10q10k10q10k.net

What changed in Playtika Holding Corp.'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Playtika Holding Corp.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+437 added−419 removedSource: 10-K (2024-02-26) vs 10-K (2023-02-28)

Top changes in Playtika Holding Corp.'s 2023 10-K

437 paragraphs added · 419 removed · 312 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

48 edited+21 added−10 removed70 unchanged
Biggest changeOverview of Top 10 Games • Slotomania is a premier social slots game with an inventory of over 300 original slot games where players earn in-game virtual rewards and virtual coins and have the ability to purchase virtual items, including virtual coins, boosts and other items to further their progression and unlock more virtual rewards. • Bingo Blitz is a bingo adventure where users progress through various levels in the theme of major global cities and are able to connect with others to earn virtual items and bonuses, including additional virtual coins and power-ups. 11 • House of Fun features an inventory of over 400 uniquely-themed slot games with a standard leveling system where players earn virtual in-game items including virtual rewards, bonuses and coins progressing through various missions that are updated regularly. • Solitaire Grand Harvest modernizes the classic solitaire game by adding new elements and challenges. • June’s Journey is a hidden object game that is set in the 1920’s, where players step into the role of amateur detective June Parker to investigate mysterious quests. • Caesars Slots features an inventory of over 200 slot games developed to have a look and feel similar to those played in casinos, including high roller lounges only accessible to those with a certain amount of virtual coins and a special “Golden Room” that provides players with exclusive features. • World Series of Poker is the official social app of the World Series of Poker and allows players to compete with friend and other players to win their own virtual World Series of Poker Bracelet. • Best Fiends is a classic match-3 game with RPG-like character development featuring an expansive story set in the mystical world of Minutia. • Board Kings creates a unique social experience by combining elements of city building with traditional board games. • Redecor is a leading mobile app that combines elements of home design and mobile gaming.
Biggest changeOverview of Top 9 Games • Bingo Blitz is a bingo adventure where users progress through various levels in the theme of major global cities and are able to connect with others to earn virtual items and bonuses, including additional virtual coins and power-ups. • Slotomania is a premier social slots game with an inventory of over 300 original slot games where players earn in-game virtual rewards and virtual coins and have the ability to purchase virtual items, including virtual coins, boosts and other items to further their progression and unlock more virtual rewards. • Solitaire Grand Harvest modernizes the classic solitaire game by adding new elements and challenges. • June’s Journey is a hidden object game that is set in the 1920’s, where players step into the role of amateur detective June Parker to investigate mysterious quests. • House of Fun features an inventory of over 400 uniquely-themed slot games with a standard leveling system where players earn virtual in-game items including virtual rewards, bonuses and coins progressing through various missions that are updated regularly. • World Series of Poker is the official social app of the World Series of Poker and allows players to compete with friend and other players to win their own virtual World Series of Poker Bracelet. • Caesars Slots features an inventory of over 200 slot games developed to have a look and feel similar to those played in casinos, including high roller lounges only accessible to those with a certain amount of virtual coins and a special “Golden Room” that provides players with exclusive features. • Best Fiends is a classic match-3 game with RPG-like character development featuring an expansive story set in the mystical world of Minutia. • Redecor is a mobile application that combines elements of home design and mobile gaming.
We cannot predict the outcome of these lawsuits and these lawsuits, or similar suits in the future, could cause Google, Apple, or other third-party platform providers to deny our social casino 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 business.
We cannot predict the outcome of these lawsuits and these lawsuits, or similar suits in the future, could cause Google, Apple, Facebook, or other third-party platform providers to deny our social casino 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 business.
The GDPR created new compliance obligations applicable to our business and some of our players, which could require us to self-determine how to interpret and implement these obligations, change our business practices and expose us to lawsuits (including class action or similar representative lawsuits) by consumers or consumer organizations for alleged breach of data protection laws.
The GDPR created compliance obligations applicable to our business and some of our players, which could require us to self-determine how to interpret and implement these obligations, change our business practices and expose us to lawsuits (including class action or similar representative lawsuits) by consumers or consumer organizations for alleged breach of data protection laws.
These opposition efforts could lead to a prohibition on social gaming or social casino gaming altogether, restrict our ability to advertise our games or substantially increase our costs to comply with regulations, all of which could have an adverse effect on our results of operations, cash flows and financial condition.
These types of opposition efforts could lead to a prohibition on social gaming or social casino gaming altogether, restrict our ability to advertise our games or substantially increase our costs to comply with regulations, all of which could have an adverse effect on our results of operations, cash flows and financial condition.
Additional legal proceedings, including demands for arbitration, targeting our games and claiming violations of state, federal or foreign laws, including gambling laws, have occurred and could occur, based on the unique and particular laws of each jurisdiction, particularly as litigation and regulations continue to evolve.
Additional legal proceedings, including demands for arbitration, targeting our games and claiming violations of state, federal or foreign laws, including gambling laws, have 14 occurred and could occur, based on the unique and particular laws of each jurisdiction, particularly as litigation and regulations continue to evolve.
The CPRA significantly expands the CCPA, including by introducing additional obligations such as data minimization and storage limitations, granting additional rights to consumers, such as correction of personal information and additional opt-out 15 rights, and creates a new entity, the California Privacy Protection Agency, to implement and enforce the law.
The CPRA significantly expands the CCPA, including by introducing additional obligations such as data minimization and storage limitations, granting additional rights to consumers, such as correction of personal information and additional opt-out rights, and creates a new entity, the California Privacy Protection Agency, to implement and enforce the law.
We have recently made significant investments in our measurement and re-targeting capabilities, and intend to continue to focus on these capabilities, particularly as many of our games were released several years ago. We leverage these investments to create personalized retargeting campaigns to re-engage former users.
We have made significant investments in our measurement and re-targeting capabilities, and intend to continue to focus on these capabilities, particularly as many of our games were released several years ago. We leverage these investments to create personalized retargeting campaigns to re-engage former users.
The information contained on, or that can be accessed through, our website is not incorporated by reference into, and is not a part of, this filing. These filings are also available free of charge on the SEC’s website at www.sec.gov.
The information contained on, or that can be accessed through, our website is not incorporated by reference into, and is not a part of, this filing. These filings are also available free of charge on the SEC’s website at www.sec.gov. 17
Anti- 13 gaming groups in several states and countries have specifically targeted social casino games, which could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern social gaming or social casino gaming specifically.
Anti-gaming groups in several states and countries have specifically targeted social casino games, which could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern social gaming or social casino gaming specifically.
Federal Trade Commission, or the FTC, announced a settlement, in which, among other things, Epic Games agreed to pay a $245 million to the FTC relating to in-game purchases in Epic Game’s popular Fortnite game. This may result in legislation affecting how we advertise, operate, and earn revenues in games with these features.
Federal Trade Commission (the “FTC”), announced a settlement, in which, among other things, Epic Games agreed to pay $245 million to the FTC relating to in-game purchases in Epic Game’s popular Fortnite game. This may result in legislation affecting how we advertise, operate, and earn revenues in games with these features.
We invest heavily in research and development, and approximately 75% of our employees are employed in research and development, which enables us to consistently introduce updates and enhancements to our games, which we strive to do on an effective basis. We have a diverse pool of talent located in game development hubs, including in Israel and Germany.
We invest heavily in research and development, and approximately 76% of our employees are employed in research and development, which enables us to consistently introduce updates and enhancements to our games, which we strive to do on an effective basis. We have a diverse pool of talent located in game development hubs, including in Israel and Germany.
We believe the value associated with our brands and the brands licensed from CIE under which we market and license our games contributes to the appeal and success of our games, and our future ability to develop, acquire or license new brand names of similar quality is important to our continued success.
We believe the value associated with our brands and the brands licensed under which we market and license our games contributes to the appeal and success of our games, and our future ability to develop, acquire or license new brand names of similar quality is important to our continued success.
Consequently, our business is subject not only to the Israeli Protection of Privacy Law, 5741-1981, or the PPL, and the Privacy Protection Regulations (Data Security), 5777-2017, but also to a number of U.S. and international laws and regulations governing data privacy and security, including with respect to the collection, processing, storage, use, transmission, sharing, and protection of personal information and other consumer data.
Consequently, our business is subject not only to the Israeli Protection of Privacy Law, 5741-1981 (the “PPL”), and the Privacy Protection Regulations (Data Security), 5777-2017, but also to a number of U.S. and international laws and regulations governing data privacy and security, including with respect to the collection, processing, storage, use, transmission, sharing, and protection of personal information and other consumer data.
Website and Available Information Our principal executive offices are located at HaChoslim St 8 Herzliya Pituach, Israel and our telephone number is 972-73-316-3251. Our website address is www.playtika.com .
Website and Available Information Our principal executive offices are located at HaChoshlim St 8 Herzliya Pituach, Israel and our telephone number is 972-73-316-3251. Our website address is www.playtika.com .
We rely on our highly skilled, technically trained and creative employees with desirable skill sets, including game designers, engineers and project managers, to develop new technologies and create innovative games. To win and keep our talented employees, we devote significant resources to identifying, hiring, training, successfully integrating and retaining these employees.
We rely on our highly skilled, technically trained and creative employees with desirable skill sets, including game designers, engineers and project managers, to develop new technologies and create innovative games. To win and keep our talented employees, we devote significant resources to identifying, hiring, integrating, developing careers and retaining these employees.
Furthermore, in 2020 and 2021 plaintiffs in several U.S. states sued Apple and/or Google alleging that the platforms violated state gambling laws by allowing the plaintiffs to download and play social casino games, including certain of our social casino games.
Furthermore, in 2020 and 2021 plaintiffs in several U.S. states sued Apple, Google and Meta Platform (Facebook), alleging that the platforms violated state gambling laws by allowing the plaintiffs to download and play social casino games, including certain of our social casino games.
We were founded in Israel in 2010, when we released our first game, Slotomania , which remains the largest game in our portfolio based on revenues as of December 31, 2022.
We were founded in Israel in 2010, when we released our first game, Slotomania , which remains the second largest game in our portfolio based on revenues as of December 31, 2023.
On May 17, 2022, Guy David Ben Yosef filed a motion for approval of a class action lawsuit in district court in Tel Aviv-Jaffa Israel against Playtika Group Israel Ltd.
See “Legal Proceedings” for more information. On May 17, 2022, Guy David Ben Yosef filed a motion for approval of a class action lawsuit in district court in Tel Aviv-Jaffa Israel against Playtika Group Israel Ltd.
Any costs incurred as a result of this potential liability could harm our business and results of operations. Human Capital As of December 31, 2022, we had approximately 3,800 employees. We believe our people are one of our most important competitive advantages.
Any costs incurred as a result of this potential liability could harm our business and results of operations. Human Capital As of December 31, 2023, we had approximately 3,600 employees. We believe our people are one of our most important assets and our key competitive advantage.
In addition, our average DPUs increased from 0.30 million in the year ended December 31, 2021 to 0.31 million in the year ended December 31, 2022. Our Live Operations Services and the Playtika Boost Platform Since our founding, we have developed most of the core technical functionality and services that form the backbone to support our games.
In addition, our average DPUs remained at 0.31 million in the both years ended December 31, 2022 and 2023. Our Live Operations Services and the Playtika Boost Platform Since our founding, we have developed most of the core technical functionality and services that form the backbone to support our games.
We believe we are able to attract and retain top talent by creating a culture that challenges and engages our employees, offering them opportunities to learn, grow and achieve their career goals.
We are able to attract and retain top talent by creating a culture that challenges and engages our employees, offering them opportunities to learn, grow and achieve their multiple career goals and we encourage internal mobility aligned to our talents’ interests.
This provides us with both a funnel of new, internally developed game concepts, ideas for improvements to our systems, and close relationships with those local game-development communities. Competition We face significant competition in all aspects of our business. Our primary competitors include Tencent Holdings, Activision Blizzard, Electronic Arts, Take-Two Interaction/Zynga, AppLovin and Product Madness/Big Fish Games.
This provides us with both a funnel of new, internally developed game concepts, ideas for improvements to our systems, and close relationships with those local game-development communities. Competition We face significant competition in all aspects of our business. Our primary competitors include Tencent Holdings, Activision Blizzard (Microsoft), Electronic Arts, Take-Two Interactive/Zynga, Light & Wonder/SciPlay, AppLovin and Aristocrat/Pixel United.
Our Portfolio of Games Our portfolio includes 20 games, 11 of which we actively manage and promote, and our top ten games collectively represented 98.1% of our revenues for the year ended December 31, 2022. Many of our games are classic in nature with mass appeal due to their highly engaging game mechanics.
Our Portfolio of Games Our portfolio includes 24 games, 14 of which we actively manage and promote, and our top nine games collectively represented 95.7% of our revenues for the year ended December 31, 2023. Many of our games are classic in nature with mass appeal due to their highly engaging game mechanics.
CIE has granted us an exclusive, worldwide and royalty-bearing license to certain intellectual property associated with World Series of Poker through September 23, 2031, and an exclusive, worldwide and royalty-bearing sublicense to certain trademarks and domain names associated with Caesars Slots through December 31, 2026.
In particular, we license intellectual property related to our Caesars Slots and World Series of Poker games and have been granted an exclusive, worldwide and royalty-bearing license to certain intellectual property associated with World Series of Poker through September 23, 2031, and an exclusive, worldwide and royalty-bearing sublicense to certain trademarks and domain names associated with Caesars Slots through December 31, 2026.
Our Daily Payer Conversion increased from 2.9% in the year ended December 31, 2021 to 3.3% in the year ended December 31, 2022, and our ARPDAU increased from $0.68 in the year ended December 31, 2021 to $0.76 in the year ended December 31, 2022.
Our Daily Payer Conversion increased from 3.3% in the year ended December 31, 2022 to 3.6% in the year ended December 31, 2023, and our ARPDAU increased from $0.76 in the year ended December 31, 2022 to $0.81 in the year ended December 31, 2023.
Some of our games are based upon traditional casino games, such as slots and poker. We believe that our games and game features do not constitute gambling and are intended for entertainment purposes only. Our games do not offer an opportunity to win real money.
We believe that our games and game features do not constitute gambling and are intended for entertainment purposes only. Our games do not offer an opportunity to win real money.
Further, we had to comply with the GDPR and also the United Kingdom GDPR (UK GDPR), which, together with the amended United Kingdom Data Protection Act 2018, retains the GDPR in United Kingdom national law. These changes may lead to additional costs and increase our overall risk exposure. In addition, the scope of data privacy regulations worldwide continues to evolve.
Further, we had to comply with the GDPR and also the United Kingdom GDPR (UK GDPR), which, together with the amended United Kingdom Data Protection Act 2018, retains the GDPR in United Kingdom national law. These laws and regulations have led to additional costs and increased our overall risk exposure.
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, and, in some cases, the ability to rapidly combine online platforms with full-time and temporary employees.
In some cases, we compete against gaming operators who could expand their product lines to include more directly competitive games that could compete with our content. 12 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, and, in some cases, the ability to rapidly combine online platforms with full-time and temporary employees.
The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly laws outside the United States.
Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly laws outside the United States.
Our ability to quickly integrate acquisitions and realize synergies enables us to compete effectively against other bidders. Additionally, our geographic diversity allows us to integrate acquisition targets, especially studios located in Europe near our other studios and our headquarters in Israel.
Additionally, our geographic diversity allows us to integrate acquisition targets, especially studios located in Europe near our other studios and our headquarters in Israel.
This may require us to expend substantial resources, modify our games, or block users from a particular jurisdiction, each of which would harm our business, financial condition, and results of operations. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business.
This may require us to expend substantial resources, modify our games, or block users from a particular jurisdiction, each of which would harm our business, financial condition, and results of operations.
The effects of the CCPA are significant and have required, and could continue to require, us to modify our data, security, and marketing practices and policies, and to incur substantial costs and expenses in an ongoing effort to comply with the CCPA and other applicable data protection laws Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent state privacy legislation in the U.S., which could increase our potential liability and adversely affect our business.
The effects of the CCPA are significant and have required, and could continue to require, us to modify our data, security, and marketing practices and policies, and to incur substantial costs and expenses in an ongoing effort to comply with the CCPA and other applicable data protection laws.
We have a powerful combination of scale, growth and operating cash flow. In the year ended December 31, 2022, we generated $2,615.5 million in revenues, net income of $275.3 million and $805.1 million in Credit Adjusted EBITDA, representing a net income margin of 10.5%, and a Credit Adjusted EBITDA margin of 30.8%.
