What changed in Playboy, Inc.'s 10-K — 2024 vs 2025

Impairments 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, 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.

During the years ended December 31, 2025 and 2024, we recorded non-cash impairment charges of $0.5 million and $3.8 million on our artwork held for sale and $1.5 million and $0.6 million on our corporate leases, respectively. 42 During the year ended December 31, 2024, we experienced declines in revenue and profitability, which caused us to test the recoverability of our indefinite-lived and certain long-lived assets.

As a result, we recognized $4.7 million of impairment charges related to the write-off of internally developed software and $17.0 million of impairment charges related to the write-down of goodwill during the year ended December 31, 2024. No such impairments were recorded in 2025.

However, if we experience declines in revenue or profitability, which could occur upon further declines in consumer demand, we may record further non-cash asset impairment charges as of the applicable impairment testing date.

Recent Trade Developments 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 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.

Seasonality of Our Consumer Product Sales While we receive revenue throughout the year, our Honey Birdette direct-to-consumer business has experienced, and may continue to experience, seasonality. Historical seasonality of revenues may be subject to change as increasing pressure from competition and economic conditions impact our licensees and consumers.

The further transition of our business to a capital-light business model may further impact the seasonality of our business in the future. How We Assess the Performance of Our Business In assessing the performance of our business, we consider a variety of performance and financial measures.

The key indicators of the financial condition and operating performance of the business are revenues, salaries and benefits, and selling and administrative expenses. To help assess performance with these key indicators, we use EBITDA and Adjusted EBITDA as non-GAAP financial measures.

We believe these non-GAAP measures provide useful information to investors and expanded insight to measure revenue and cost performance as a supplement to the GAAP consolidated financial statements. Refer to the “ EBITDA and Adjusted EBITDA ” section below for reconciliations of EBITDA and Adjusted EBITDA to net loss, the closest GAAP measure.

Components of Results of Operations Revenues 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 starting January 1, 2025, licensing the operation of our digital subscriptions and content businesses, which were owned and operated by us in the prior year comparative period.

Consumer Products Revenue from sales of online apparel and 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. Licensing We license trademarks under multi-year arrangements to consumer products and online and location-based entertainment businesses. Typically, the initial contract term ranges between one to 15 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. 43 Starting January 1, 2025, we licensed the operation of our Playboy Plus, Playboy TV (online and linear) and Playboy Club digital businesses, which was previously owned and operated by us and included in our Digital Subscriptions and Content reportable segment in the prior year comparative period, to Byborg pursuant to the LMA.

Prior to January 1, 2025, digital subscription revenue was derived from subscription sales of playboyplus.com and playboy.tv , which are online content platforms. We received fixed consideration shortly before the start of the subscription periods from these contracts, which were primarily sold in monthly, annual, or lifetime subscriptions.

Revenues from lifetime subscriptions were 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.

Prior to January 1, 2025, we also licensed programming content to certain cable television operators and direct-to-home satellite television operators who paid 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 were generally collected monthly and recognized as revenue as earned.

Cost of Sales Cost of sales primarily consist of merchandise costs, warehousing and fulfillment costs, agency and commission fees, website 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, costs associated with branding activities, customer shipping and handling expenses, fulfillment activity costs and freight-in expenses.

Selling and Administrative Expenses Selling and administrative expenses primarily consist of corporate office and retail store occupancy costs, personnel costs, including stock-based compensation, 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 and insurance.

Impairments Impairments consist of the impairments of our artwork held for sale, right-of-use assets related to our corporate leases, internally developed software and goodwill. Other Operating Expense, Net Other operating income (expense), net consists primarily of gains and losses on disposal of assets and other miscellaneous items.

Nonoperating (Expense) Income Interest expense Interest expense consists of interest on our long-term debt and the amortization of deferred financing costs and debt premium/discount.

Other Income (Expense), Net Other income (expense), 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 and interest income.

