Although we were able to obtain replacement coverage on comparable terms, it is possible that additional insurance carriers would decide not to insure mobile games companies or significantly increase the costs for insurance to companies in our business Such losses could adversely affect our business prospects, results of operations, cash flows and financial condition.business.

Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. Our existing corporate structure and intercompany arrangements have been implemented in a manner we believe is in compliance with current prevailing tax laws. However, the tax benefits that we take advantage of could be undermined due to changing tax laws, both in the United States and in other applicable jurisdictions, including Israel. In addition, the taxing authorities in the United States and other jurisdictions where we do business regularly examine income and other tax returns and we are currently under exam in several jurisdictions, including the United States and Israel. We expect that theytax authorities may continue to examine our income and other tax returns.returns in the future. The ultimate outcome of these examinations cannot be predicted with certainty.

We believe that our Israeli subsidiaries are eligible for certain tax benefits provided to a Preferred Technology Enterprise (PTE) or Special Preferred Technology Enterprise (SPTE) under the Israeli Law for the Encouragement of Capital Investments, 1959, or the Investment Law, including, inter alia, a reduced corporate tax rate on Israeli preferred technology taxable income, as defined in the Investment Law and its regulations. In order to remain eligible for the tax benefits under the PTE/SPTE regime, our Israeli subsidiaries must continue to meet certain conditions stipulated in the Investment Law and its regulations, as amended. If our Israeli subsidiaries were to fail to continue to meet such conditions, then our Israeli subsidiaries would not be eligible for such tax benefits and our Israeli taxable income would be subject to regular Israeli corporate tax rates. Additionally, if our Israeli subsidiaries increase their activities outside of Israel through acquisitions, their expanded activities might not be eligible for inclusion in future Israeli tax benefit programs which could increase our costs and taxes.

The Company believes that it is reasonably possible that the total amount of tax benefits that we are not able to recognize may increase significantly as a result of the open examination in Israel for the tax years ended 2017 through 2021.2024. Should those tax positions not be fully sustained under examination, an acceleration of material income taxes payable, including interest and penalties, could occur. As a result, cash required for payments of income taxes, interest and penalties could be material in the period in which such determination is made. In addition, if such tax positions are not fully sustained, it could have an impact on our ability to take advantage of certain tax benefits associated with the PTE/SPTE regime in the future. We are currently disputing warrants issued from the Israel Tax Authority with respect to tax year 2017 and assessments issued from the Israel Tax Authority with respect to tax year 2018 relating to the PTE regime. In addition, the Israel Tax Authority is currently examining tax years 2019 through 2021. We are also currently disputing a $3.6 million deficit notice relating to the purchase of a private aircraft we received from the Israel Airports Authority.2017-2021. See “Business—Legal Proceedings.” We are unable to predict the ultimate outcome of resolution of these disputes, and it is possible that they could have a material effect on our effective tax rate, financial condition, results of operations and cash flows in future periods.

Our effective tax rate for 20242025 was 42.2%(19.3)% compared with 40.1%42.2% for 2023.2024. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Taxes on Income.” In general, changes in applicable U.S. federal and state and foreign tax laws and regulations, or their interpretation and application, including the possibility of retroactive effect, could affect our tax expense. Taxing authorities in many jurisdictions in which we operate may propose changes to their tax laws and regulations in response to, among other things, evolving global tax landscapes. These potential changes could have a material impact on our effective tax rate, long-term tax planning and financial results.

The Company has gross unrecognized tax benefit liabilities and gross offsetting tax benefits in multiple jurisdictions associated with potential transfer pricing adjustments. It is possible that certain taxing authorities could examine the Company’s operating structure, including any operational shifts between jurisdictions, and the Company’s historical transfer pricing methodologies and propose an adjustment that would result in additional tax expense. While tax treaties exist between various countries that reduce the risk of double taxation, in the event of an examination targeting our transfer pricing methodologies, there is a risk that the negotiation between these respective countries’ taxing authorities does not align with the Company’s expectation, therefore resulting in more net tax expense than what is estimated.