We have a powerful combination of scale and operating cash flow. In the year ended December 31, 2023, we generated $2,567.0 million in revenues, net income of $235.0 million and $832.2 million in Credit Adjusted EBITDA, representing a net income margin of 9.2%, and a Credit Adjusted EBITDA margin of 32.4%.
We offer an array of career development services to our employees including access to professional trainings through our Playtika Academy program or external resources, access to leadership and manager trainings, including our annual leadership 16 workshop and mentoring opportunities.
We offer an array of career development services to our employees including instructor-led training, different online knowledge resources through our Playtika Academy program or external resources, and a full leadership development journey including mentoring opportunities.
The Playtika Boost Platform includes: • Digital Studio, which is being developed to use digital and AI technologies to optimize game operations and monetization • Meta-games and monetization events, including tournaments, challenges, and missions; • Payment systems and payment page optimization tools; • Loyalty programs; • Data analytics infrastructure, including business intelligence, simulation, and modelling frameworks and dashboards; • Tailored user data, including segmentation and grouping, enabling customizable content curation; • Social gaming infrastructure, including multiplayer game services, match-making algorithms, clans, and intra-game social networking; and • Customer service, monitoring, disaster recovery, alerts, and security. 9 There are also a number of additional services we provide to studios, based on their game’s needs and strategies, including: • Digital Studio: A developing suite of advanced and easy to use tools to maximize efficiency and designed to enhance revenue by personalizing the player experience • Player Journey: Proprietary software that allows game operators to create and deploy personalized game content in real-time without extensive software development; • Campaign Manager: Suite of tools and systems enabling outbound communication with players (push notifications, email, SMS, etc.); • Marketing Suite: Enhanced tools for managing user acquisition and retargeting campaigns, and operating ad-monetization and cross-promotion activities; • Artificial Intelligence / Machine Learning: Software and algorithms to support artificial intelligence and machine learning models to enhance and supplement traditional data analytics; • Customer Service: Additional tools and software for customer relationship management, account management, and customer service activities; and • Back Office Services Software (BOSS): Complete suite of back-office support software that helps manage day-to-day game operations and configurations.
There are also a number of additional services we provide to studios, based on their game’s needs and strategies, including: • Digital Studio: A developing suite of advanced and easy to use tools to maximize efficiency and designed to enhance revenue by personalizing the player experience; • Player Journey: Proprietary software that allows game operators to create and deploy personalized game content in real-time without extensive software development; • Campaign Manager: Suite of tools and systems enabling outbound communication with players (push notifications, email, SMS, social networks, etc.); • Marketing Suite: Enhanced data-driven tools for managing user acquisition and retargeting campaigns, based on Lifetime Value predictions and budget allocation recommendations models driven by AI, reducing operation time and increasing efficiency; operates ad-monetization activities by managing automatic and manual auctions and bids; • AB Boost: An end-to-end system for planning, executing, an analyzing experiments for AB testing, offers automation and optimization using statistical calculations and AI recommendations; • Artificial Intelligence / Machine Learning: Software and algorithms to support artificial intelligence and machine learning models to enhance and supplement traditional data analytics; • Customer Service: Additional tools and software for customer relationship management, account management, and customer service activities; and • Back Office Services Software (BOSS): Complete suite of back-office support software that helps manage day-to-day game operations and configurations in one place.
We view acquisitions as an effective strategy to expand the scale and scope of our mobile games and as a complementary strategy to new game development. Marketing and Player Lifecycle Management Over our twelve year history, we have gained significant expertise in acquiring new users, converting users to payers, retaining active users, and re-engaging inactive ones.
We consider acquisitions as a pivotal strategy for increasing our mobile game offerings and enhancing the diversity and strength of our portfolio, thereby facilitating its growth and expansion Marketing and Player Lifecycle Management Over our history, we have gained significant expertise in acquiring new users, converting users to payers, retaining active users, and re-engaging inactive users.
We have built these core technical functions and services, and created a scalable, proprietary technology platform, the Playtika Boost Platform, that enhances our live operations services across our games.
We have built these core technical functions and services, and created a scalable, proprietary technology platform, the Playtika Boost Platform, that enhances our live operations services. Recently our platform has been powered by Machine Learning Platform and artificial intelligence (“AI”) engines for various use-cases in marketing, games operations and monetization.
They may also offer their products and services in local languages we do not offer. 12 Intellectual Property We consider our intellectual property rights, including our trademarks, copyrights, and trade secrets, in the aggregate, material to our business. We endeavor to protect our investment in our intellectual property by seeking protection in the jurisdictions where we do business, as appropriate.
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. Intellectual Property We consider our intellectual property rights, including our trademarks, copyrights, and trade secrets, in the aggregate, material to our business.
Further, new, increasingly restrictive regulations are coming into force all around the world, such as in China, Belarus, Thailand and Brazil, but also within the United States. For example, in 2018, California enacted the California Consumer Privacy Act, or the CCPA, which became effective on January 1, 2020.
In addition, the scope of data privacy regulations worldwide continues to evolve. Further, new, increasingly restrictive regulations are coming into force all around the world, such as in China, Belarus, Thailand and Brazil, but also within the 15 United States.
We generally obtain trademark protection and often seek to register trademarks for the names and designs under which we market and license our games. As of January 1, 2023, we owned approximately 877 registered trademarks in the United States, and approximately 814 registered trademarks in jurisdictions outside of the United States.
We endeavor to protect our investment in our intellectual property by seeking protection in the jurisdictions where we do business, as appropriate. We generally obtain trademark protection and often seek to register trademarks for the names and designs under which we market and license our games.
Regulation of cookies and web beacons may lead to broader restrictions on our online activities, including efforts to understand followers’ internet usage and promote ourselves to them. We are subject to a variety of laws in the United States and other non-U.S. jurisdictions regarding data privacy, cybersecurity, and consumer protection, which are continuously evolving and developing.
Regulation of cookies and web beacons may lead to broader restrictions on our online activities, including efforts to understand followers’ internet usage and promote ourselves to them.
Our two largest games, Slotomania and Bingo Blitz, generated approximately half of our revenues for the year ended December 31, 2022.
Our portfolio includes both casual and social casino-themed games. For the year ended December 31, 2023, our casual games generated 56.7% of our revenues, with our social casino-themed games 11 accounting for the remaining 43.3%. Our two largest games, Slotomania and Bingo Blitz , generated approximately 46% of our revenues for the year ended December 31, 2023.
Both Virginia and Colorado have enacted similar legislation to the CCPA, and other states are considering similar legislation. Further, in November 2020, California voters passed the California Privacy Rights Act, or CPRA.
Further, in November 2020, California voters passed the California Privacy Rights Act, or CPRA.
Generally, our strategy involves identifying potential acquisition targets that fall into one of five categories: • Newly developed or underperforming games with a proven game concept in our core genres to facilitate improvement in engagement, monetization, and retention; • Established games in our core genres, to increase the trajectory of the games; or • Non-traditional games and gamifiable applications that expand our reach to adjacent categories; • Businesses and applications that enable us to further leverage our existing technology and capabilities to offer live-ops and monetization solutions to game developers; • Acquisitions to enhance our marketing or technology capabilities. 10 After an acquisition, we deploy our live operations services and, if appropriate for the acquired game, app or studio, seek to integrate them into the Playtika Boost Platform, providing access to our technical infrastructure.
Over the past 12 years, we have successfully acquired a number of mobile games and studios, including InnPlay Studios (2023), Youda Games (2023), JustPlay (2022), Reworks (2021), Seriously (2019), Supertreat (2019), Wooga (2018), Jelly Button (2017), House of Fun (2014), World Series of Poker (2013) and Bingo Blitz (2012). 10 Generally, our strategy involves identifying potential acquisition targets that fall into one of five categories: • Newly developed or underperforming games with a proven game concept in our core genres to facilitate improvement in engagement, monetization, and retention; • Established games in our core genres, to increase the trajectory of the games; • New types of business models within mobile games as well as new genres of games within in-app purchase mobile games; • Businesses and applications that enable us to further leverage our existing technology and capabilities to offer live-ops and monetization solutions to game developers; or • Acquisitions to enhance our marketing or technology capabilities.
The CCPA and CPRA could subject us to additional compliance costs as well as potential fines, individual claims and commercial liabilities. Israel has also implemented data protection laws and regulations, including the PPL.
The CCPA and CPRA could subject us to additional compliance costs as well as potential fines, individual claims and commercial liabilities. The CCPA was only the beginning of a trend toward more stringent state privacy legislation in the United States.
Additionally, many of the feature elements of our games, including game characters, are subject to copyright protection. In addition to the intellectual property that we own, we license certain intellectual property from third parties. In particular, we license intellectual property related to our Caesars Slots and World Series of Poker games from CIE.
In addition to the intellectual property that we own, we license certain intellectual property from third parties.
The 14 outcome of many of these initiatives is not yet known, but we anticipate there may be legislation forthcoming in at least some of these jurisdictions that could affect how we offer these features which could negatively affect our revenues. Data Privacy and Security We are an Israeli headquartered company with users around the globe.
It is also possible that the EU and other parts of the world adopt similar guidelines or legislation, and developments of this kind could further restrict our business or negatively affect our revenues. Data Privacy and Security We are an Israeli headquartered company with users around the globe.
For example, a bill introduced in Australia in 2020 would amend that country’s Interactive Gambling Act of 2001 to ban online social casino games.
For example, while a bill introduced in Australia in 2020 to ban online social casino games (through an amendment of the Interactive Gambling Act of 2001) remains under consideration, in May 2023 the Australian Government published Guidelines for the Classification of Computer Games, set to go into effect late 2024, which would limit games containing ‘simulated gambling’ features to adults 18 and over.
Removed
Over the past 10 years, we have successfully acquired a number of mobile games and studios, including JustPlay (2022), Reworks (2021), Seriously (2019), Supertreat (2019), Wooga (2018), Jelly Button (2017), House of Fun (2014), World Series of Poker (2013) and Bingo Blitz (2012).
Added
The Playtika Boost Platform includes: • Digital Studio suite, which is being developed to use digital and AI technologies to optimize marketing, game operations and monetization, including generative AI models for efficient art processes and for our customer support and VIP processes; • Meta-games and monetization events, including tournaments, challenges, and missions; • Payment systems, including payment page optimization tools used for direct-to-consumer and Playtika Webstore transactions; • Loyalty programs; • User identity capabilities to enable user registration with our games and across Playtika’s portfolio; • Data analytics infrastructure, including business intelligence, simulation, and modelling frameworks and dashboards; • Tailored user data, including segmentation and grouping, enabling customizable content curation; • Social gaming infrastructure, including multiplayer game services, match-making algorithms, clans, and intra-game social networking; and • Customer service, monitoring, disaster recovery, alerts, and security. 9 One of our core strengths lies in our ability to generate assets that maintain the distinct style and character fidelity of each individual game in our portfolio.
Removed
Our portfolio includes both casual and casino-themed games. For the year ended December 31, 2022, our casual games generated 53.8% of our revenues, with our casino-themed games accounting for the remaining 46.2%. Our oldest and largest game franchises have accounted for a significant portion of our growth.
Added
Our efforts have involved automating the process of generating creative content for features and promos using state-of-the-art generative AI models. We also utilize Generative AI on VIP and Customer Support domains, where our agents will receive suggestions and recommendations based on Large Language Models integrated into their work platform.
Removed
In some cases, we compete against gaming operators who could expand their product lines to include more directly competitive games that could compete with our content.
Added
After an acquisition, we deploy our live operations services and, if appropriate for the acquired game, app or studio, seek to integrate them into the Playtika Boost Platform, providing access to our technical infrastructure. Our ability to quickly integrate acquisitions and realize synergies enables us to compete effectively against other bidders.
Removed
Internationally, local competitors may have greater brand recognition than us in their local country and a stronger understanding of local culture and commerce.
Added
As of December 31, 2023, we owned approximately 994 registered trademarks in the United States, and approximately 876 registered trademarks in jurisdictions outside of the United States. Additionally, many of the feature elements of our games, including game characters, are subject to copyright protection.
Removed
There has been considerable focus on in-game offers to purchase virtual goods or premiums with real world currency (or with virtual in-game currency that can be purchased with real world currency) for which the player doesn’t know prior to purchase the specific digital goods or premiums they will be receiving (sometimes referred to as loot boxes, crates, or mystery prizes).
Added
In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business. 13 Some of our games are based upon traditional casino games, such as slots and poker.
Removed
Some commentators have noted that these features are similar to gambling because users are providing something of value for the chance to win a prize, with a large number of prizes having relatively modest value or utility and fewer having significant value or utility.
Added
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.
Removed
The FTC held a public workshop on loot boxes in August 2019, and at least one bill has been introduced in the U.S. Senate that would regulate loot boxes in games marketed to minors.
Added
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.
Removed
Loot boxes have been banned in Belgium and the Netherlands, and gambling regulators in at least 16 jurisdictions (Austria, Czech Republic, France, Gibraltar, Ireland, Isle of Man, Jersey, Latvia, Malta, Netherlands, Norway, Poland, Portugal, Spain, Washington State, United States, and the United Kingdom) signed an agreement in 2018 to investigate the role of loot boxes in digital games.
Added
Shortly thereafter, Slotomania was blocked from the Google Play Store in Indonesia.
Removed
China has imposed stringent requirements and limitation on the offering of loot boxes including, among other things, that loot boxes cannot be acquired with real money or virtual currency, that all items available in loot boxes must be obtainable through other means, and the odds of winning must be published. Japan has been advancing a self-regulatory approach to loot boxes.
Added
Although we have not experienced a material impact on our business, financial condition or results of operations due to limited revenues we currently have in the affected jurisdictions, if our platform providers took these actions in jurisdictions that are more significant to our operations, it would be harmful to our business.
Removed
Moreover, the European Commission is currently reevaluating its adequacy decision with respect to the flow of personal data into Israel. A change in this adequacy decision might affect the conditions in which we will be able to transfer personal data from the European Union (and Norway, Liechtenstein and Iceland) into Israel.
Added
Since that date, suits have been filed against us in courts in Alabama and Tennessee, alleging that certain of our social casino games violate those states’ gambling laws, and several arbitrations have been initiated making similar allegations under the laws of Georgia, Kentucky, Massachusetts, New Jersey, and Ohio.
Added
These actions invoke state gambling loss recovery statutes to seek recovery of the purchases made by all players of the games in the respective state during the applicable limitations period. All of the arbitrations resolved to date have either been dismissed or resolved, on an individual basis, at minimal value. The two court lawsuits remain pending.
Added
We are currently working with the other side on an agreement to settle this matter.
Added
There has been an increasing focus on a mechanic widely used in the games industry know as ‘loot boxes’ (and sometime also ‘loot crates’ or ‘mystery prizes’). A loot box is a mechanic that provides a player with random in-game virtual items in exchange for real-world money or in-game virtual currency.
Added
In most countries, it is now clear that loot boxes do not constitute gambling, because the items provided to a player have no real-world value.
Added
There are however a few exceptions – one recent example being in Austria, where a court ruled that loot boxes in FIFA Ultimate Team packs, constitute illegal gambling due to the existence of a secondary market for these virtual items.
Added
In any event, the use of loot boxes can result in an increasing burden of regulatory compliance and operation restrictions as a result of consumer and advertising laws and regulations, the requirements of platform owners (such as Apple and Google), and the introduction of industry standards and practices, such as the guiding principles published by the UK government in 2023 (the UK Principles).
Added
Although the UK Principles are currently only expressed as a set of industry guidelines, if the industry does not implement them, it is possible that legislation will be adopted to enforce these or similar guidelines.
Added
For example, in 2018, California enacted the California Consumer Privacy Act, or the CCPA, which became effective on January 1, 2020.
Added
States such as Colorado, Utah and Virginia have already enacted similar legislation to the CCPA, and other states including Delaware, Indiana, Iowa, Montana, New Jersey, Oregon, Tennessee and Texas have passed similar laws that are set to go into effect in the upcoming months and years. Israel has also implemented data protection laws and regulations, including the PPL.
Added
We are subject to a variety of laws in the United States and other non-U.S. jurisdictions regarding data privacy, cybersecurity, and consumer protection, which are continuously evolving and developing, including, among others, the laws described above, online safety regulations such as the EU Digital Services Act, the UK Online Safety Act, and the Australia Online Safety Act, competition laws such as the EU Digital Markets Act, consumer protection laws such as the EU’s New Deal for 16 Consumers, whistleblowing laws, such as the EU Whistleblower Directive, and artificial intelligence regulations such as the EU Artificial Intelligence Act and the U.S.
