Quarterly report [Sections 13 or 15(d)]

SEGMENT REPORTING

v3.26.1
SEGMENT REPORTING
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
SEGMENT REPORTING
NOTE 3—SEGMENT REPORTING
The Company has aggregated its operating segments into the following reportable segments: playGAMES and playAWARDS, which represent our different products and services. A detailed discussion regarding the products and services from which each reportable segment derives its revenue is included in our 2025 Annual Report on Form 10-K filed on March 16, 2026 and amended on Form 10-K/A filed on April 3, 2026.
Adjusted EBITDA ("AEBITDA") is the Company’s reportable segment GAAP measure, which management utilizes as the primary profit measure for its reportable segments and underlying operating segments. AEBITDA is a measure defined as net income (loss) before interest, income taxes, depreciation and amortization, restructuring and related costs (consisting primarily of severance and other restructuring related costs), stock-based compensation expense, and other income and expense items (including special infrequent items, foreign currency gains and losses, and other non-cash items).
Expenses include indirect costs that are allocated to operating segments based on a reasonable allocation methodology, which are generally related to sales and marketing activities, general and administrative overhead, and costs associated with administering the playAWARDS myVIP program in the playGAMES applications. Net revenue excludes transactions between the Company's operating segments. Certain expenses incurred by playAWARDS have been allocated to playGAMES at cost. The chief operating decision maker does not evaluate operating segments using asset information.
The following table presents the Company’s segment information:
Three Months Ended June 30, 2026 Three Months Ended June 30, 2025
playGAMES playAWARDS Total playGAMES playAWARDS Total
Net revenue
Virtual currency $ 41,886  $ 781  $ 42,667  $ 47,981  $ 227  $ 48,208 
Advertising 12,316  —  12,316  11,128  —  11,128 
Other —  9  9  —  2  2 
54,202  790  54,992  59,109  229  59,338 
Segment expenses
Cost of sales 10,743  78  10,821  14,539  24  14,563 
Payroll & related 10,071  1,279  11,350  9,079  1,453  10,532 
User acquisition 11,806  —  11,806  9,066  —  9,066 
Other(1)
10,109  362  10,471  9,950  1,138  11,088 
42,729  1,719  44,448  42,634  2,615  45,249 
Reportable segment AEBITDA $ 11,473  $ (929) $ 10,544  $ 16,475  $ (2,386) $ 14,089 
Other operating expense
Corporate and other $ 3,241  $ 3,375 
Restructuring expenses 4,789  60 
Other reconciling items —  (2)
Stock-based compensation 2,354  4,608 
Depreciation and amortization 9,709  9,535 
20,093  17,576 
Non-operating income (expense)
Change in fair value of contingent consideration
 (2,480) 169 
Interest income, net 634  946 
Other expense (397) (367)
(2,243) 748 
Loss before income taxes (11,792) (2,739)
Income tax expense (1,482) (209)
Net loss $ (13,274) $ (2,948)
(1)Consists of legal, rent, information technology, outside services, marketing, and other general and administrative expenses.
Six Months Ended June 30, 2026 Six Months Ended June 30, 2025
playGAMES playAWARDS Total playGAMES playAWARDS Total
Net revenue
Virtual currency $ 86,591  $ 1,324  $ 87,915  $ 98,673  $ 375  $ 99,048 
Advertising 25,473  —  25,473  22,991  —  22,991 
Other —  14  14  —  8  8 
112,064  1,338  113,402  121,664  383  122,047 
Segment expenses
Cost of sales 22,734  132  22,866  30,302  40  30,342 
Payroll & related 20,082  2,767  22,849  18,254  3,020  21,274 
User acquisition 28,499  —  28,499  19,223  —  19,223 
Other(1)
20,603  860  21,463  19,101  1,998  21,099 
91,918  3,759  95,677  86,880  5,058  91,938 
Reportable segment AEBITDA 20,146  (2,421) 17,725  34,784  (4,675) 30,109 
Other operating expense
Corporate and other $ 6,851  $ 6,908 
Restructuring expenses 9,441  1,395 
Other reconciling items 7  1 
Stock-based compensation
 4,738  8,866 
Depreciation and amortization 19,542  19,167 
40,579  36,337 
Non-operating income (expense)
Change in fair value of contingent consideration
 300  (156)
Interest income, net 1,356  1,852 
Other expense (660) (739)
996  957 
Loss before income taxes (21,858) (5,271)
Income tax expense (2,092) (557)
Net loss $ (23,950) $ (5,828)
(1)Consists of legal, rent, information technology, outside services, marketing, and other general and administrative expenses.
Reorganization
On March 10, 2026, the Company initiated an internal reorganization plan (the “2026 Reorganization Plan”) which is intended to enhance efficiency and reduce operating expenses. The 2026 Reorganization Plan includes a reduction of the Company’s current total global workforce by approximately 27%. The Company expects to incur aggregate charges of approximately $4.5 million to $7.0 million in connection with the 2026 Reorganization Plan, consisting primarily of employee transition costs, severance payments, employee benefits, stock-based compensation, and lease termination and other facility-related costs, substantially all of which are expected to be recognized during 2026.
The following table presents the charges for the 2026 Reorganization Plan, which is reflected in “Restructuring and related” in the Condensed Consolidated Statements of Operations:
playGAMES playAWARDS Corporate and Other Total
Employee termination benefits
 $ 1,461  $ 261  $ 565  $ 2,287 
Lease-related charges(1)
121  68  149  338 
Asset-related charges(2)
191  3  6  200 
Other
 14  7  31  52 
Three months ended March 31, 2026 $ 1,787  $ 339  $ 751  $ 2,877 
Employee termination benefits
 1,741  —  93  1,834 
Lease-related charges(1)
635  (24) (62) 549 
Asset-related charges(2)
302  11  27  340 
Other
 120  6  15  141 
Three months ended June 30, 2026 2,798  (7) 73  2,864 
Six months ended June 30, 2026 $ 4,585  $ 332  $ 824  $ 5,741 
(1)Lease-related charges primarily represent accelerated amortization of operating lease right of use ("ROU") assets due to a change in useful life. See Note 11—Leases for further discussion.
(2)Asset-related charges primarily represent impairment and loss on disposal of property and equipment.
The following table summarizes the activity related to the liabilities associated with the Company's reorganization plan:
Employee Termination Benefits Lease-Related Charges Asset-Related Charges Other Total
Balance as of December 31, 2025
 $ —  $ —  $ —  $ —  $ — 
Reorganization charges and adjustments 4,122  887  540  192  5,741 
Non-cash charges (138) (837) (540) (30) (1,545)
Payments (1,703) (37) —  (130) (1,870)
Balance as of June 30, 2026
 $ 2,281  $ 13  $ —  $ 32  $ 2,326 
playGAMES Goodwill
The Company monitors its playGAMES reporting unit for potential indicators of impairment on an ongoing basis. During the three months ended June 30, 2026, the Company considered various qualitative and quantitative factors, including trends in operating performance and broader market conditions affecting the playGAMES segment.
As of the Company’s most recent annual impairment test performed on October 1, 2025, the estimated fair values of the reporting units exceeded their respective carrying values by a relatively narrow amount. While the Company continues to monitor the performance of these reporting units in light of recent operating trends and market conditions, management determined that no impairment charge was required as of June 30, 2026.
If actual results differ from current expectations, or if management updates its assumptions or projections for these reporting units, including those related to future cash flows, the estimated fair values of the reporting units may change, which could result in impairment charges in future periods.