Global tax reform initiatives that impose a global tax on multinational enterprises, could materially affect our financial condition, effective tax rate, long-term tax planning, future profitability and results of operationsoperations.

•Acquisitions of games and new technology. We have grown and expect towill continue to growevaluate opportunities to further expand our business by acquiring games and game studios that have broad appeal and potential for scalable leadership in our core genres, enhance our growth profile, or that we believe can benefit from our live operations services, our design experience, and our scale. When we acquire games and studios, we focus on providing existing audiences with proven content and applying live operations to create a better game experience for users.

We distribute our games to the end customer through various web and mobile platforms, such as Apple, Facebook, Google and other web and mobile platforms plus our own Direct-to-Consumer platforms. Through these platforms, users can download our free-to-play games and can purchase virtual items to enhance their game-playing experience. Players can purchase virtual items through various widely accepted payment methods offered in the games. Payments from players for virtual items are non-refundable and relate to non-cancellable contracts that specify our obligations and cannot be redeemed for cash nor exchanged for anything other than virtual items within our games.

Our games are played on various third-party platforms forthat whichallow customers to choose to make purchases through our Direct-to-Consumer platform or through the third-party platform. If paid through the third-part platform, the platform providers collect proceeds from our customers and pay us an amount after deducting platform fees. For purchases made through both the third-party and Direct-to-Consumer platforms, we are primarily responsible for fulfilling the virtual items, have the control over the content and functionality of games and have the discretion to establish the virtual items’ prices. Therefore, we are the principal and, accordingly revenues are recorded on a gross basis. Payment processing fees paid to platform providers are recorded within cost of revenue.

Cost of revenue includes payment processing fees, customer support, hosting feesfees, royalties and depreciation and amortization expenses associated with assets directly involved in the generation of revenues, including servers and internal use software. Platform providers (such as Apple, Facebook and Google) charge a transactional payment processing fee to accept payments from our players for the purchase of in-app virtual goods. Payment processing fees and other related expenses for in-app purchases made through our Direct-to-Consumer platforms are typically 3-4%,3-4%. comparedIf our players choose to pay through a third-party platform, platform providers (such as Apple and Google) charge a transactional payment processing fee of 30% platformto feeaccept payments from our players for thirdsuch party platforms.purchases. We generally expect cost of revenue to fluctuate proportionately with revenues.

We measure the performance of our business by using several key financial metrics, including revenue and operating income, and operating metrics, including Daily Active Users, Average Revenue per Daily Active User, Monthly Active Users, Daily Paying Users, and Average RevenueDaily perPayer Paying User.Conversion. These operating metrics help our management to understand and measure the engagement levels of our players, the size of our audience and our reach. See “BasisGlossary of Presentation” and “Summary Consolidated Financial and Other DataTerms” for additional information of these measures.

The decrease in interest income for 2025 when compared to 2024 is driven primarily by lower average balances held in interest bearing cash, cash equivalents and short-term investments throughout 2025, primarily reflecting the use of cash in the SuperPlay acquisition. The increase in interest income for 2024 when compared to 2023 is primarily due to higher interest rates, more active investments of excess cash in income-bearing investments, and from intersetinterest earned on excess taxes paid in Israel in prior years.

The provision for income tax was $118.3$33.5 million for the year ended December 31, 20242025 and the effective income tax rate was 42.2%.(19.3)%. The difference between the effective income tax rate and the U.S. statutory tax rate is primarily due to adverse impacts of certain recurring items including tax rateschanges in foreignvaluation jurisdictionsof Contingent Consideration and the relative amounts of income earned in those jurisdictions, unrecognized tax benefits, GILTI inclusion, and valuation allowances. These adverse impacts are partially offset by the favorable impact of the Israeli Preferred Technology Enterprise regime.inclusion. The full rate reconciliation is available in Note 21,22, Income Taxes.

The provision for income tax was $157.1$118.3 million for the year ended December 31, 20232024 and the effective income tax rate was 40.1%.42.2%. The difference between the effective income tax rate and the U.S. statutory tax rate was primarily due to adverse impacts of certain recurring items such asincluding tax rates in foreign jurisdictions and the relative amounts of income earned in those jurisdictions, unrecognized tax benefits, GILTI inclusion, and GILTIvaluation inclusion.allowances. These adverse impacts are partially offset by the the favorable impact of the Israeli Preferred Technology Enterprise regime. The full rate reconciliation is available in Note 22, Income Taxes.