Added
Our managers and employees are asked to go through bi-yearly performance and development discussions, allowing us to identify and provide a range of tailor made solutions to our Top-Talent population.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

153 edited+50 added−70 removed469 unchanged
Biggest changeIn the event that Apple, Google, Facebook or any of our other platform providers changes its 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. 25 In addition, there are numerous ongoing academic, political and regulatory discussions in the United States, Europe, Australia 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.
Biggest changeIn the event that Apple, Google, Facebook or any of our other platform providers changes its 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.
Summary of Risk Factors The risks more fully described below that relate to our business include, but are not limited to, the following important risks: • we rely on third-party platforms, such as the iOS App Store, Facebook, and Google Play Store, to distribute our games and collect revenues, and such platforms may adversely change their policies; • a limited number of games generate a majority of our revenues; • a small percentage of total users generate a majority of our revenues; • our free-to-play business model, and the value of virtual items sold in our games, is highly dependent on how we manage the game revenues and pricing models; • our inability to make acquisitions and/or integrate acquired businesses successfully could limit our growth or disrupt our plans and operations; • we may be unable to successfully develop new games; • our new games may not be successful after launch; • we operate in a highly competitive industry with low barriers to entry; • we have significant indebtedness and are subject to obligations and restrictive covenants under our debt instruments; • we are controlled by Yuzhu Shi, whose economic and other interests in our business may differ from yours; • legal or regulatory restrictions or proceedings could adversely impact our business and limit the growth of our operations; 17 • the impact of an economic recession or periods of increased inflation, and any reductions to household spending on the types of discretionary entertainment we offer; • our international operations and ownership, including our significant operations in Israel, Ukraine and Belarus and the fact that our controlling stockholder is a Chinese-owned company; • security breaches or other disruptions could compromise our information or the information of our players and expose us to liability; and • our inability to protect our intellectual property and proprietary information could adversely impact our business.
Summary of Risk Factors The risks more fully described below that relate to our business include, but are not limited to, the following important risks: • we rely on third-party platforms, such as the iOS App Store, Facebook, and Google Play Store, to distribute our games and collect revenues, and such platforms may adversely change their policies; • a limited number of games generate a majority of our revenues; • a small percentage of total users generate a majority of our revenues; • our free-to-play business model, and the value of virtual items sold in our games, is highly dependent on how we manage the game revenues and pricing models; • our inability to make acquisitions and/or integrate acquired businesses successfully could limit our growth or disrupt our plans and operations; • we may be unable to successfully develop new games; • our new games may not be successful after launch; • we operate in a highly competitive industry with low barriers to entry; • we have significant indebtedness and are subject to obligations and restrictive covenants under our debt instruments; • we are controlled by Yuzhu Shi, whose economic and other interests in our business may differ from yours; • legal or regulatory restrictions or proceedings could adversely impact our business and limit the growth of our operations; • the impact of an economic recession or periods of increased inflation, and any reductions to household spending on the types of discretionary entertainment we offer; • our international operations and ownership, including our significant operations in Israel, Ukraine and Belarus and the fact that our controlling stockholder is a Chinese-owned company; • security breaches or other disruptions could compromise our information or the information of our players and expose us to liability; and • our inability to protect our intellectual property and proprietary information could adversely impact our business.
Our ability to successfully grow through these types of transactions also 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: • failure to identify acquisition, investment or other strategic alliance opportunities that we deem suitable or available on favorable terms; • problems integrating acquired businesses, technologies or products, including issues maintaining uniform standards, procedures, controls and policies, or applying Boost to our new games; • unsuccessful efforts to expand and unanticipated challenges in entering into new categories of games and applications, including design entertainment and home design; • problems properly valuing prospective acquisitions, particularly those with limited operating histories; • failure to fully identify potential risks and liabilities associated with acquired businesses; • unanticipated costs associated with acquisitions, investments or strategic alliances; • adverse impacts on our overall margins; • diversion of management’s attention from the day-to-day operations of our existing business; • potential loss of key employees of acquired businesses; and • increased legal and accounting compliance costs.
Our ability to successfully grow through these types of transactions also 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: • failure to identify acquisition, investment or other strategic alliance opportunities that we deem suitable or available on favorable terms; • problems integrating acquired businesses, technologies or products, including issues maintaining uniform standards, procedures, controls and policies, or applying Boost to our new games; • unsuccessful efforts to expand and unanticipated challenges in entering into new categories of games and applications, including design entertainment and home design; 21 • problems properly valuing prospective acquisitions, particularly those with limited operating histories; • failure to fully identify potential risks and liabilities associated with acquired businesses; • unanticipated costs associated with acquisitions, investments or strategic alliances; • adverse impacts on our overall margins; • diversion of management’s attention from the day-to-day operations of our existing business; • potential loss of key employees of acquired businesses; and • increased legal and accounting compliance costs.
Our business would be harmed if: • the platform providers discontinue or limit our access to their platforms; • governments or private parties, such as internet providers, impose bandwidth restrictions or increase charges or restrict or prohibit access to those platforms; • the platforms increase the fees they charge us; • the platforms modify their algorithms, communication channels available to developers, respective terms of service or other policies; • the platforms decline in popularity; • the platforms adopt changes or updates to their technology that impede integration with other software systems or otherwise require us to modify our technology or update our games in order to ensure players can continue to access our games and content with ease; • the platforms elect or are required to change how they label free-to-play games or take payment for in-game purchases; • the platforms block or limit access to the genres of games that we provide in any jurisdiction; • the platforms impose restrictions or spending caps or make it more difficult for players to make in-game purchases of virtual items; • the platforms change how the personal information of players is made available to developers or develop or expand their own competitive offerings; or • we are unable to comply with the platform providers’ terms of service.
Our business would be harmed if: • the platform providers discontinue or limit our access to their platforms; 18 • governments or private parties, such as internet providers, impose bandwidth restrictions or increase charges or restrict or prohibit access to those platforms; • the platforms increase the fees they charge us; • the platforms modify their algorithms, communication channels available to developers, respective terms of service or other policies; • the platforms decline in popularity; • the platforms adopt changes or updates to their technology that impede integration with other software systems or otherwise require us to modify our technology or update our games in order to ensure players can continue to access our games and content with ease; • the platforms elect or are required to change how they label free-to-play games or take payment for in-game purchases; • the platforms block or limit access to the genres of games that we provide in any jurisdiction; • the platforms impose restrictions or spending caps or make it more difficult for players to make in-game purchases of virtual items; • the platforms change how the personal information of players is made available to developers or develop or expand their own competitive offerings; or • we are unable to comply with the platform providers’ terms of service.
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.” For more information on risks related to our operations in Belarus, see “—Our operations may be adversely affected by ongoing developments in Belarus, Ukraine or Romania.” In the occurrence of a catastrophic event, including a global pandemic like the COVID-19 pandemic or the consequences of climate change, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in application development, lengthy interruptions in our services, breaches of data security and loss of critical data, such as player, customer and billing data as well as intellectual property rights, software versions or other relevant data regarding operations, and there can be no assurances that our insurance policies will be sufficient to compensate us for any resulting losses, which could have a material adverse effect on our business, financial condition and results of operations.
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 Belarus, see “—Our operations may be adversely affected by ongoing developments in Belarus, Ukraine or Romania.” In the occurrence of a catastrophic event, including a global pandemic like the COVID-19 pandemic or the consequences of climate change, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in application development, lengthy interruptions in our services, breaches of data security and loss of critical data, such as player, customer and billing data as well as intellectual property rights, software versions or other relevant data regarding operations, and there can be no assurances that our insurance policies will be sufficient to compensate us for any resulting losses, which could have a material adverse effect on our business, financial condition and results of operations.
As a result of Russia’s military conflict in Ukraine, governmental authorities in the United States, the European Union and the United Kingdom, among others, have launched numerous sanctions and export control measures, including: • blocking sanctions on some of the largest state-owned and private Russian and Belarusian financial institutions (and their subsequent removal from SWIFT); • blocking sanctions against Russian and Belarusian individuals, including the Russian President and the Belarussian President, other politicians and those with government connections or involved in Russian military activities; • expansion of sectoral sanctions in various sectors of the Russian and Belarusian economies and the defense sector, including barring of Russian oil imports and purchases; • United Kingdom sanctions introducing restrictions on providing loans to, and dealing in securities issued by, persons connected with Russia and restrictions on trade, including in connection with certain security-related goods and technology, iron and steel products, intercepting and monitoring services, maritime goods and technology, jet fuel and fuel additives and UK and EU currency banknotes; • restrictions on access to the financial and capital markets in the European Union; • prohibiting against U.S. persons from making new investments in Russia; • sanctions prohibiting most commercial activities of U.S. and EU persons in Crimea and Sevastopol; • enhanced export controls and trade sanctions targeting Russia’s imports of technological goods as a whole, including tighter controls on exports and reexports of dual-use items, stricter licensing policy with respect to issuing export licenses, and/or increased use of “end-use” controls to block or impose licensing requirements on exports, as well as higher import tariffs and a prohibition on exporting luxury goods to Russia and Belarus, and • additional sanctions following the attempted annexation by Russia of Ukraine's Donetsk, Luhansk, Kherson and Zaporizhzhia regions, on October 6, 2022.
As a result of Russia’s military conflict in Ukraine, governmental authorities in the United States, the European Union and the United Kingdom, among others, have launched numerous sanctions and export control measures, including: • blocking sanctions on some of the largest state-owned and private Russian and Belarusian financial institutions (and their subsequent removal from SWIFT); • blocking sanctions against Russian and Belarusian individuals, including the Russian President and the Belarussian President, other politicians and those with government connections or involved in Russian military activities; • expansion of sectoral sanctions in the Russian and Belarusian economies and the defense sector, including barring of Russian oil imports and purchases; • United Kingdom sanctions introducing restrictions on providing loans to, and dealing in securities issued by, persons connected with Russia and restrictions on trade, including in connection with certain security-related goods and technology, iron and steel products, intercepting and monitoring services, maritime goods and technology, jet fuel and fuel additives and UK and EU currency banknotes; • restrictions on access to the financial and capital markets in the European Union; • prohibiting against U.S. persons from making new investments in Russia; • sanctions prohibiting most commercial activities of U.S. and EU persons in Crimea and Sevastopol; • enhanced export controls and trade sanctions targeting Russia’s imports of technological goods as a whole, including tighter controls on exports and reexports of dual-use items, stricter licensing policy with respect to issuing export licenses, and/or increased use of “end-use” controls to block or impose licensing requirements on exports, as well as higher import tariffs and a prohibition on exporting luxury goods to Russia and Belarus, and • additional sanctions following the attempted annexation by Russia of Ukraine's Donetsk, Luhansk, Kherson and Zaporizhzhia regions, on October 6, 2022.
In addition, our Credit Agreement contains a financial covenant applicable to the Revolving Credit Facility thereunder, and our Credit Agreement and the Indenture each contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest, including our ability to, among other things: • incur additional debt under certain circumstances; • create or incur certain liens or permit them to exist; • enter into certain sale and lease-back transactions; • make certain investments and acquisitions; • consolidate, merge or otherwise transfer, sell or dispose of our assets; • pay dividends, repurchase stock and make other certain restricted payments; or • enter into certain types of transactions with affiliates.
In addition, our Credit Agreement contains a financial covenant applicable to the Revolving Credit Facility thereunder, and our Credit Agreement and the Indenture each contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest, including our ability to, among other things: 23 • incur additional debt under certain circumstances; • create or incur certain liens or permit them to exist; • enter into certain sale and lease-back transactions; • make certain investments and acquisitions; • consolidate, merge or otherwise transfer, sell or dispose of our assets; • pay dividends, repurchase stock and make other certain restricted payments; or • enter into certain types of transactions with affiliates.
In part due to the uncertainty of the legal climate, 49 complying with regulations, and any applicable rules or guidance from regulatory authorities or self-regulatory organizations relating to privacy, data protection, information security and consumer protection, may result in substantial costs and may necessitate changes to our business practices, which may compromise our growth strategy, adversely affect our ability to attract or retain players, and otherwise adversely affect our business, reputation, legal exposure, financial condition and results of operations.
In part due to the uncertainty of the legal climate, complying with regulations, and any applicable rules or guidance from regulatory authorities or self-regulatory organizations relating to privacy, data protection, information security and consumer protection, may result in substantial costs and may necessitate changes to our business practices, which may compromise our growth strategy, adversely affect our ability to attract or retain players, and otherwise adversely affect our business, reputation, legal exposure, financial condition and results of operations.
These lawsuits, or similar suits in the future, could cause Google, Apple, or other third-party platform providers to deny our social casino 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.
These lawsuits, or similar suits in the future, could cause Google, Apple, or other third-party platform providers to deny our social casino games access to their platforms or the platforms could seek to pass on liability, including defense 28 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.
For legislation regarding protection of particular minors, See “Risk Factors— Risks Related to Our Information Technology and Data Security— Data privacy and security laws and regulations in the jurisdictions in which we do business could increase the cost of our operations and subject us to possible sanctions, civil lawsuits (including class action or similar representative lawsuits) and other penalties; such laws and regulations are continually evolving.
For legislation regarding protection of particular minors, See “Risk Factors— Risks Related to Our Information Technology and Data Security.” Data privacy and security laws and regulations in the jurisdictions in which we do business could increase the cost of our operations and subject us to possible sanctions, civil lawsuits (including class action or similar representative lawsuits) and other penalties; such laws and regulations are continually evolving.
If we were treated as an expatriated entity, there could be significant adverse tax consequences to us. The rules under Section 7874 of the Code are complex and subject to detailed regulations (the application of which is uncertain in 36 various respects and would be impacted by changes in such U.S. Treasury regulations with possible retroactive effect) and factual uncertainties.
If we were treated as an expatriated entity, there could be significant adverse tax consequences to us. The rules under Section 7874 of the Code are complex and subject to detailed regulations (the application of which is uncertain in various respects and would be impacted by changes in such U.S. Treasury regulations with possible retroactive effect) and factual uncertainties.
As long as Yuzhu Shi continues to control shares representing a majority of our voting power, he will generally be able to determine the outcome of all corporate actions requiring stockholder approval, including the election and removal of directors (unless supermajority approval of such matter is required by applicable law and our amended and restated certificate of incorporation).
As long as Yuzhu Shi continues to control shares representing a majority of our voting power, he will generally be able to determine the outcome of all 24 corporate actions requiring stockholder approval, including the election and removal of directors (unless supermajority approval of such matter is required by applicable law and our amended and restated certificate of incorporation).
Even if we conclude, and our independent registered public accounting firm concurs, that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, 33 because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements.
Even if we conclude, and our independent registered public accounting firm concurs, that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements.
Moreover, foreign jurisdictions could impose tariffs, quotas, trade barriers and other similar restrictions on our international sales. Additionally, while we maintain offices in the United States, most of our senior management and employees are located in our international offices, including our offices in Israel, Belarus, Ukraine and Romania, which subject us to added business, political and economic risks.
Moreover, foreign jurisdictions could impose tariffs, quotas, trade barriers and other similar restrictions on our international sales. 37 Additionally, while we maintain offices in the United States, most of our senior management and employees are located in our international offices, including our offices in Israel, Belarus, Ukraine and Romania, which subject us to added business, political and economic risks.
Biden’s administration continue to be complex and uncertain. President Biden issued executive orders barring American investment into certain Chinese companies and initiating national security reviews of software applications linked to foreign adversaries such as China, and the U.S. government has sanctioned numerous Chinese nationals and added Chinese companies to the Department 43 of Commerce Entity List.
Biden’s administration continue to be complex and uncertain. President Biden issued executive orders barring American investment into certain Chinese companies and initiating national security reviews of software applications linked to foreign adversaries such as China, and the U.S. government has sanctioned numerous Chinese nationals and added Chinese companies to the Department of Commerce Entity List.
If our performance metrics are not accurate representations of our business, player base or traffic levels, if we discover material inaccuracies in our metrics or if the 31 metrics we rely on to track our performance do not provide an accurate measurement of our business or otherwise change, our reputation may be harmed and our business, prospects, financial condition and results of operations could be materially and adversely affected.
If our performance metrics are not accurate representations of our business, player base or traffic levels, if we discover material inaccuracies in our metrics or if the metrics we rely on to track our performance do not provide an accurate measurement of our business or otherwise change, our reputation may be harmed and our business, prospects, financial condition and results of operations could be materially and adversely affected.
This includes deployment and maintenance of reliable next-generation digital networks with the speed, data capacity and security necessary to provide reliable wireless communications services. Wireless communications infrastructure may be unable to support the demands placed on it if the number of subscribers continues to increase, or if existing or future subscribers increase their bandwidth requirements.