Benefit (expense) from Income Taxes Benefit (expense) 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. 44 Results of Operations Comparison of Fiscal Years Ended December 31, 2025 and 2024 The following table summarizes key components of our results of operations for the periods indicated (in thousands, except percentages): Year Ended December 31, 2025 2024 $ Change % Change Net revenues $ 120,928 $ 116,135 $ 4,793 4 % Costs and expenses: Cost of sales (35,077) (41,780) 6,703 (16) Selling and administrative expenses (91,029) (98,716) 7,687 (8) Impairments (2,087) (26,078) 23,991 (92) Other operating expense, net (763) (399) (364) 91 Total operating expense (128,956) (166,973) 38,017 (23) Operating loss (8,028) (50,838) 42,810 (84) Nonoperating (expense) income: Interest expense (8,225) (23,689) 15,464 (65) Other income (expense), net 2,355 (1,722) 4,077 (237) Total nonoperating expense (5,870) (25,411) 19,541 (77) Loss before income taxes (13,898) (76,249) 62,351 (82) Benefit (expense) from income taxes 1,226 (3,148) 4,374 (139) Net loss (12,672) (79,397) 66,725 (84) Net loss attributable to Playboy, Inc. $ (12,672) $ (79,397) $ 66,725 (84) % The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenue for the periods indicated: Year Ended December 31, 2025 2024 Net revenues 100 % 100 % Costs and expenses: Cost of sales (29) (36) Selling and administrative expenses (75) (85) Impairments (2) (22) Other operating expense, net (1) — Total operating expense (107) (143) Operating loss (7) (43) Nonoperating (expense) income: Interest expense (7) (20) Other income (expense), net 2 (1) Total nonoperating expense (5) (21) Loss before income taxes (12) (64) Benefit (expense) from income taxes 1 (3) Net loss (11) (67) Net loss attributable to Playboy, Inc.

(11) % (67) % 45 Net Revenues The following table sets forth net revenues by reportable segment (in thousands): Year Ended December 31, 2025 2024 $ Change % Change Direct-to-consumer $ 70,854 $ 69,729 $ 1,125 2 % Licensing 46,406 24,802 21,604 87 Corporate 1,315 662 653 99 All other 2,353 20,942 (18,589) (89) Total $ 120,928 $ 116,135 $ 4,793 4 % Direct-to-Consumer The increase in direct-to-consumer net revenues, compared to the prior year comparative period, was primarily due to continued improvement in consumer perception of the Honey Birdette brand, which resulted in increased sales of full-price products, partly offset by lower sales of discounted products.

Licensing The increase in licensing net revenues, compared to the prior year comparative period, was primarily due to $20.0 million of minimum guaranteed royalties recognized pursuant to the LMA, and a $2.9 million increase in royalties recognized from other licensing partners, out of which $2.2 million pertained to a licensing agreement with one of our Chinese licensees signed in the second quarter of 2024, partly offset by $1.3 million of revenue from an inventory sale to a licensee in the prior year comparative period that did not recur in 2025.

Corporate The increase in corporate revenues, compared to the prior year comparative period, was primarily due to an increase in corporate branding initiatives, including magazine sales and activities related to promotions for our magazine.

All Other The decrease in all other net revenues, compared to the prior year comparative period, was primarily due to the licensing of our digital subscriptions and content operations to Byborg pursuant to the LMA, effective as of January 1, 2025.

As a result, our previously reported Digital Subscriptions and Content operating and reportable segment was eliminated and its operations in the prior year comparative period were recast to be included in “All Other” for comparative purposes.

“All Other” net revenues for the year ended December 31, 2025 related to the amortization of deferred revenue balances that existed as of December 31, 2024 (prior to the LMA effective date of January 1, 2025) that pertain to our previously reported digital subscriptions and content operations. 46 Cost of Sales and Gross Margin The following table sets forth cost of sales and gross margin by reportable segment (in thousands): Year Ended December 31, 2025 2024 $ Change % Change Direct-to-consumer $ (28,461) $ (30,345) $ 1,884 (6) % Licensing (4,536) (2,310) (2,226) 96 Corporate (128) — (128) 100 All other (1,952) (9,125) 7,173 (79) Total cost of sales $ (35,077) $ (41,780) $ 6,703 (16) % Direct-to-consumer gross profit $ 42,393 $ 39,384 $ 3,009 8 % Direct-to-consumer gross margin 60 % 56 % Licensing gross profit $ 41,870 $ 22,492 $ 19,378 86 % Licensing gross margin 90 % 91 % Corporate gross profit $ 1,187 $ 662 $ 525 79 % Corporate gross margin 90 % 100 % Other gross profit $ 401 $ 11,817 $ (11,416) (97) % Other gross margin 17 % 56 % Total gross profit $ 85,851 $ 74,355 $ 11,496 15 % Total gross margin 71 % 64 % Direct-to-Consumer The decrease in direct-to-consumer cost of sales and the increase in gross margin, compared to the prior year comparative period, was primarily due to a $2.3 million decrease in Honey Birdette’s product, shipping and fulfillment costs due to lower sales of discounted products.

The increase in gross profit and gross margin was due to continued improvement in consumer demand at Honey Birdette, which resulted in increased sales of full-price products at a higher margin.

Licensing 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 $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 to a licensing agent.

Without such settlement, licensing gross margin would have increased to 95%. Corporate Corporate gross profit during the years ended December 31, 2025 and 2024 primarily related to brand related initiatives in the fourth quarter of 2025, payments for access to our iPlayboy archives, brand related activities, including for Playboy magazine, events and sponsorships.