The provision for income tax was $85.5$157.1 million for the year ended December 31, 2022,2023, and the effective income tax rate was 23.7%.40.1%. The difference between the effective income tax rate and the U.S. statutory tax rate was primarily due to adverse impacts of certain recurring items such as tax rates in foreign jurisdictions and the relative amounts of income earned in those jurisdictions, unrecognized tax benefits, and GILTI inclusion. These adverse impacts are partially offset by the recurring favorable impact of the Israeli Preferred Technology Enterprises regime. ItThe full rate reconciliation is alsoavailable favorablyin affectedNote by22, itemsIncome that are not consistent from year to year. Of these items, the primary differences related to the reversal of a valuation allowance relating to foreign net operating losses and return-to-provision adjustments.Taxes.

Reconciliation of CreditNet income (loss) to Adjusted EBITDA to net income

Credit Adjusted EBITDA is a non-GAAP financial measure and should not be construed as an alternative to net income as an indicator of operating performance, nor as an alternative to cash flow provided by operating activities as a measure of liquidity, or any other performance measure in each case as determined in accordance with GAAP.

Below is a reconciliation of Credit Adjusted EBITDA to net income, the closest GAAP financial measure. Our Credit Agreement defines Adjusted EBITDA (which we call “Credit Adjusted EBITDA”) as net income before (i) interest expense, (ii) interest income, (iii) provision for income taxes, (iv) depreciation and amortization expense, (v) impairment charges, (vi) stock-based compensation, (vii) contingent consideration, (viii) acquisition and related expenses, and (ix) certain other items. We calculate Credit Adjusted EBITDA Margin as Credit Adjusted EBITDA divided by revenues.

Credit Adjusted EBITDA and Credit Adjusted EBITDA Margin as calculated herein may not be comparable to similarly titled measures reported by other companies within the industry and are not determined in accordance with GAAP. Our presentation of Credit Adjusted EBITDA and Credit Adjusted EBITDA Margin should not be construed as an inference that our future results will be unaffected by unusual or unexpected items.

(3) Amounts for the year ended December 31, 2025 consists of $9.8 million and $2.0 million incurred by the Company related to restructuring activities and severance, respectively, and $1.1 million of reimbursement of a tax assessment paid under protest in 2023. The amount for the year ended December 31, 2024 consists primarily of $14.5 million and $6.9 million incurred by the Company related to severance and restructuring activities, respectively. The amount for the year ended December 31, 2023 consists primarily of $1.8 million incurred by the Company for severance and $1.0 million for a tax assessment paid under protest. The amount for the year ended December 31, 2022 includes $13.2 million incurred by the Company for severance, $4.1 million incurred by the Company for relocation and support provided to employees due to the war in Ukraine and $16.4 million incurred related to the announced restructuring activities.

We incur capital expenditures in the normal course of business and perform ongoing enhancements and updates to our social and mobile games to maintain their quality standards. Cash used for capital expenditures in the normal course of business is typically made available from cash flows generated by operating activities. We may also pursue acquisition opportunities for additional businesses or social or mobile games that meet our strategic and return on investment criteria. Capital needs are evaluated on an individual investmentopportunity basis and may require significant capital commitments.

Our primary sources of liquidity are the cash flows generated from our operations, currently available unrestricted cash and cash equivalents, short-term highly liquid investments, and borrowings under our Credit Facility and Revolver. Our cash and cash equivalents and short-term investments totaled $565.8$820.2 million and $1,029.7$565.8 million at December 31, 20242025 and December 31, 2023,2024, respectively. AsOn April 23, 2025, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement which, among other things, decreased the aggregate principal amount of December 31, 2024 and 2023, we had $600 million in additional borrowing capacity pursuant to our Revolving Credit Facility. Recognizing that ourthe Revolving Credit Facility maturesfrom in$600 million to $550 million. On February 16, 2026, wethe areCompany evaluatingentered ourinto financinga alternativesFifth andAmendment debt(the maturities“Fifth inAmendment”) to the near-term.Credit PaymentsAgreement which, among other things, extended the maturity of short-term debt obligations, dividends to shareholders and other commitments are expected to be made from cash on the balance sheet and operating cash flows. Long-term obligations are expected to be paid through operating cash flows, or, if necessary, borrowings under our Revolving Credit facilityFacility or,to ifMarch necessary,6, additional term loans or issuances of equity.2027.