This includes deployment and maintenance of reliable next-generation digital networks with the speed, data capacity and security necessary to provide reliable wireless communications services. Wireless communications 46 infrastructure may be unable to support the demands placed on it if the number of subscribers continues to increase, or if existing or future subscribers increase their bandwidth requirements.
The GDPR created new compliance obligations applicable to our business and some of our players, which could require us to self-determine how to interpret and implement these obligations, change our business practices and expose us to lawsuits (including class action or similar representative lawsuits) by consumers or consumer organizations for alleged breach of data protection laws.
The GDPR created compliance obligations applicable to our business and some of our players, which could require us to self-determine how to interpret and implement these obligations, change our business practices and expose us to lawsuits (including class action or similar representative lawsuits) by consumers or consumer organizations for alleged breach of data protection laws.
See “—Legal proceedings may materially adversely affect our business and our results of operations, cash flows and financial condition” and “Business—Legal Proceedings.” In September 2018, sixteen gambling regulators signed a declaration expressing concern over the blurring of lines between gambling and video game products, including social casino gaming.
See “—Legal proceedings may materially adversely affect our business and our results of operations, cash flows and financial condition” and “Business—Legal Proceedings.” 27 In September 2018, sixteen gambling regulators signed a declaration expressing concern over the blurring of lines between gambling and video game products, including social casino gaming.
Even if games based on licensed content or brands remain popular, any of our licensors could decide not to renew our existing licenses or not to license additional intellectual property rights to us and instead license to our competitors or develop and publish its own games or other applications, competing with us in the marketplace.
Even if games based on licensed content or brands remain popular, any of our licensors could decide not to renew our existing licenses or not to license additional intellectual property rights to us and instead license to our competitors 52 or develop and publish its own games or other applications, competing with us in the marketplace.
Any costs incurred as a result of this potential liability could harm our business, financial condition or results of operations. 26 Legal or regulatory restrictions could adversely impact our business and limit the growth of our operations. There is significant opposition in some jurisdictions to social gaming, including social casino games.
Any costs incurred as a result of this potential liability could harm our business, financial condition or results of operations. Legal or regulatory restrictions could adversely impact our business and limit the growth of our operations. There is significant opposition in some jurisdictions to social gaming, including social casino games.
Regulation of cookies and web beacons may lead to broader restrictions on our online activities, including efforts to understand followers’ internet usage and promote ourselves to them. 48 Israel has also implemented data protection laws and regulations, including the Israeli Protection of Privacy Law, 5741-1981, or the PPL.
Regulation of cookies and web beacons may lead to broader restrictions on our online activities, including efforts to understand followers’ internet usage and promote ourselves to them. Israel has also implemented data protection laws and regulations, including the Israeli Protection of Privacy Law, 5741-1981, or the PPL.
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.
Increased competition and success of other 22 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.
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 27 which Epic Games agreed to pay a $245 million to the FTC relating to in-game purchases in Epic Game’s popular Fortnite game.
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.
These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.
These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns 32 can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.
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.
For a game to remain popular and to retain players, we must effectively 19 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.
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.
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 33 compliance with current prevailing tax laws.
Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline. Our stock price and trading volume may be heavily influenced by the way analysts and investors interpret our financial information and other disclosures.
Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline. 56 Our stock price and trading volume may be heavily influenced by the way analysts and investors interpret our financial information and other disclosures.
Moreover, any loss incurred could exceed policy limits and policy payments made to us may not be made on a timely basis. In addition, we may not be able to obtain or renew certain insurance policies either on commercially reasonable terms of at all.
Moreover, any loss incurred could exceed policy limits and policy payments made to us may not be made on a timely basis. In addition, we may not be able to obtain or renew certain insurance policies either on commercially reasonable terms or at all.
Further, our ability to expand successfully in foreign jurisdictions involves other risks, including difficulties in integrating foreign operations, risks associated with entering jurisdictions in which we may have little experience and the day-to-day 38 management of a growing and increasingly geographically diverse company.
Further, our ability to expand successfully in foreign jurisdictions involves other risks, including difficulties in integrating foreign operations, risks associated with entering jurisdictions in which we may have little experience and the day-to-day management of a growing and increasingly geographically diverse company.
If that happens, we may not be able to successfully adapt to player preferences to improve and enhance our games, retain existing players and maintain the popularity of our games, which could cause our business, financial condition, or results of operations to suffer.
If that happens, we may not be able to 31 successfully adapt to player preferences to improve and enhance our games, retain existing players and maintain the popularity of our games, which could cause our business, financial condition, or results of operations to suffer.
We could also be negatively impacted by existing and proposed laws and regulations in the United States, Israel, the European Union, and other jurisdictions in which we operate, as well as government policies and practices related to cybersecurity, data privacy, data localization and data protection.
We could also be negatively impacted by 45 existing and proposed laws and regulations in the United States, Israel, the European Union, and other jurisdictions in which we operate, as well as government policies and practices related to cybersecurity, data privacy, data localization and data protection.
Efforts to comply with these and other data privacy and security restrictions that may be enacted could require us to modify our data processing practices and policies and increase the cost of our operations. Failure to comply with such restrictions could subject us to criminal and civil sanctions and other penalties.
Efforts to comply with these and other data privacy and security restrictions that may be enacted could require us to modify our data processing practices and policies and increase the cost of our operations. Failure to comply with such restrictions 48 could subject us to criminal and civil sanctions and other penalties.
Our or our platform and service providers’ actual or perceived failure to comply with these laws and regulations could harm our business. 47 We collect, process, store, use and share data, some of which contains personal information, including the personal information of our players.
Our or our platform and service providers’ actual or perceived failure to comply with these laws and regulations could harm our business. We collect, process, store, use and share data, some of which contains personal information, including the personal information of our players.
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 23 intensify.
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.
Our ability to successfully attract in-game advertisers depends on our ability to design an attractive advertising model that retains players. While the vast majority of our revenues are generated by in-game purchases, a growing portion of our revenues are generated from the sale of in-game advertisements.
Our ability to successfully attract in-game advertisers depends on our ability to design an attractive advertising model that retains players. 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.
Such losses, or inability to maintain insurance, could adversely affect our business prospects, results of operations, cash flows and financial condition. 30 We primarily rely on skilled employees with creative and technical backgrounds.
Such losses, or inability to maintain insurance, could adversely affect our business prospects, results of operations, cash flows and financial condition. We primarily rely on skilled employees with creative and technical backgrounds.
Accordingly, if we elect to rely on these exemptions in the future, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Nasdaq rules.
Accordingly, if we elect to rely on these exemptions in the future, you will not have the 36 same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Nasdaq rules.
Shi 24 and his affiliates, the result of which would have been that Giant would control the voting power of the shares of our common stock and would permit Giant to consolidate us for accounting purposes.
Shi and his affiliates, the result of which would have been that Giant would control the voting power of the shares of our common stock and would permit Giant to consolidate us for accounting purposes.
If securities or industry analysts do not publish research or reports about our business, 57 delay publishing reports about our business, or publish negative reports about our business, regardless of accuracy, our common stock price and trading volume could decline.
If securities or industry analysts do not publish research or reports about our business, delay publishing reports about our business, or publish negative reports about our business, regardless of accuracy, our common stock price and trading volume could decline.
If certain U.S. federal income tax rules under Section 7874 of the Internal Revenue Code apply to us, such rules could result in adverse U.S. federal income tax consequences. Generally, Section 7874 of the U.S.
If certain U.S. federal income tax rules under Section 7874 of the Internal Revenue Code apply to us, such rules could result in adverse U.S. federal income tax consequences. 35 Generally, Section 7874 of the U.S.
The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits could increase significantly as a result of the open examination in Israel for the tax years ended 2017 through 2020. Should those tax positions not be fully sustained under examination, an acceleration of material income taxes payable, including interest and penalties, could occur.
The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits could increase significantly as a result of the open examination in Israel for the tax years ended 2017 through 2021. Should those tax positions not be fully sustained under examination, an acceleration of material income taxes payable, including interest and penalties, could occur.
As we continue to grow our business, our revenue growth rates may decline compared to prior fiscal years due to a number of reasons, which may include more challenging comparisons to prior periods, 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.
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 more challenging comparisons to prior periods, 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.
While the ePrivacy Regulation was originally intended to be adopted on 25 May 2018 (alongside the GDPR), it is still going through the European legislative process. The current draft of the ePrivacy Regulation imposes strict opt-in e-marketing rules with limited exceptions for business to business communications and significantly increases fining powers to the same levels as the GDPR.
While the ePrivacy Regulation was originally intended to be adopted in May 2018 (alongside the GDPR), it is still going through the European legislative process. The current draft of the ePrivacy Regulation imposes strict opt-in e-marketing rules with limited exceptions for business-to-business communications and significantly increases fining powers to the same levels as the GDPR.
If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively, which could harm our competitive position, business, financial condition, results of operations and prospects. 56 General Risks The price of our common stock may fluctuate substantially.
If we are unable to establish name recognition based on our trademarks 55 and trade names, we may not be able to compete effectively, which could harm our competitive position, business, financial condition, results of operations and prospects. General Risks The price of our common stock may fluctuate substantially.
Our business, including our ability to operate and expand internationally, could be adversely affected if laws or regulations are adopted, interpreted or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices, 50 the design of our games, features or our privacy policy.
Our business, including our ability to operate and expand internationally, could be adversely affected if laws or regulations are adopted, interpreted or 49 implemented in a manner that is inconsistent with our current business practices and that require changes to these practices, the design of our games, features or our privacy policy.
The Chinese government has taken similar measures, including passing the Anti-Foreign Sanctions Law and imposing sanctions on American nationals and organizations.
The Chinese government has taken similar measures, including passing the Anti-Foreign Sanctions 42 Law and imposing sanctions on American nationals and organizations.
For example, Apple recently developed its own video game subscription service, Apple Arcade, which may compete further with our games.
For example, Apple developed its own video game subscription service, Apple Arcade, which may compete further with our games.
Even where we are able to successfully adapt to changing 44 technology, platforms, devices and operating models and evolving industry standards, we may require substantial expenditures to do so, which could adversely impact our business, financial condition and results of operations.
Even where we are able to successfully adapt to changing 43 technology, platforms, devices and operating models and evolving industry standards, we may require substantial expenditures to do so, which could adversely impact our business, financial condition and results of operations.
We believe it is more likely than not that the benefit from certain net operating loss carryforwards will not be realized and as such, we have provided a valuation allowance on $7.4 million of net operating losses.
We believe it is more likely than not that the benefit from certain net operating loss carryforwards will not be realized and as such, we have provided a valuation allowance on $40.7 million of net operating losses.
If third parties obtain patent protection with respect to such technologies, they may assert that our technology infringes their patents and seek to charge us a licensing fee or 51 otherwise preclude the use of our technology.
If third parties obtain patent protection with respect to 50 such technologies, they may assert that our technology infringes their patents and seek to charge us a licensing fee or otherwise preclude the use of our technology.
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 a recent case, the U.S. Court of Appeals for the Ninth Circuit decided that a social casino game produced by one of our competitors should be considered illegal gambling under Washington state law.
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. The U.S. Court of Appeals for the Ninth Circuit decided that a social casino game produced by one of our competitors should be considered illegal gambling under Washington state law.
The imposition of such measures could adversely impact our business, including preventing us from performing existing contracts, recognizing revenue, pursuing new business opportunities or receiving payment for products already supplied or services already performed with customers. 42 We review and monitor our contractual relationships with suppliers to establish whether any are target of the applicable sanctions.
The imposition of such measures could adversely impact our business, including preventing us from performing existing contracts, recognizing revenue, pursuing new business opportunities or receiving payment for products already supplied or services already performed with customers. 41 We review and monitor our contractual relationships with suppliers to establish whether any are a target of the applicable sanctions.
Antokol, the agreement has no specific duration and he can terminate his employment at any time, subject to certain agreed notice periods and post-termination restrictive covenants. We do not maintain key-man insurance for Mr. Antokol or any other executive officer or member of our senior management team.
Antokol, the agreement has no specific 30 duration and he can terminate his employment at any time, subject to certain agreed notice periods and post-termination restrictive covenants. We do not maintain key-man insurance for Mr. Antokol or any other executive officer or member of our senior management team. In addition, Mr.
Foreign Corrupt Practices Act, or the FCPA, and other anti-corruption laws that generally prohibit U.S. persons and companies and their agents from offering, promising, authorizing or making improper payments to foreign government officials for the purpose of obtaining or retaining business; • limitations on and costs related to the repatriation of funds; • compliance with applicable sanctions regimes regarding dealings with certain persons or countries; • restrictions on the export or import of technology; • trade and tariff restrictions; • variations in tariffs, quotas, taxes and other market barriers; and • difficulties in enforcing intellectual property rights in countries other than the United States.
Foreign Corrupt Practices Act, or the FCPA, and other anti-corruption laws that generally prohibit U.S. persons and companies and their agents from offering, promising, authorizing or making improper payments to foreign government officials for the purpose of obtaining or retaining business; • limitations on and costs related to the repatriation of funds; • compliance with applicable sanctions regimes regarding dealings with certain persons or countries; • restrictions on the export or import of technology or on our ability to operate in those jurisdictions; • trade and tariff restrictions; • variations in tariffs, quotas, taxes and other market barriers; and • difficulties in enforcing intellectual property rights in countries other than the United States.
As of December 31, 2022, Yuzhu Shi controls shares representing a majority of our combined voting power through his indirect interest in Playtika Holding UK II Limited, or Playtika Holding UK and its affiliates.
As of December 31, 2023, Yuzhu Shi controls shares representing a majority of our combined voting power through his indirect interest in Playtika Holding UK II Limited, or Playtika Holding UK and its affiliates.
As a result, compared to all users who play our games in any period, only a small percentage of such users were paying users. For example, for the year ended December 31, 2022, our average Daily Payer Conversion was 3.3%. In addition, a large percentage of our revenues comes from a small subset of these paying users.
As a result, compared to all users who play our games in any period, only a small percentage of such users were paying users. For example, for the year ended December 31, 2023, our average Daily Payer Conversion was 3.6%. In addition, a large percentage of our revenues comes from a small subset of these paying users.
Effective January 1, 2022, pursuant to the Tax Cuts and Jobs Act of 2017, R&D expenses are required to be capitalized and amortized for tax purposes, which has delayed the deductibility of these expenses and increased the amount of cash taxes we paid during the year ended December 31, 2022.
Effective January 1, 2022, pursuant to the Tax Cuts and Jobs Act of 2017, R&D expenses are required to be capitalized and amortized for tax purposes, which has delayed the deductibility of these expenses and increased the amount of cash taxes we paid during the years ended December 31, 2023 and 2022.
Shi and his affiliates may, in his and their discretion, seek to consummate similar transactions in the future, and we would not be able to prevent such transactions from being consummated.
Shi and his affiliates may, in his and their discretion, seek to consummate similar transactions in the future, and we would not be able to prevent such transactions from being consummated. In addition, Mr.
We have a significant research and development center in Belarus and, accordingly, our business, financial condition, results of operations and prospects are affected by economic, political and legal developments in Belarus.
We currently have a research and development center in Belarus and, accordingly, our business, financial condition, results of operations and prospects are affected by economic, political and legal developments in Belarus.
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.” For more information on risks related to our operations in Belarus, Ukraine and Romania, see “—Our operations may be adversely affected by ongoing developments in Belarus, Ukraine or Romania.” 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.
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 Belarus, Ukraine and Romania, see “—Our operations may be adversely affected by ongoing developments in Belarus, Ukraine or Romania.” 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.
In addition, as we operate and sell internationally, we are subject to the FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by the United States and other business entities for the purpose of obtaining or retaining business.
In addition, as we operate and sell internationally, we are subject to the FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties and other business entities for the purpose of obtaining or retaining business.
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, for the years ended December 31, 2022 and 2021, our top two games by revenue, Slotomania and Bingo Blitz , collectively generated approximately half of our revenues for each period.
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, for the years ended December 31, 2023 and 2022, our top two games by revenue, Slotomania and Bingo Blitz , collectively generated approximately 46% of our revenues for each period.
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, 2022, 71.5% of our revenues were generated through the iOS App Store, Facebook, and Google Play Store.
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, 2023, 70.5% of our revenues were generated through the iOS App Store, Facebook, and Google Play Store.
Regarding transfers to the United States of personal data (as such term is used in the GDPR and applicable EU member state legislation) about our staff, European users, and other third parties, we have relied upon certain standard contractual clauses approved by the EU Commission (the SCCs).
Regarding transfers to the United States of personal data (as such term is used in the GDPR and applicable EU member state legislation) about our staff, European users, and other third parties, we utilize certain standard contractual clauses approved by the EU Commission (the SCCs).
As of December 31, 2022, we had operations in Australia, Austria, Belarus, Finland, Germany, India, Israel, Poland, Romania, Switzerland, Ukraine, the United Kingdom and the United States. We have in the past and may continue to experience disruption as a result of catastrophic events in the countries in which we operate.
As of December 31, 2023, we had operations in Australia, Austria, Belarus, Finland, Germany, India, Israel, Netherlands, Poland, Romania, Spain, Switzerland, Ukraine, the United Kingdom and the United States. We have in the past and may continue to experience disruption as a result of catastrophic events in the countries in which we operate.
In response to the support and facilitation by Belarus for the invasion and ongoing conflict, the United States imposed sanctions against multiple individuals and entities in Belarus. In January 2023, Belarus adopted legislation that allows it to replace management of Belarusian entities with foreign shareholders and seize the property of such entities.
In response to the support and facilitation by Belarus for the invasion and ongoing conflict, the United States, the European Union and other countries imposed sanctions against multiple individuals and entities in Belarus. In January 2023, Belarus adopted legislation that allows it to replace management of Belarusian entities with foreign shareholders and seize the property of such entities.
While none of our games primarily target children under 18 years of age as their primary audience, the United Kingdom enacted the “Age Appropriate Design Code” (commonly referred to as the “Children’s Code”), a statutory code of practice pursuant to the United Kingdom Data Protection Act 2018.
While most of our games do not primarily target children under 18 years of age as their primary audience, the United Kingdom enacted the “Age Appropriate Design Code” (commonly referred to as the “Children’s Code”), a statutory code of practice pursuant to the United Kingdom Data Protection Act 2018.
We are unable to predict if and how these legislative changes will be enacted into law, and it is possible that they could have a material effect on our corporate tax liability and our global effective tax rate.
At this time, we are unable to predict if and how these legislative 34 changes will be enacted into law, and it is possible that they could have a material effect on our corporate tax liability and our global effective tax rate.
These abilities are subject to various uncertainties, including but not limited to: • our ability to provide an enhanced experience for paying users without adversely affecting the gameplay experience for non-paying users; • our ability to continually anticipate and respond to changing user interests and preferences generally and to changes in the gaming industry; • our ability to introduce effective amounts of new content to our players; • our ability to compete successfully against a large and growing number of industry participants with essentially no barriers to entry; • our ability to hire, integrate and retain skilled personnel; • our ability to increase penetration in, and enter into new, demographic markets; • our ability to achieve a positive return on our user acquisition and other marketing investments and to drive organic growth; and • our ability to minimize and quickly resolve bugs or outages.
These abilities are subject to various uncertainties, including but not limited to: • our ability to provide an enhanced experience for paying users without adversely affecting the gameplay experience for non-paying users; • our ability to continually anticipate and respond to changing user interests and preferences generally and to changes in the gaming industry; • our ability to introduce effective amounts of new content to our players; • our ability to compete successfully against a large and growing number of industry participants with essentially no barriers to entry; • our ability to hire, integrate and retain skilled personnel; • our ability to increase penetration in, and enter into new, demographic markets; • our ability to achieve a positive return on our user acquisition and other marketing investments and to drive organic growth; and • our ability to minimize and quickly resolve bugs or outages. 20 Some of our users also depend on our customer support organization to answer questions relating to our games.
Further, beginning January 1, 2021, we were required to comply with the GDPR and also the United Kingdom GDPR (UK GDPR), which, together with the amended United Kingdom Data Protection Act 2018, retains the GDPR in United Kingdom national law. These changes may lead to additional costs and increase our overall risk exposure.
Further, beginning January 1, 2021, we were required to comply with the GDPR and also the United Kingdom GDPR (UK GDPR), which, together with the amended United 47 Kingdom Data Protection Act 2018, retains the GDPR in United Kingdom national law. These laws and regulations lead to additional costs and increase our overall risk exposure.
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, in each of the years ended December 31, 2022 and 2021, we derived 97.9% and 97.1% of our revenues from in-game purchases, respectively.
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, in each of the years ended December 31, 2023 and 2022, we derived 98.4% and 97.9% of our revenues from in-game purchases, respectively.
While none of our games primarily target children under 18 years of age as their primary audience, the FTC, as well as consumer organizations, may consider that the characteristics of several of our games attract children under 13 years of age. The U.S.
While most of our games do not primarily target children under 18 years of age as their primary audience, the FTC, as well as consumer organizations, may consider that the characteristics of several of our games attract children under 13 years of age. The U.S.
Although we have non-competition agreements with such officers, they are unlikely to be enforced by California courts or under California law. We are subject to certain employee severance obligations, which may result in an increase in our expenditures.
Although we have non-competition agreements with such officers through the end of 2024, they are unlikely to be enforced by California courts or under California law. We are subject to certain employee severance obligations, which may result in an increase in our expenditures.
We have a significant research and development center in Ukraine and, accordingly, our business, financial condition, results of operations and prospects are affected by economic, political and legal developments in Ukraine. 41 Romania The current political environment in Romania is dynamic and may become unstable.
We have significant research and development centers in Ukraine and, accordingly, our business, financial condition, results of operations and prospects are affected by economic, political and legal developments in Ukraine. 40 Romania The current political environment in Romania is dynamic and may become unstable.
Further, there currently are a number of additional proposals related to data privacy or security pending before federal, state, and foreign legislative and regulatory bodies, including in a number of U.S. states considering consumer protection laws similar to the CCPA.
Further, there currently are a number of additional proposals related to data privacy or security pending before federal, state, and foreign legislative and regulatory bodies and a number of U.S. states have adopted consumer protection laws similar to the CCPA.
As a result of the above, we are in the process of working with certain jurisdictions to comply with filing requirements associated with our activities that have given rise to sales, use, value added taxes and any other taxes in additional states or jurisdictions in which we historically have not registered to collect and remit taxes.
As a result of the above, we are continuing to work with various jurisdictions to comply with filing requirements associated with our activities that have given rise to sales, use, value added taxes and any other taxes in additional states or jurisdictions in which we historically have not registered to collect and remit taxes.
The COVID-19 pandemic could also affect the health of our consumers, which may affect sales of our virtual items in our games or result in lower-than-expected attendance at, or the cancellation of, events hosted by us (as has already occurred for a number of scheduled events).
These types of health crises could also affect the health of our consumers, which may affect sales of our virtual items in our games or result in lower-than-expected attendance at, or the cancellation of, events hosted by us (as has already occurred for a number of scheduled events).
For example, in each of the years ended December 31, 2022 and 2021, we derived 2.1% and 2.9% of our revenues from in-game advertising, respectively.
For example, in each of the years ended December 31, 2023 and 2022, we derived 1.6% and 2.1% of our revenues from in-game advertising, respectively.
While tax treaties exist between Israel and the United States, United Kingdom, and Austria 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.
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.

… 193 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeITEM 2. PROPERTIES We lease facilities in approximately 20 locations throughout the world, including locations in Israel, the United States, Australia, Austria, Belarus, Finland, Germany, India, Poland, Romania, Switzerland, Ukraine, and the United Kingdom. We believe our existing facilities are sufficient for our current needs.
Biggest changeITEM 2. PROPERTIES We lease facilities in approximately 20 locations throughout the world, including locations in Israel, the United States, Australia, Austria, Belarus, Finland, Germany, Poland, Romania, Switzerland, Ukraine, and the United Kingdom. We believe our existing facilities are sufficient for our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

9 edited+22 added−5 removed9 unchanged
Biggest changeHowever, in the interest of resolution and while preserving all rights, the Company has engaged in negotiations with certain of the shareholders and has produced materials in relation to the demands. We received seven demands for arbitration in late 2022 and early 2023 alleging that our games constitute illegal gambling under applicable state law.
Biggest changeThe Company intends to pursue this case vigorously. The Company received seven demands for arbitration in late 2022 and early 2023 alleging that its games constitute illegal gambling under applicable state law. These demands generally attempted to recover amounts spent by third parties on the Company’s games by relying on state gambling loss recovery statutes.
On November 23, 2021, the Company and its directors and certain of its officers were named in a putative class action lawsuit filed in the United States District Court for the Eastern District of New York (Bar-Asher v. Playtika Holding Corp. et al.).
On November 23, 2021, the Company, its directors and certain of its officers were named in a putative class action lawsuit filed in the United States District Court for the Eastern District of New York (Bar-Asher v. Playtika Holding Corp. et al.).
In response, Enigmatus s.r.o. asserted that it was the owner of the Sloto-formative trademarks and denied that its game title infringed the Company’s trademarks. Enigmatus s.r.o. applied to register one of the Company’s trademarks in the United Kingdom and European Union, and the Company successfully opposed its applications.
In response, Enigmatus s.r.o. asserted that it was the owner of the Sloto-formative trademarks and denied that its game title infringed upon the Company’s trademarks. Enigmatus s.r.o. applied to register one of the Company’s trademarks in the United Kingdom and European Union, and the Company successfully opposed its applications.
On September 15, 2022, in accordance with local rules of the Court, the Company and other defendants in the case filed a letter notifying the Court of defendants’ service upon plaintiffs of, among other things, a notice of motion to dismiss plaintiffs’ amended complaint and memorandum of law in support of the defendants’ motion to dismiss plaintiffs’ amended complaint, and on November 30, 2022, the Company filed with the Court the motion to dismiss.
On September 15, 2022, in accordance with local rules of the Court, the Company and other defendants in the case filed a letter notifying the Court of defendants’ service upon plaintiffs of, among other things, a notice of motion to dismiss plaintiffs’ amended complaint and a memorandum of law in support of the defendants’ motion to dismiss plaintiffs’ amended complaint.
The complaint was brought on behalf of an alleged class of purchasers of the Company’s securities between January 15, 2021 and November 2, 2021, and alleged violations of federal securities laws arising out of alleged misstatements or omissions by the defendants during the alleged class period.
The complaint is allegedly brought on behalf of a class of purchasers of the Company’s securities between January 15, 2021 and November 2, 2021, and alleges violations of federal securities laws arising out of alleged misstatements or omissions by the defendants during the alleged class period.
As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. The Company has defended this case vigorously and will continue to do so.
On November 30, 2022, the Company filed with the Court a motion to dismiss. As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. The Company has defended this case vigorously and will continue to do so.
Pleadings have been exchanged and the lawsuit is in the discovery stage. A hearing date for summary trial has been scheduled for June 27-29, 2023. The Company has defended this case vigorously and will continue to do so.
Pleadings have been exchanged and documentary discovery completed. A hearing for summary trial was conducted between June 27-29, 2023. The Company has defended this case vigorously and will continue to do so.
As the arbitrations are in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. The Company will defend this case vigorously. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 62 PART II
As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. The Company intends to vigorously defend this case.
In January 2023, PGI filed its response to the plantiff’s motion, and a pre-trial hearing is set for March 19, 2023. As the case is in preliminary 61 stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. The Company will defend this case vigorously.
As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. The Company intends to defend this case vigorously.
Removed
In December 2016, a copywriter lawsuit was filed against Wooga GmbH (a subsidiary of the Company) in the regional court of Berlin, Germany. The Plaintiff is suing for additional remuneration to his contributions for a storyline provided for one of Wooga's games and alleged reuse of parts of that storyline in one of Wooga’s other games.
Added
On November 4, 2022, the Company and certain of its directors were named in a derivative action lawsuit filed in the United States District Court for the Eastern District of New York (Bushansky v. Antokol., et al.).
Removed
In its partial ruling delivered on August 18, 2020, the court dismissed the latter claim, but ordered Wooga to provide to the plaintiff revenue numbers of the game in which plaintiff’s contributions are used. Wooga complied with the court’s order.
Added
The complaint was brought on behalf of the Company by a putative stockholder alleging that the named directors were negligent in their oversight of the preparation of the Company’s Proxy Statement in alleged violation of federal securities laws and that those directors breached their fiduciary duties upon related allegations.
Removed
The plaintiff further pursues additional remuneration claims, including filing a statement with the court on June 13, 2022 in which plaintiff is seeking Euro 8.5 million plus interest. A hearing in court was held on June 21, 2022. The parties filed their latest statements on September 26, 2022 and now await further instructions from the court.
Added
The complaint also asserts claims for contribution and indemnification, and aiding and abetting. The complaint seeks, among other things, damages, disgorgement and restitution by the director defendants, and attorneys’ fees and costs.
Removed
As of December 31, 2022, the Company has recorded in its financial statements a reserve based upon its best estimate outcome. It is possible that any final amounts payable in connection with this lawsuit could exceed the Company’s currently reserved best estimate. The Company has defended this case vigorously and will continue to do so.
Added
Based upon an agreement of plaintiff, the Company, and the other defendants, on February 13, 2023, the Court stayed this action until the resolution of the motion to dismiss in the class action case of Bar-Asher v. Playtika Holding Corp.
Removed
The Company has received a number of demand letters pursuant to Section 220 of the Delaware General Corporation Law (“DGCL”), seeking disclosure of certain of the Company’s books and records. The Company has responded to those demands, stating its belief that the demand letters fail to fully comply with the requirements of Section 220 of the DGCL.
Added
On January 12, 2023, PGI filed its response to the Motion for Approval. On March 5, 2023, the applicant submitted his reply to PGI’s 61 response. A pre-trial hearing was held on May 4, 2023. The parties agreed to appoint a mediator to try and resolve the dispute.
Added
The first mediation meeting was held on August 16, 2023 and the second mediation meeting was held on January 7, 2024. The parties are actively working towards a settlement agreement with response to this matter and the expected range of loss is not material to the Company’s financial statements as a whole.
Added
If a mediated resolution is not reached the Company will continue defending this case vigorously. On April 10, 2023, Playtika Holding UK II Limited, the Company’s controlling shareholder, and certain officers of the Company were sued (Kormos v Playtika Holding UK II Limited, et al.) in the Delaware Chancery Court.
Added
The lawsuit alleges generally that the defendants breached fiduciary duties owed to the Company and its stockholders with respect to the controlling shareholder’s indication of an interest in selling some or all of its shares, and the resulting strategic review process and self-tender offer. On August 18, 2023, defendants filed with the Court motions to dismiss the claims.
Added
A hearing on the motions to dismiss was held on November 21, 2023. On January 18, 2024, the court denied Playtika Holding UK II Limited’s motion to dismiss in an oral ruling but reserved decision on the motion to dismiss the claims against the Company’s officers for a written opinion.
Added
As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. On November 13, 2023, plaintiff Gina v.
Added
Burt filed a lawsuit against the Company and its subsidiary, Playtika Ltd., in the Circuit Court of Coffee County, Tennessee, alleging that the Company’s social casino-themed games are unlawful gambling under Tennessee law.
Added
The lawsuit seeks to recover all amounts paid by Tennessee residents to the Company in connection with its games during the period beginning one year before the filing of the lawsuit until the case is resolved but excluding any residents who spent $75,000 or more during such time period. After the Company removed the case to the U.S.
Added
District Court for the Eastern District of Tennessee, plaintiff filed a motion to remand the case back to the Coffee County Circuit Court. The Company filed a motion to dismiss and a motion to compel arbitration and intends to oppose the plaintiff’s motion to remand.
Added
On March 8, 2023, plaintiff Gayla Hamilton Mills filed a lawsuit against the Company and its subsidiary, Playtika Ltd., in the Circuit Court of Franklin County, Alabama, alleging that the Company’s social casino-themed games are unlawful gambling under Alabama law.
Added
The lawsuit seeks to recover all amounts paid by Alabama residents to the Company in connection with its games during the period beginning one year before the filing of the lawsuit until the case is resolved. After the Company removed the case to the U.S.
Added
District Court for the Northern District of Alabama, plaintiff dismissed the complaint and filed a very similar new complaint in the Circuit Court of Franklin County, Alabama on August 25, 2023.
Added
The new complaint asserted the same cause of action and bases for relief, but limited the requested recovery to the amounts paid to the Company in connection with its games only by those Alabama residents who spent less than $75,000 during the one year before the filing of the lawsuit until the case is resolved.
Added
The Company timely removed the new complaint to the same U.S. district court on September 28, 2023. On October 20, 2023, the plaintiff filed a motion to remand the case back to the Franklin County Circuit Court and pleadings have been exchanged on the motion to remand.
Added
As the case is in preliminary stages, the Company cannot estimate what impact, if any, the litigation may have on its results of operations, financial condition or cash flows. The Company intends to defend this case vigorously.
Added
On February 27, 2023, the company received a deficit notice from the Ben Gurion Airport Customs House concerning the purchase of a private aircraft. The deficit notice claims that the company's acquisition of the aircraft is an import into Israel, and, as a result, it was obliged to pay purchase tax and VAT for the acquisition.