In 2024,2024 and 2025, our Board of Directors elected to declare quarterly cash dividends of $0.10 per share of the Company’s outstanding common stock. We will maintain a focus on financial discipline through a balanced approach of evaluation of M&A opportunities and stockholder dividends while maintaining adequate capital requirements for ongoing operations. The Board will continue to evaluate the economic environment, our cash needs, optimal uses of cash, and other applicable factors, and may elect to make changes to the payment of dividends (if any) in future periods.

Our ability to fund our operations, pay our debt obligations and fund planned capital expenditures depends, in part, upon economic and other factors that are beyond our control, and disruptions in capital markets could impact our ability to secure additional funds through financing activities. We believe that our cash and cash equivalents balance, short-term investments, restricted cash, borrowing capacity under our Revolving Credit Facility and our cash flows from operations will be sufficient to meet our normal operating requirements during the next 12 months and the foreseeable future and to fund capital expenditures.

Net cash flow provided by operating activities for each period primarily consisted of net income generated during the period, exclusive of non-cash expenses such as depreciation, amortization and stock-based compensation, and changes in the fair value of contingent consideration payable, with changes in working capital impacted by the payment of annual and incentive bonuses and payment of long-term cash compensation during the first quarter and other normal timing differences.

Net cash flows used in investing activities for the year ended December 31, 20242025 increaseddecreased $541.9$560.4 million when compared to the year ended December 31, 20232024 mainly due to $686.9 million of consideration paid (net of cash acquired) for the 2024 acquisition of SuperPlay Ltd.Ltd offset by an additional $79.6 million paid for short-term investments in 2025.

Net cash flows used in investing activities for the year ended December 31, 20232024 increased $165.6$541.9 million when compared to the year ended December 31, 2022,2023, mainly due to $159.6$686.9 million of consideration paid (net of cash acquired) for the 2024 acquisitions of SuperPlay Ltd offset by $159.6 million for the 2023 acquisitions of YoudaInnPlay GamesLabs, and G.SYouda InnPlay Labs Ltd.Games.

Net cash flows used in financing activities for the year ended December 31, 2024,2025, was $230.0 million primarily related to dividends paid, earnout payments related to acquisitions, the repurchase of shares and repayments on bank borrowings. Net cash flows used in financing activities of $167.1 million for the year ended December 31, 2024 primarily related to dividends paid, earnout payments related to acquisitions, and repayments on bank borrowings. Net cash flows used in financing activities of $18.2 million for the year ended December 31, 20232023, primarily related to repayments on bank borrowings. Net cash flows used in financing activities of $652.0 million for the year ended December 31, 2022, primarily related to the Company’s Tender Offer in October 2022.

Business combinations and related fair value measurements

We primarily derive revenues from the sale of virtual items associated with online games. We distribute our games to the end customer through various web and mobile platforms such as Apple, Facebook, Google, and other web and mobile platforms. Through these platforms, users can download our free-to-play games and can purchase virtual currency which is redeemed in the game for virtual goods, or players can purchase virtual goods directly (collectively referred to as virtual items) to enhance their game-playing experience.

Since early 2026, the conflict involving Iran and Israel has intensifiedremained intohighly a broader regional confrontation,volatile, with Iranperiodic andexchanges Israel exchangingof missile, drone, air, and airmaritime-related strikes,attacks, and with related hostilities also involving Hezbollah in Lebanon, the Houthis in Yemen, and other Iran-aligned groups across the region. Recent reporting indicates that the conflict remains volatile and fluid, with continuedalthough diplomatic efforts and ceasefire-related discussions have continued, the potentialsituation forremains fluid and fragile, and renewed escalation remains possible if a lastingdurable arrangement is not reached.achieved.