Added
The company disputes that any tax or VAT is owed. On July 26, 2023, the Customs House's definitive response was received, with the deficit notice still intact. The current claimed amount of the deficit notice is approximately $3.6 million. The Company paid the deficit notice under protest and filed a claim with the district court on December 12, 2023.
Added
All of these demands have either been dismissed or resolved, on an individual basis, at an immaterial value. 62 ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 63 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+1 added−3 removed1 unchanged
Biggest changeThe information furnished under the heading “Stock Performance Graph”, including the performance graph, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Biggest changeThe information furnished under the heading “Stock Performance Graph”, including the performance graph, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended or the Exchange Act, except as expressly set forth by specific reference in such a filing. 64 ITEM 6.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Global Select Market under the ticker symbol PLTK. As of February 22, 2023, there were approximately 11 stockholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Global Select Market under the ticker symbol PLTK. As of February 22, 2024, there were approximately 11 stockholders of record of our common stock.
Stock Performance Graph The following graph compares the cumulative total stockholder return of our common stock with the cumulative total return of the S&P 500 Index and the NASDAQ Composite Index for the period between January 14, 2021 and December 31, 2022.
Stock Performance Graph The following graph compares the cumulative total stockholder return of our common stock with the cumulative total return of the S&P 500 Index and the NASDAQ Composite Index for the period between January 14, 2021 and December 31, 2023.
Removed
Dividends We do not anticipate paying cash dividends on our shares of common stock on a go-forward basis.
Added
Dividends On February 25, 2024, Board of Directors of the Company declared a cash dividend of $0.10 per share of the Company’s outstanding common stock, payable on April 5, 2024 to stockholders of record as of the close of business on March 22, 2024, with future dividends subject to market conditions and Board approval.
Removed
Issuer Purchases of Equity Securities Purchases of its own equity securities by the Company during the quarter ended December 31, 2022, are as follows: Period (a) Total number of shares purchased (b) Average price paid per share (c) Total number of shares purchased as poart of publicly announced plans or programs (d) Maximum number of shares that may yet be purchased under the plans or programs October 1 through October 31, 2022 (1) 51,813,472 $11.58 51,813,472 — November 1 through November 30, 2022 — n/a — — December 1 through December 31, 2022 — n/a — — Total 51,813,472 51,813,472 — __________ (1) On August 29, 2022, the Company announced a tender offer for the purchase of up to 51,813,472 shares of its issued and outstanding common stock, par value $0.01 per share (each, a “Share” and collectively, “Shares”) or such lesser number of Shares as are properly tendered and not properly withdrawn, at a price of $11.58 per Share (the "Tender 63 Offer").
Removed
On October 10, 2022, the Company announced that it accepted for purchase 51,813,472 Shares for an aggregate cost of $600 million, excluding fees and expense related to the Tender Offer.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

86 edited+29 added−18 removed77 unchanged
Biggest changeYear ended December 31, (In millions) 2022 2021 2020 Net income $ 275.3 $ 308.5 $ 92.1 Provision for income taxes 85.5 99.9 102.3 Interest expense and other, net 110.6 153.8 192.8 Depreciation and amortization 162.0 145.5 119.2 EBITDA 633.4 707.7 506.4 Stock-based compensation (1) 123.5 100.4 276.0 Contingent consideration (14.3) (6.6) 17.4 Acquisition and related expenses (2) 24.7 43.3 14.0 Legal settlement (3) — — 37.6 Other items (4) 37.8 3.9 7.5 Credit Adjusted EBITDA $ 805.1 $ 848.7 $ 858.9 Net income margin 10.5 % 11.9 % 3.9 % Credit Adjusted EBITDA margin 30.8 % 32.9 % 36.2 % __________ 72 (1) Reflects, for all years, stock-based compensation expense related to the issuance of equity awards to certain of our employees.
Biggest changeOur 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. 73 Year ended December 31, (In millions) 2023 2022 2021 Net income $ 235.0 $ 275.3 $ 308.5 Provision for income taxes 157.1 85.5 99.9 Interest expense and other, net 109.5 110.6 153.8 Depreciation and amortization 158.0 162.0 145.5 EBITDA 659.6 633.4 707.7 Stock-based compensation (1) 110.0 123.5 100.4 Impairment of intangible assets 51.3 — — Contingent consideration 1.4 (14.3) (6.6) Acquisition and related expenses (2) 6.5 24.7 43.3 Other items (3) 3.4 37.8 3.9 Credit Adjusted EBITDA $ 832.2 $ 805.1 $ 848.7 Net income margin 9.2 % 10.5 % 11.9 % Credit Adjusted EBITDA margin 32.4 % 30.8 % 32.9 % __________ (1) Reflects, for all years, stock-based compensation expense related to the issuance of equity awards to our employees.
Absent this acquisition, revenues in 2022 declined when compared with 2021 as improved monetization and increased revenues from new content and product features across our broader portfolio of games were unable to offset the incremental revenues recognized in 2021 due to the Covid pandemic.
Absent this acquisition, revenues in 2022 declined when compared with 2021 as improved monetization and increased revenues from new content and product features across our broader portfolio of games were unable to offset the incremental revenues recognized in 2022 due to the Covid pandemic.
(4) Amount for the year ended December 31, 2022 consists of $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.
The amount for the year ended December 31, 2022 consists of $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.
This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused and tax planning alternatives. Uncertain tax positions The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions.
This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused and tax planning alternatives. 81 Uncertain tax positions The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions.
Sales and other taxes collected from customers on behalf of governmental authorities are accounted for on a net basis and are not included in revenues or operating expenses. We also have relationships with certain advertising service providers for advertisements within our games and revenues from these advertising providers is generated through impressions, clickthroughs, banner ads and offers.
Sales and other taxes collected from customers on behalf of governmental authorities are accounted for on a net basis and are not included in revenues or operating expenses. 79 We also have relationships with certain advertising service providers for advertisements within our games and revenues from these advertising providers is generated through impressions, clickthroughs, banner ads and offers.
Except as otherwise provided in an agreement between us and the employee, if an employee is terminated (voluntarily or involuntarily), any unvested awards as of the date of termination will be forfeited. 78 If factors change and we employ different assumptions, stock-based compensation cost on future awards may differ significantly from what we have recorded in the past.
Except as otherwise provided in an agreement between us and the employee, if an employee is terminated (voluntarily or involuntarily), any unvested awards as of the date of termination will be forfeited. If factors change and we employ different assumptions, stock-based compensation cost on future awards may differ significantly from what we have recorded in the past.
When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. 75 Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired technology and acquired trademarks and user base from a market participant perspective, useful lives and discount rates.
When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired technology, acquired trademarks and the acquired user base from a market participant perspective, useful lives and discount rates.
The preparation of cash flow projections for use in any impairment indicators test or fair value analysis requires management to make critical estimates, judgments and assumptions with regards to estimated future cash flows, as they are, by their nature, subjective and actual results may differ materially from such estimates.
The preparation of cash flow projections for use in any impairment indicators test or fair value analysis requires management to make critical estimates, judgments and assumptions with regards to estimated future cash flows, as they are, by their 78 nature, subjective and actual results may differ materially from such estimates.
The development costs related to new games or updates to existing games are expensed as incurred to research and development in the consolidated statements of comprehensive income. Goodwill The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.
The development costs related to new games or updates to existing games are expensed as incurred to research and development in the consolidated statements of comprehensive income. 77 Goodwill The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.
As we do not have a long history of market prices for our common stock because the stock was not publicly traded prior to January 2021, we used observable data for a group of peer companies that grant options with substantially similar terms to assist in developing our volatility assumptions.
As we do not have a long history of market prices for our common stock because our stock was not publicly traded prior to January 2021, we used observable data for a group of peer companies that grant options with substantially similar terms to assist in developing our volatility assumptions.
We have determined through a review of game play 77 behavior that players generally do not purchase additional virtual currency until their existing virtual currency balances have been substantially consumed. This review, performed on a game-by-game basis, includes an analysis of game players’ historical play behavior, purchase behavior, and the amount of virtual currency outstanding.
We have determined through a review of game play behavior that players generally do not purchase additional virtual currency until their existing virtual currency balances have been substantially consumed. This review, performed on a game-by-game basis, includes an analysis of game players’ historical play behavior, purchase behavior, and the amount of virtual currency outstanding.
As a result, fewer shares are generally issued than the number of RSUs outstanding, and the income tax withholding is recorded as a reduction to additional paid-in capital. Our stock-based compensation expense is recorded in the financial statement line items relevant to each of the award recipients.
As a result, fewer shares are generally issued than the number of RSUs outstanding, and the income tax withholding is recorded as a reduction to additional paid-in capital. 80 Our stock-based compensation expense is recorded in the financial statement line items relevant to each of the award recipients.
Business combinations We apply the provisions of ASC 805, Business Combination and allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
Business combinations We apply the provisions of ASC 805, Business Combinations and allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
Upon determination that the carrying value of a long-lived asset may not be recoverable based upon a comparison of aggregate undiscounted projected future cash flows to the carrying amount of the asset, an impairment charge is recorded for the excess of the carrying amount over fair value.
Upon determination that the carrying value of a long-lived asset may not be recoverable based upon a comparison of aggregate undiscounted projected future cash flows to the carrying amount of the asset, an impairment charge is recorded for the excess of the carrying amount over estimated fair value.
Restricted cash primarily consists of deposits to secure obligations under our operating lease agreements and to secure company-issued credit cards. The classification of restricted cash as current and long-term is dependent upon the intended use of each particular reserve.
Restricted cash primarily consists of deposits to secure obligations under our operating lease agreements and to secure 74 company-issued credit cards. The classification of restricted cash as current and long-term is dependent upon the intended use of each particular reserve.
The Credit Facilities were provided pursuant to the Credit Agreement, dated as of December 10, 2019, by and among Playtika, the lenders party thereto, and Credit Suisse, AG, Cayman Islands Branch, as administrative agent (in 74 such capacity, the "Administrative Agent") and collateral agent (in such capacity, the "Collateral Agent").
The Credit Facilities were provided pursuant to the Credit Agreement, dated as of December 10, 2019, by and among Playtika, the lenders party thereto, and Credit Suisse, AG, Cayman Islands Branch, as administrative agent (in such capacity, the "Administrative Agent") and collateral agent (in such capacity, the "Collateral Agent").
The combination of unusually high DAUs in early 68 2021, combined with the continued focus of the Company’s marketing efforts on player conversion rather than increasing player traffic lead to a decrease in DAUs for 2022 when compared with 2021.
The combination of unusually high DAUs in early 2021, combined with the continued focus of the Company’s marketing efforts on player conversion rather than increasing player traffic lead to a decrease in DAUs for 2022 when compared with 2021.
Derivative instruments We use interest rate swap contracts to reduce our exposure to fluctuating interest rates associated with our variable rate debt, and to effectively increase the portion of debt upon which we pay a fixed interest rate.
Derivative instruments Interest rate swap agreements We use interest rate swap contracts to reduce our exposure to fluctuating interest rates associated with our variable rate debt, and to effectively increase the portion of debt upon which we pay a fixed interest rate.
We periodically review the estimates of performance against the defined criteria to assess the expected payout of each outstanding PSU grant and adjust the stock compensation expense accordingly. For RSUs, shares are issued on the vesting dates net of the applicable statutory income tax withholding to be paid by us on behalf of our employees.
For PSUs, we periodically review the estimates of performance against the defined criteria to assess the expected payout of each outstanding grant and adjust the stock compensation expense accordingly. For RSUs, shares are issued on the vesting dates net of the applicable statutory income tax withholding to be paid by us on behalf of our employees.
We use foreign currency derivative contracts to reduce our exposure to fluctuating exchange rates between the United States dollar (as our functional currency) and certain expense lines denominated in Israeli Shekels (“ILS”), Polish Zloty (“PLN”) and Romanian Leu (“RON”). Our derivative contracts are designated as cash flow hedges under ASC 815.
Foreign currency hedge agreements We use foreign currency derivative contracts to reduce our exposure to fluctuating exchange rates between the United States dollar (as our functional currency) and certain expense lines denominated in Israeli Shekels (“ILS”), Polish Zloty (“PLN”) and Romanian Leu (“RON”). Our derivative contracts are designated as cash flow hedges under ASC 815.
We intend to continue to seek new opportunities to enhance and refine these marketing efforts to acquire new users, including identifying potential technologies to enhance our marketing and advertising capabilities. 65 Components of our Results of Operations Revenues We primarily derive revenue from the sale of virtual items associated with online games.
We intend to continue to seek new opportunities to enhance and refine these 66 marketing efforts to acquire new users, including identifying potential technologies to enhance our marketing and advertising capabilities. Components of our Results of Operations Revenues We primarily derive revenue from the sale of virtual items associated with online games.
Long-term obligations are expected to be paid through operating cash flows, or, if necessary, borrowings under our Revolving Credit facility or, if necessary, additional term loans or issuances of equity. Our restricted cash totaled $1.7 million and $2.0 million at December 31, 2022 and December 31, 2021, respectively.
Long-term obligations are expected to be paid through operating cash flows, or, if necessary, borrowings under our Revolving Credit facility or, if necessary, additional term loans or issuances of equity. Our restricted cash totaled $2.0 million and $1.7 million at December 31, 2023 and December 31, 2022, respectively.
We determine the estimated fair value based on a combination of EBITDA and estimated future cash flows discounted at rates commensurate with the capital structure and cost of capital of comparable market participants, giving appropriate consideration to the prevailing borrowing rates within the industry in general.
We determine the estimated fair value based on a combination of market multiples and estimated future cash flows discounted at rates commensurate with the capital structure and cost of capital of comparable market participants, giving appropriate consideration to the prevailing borrowing rates within the industry in general.
General and administrative expenses also include depreciation and amortization expenses associated with assets not directly attributable to any of the expense categories above. We also record adjustments to contingent consideration payable recorded after the acquisition date, 66 and legal settlement expenses, as components of general and administrative expense.
General and administrative expenses also include depreciation and amortization expenses associated with assets not directly attributable to any of the 67 expense categories above. We also record adjustments to contingent consideration payable recorded after the acquisition date, and legal settlement expenses, as components of general and administrative expense.
The Notes mature on March 15, 2029. Interest on the Notes will accrue at a rate of 4.250% per annum. Interest on the Notes is payable semi-annually in cash in arrears on March 15 and September 15 of each year, commencing on September 15, 2021.
Interest on the Notes will accrue at a rate of 4.250% per annum. Interest on the Notes is payable semi-annually in cash in arrears on March 15 and September 15 of each year, commencing on September 15, 2021.
Certain accounting policies require that we apply significant judgment in defining the appropriate assumptions for calculating financial estimates. By their nature, these judgments will be subject to an inherent degree of uncertainty.
GAAP. Certain accounting policies require that we apply significant judgment in determining the appropriate assumptions for calculating financial estimates. By their nature, these judgments will be subject to an inherent degree of uncertainty.
Recently issued accounting pronouncements See Note 1, Organization and Summary of Significant Accounting Policies, to our audited consolidated financial statements included elsewhere in this filing for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this filing.
Recently issued accounting pronouncements See Note 1, Organization and Summary of Significant Accounting Policies, to the financial statements included elsewhere in this filing for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this filing.
As of December 31, 2022 and 2021, we had $600 million in additional borrowing capacity pursuant to our Revolving Credit Facility. Payments of short-term debt obligations and other commitments are expected to be made from cash on the balance sheet and operating cash flows.
As of December 31, 2023 and 2022, we had $600 million in additional borrowing capacity pursuant to our Revolving Credit Facility. Payments 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.
Sales and marketing expenses Sales and marketing expenses for the year ended December 31, 2022 increased by $22.0 million when compared with the year ended December 31, 2021. The increase in sales and marketing expenses was primarily related to increased amortization expense, increased media buy expenses, increased stock-based compensation costs, and increased headcount and higher associated payroll costs.
The increase in sales and marketing expenses was primarily related to increased amortization expense, increased media buy expenses, increased stock-based compensation costs, and increased headcount and higher associated payroll costs. 71 General and administrative expenses General and administrative expenses for the year ended December 31, 2022 increased by $9.0 million when compared with the year ended December 31, 2021.
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) stock-based compensation, (vi) legal settlements, (vii) contingent consideration, (viii) acquisition and related expenses, and (ix) certain other items.
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 of intangible assets, (vi) stock-based compensation, (vii) contingent consideration, (viii) acquisition and related expenses, and (ix) certain other items.
Other Factors Affecting Net Income Year ended December 31, (in millions) 2022 2021 2020 Interest expense $ 117.5 $ 149.2 $ 198.3 Interest income (14.1) (0.8) (0.1) Foreign currency exchange, net 7.0 5.7 (5.7) Other 0.2 (0.3) 0.3 Taxes on income 85.5 99.9 102.3 Interest expense Interest expense in 2022, 2021 and 2020 is primarily related to amounts borrowed under the December 2019 Credit Facilities.
Other Factors Affecting Net Income Year ended December 31, (in millions) 2023 2022 2021 Interest expense $ 153.0 $ 117.5 $ 149.2 Interest income (42.7) (14.1) (0.8) Foreign currency exchange, net (1.3) 7.0 5.7 Other 0.5 0.2 (0.3) Taxes on income 157.1 85.5 99.9 Interest expense Interest expense in 2023, 2022 and 2021 is primarily related to amounts borrowed under the December 2019 Credit Facilities.
Significant terms of the Credit Facilities, the New Term Loan and the Notes, including balances outstanding, interest and fees, mandatory and voluntary prepayment requirements, collateral and guarantors and restrictive covenants are detailed in Note 12, Debt , to the accompanying consolidated financial statements. Critical accounting policies and estimates We prepare our financial statements in conformity with U.S. GAAP.
Significant terms of the Credit Facilities, the New Term Loan and the Notes, including balances outstanding, interest and fees, mandatory and voluntary prepayment requirements, collateral and guarantors and restrictive covenants are detailed in Note 12, Debt , to the financial statements included elsewhere in this filing. Critical accounting policies and estimates We prepare our financial statements in conformity with U.S.
We monitor the effectiveness of our hedges on a quarterly basis, both qualitatively and quantitatively, and expects these hedges to remain highly effective at offsetting fluctuations in exchange rates through their respective maturity dates. See Note 14, Derivative Instruments, for additional discussion.
We monitor the effectiveness of our hedges on a quarterly basis, both qualitatively and quantitatively, and expect these hedges to remain highly effective at offsetting fluctuations in exchange rates through their respective maturity dates. See Note 14, Derivative Instruments, to the financial statements included elsewhere in this filing for additional discussion.
Amounts for the years ended December 31, 2021 and 2020 include business optimization expenses. Liquidity and Capital Resources Capital spending We incur capital expenditures in the normal course of business and perform ongoing enhancements and updates to our social and mobile games to maintain their quality standards.
The amount for the year ended December 31, 2021 includes business optimization expenses. Liquidity and Capital Resources Capital spending We incur capital expenditures in the normal course of business and perform ongoing enhancements and updates to our social and mobile games to maintain their quality standards.
We performed a regression analysis at inception of the hedging relationship and at period end in which it compared the change in the fair value of the swap transaction and the change in fair value of a hypothetical interest rate swap having terms that identically match the terms of the debt's interest rate payments based on at least 30 observations that are based on historical swap rates.
We performed a regression analysis at the inception of the hedging relationship and at period end in which we compared the change in the fair value of the swap transaction and the change in fair value of a hypothetical interest rate swap having terms that identically match the terms of the debt's interest rate payments historical swap rates.
General and administrative expenses General and administrative expenses for the year ended December 31, 2022 increased by $9.0 million when compared with the year ended December 31, 2021. General and administrative expenses includes stock-based compensation expenses of $69.5 million for the year ended December 31, 2022, compared with $64.4 million for the year ended December 31, 2021.
General and administrative expenses includes stock-based compensation expenses of $69.5 million for the year ended December 31, 2022, compared with $64.4 million for the year ended December 31, 2021.
Also on March 11, 2021, the Company issued $600.0 million aggregate principal amount of its 4.250% senior notes due 2029 under an indenture, dated March 11, 2021. The combination of these two March 2021 transactions significantly reduced our average interest rates on our outstanding indebtedness, driving the decrease in interest expense in 2021 when compared with 2020.
Also on March 11, 2021, the Company issued $600.0 million aggregate principal amount of its 4.250% senior notes due 2029 under an indenture, dated March 11, 2021. The combination of these two March 2021 transactions significantly reduced our average interest rates on our outstanding indebtedness.
Net income Upon aggregating all of the components of our results of operations above, net income for the year ended December 31, 2022 decreased by $33.2 million when compared with 2021. Net income for the year ended December 31, 2021 increased $216.4 million when compared to 2020.
Net income Upon aggregating all of the components of our results of operations above, net income for the year ended December 31, 2023 decreased by $40.3 million when compared with 2022. Net income for the year ended December 31, 2022 decreased by $33.2 million when compared to 2021.
We also seek to make acquisitions in technology that enhance our marketing, artificial intelligence and research and development capabilities. • Offering of new games and release of new content, offers, and features . Our revenue growth has been driven by improving the content, offers, and features in our existing games and the acquisition of new games.
We also seek to make acquisitions in technology that enhance our marketing, artificial intelligence and research and development capabilities. • Offering of new games and release of new content, offers, and features . Our key revenue drivers include improving the content, offers, and features in our existing games and the acquisition of new games.
Financing activity cash flows for the year ended December 31, 2021 primarily related to the Company’s initial public offering of its equity in January 2021, and the refinancing of its Old Term Loan (as defined below) in March 2021.
Net cash flows provided by financing activities of $559.7 million for the year ended December 31, 2021, primarily related to the Company’s initial public offering of its equity in January 2021, and the refinancing of its Old Term Loan (as defined below) in March 2021.
Adjusting for these items, general and administrative expenses increased by approximately $35.2 million, primarily due to increased compensation costs associated with the long-term incentive plan, which was partially offset by reduced expense attributable to adjusting contingent consideration to fair value.
Adjusting for these items, general and administrative expenses increased by approximately $39.3 million, primarily due to increased compensation costs associated with the long-term incentive plan and costs associated with exploring strategic alternatives, which were partially offset by reduced expense attributable to adjusting contingent consideration to fair value.
Liquidity Our primary sources of liquidity are the cash flows generated from our operations, currently available unrestricted cash and cash equivalents, short-term bank deposits, and borrowings under our Credit Facility and Revolver. Our cash and cash equivalents and short-term bank deposits totaled $768.7 million and $1,117.1 million at December 31, 2022 and December 31, 2021, respectively.
Liquidity 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 totaled $1,029.7 million and $768.7 million at December 31, 2023 and December 31, 2022, respectively.
We plan to continue to invest in sales and marketing to retain and acquire users. However, sales and marketing expenses may fluctuate as a percentage of revenues depending on the timing and efficiency of our marketing efforts.
In addition, sales and marketing expenses include depreciation and amortization expenses associated with assets related to our sales and marketing efforts. We plan to continue to invest in sales and marketing to retain and acquire users. However, sales and marketing expenses may fluctuate as a percentage of revenues depending on the timing and efficiency of our marketing efforts.
Net Income We calculate net income as revenue minus cost of revenues, research and development, sales and marketing and general and administrative expenses, interest and taxes. 67 Results of Operations The tables below show the results of our key financial and operating metrics for the periods indicated. Unless otherwise indicated, financial metrics are presented in millions of U.S.
Net Income We calculate net income as revenue minus cost of revenues, research and development, sales and marketing, general and administrative expenses, interest and taxes. 68 Results of Operations The tables below show the results of our key financial and operating metrics for the periods indicated.
The difference between the effective income tax rate and the U.S. statutory tax rate was due to recurring items such as tax rates in foreign jurisdictions and the relative amounts of income earned in those jurisdictions.
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.
Net cash flows provided by operating activities for the year ended December 31, 2021 increased $34.0 million when compared with the year ended December 31, 2020.
Net cash flows provided by operating activities for the year ended December 31, 2022 decreased $58.0 million when compared with the year ended December 31, 2021.
Sales and marketing expenses Sales and marketing expenses for the year ended December 31, 2021 increased by $79.7 million when compared with the year ended December 31, 2020.
Sales and marketing expenses Sales and marketing expenses for the year ended December 31, 2022 increased by $22.0 million when compared with the year ended December 31, 2021.
Financing activities Net cash flows used in financing activities for the year ended December 31, 2022 was $652.0 million when compared to net cash flows provided by financing activities of $559.7 million for the year ended December 31, 2021. Financing activity cash flows for the year ended December 31, 2022 primarily related to the Company’s Tender Offer in October 2022.
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.
We expect to continue to incur interest expense under our Credit Agreement, although such interest expense will fluctuate based upon the underlying variable interest rates. In March 2021, we entered into two interest rate swap agreements, each with a notional value of $250 million, reducing our overall exposure to variable interest rates.
We expect to continue to incur interest expense under our Credit Agreement, although such interest expense will fluctuate based upon the underlying variable interest rates. We entered into multiple interest rate swap agreements in March 2021 and in January 2023, accumulating to a total notional value of $1.0 billion, reducing our overall exposure to variable interest rates.
Dollars, user statistics are presented in millions of users, and ARPDAU is presented in U.S. Dollars. We measure the performance of our business by using several key financial metrics, including revenue and operating income, and operating metrics, including Daily Active Users, Average Revenue per Daily Active User, Paying Users, and Average Revenue per Paying User.
We measure the performance of our business by using several key financial metrics, including revenue and operating income, and operating metrics, including Daily Active Users, Average Revenue per Daily Active User, Paying Users, and Average Revenue per Paying User.
Year ended December 31, (in millions, except percentages, Average DPUs, and ARPDAU) 2022 2021 2020 Revenues $ 2,615.5 $ 2,583.0 $ 2,371.5 Total cost and expenses $ 2,144.1 $ 2,020.8 $ 1,984.3 Operating income $ 471.4 $ 562.2 $ 387.2 Net income $ 275.3 $ 308.5 $ 92.1 Credit Adjusted EBITDA $ 805.1 $ 848.7 $ 858.9 Non-financial performance metrics Average DAUs 9.4 10.4 11.2 Average DPUs (in thousands) 314 300 285 Average Daily Payer Conversion 3.3 % 2.9 % 2.6 % ARPDAU $ 0.76 $ 0.68 $ 0.58 Average MAUs 31.4 34.0 34.2 Comparison of the year ended December 31, 2022 versus the year ended December 31, 2021 Year ended December 31, (in millions) 2022 2021 Revenues earned through third-party platforms $ 2,008.6 $ 2,054.0 Revenues earned through Direct-to-Consumer platforms 606.9 529.0 Revenues $ 2,615.5 $ 2,583.0 Cost of revenue $ 735.7 $ 729.0 Research and development expenses 472.3 386.7 Sales and marketing expenses 603.7 581.7 General and administrative expenses 332.4 323.4 Total costs and expenses $ 2,144.1 $ 2,020.8 Revenues Revenues for the year ended December 31, 2022 increased by $32.5 million when compared to 2021.
Year ended December 31, (in millions, except percentages, Average DPUs, and ARPDAU) 2023 2022 2021 Revenues $ 2,567.0 $ 2,615.5 $ 2,583.0 Total cost and expenses $ 2,065.4 $ 2,144.1 $ 2,020.8 Operating income $ 501.6 $ 471.4 $ 562.2 Net income $ 235.0 $ 275.3 $ 308.5 Credit Adjusted EBITDA $ 832.2 $ 805.1 $ 848.7 Non-financial performance metrics Average DAUs 8.7 9.4 10.4 Average DPUs (in thousands) 310 314 300 Average Daily Payer Conversion 3.6 % 3.3 % 2.9 % ARPDAU $ 0.81 $ 0.76 $ 0.68 Average MAUs 29.4 31.4 34.0 Comparison of the year ended December 31, 2023 versus the year ended December 31, 2022 Year ended December 31, (in millions) 2023 2022 Revenues earned through third-party platforms $ 1,927.6 $ 2,008.6 Revenues earned through Direct-to-Consumer platforms 639.4 606.9 Revenues $ 2,567.0 $ 2,615.5 Cost of revenue $ 718.5 $ 735.7 Research and development expenses 406.4 472.3 Sales and marketing expenses 585.7 603.7 General and administrative expenses 303.5 332.4 Impairment of intangible assets 51.3 — Total costs and expenses $ 2,065.4 $ 2,144.1 Revenues Revenues for the year ended December 31, 2023 decreased by $48.5 million when compared with the year ended December 31, 2022.
We recognize revenues from the sale of durable virtual items ratably over the estimated average life of the paying player, which is estimated on a game-by-game basis and generally ranges from three months up to one year.
Durable virtual items represent items that are accessible to the player over an extended period of time. We recognize revenues from the sale of durable virtual items ratably over the estimated average life of the paying player, which is estimated on a game-by-game basis and generally ranges from eight months up to fourteen months.
For each future reporting period, we will continue performing retrospective and prospective assessments of hedge effectiveness in a single regression analysis by updating the regression analysis that was prepared at inception of the hedging relationship.
We believe that the hedging instruments are expected to be highly effective at offsetting changes in the hedged transactions attributable to the risk being hedged. For each future reporting period, we will continue performing retrospective and prospective assessments of hedge effectiveness in a single regression analysis by updating the regression analysis that was prepared at inception of the hedging relationship.
The difference between the effective income tax rate and the U.S. statutory tax rate was due to recurring items such as 71 tax rates in foreign jurisdictions and the relative amounts of income earned in those jurisdictions, unrecognized tax benefits, and GILTI inclusion. It is also affected by items that are not consistent from year to year.
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.
EBITDA multiples and discounted cash flows are common measures used to value businesses in our industry. If the estimated fair value exceeds carrying value, goodwill is considered not to be impaired and no additional steps are necessary.
Market multiples and discounted cash flows are common measures used to value businesses in our industry. If the estimated fair value exceeds carrying value, goodwill is considered not to be impaired. However, if the carrying amount exceeds estimated fair value, an impairment loss is recognized in an amount equal to the excess.
Impairment indicators include any significant changes in the manner of the Company’s use of the assets and significant negative industry or economic trends. We recognize impairment based on the difference between the fair value of the asset and its carrying value. Fair value is generally measured based on either quoted market prices, if available, or a discounted cash flow analysis.
We recognize impairment based on the difference between the estimated fair value of the asset and its carrying value. Fair value is generally estimated based on either quoted market prices, if available, or a discounted cash flow analysis.
(2) Amounts for the year ended December 31, 2022 primarily relate to expenses incurred by the Company in connection with the evaluation of strategic alternatives for the Company. Amounts for the year ended December 31, 2021 primarily relate to bonus expenses paid as a result of the successful initial public offering of the Company’s stock in January 2021.
The amount for the year ended December 31, 2021 primarily relates to bonus expenses paid as a result of the successful initial public offering of the Company’s stock in January 2021.
The difference between the effective income tax rate and the U.S. statutory tax rate is due to 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. It is also affected by items that are not consistent from year to year.
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 rates in foreign jurisdictions and the relative amounts of income earned in those jurisdictions, unrecognized tax benefits, and GILTI inclusion.
Thus, to the extent the revenues volumes deteriorate in the near future, discount rates increase significantly, or we do not meet our projected performance, we could have impairments to record in the next twelve months, and such impairments could be material. 76 Impairment of long-lived assets Our long-lived assets to be held or used, including right-of-use (“ROU”) assets, and identifiable intangible assets that are subject to amortization are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, in accordance with ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets.
Impairment of long-lived assets Our long-lived assets to be held or used, including right-of-use (“ROU”) assets, and identifiable intangible assets that are subject to amortization are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, in accordance with ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets.
Of these items, the primary difference related to the reversal of deferred tax liabilities due to the change in reinvestment assertion related to undistributed earnings of certain of our non-U.S. subsidiaries during the year. The provision for income tax was $102.3 million for the year ended December 31, 2020, and the effective income tax rate was 52.6%.
Of these items, the primary difference related to the reversal of deferred tax liabilities due to the change in reinvestment assertion related to undistributed earnings of certain of our non-U.S. subsidiaries during the year.
Investing activities Net cash flows used in investing activities for the year ended December 31, 2022 decreased $534.8 million when compared to the year ended December 31, 2021 mainly due to $394.1 million of consideration paid (net of cash acquired) for the 2021 acquisition of Reworks.
Net cash flows used in investing activities for the year ended December 31, 2022 decreased $534.8 million when compared to the year ended December 31, 2021, mainly due to $394.1 million of consideration paid (net of cash acquired) for the 2021 acquisition of Reworks and $100.0 million used for investment in short-term bank deposits in 2021, offset by $100.1 million of proceeds from short-term bank deposits in 2022. 75 Financing activities Net cash flows used in financing activities for the year ended December 31, 2023, was $18.2 million primarily related to repayments on bank borrowings.
Our financial performance is dependent, in part, on our ability to convert more active players into paying players and sustainably grow user spend over the long term. Our players’ willingness to consistently make in-app purchases is impacted by our ability to deliver engaging content and personalized user experiences. • Acquisitions of games and new technology .