While this prolonged regional conflict has not had a direct material financial impact on the Company as of the date of this filing, the Company’s headquarters are located in Israel, and the Company employs approximately 1,1751,195 professionals in Israel, including the majority of the Company’s senior leadership team. The Company continues to actively monitor developments in Israel, Iran, Lebanon, Yemen and the broader region, including the possible effects of renewed hostilities, security disruptions, maritime chokepoint risks, and related operational, supply chain, and personnel risks.

Comparison of the three and six months ended MarchJune 31,30, 2026 versus the three and six months ended MarchJune 31,30, 2025

Revenues for the three and six months ended MarchJune 31,30, 2026 increased by $38.7$35.1 million and $73.8 million, respectively, when compared with the comparable periodperiods of 2025 primarily due to incremental revenues from certain SuperPlay titles which more than offset the decrease in revenues due to reduced monetization primarily in slot-themedother games.

Cost of revenue for the three and six months ended MarchJune 31,30, 2026 decreased by $5.2$2.9 million and $8.1 million, respectively, when compared with the comparable period of 2025. The decrease in cost of revenue was primarily driven by a higher proportion of revenue generated through our direct-to-consumer platforms, which incur lower platform fees compared to third-party platforms, partially offset by increased platform fees associated with higher overall revenue and higher royalty expenses.

Research and development expenses for the three and six months ended MarchJune 31,30, 2026 decreased by $5.8$18.1 million and $23.9 million, respectively, when compared with the comparable period of 2025. The decrease was primarily attributable to lower headcount and reduced outsourcing spend as well as lower stock-based compensation expense as previously granted awards became fully vested, partially offset by the issuance of fewer new equity awards with lower grant-date fair values. ThisDuring the six months ended June 30, 2026, the decrease was offset by severance expense related to the reduction in force during the three months ended March 31, 2026.force.

Sales and marketing expenses for the three months ended MarchJune 31,30, 2026 increaseddecreased by $88.8$5.1 million when compared with the comparablethree periodsmonths ofended June 30, 2025. The increasesdecrease inwas sales and marketing expenses werelargely due largely to increased media buy related to SuperPlay, offset by a decrease in media buy in some other games and in depreciation and amortization related to fully amortized assets. Salesassets and marketing expenses may materially fluctuate between quarters as a percentagedecrease ofin revenuesmedia dependingbuy onin thesome timinggames, of our marketing efforts driven primarilyoffset by ouran newlyincrease acquiredin studiosmedia suchbuy asrelated SuperPlayto and InnPlay.SuperPlay.

Interest expense for the three months ended MarchJune 31,30, 2026 decreasedincreased $1.4$1.3 million when compared with the samethree periodsmonths ofended June 30, 2025 as a result of lower variable rate debt balance and lowerhigher average interest rates paid on that balance. Interest expense for the six months ended June 30, 2026 decreased $0.1 million when compared with the six months ended June 30, 2025 as a result of a lower variable debt balance offset by higher average interest rates paid on that balance.

Interest income for the three months ended MarchJune 31,30, 2026 increaseddecreased by $1.4$1.1 million when compared with the samethree periodsmonths ofended June 30, 2025 as a result of higherlower balances held in interest bearing cash, cash equivalentsequivalent and short-term investments,investment slightlyaccounts, offset byand lower average interest rates earned on those balances.. Interest income for the six months ended June 30, 2026 increased by $0.3 million when compared with the six months ended June 30, 2026 as a result of higher average balances held in interest bearing cash, cash equivalent and short-term investment accounts, slightly offset by lower interest rates earned on those balances.