Our players’ willingness to consistently make in-app purchases is impacted by our ability to deliver engaging content and personalized user experiences. • Acquisitions of games and new technology .
Key Factors Affecting Our Business There are a number of factors that affect the performance of our business, and the comparability of our results from period to period, including: • Conversion of players into paying users and ongoing monetization. While our games are free-to-play, we generate substantially all of our revenues from players’ purchases of in-game virtual items.
The Company is actively monitoring the developments in this war. Key Factors Affecting Our Business There are a number of factors that affect the performance of our business, and the comparability of our results from period to period, including: • Conversion of players into paying users and ongoing monetization.
We consider accounting estimates to be critical accounting policies when: • the estimates involve matters that are highly uncertain at the time the accounting estimate is made; and • different estimates or changes to estimates could have a material impact on the reported financial positions, changes in financial position or results of operations.
Our judgments are based upon our management’s historical experience, terms of existing contracts, observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate. 76 We consider accounting estimates to be critical accounting policies when: • the estimates involve matters that are highly uncertain at the time the accounting estimates are made; and • different estimates or changes to estimates could have a material impact on the reported financial positions, changes in financial position or results of operations.
Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Software development costs We review internal use software development cost associated with infrastructure and new games or updates to existing games to determine if the costs qualify for capitalizing.
Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
The decrease in interest expense in 2022 when compared with 2021 is driven primarily by lower average interest rates. The increase in interest income in 2022 when compared with 2021 is driven primarily by more active investment of excess cash in income-bearing investments.
Interest income Interest income in 2023, 2022 and 2021 is primarily related to interest earned on cash, cash equivalents and short term bank deposits. The increase in interest income in 2023 when compared with previous years is driven primarily by higher interest rates and from more active investment of excess cash in income-bearing investments.
Sales and marketing Sales and marketing consists of costs related to advertising and user acquisition, including costs related to salaries, bonuses, benefits, and other compensation, including stock-based compensation and allocated overhead. In addition, sales and marketing expenses include depreciation and amortization expenses associated with assets related to our sales and marketing efforts.
We expect that research and development expenses specifically associated with new game development will fluctuate over time. Sales and marketing Sales and marketing consists of costs related to advertising and user acquisition, including costs related to salaries, bonuses, benefits, and other compensation, including stock-based compensation and allocated overhead.
We believe that our cash and cash equivalents balance, short-term bank deposits, 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. 73 Cash flows The following tables present a summary of our cash flows for the periods indicated (in millions): Year ended December 31, 2022 2021 2020 Net cash flows provided by operating activities $ 493.7 $ 551.7 $ 517.7 Net cash flows used in investing activities (74.6) (609.4) (98.1) Net cash flows provided by (used in) financing activities (652.0) 559.7 (181.3) Effect of foreign exchange rate changes on cash and cash equivalents (15.7) (6.6) 13.3 Net change in cash, cash equivalents and restricted cash $ (248.6) $ 495.4 $ 251.6 Operating activities Net cash flows provided by operating activities for the year ended December 31, 2022 decreased $58.0 million when compared with the year ended December 31, 2021.
Cash flows The following tables present a summary of our cash flows for the periods indicated (in millions): Year ended December 31, 2023 2022 2021 Net cash flows provided by operating activities $ 515.6 $ 493.7 $ 551.7 Net cash flows used in investing activities (240.2) (74.6) (609.4) Net cash flows provided by (used in) financing activities (18.2) (652.0) 559.7 Effect of foreign exchange rate changes on cash and cash equivalents 4.1 (15.7) (6.6) Net change in cash, cash equivalents and restricted cash $ 261.3 $ (248.6) $ 495.4 Operating activities Net cash flows provided by operating activities for the year ended December 31, 2023 increased $21.9 million when compared with the year ended December 31, 2022.
Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the more likely than not realization threshold.
Income taxes Valuation allowances We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the more likely than not realization threshold.
The New Term Loan matures on March 11, 2028 and requires scheduled quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount of the New Term Loan, with the balance due at maturity. Also on March 11, 2021, we issued $600.0 million aggregate principal amount of our 4.250% senior notes due 2029 (the “Notes”).
The New Term Loan matures on March 11, 2028 and requires scheduled quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount of the New Term Loan, with the balance due at maturity. On June 19, 2023, the Company amended the Credit Agreement pursuant to a Third Amendment to Credit Agreement (the “Third Amendment”).
See Note 13, Equity Transactions and Stock Incentive Plan, in the accompanying audited consolidated financial statements for the three years ended December 31, 2022 for additional discussion.
See Note 13, Equity Transactions and Stock Incentive Plan, to the financial statements included elsewhere in this filing for additional discussion.
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. The provision for income tax was $99.9 million for the year ended December 31, 2021 and the effective income tax rate was 24.5%.
The provision for income tax was $99.9 million for the year ended December 31, 2021, and the effective income tax rate was 24.5%.
Net cash flows used in investing activities for the year ended December 31, 2021 increased $511.3 million when compared to the year ended December 31, 2020, due to $394.1 million of consideration paid (net of cash acquired) for the 2021 acquisition of Reworks.
Investing activities Net cash flows used in investing activities for the year ended December 31, 2023 increased $165.6 million when compared to the year ended December 31, 2022 mainly due to $159.6 million of consideration paid (net of cash acquired) for the 2023 acquisitions of Youda Games and G.S InnPlay Labs Ltd.
Capitalization of such costs begins when the preliminary project stage is completed and ceases at the point in which the project is substantially complete and is ready for its intended purpose. With respect to new games or updates to existing games, the preliminary project stage remains ongoing until just prior to worldwide launch.
With respect to new games or updates to existing games, the preliminary project stage remains ongoing until just prior to worldwide launch.
Adjusting for these items, general and administrative expenses increased by approximately $39.3 million, primarily due to increased compensation costs associated with the long-term incentive plan and costs associated with exploring strategic alternatives, which were partially offset by reduced expense attributable to adjusting contingent consideration to fair value. 69 Comparison of the year ended December 31, 2021 versus the year ended December 31, 2020 Year ended December 31, (in millions) 2021 2020 Revenues earned through third-party platforms $ 2,054.0 $ 2,048.5 Revenues earned through Direct-to-Consumer platforms 529.0 323.0 Revenues $ 2,583.0 $ 2,371.5 Cost of revenue $ 729.0 $ 712.2 Research and development expenses 386.7 268.9 Sales and marketing expenses 581.7 502.0 General and administrative expenses 323.4 501.2 Total costs and expenses $ 2,020.8 $ 1,984.3 Revenues Revenues for the year ended December 31, 2021 increased by $211.5 million when compared to 2020.
Also included in the year ended December 31, 2023 is a $9.7 million write-off of JustPlay.LOL Ltd’s game title. 70 Comparison of the year ended December 31, 2022 versus the year ended December 31, 2021 Year ended December 31, (in millions) 2022 2021 Revenues earned through third-party platforms $ 2,008.6 $ 2,054.0 Revenues earned through Direct-to-Consumer platforms 606.9 529.0 Revenues $ 2,615.5 $ 2,583.0 Cost of revenue $ 735.7 $ 729.0 Research and development expenses 472.3 386.7 Sales and marketing expenses 603.7 581.7 General and administrative expenses 332.4 323.4 Total costs and expenses $ 2,144.1 $ 2,020.8 Revenues Revenues for the year ended December 31, 2022 increased by $32.5 million when compared to the year ended December 31, 2021.
However, if the carrying amount exceeds estimated fair value, an impairment loss is recognized in an amount equal to the excess, limited to the amount of goodwill allocated to the reporting unit. The annual evaluation of goodwill requires the use of estimates about future operating results, valuation multiples, and discount rates to determine their fair value.
The annual evaluation of goodwill requires the use of estimates about future operating results, valuation multiples, and discount rates to determine its fair value. Changes in these assumptions can materially affect these estimates.
The increase in sales and marketing expenses was primarily due to approximately $21.7 million in incremental expenses incurred by us related to the acquisition of Reworks, and to increased marketing expenses related to media buy expenses, increased stock-based compensation costs, and increased headcount and higher associated payroll costs. 70 General and administrative expenses General and administrative expenses for the year ended December 31, 2021 decreased by $177.8 million when compared with the year ended December 31, 2020.
The decrease in sales and marketing expenses was primarily related to decreased offline media expenses, depreciation and amortization expense, and decreased headcount and lower associated payroll costs. General and administrative expenses General and administrative expenses for the year ended December 31, 2023 decreased by $28.9 million when compared with the year ended December 31, 2022.
If a quantitative analysis is necessary, we compare the fair value of our reporting unit to our carrying value.
If, after assessing the qualitative factors, we determine that it is not more likely than not the asset is impaired, goodwill is considered not to be impaired and no additional steps are necessary. If a quantitative analysis is necessary, we compare the fair value of our reporting unit to our carrying value.
The inputs used to measure the fair value of our foreign currency derivative contracts are categorized as Level 2 in the fair value hierarchy as established by ASC 820. 79 Income taxes Valuation allowances We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized.
The inputs used to measure the fair value of our foreign currency derivative contracts are categorized as Level 2 in the fair value hierarchy as established by ASC 820.
The same focus on player conversion, combined with improvements to monetization, new content and new product features drove an increase in DPUs in 2021 compared with 2020. The increase in revenues generated from Direct-to-Consumer platforms as a percentage of total revenues resulted from marketing activities for the games offered through these platforms.
The increase in revenues generated from Direct-to-Consumer platforms as a percentage of total revenues resulted from marketing activities for the games offered through these platforms. Cost of revenue Cost of revenue for the year ended December 31, 2023 decreased by $17.2 million when compared with the year ended December 31, 2022.

… 53 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+2 added−1 removed4 unchanged
Biggest changeWe also have foreign currency risks related to our revenues and operating expenses denominated in currencies other than the U.S. Dollar, including the Australian Dollar, Canadian Dollar, British Pound, Euro, Polish Zloty (“PLN”) and Romanian Leu (“RON”). Accordingly, changes in exchange rates in the future may negatively affect our future revenues and other operating results as expressed in U.S. Dollars.
Biggest changeDollar, primarily the Israeli Shekel (“ILS”), British Pound, Euro, Polish Zloty (“PLN”) and Romanian Leu (“RON”). Accordingly, changes in exchange rates in the future may negatively affect our future revenues and other operating results as expressed in U.S. Dollars. Our foreign currency risk is partially mitigated as our revenues recognized in currencies other than the U.S.
There were no borrowings against our Revolving 80 Credit Facility at December 31, 2022 or December 31, 2021. The Notes bear interest at a fixed rate of 4.250% per annum and accordingly do not vary with prevailing interest rates.
There were no borrowings against our Revolving Credit Facility at December 31, 2023 or December 31, 2022. The Notes bear interest at a fixed rate of 4.250% per annum and accordingly do not vary with prevailing interest rates.
We had borrowings outstanding under our Term Loan with book values of $1,831.2 million and $1,843.8 million at December 31, 2022 and December 31, 2021, respectively, which were subject to a weighted average interest rate of 4.440% and 2.850% for the years ended December 31, 2022 and 2021, respectively.
We had borrowings outstanding under our Term Loan with book values of $1,822.8 million and $1,831.2 million at December 31, 2023 and December 31, 2022, respectively, which were subject to a weighted average interest rate of 7.840% and 4.440% for the years ended December 31, 2023 and 2022, respectively.
As of December 31, 2022, we had entered into derivative contracts to purchase certain foreign currencies, including ILS, RON and PLN, at future dates. The approximate amount of hedges was equal to $187.4 million, and all contracts are expected to mature during the upcoming 12 months. 81
As of December 31, 2023, we had entered into derivative contracts to purchase certain foreign currencies, including ILS, RON and PLN, at future dates. The approximate amount of hedges was equal to $208.6 million, and all contracts are expected to mature during the upcoming 12 months. 83
The Company is unable to estimate the impact on the fair value of the Company’s debt of a hypothetical 100 basis point increase or decrease in weighted average interest rates Investment risk We had cash and cash equivalents including restricted cash and cash equivalents totaling $770.4 million and $1,019.0 million as of December 31, 2022 and December 31, 2021, respectively.
We are unable to estimate the impact on the fair value of our debt of a hypothetical 100 basis point increase or decrease in weighted average interest rates Investment risk We had cash and cash equivalents including restricted cash totaling $1,031.7 million and $770.4 million as of December 31, 2023 and December 31, 2022, respectively.
We do not enter into investments for trading or speculative purposes. Due to the short-term nature of these instruments, a hypothetical 100 bps increase in interest rates would not have a material impact on their fair value as of December 31, 2022. Foreign currency risk Our functional currency is the U.S.
Changes in rates would primarily impact interest income due to the relatively short-term nature of our investments. Due to the short-term nature of these instruments, a hypothetical 100 bps increase in interest rates would not have a material impact on their fair value as of December 31, 2023. Foreign currency risk Our functional currency is the U.S.
A hypothetical 100 basis point increase or decrease in weighted average interest rates under our Term Loan and Revolving Credit Facility would have increased or decreased our interest expense by $13.7 million and $24.9 million for the years ended December 31, 2022 and 2021, respectively, prior to consideration of the impact the hypothetical basis point change would have had on our interest rate swap agreements.
A hypothetical 100 basis point increase or decrease in weighted average interest rates under our Term Loan and Revolving Credit Facility would have increased or decreased our interest expense by $8.5 million and $13.7 million for the years ended December 31, 2023 and 2022, respectively, including consideration of the impact the hypothetical basis point change would have had on our interest rate swap agreements. 82 The fair value of our Credit Facilities will generally fluctuate with movements of interest rates, increasing in periods of declining rates of interest and declining in periods of increasing rates of interest.
In January 2023, the Company entered into two interest rate swap agreements, each with a notional value of $250 million. Each of these swap agreements is with a different financial institution, and each swap requires the Company to pay a fixed interest rate of 3.435% in exchange for receiving one-month LIBOR for six months and one-month Term SOFR afterwards.
Each of these swap agreements is with a different financial institution, and each swap requires us to pay a fixed interest rate of 3.435% in exchange for receiving one-month LIBOR for six months and one-month Term SOFR afterwards. The interest rate swap agreements settle monthly commencing in February 2023 through their termination dates on February 28, 2028.
Each swap requires the Company to pay a fixed interest rate of 0.9275% in exchange for receiving the underlying floating rate. Upon the update of the index to SOFR, we expect that the fixed rate will change from this current rate. The interest rate swap agreements settle monthly commencing in April 2021 through their termination dates on April 30, 2026.
Each swap requires us to pay a fixed interest rate of 0.9275% in exchange for receiving one-month LIBOR. The interest rate swap agreements settle monthly commencing in April 2021 through their termination dates on April 30, 2026.
Dollar and our revenues and expenses are primarily denominated in U.S. Dollars. However, a significant portion of our headcount related expenses, consisting principally of salaries and related personnel expenses as well as leases and certain other operating expenses, are denominated in Israeli Shekels (“ILS”).
Dollar and most of our revenues are denominated in U.S. Dollars. However, we have foreign currency risks related to a significant portion of our operating expenses, consisting of headcount related expenses as well as leases and certain other operating expenses, denominated in currencies other than the U.S.
We also had short-term bank deposits of $100.1 million as of December 31, 2021. Our investment policy and strategy primarily attempts to preserve capital and meet liquidity requirements without significantly increasing risk. Our cash and cash equivalents and short-term bank deposits primarily consist of commercial papers, bank deposits and money market funds.
Our investment policy and strategy primarily attempts to preserve capital and meet liquidity requirements without significantly increasing risk. Our cash and cash equivalents primarily consist of commercial papers, bank deposits and money market funds. We do not enter into investments for trading or speculative purposes.
Our foreign currency risk is partially mitigated as our revenues recognized in currencies other than the U.S. Dollar is diversified across geographic regions and we incur expenses in the same currencies in these regions.
Dollar is diversified across geographic regions and we incur expenses in the same currencies in these regions.
Removed
The fair value of our Credit Facilities will generally fluctuate with movements of interest rates, increasing in periods of declining rates of interest and declining in periods of increasing rates of interest.
Added
In June 2023 these two interest rate swap agreements were amended, so that effective July 31, 2023 we will pay a fixed interest rate of 0.85% in exchange for receiving one-month Term SOFR. In January 2023, we entered into two interest rate swap agreements, each with a notional value of $250 million.
Added
The estimated fair value of our interest rate swap agreements is derived from a discounted cash flow analysis.

Other PLTK 10-K year-over-year comparisons