The effective income tax rate for the three months ended MarchJune 31,30, 2026 was 22.1%29.9% compared to 25.5%26.4% for the three months ended MarchJune 31,30, 2025. The effective income tax rate for the six months ended June 30, 2026 was (79.2)% compared to 26.0% for the six months ended June 30, 2025. 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 threesix months ended MarchJune 31,30, 2026 was primarily due to changes in estimated value of contingent consideration and tax rates in foreign jurisdictions, partially offset by impacts of tax positions that do not meet the more likely than not standard. The difference between the effective tax rate and the 21% U.S. federal statutory rate for the threesix months ended MarchJune 31,30, 2025 was primarily due to the inclusion of Global Intangible Low-Taxed Income, tax rates in foreign jurisdictions, state income taxes, and changes in valuation allowances, partially offset by a favorable impact of tax positions that do not meet the more likely than not standard. .

Upon aggregating all of the components of our results of operations above, net income (loss) for the three months ended MarchJune 31,30, 2026 increased $14.8 million and for the six months ended June 30, 2026, decreased $88.1$73.3 million when compared with the same periodperiods of 2025.

(3) AmountAmounts for the three months ended March 31, 2026 consists entirely of severance, and the amount for the threesix months ended MarchJune 31,30, 20252026 consists primarily of $0.7$1.6 million ofand severance$15.3 million, respectively, incurred by the Company.Company for severance.

Our primary sources of liquidity are the cash flows generated from our operations, currently available unrestricted cash and cash equivalents, short-term highly liquid investments, and borrowings under our $550 million revolving credit facility (the “Revolving Credit Facility”) (together with our senior secured first lien term loan, the “Credit Agreement”). Our cash and cash equivalents and short-term investments totaled $779.2$438.5 million and $820.2 million at MarchJune 31,30, 2026 and December 31, 2025, respectively. On April 23, 2025, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement which, among other things, decreased the aggregate principal amount of the Revolving Credit Facility from $600 million to $550 million. On February 16, 2026, the Company entered into a Fifth Amendment (the “Fifth Amendment”) to the Credit Agreement which, among other things, extended the maturity of the Revolving Credit Facility to March 6, 2027.

As of MarchJune 31,30, 2026 and December 31, 2025, we had $550 million in additional borrowing capacity pursuant to our Revolving Credit Facility. Payments of short-term debt obligations and other commitments are expected to be made from cash on the balance sheet and operating cash flows. Long-term obligations are expected to be paid through operating cash flows, refinancing of our existing credit facilities or additional debt issuances.

Net cash flows provided by operating activities for the threesix months ended MarchJune 31,30, 2026 was $22.8$51.5 million compared with $18.8$164.9 million for the same period of 2025. Net cash flows provided by operating activities for each period primarily consisted of net income generated during the period, exclusive of non-cash expenses such as depreciation, amortization, stock-based compensation and changes in the fair value of contingent consideration payable, with changes in working capital impacted by the payment of annual and incentive bonuses and payment of long-term cash compensation during the first quarter and other normal working-capital timing differences. The activity for the six months ended June 30, 2026 includes a cash outflow of $111.0 million for the payment of the SuperPlay earnout in excess of acquisition day fair value.

Net cash flow provided by investing activities for the threesix months ended MarchJune 31,30, 2026 was $115.5$99.0 million compared with cash flow used in investing activities of $105.1$135.2 million for the same period of 2025. Cash flows related to investing activities generally includes activity related to the purchase of and proceeds from short-term investments and marketable securities as well as outflows related to the purchase and capitalization of assets. The activity for the threesix months ended MarchJune 31,30, 2026 includes a cash inflow of $135.6 million in proceeds from the sale of marketable securities. The activity for the threesix months ended MarchJune 31,30, 2025 includes a cash outflow of $79.5$159.8 million for the purchase of short-term investments.

Net cash flows used in financing activities for the threesix months ended MarchJune 31,30, 2026 was $43.6$398.4 million, compared with $47.4$97.0 million for the same period of 2025. Financing activity cash flows for the threesix months ended MarchJune 31,30, 2026 primarily relates to cash paid in relation to the Company’s purchase of SuperPlay. Financing activity cash flows in both 2026 and 2025 primarily relates toincluded cash dividends paid and repayments on our bank borrowings and for the threesix months ended MarchJune 31,30, 2025 includes $4.8$10.9 million of cash paid for repurchases of common stock under the Company’s stock repurchase program.