Quarterly report [Sections 13 or 15(d)]

SEGMENT REPORTING

v3.26.3
SEGMENT REPORTING
 9 Months Ended
Sep. 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. The Company defines AEBITDA 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 certain 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 September 30, 2026 Three Months Ended September 30, 2025
playGAMES playAWARDS Total playGAMES playAWARDS Total
Net revenue
Virtual currency $ 37,841  $ 495  $ 38,336  $ 46,123  $ 258  $ 46,381 
Advertising 10,572  —  10,572  11,257  —  11,257 
Other —  13  13  4  6  10 
48,413  508  48,921  57,384  264  57,648 
Segment expenses
Cost of sales 9,129  53  9,182  13,603  26  13,629 
Payroll & related 8,703  1,177  9,880  9,432  1,594  11,026 
User acquisition 6,070  —  6,070  9,389  —  9,389 
Other(1)
10,026  398  10,424  11,562  1,024  12,586 
33,928  1,628  35,556  43,986  2,644  46,630 
Reportable segment AEBITDA $ 14,485  $ (1,120) $ 13,365  $ 13,398  $ (2,380) $ 11,018 
Other operating expense
Corporate and other $ 3,385  $ 3,773 
Restructuring expenses 9,167  1,253 
Goodwill impairment 9,200  — 
Other reconciling items (1) 2 
Stock-based compensation 2,041  3,030 
Special infrequent
 —  1,250 
Depreciation and amortization 9,342  9,576 
33,134  18,884 
Non-operating income (expense)
Change in fair value of contingent consideration
 8,008  (1,866)
Interest income, net 775  917 
Other expense (23) (9)
8,760  (958)
Loss before income taxes (11,009) (8,824)
Income tax expense (30) (294)
Net loss $ (11,039) $ (9,118)
(1)Consists of legal, rent, information technology, outside services, marketing, and other general and administrative expenses.
Nine Months Ended September 30, 2026 Nine Months Ended September 30, 2025
playGAMES playAWARDS Total playGAMES playAWARDS Total
Net revenue
Virtual currency $ 124,432  $ 1,819  $ 126,251  $ 144,797  $ 633  $ 145,430 
Advertising 36,044  —  36,044  34,248  —  34,248 
Other —  28  28  3  14  17 
160,476  1,847  162,323  179,048  647  179,695 
Segment expenses
Cost of sales 31,863  185  32,048  43,905  66  43,971 
Payroll & related 28,785  3,944  32,729  27,686  4,614  32,300 
User acquisition 34,569  —  34,569  28,612  —  28,612 
Other(1)
30,629  1,259  31,888  30,663  3,022  33,685 
125,846  5,388  131,234  130,866  7,702  138,568 
Reportable segment AEBITDA 34,630  (3,541) 31,089  48,182  (7,055) 41,127 
Other operating expense
Corporate and other $ 10,235  $ 10,681 
Restructuring expenses 18,608  2,648 
Goodwill impairment 9,200  — 
Other reconciling items 6  3 
Stock-based compensation
 6,779  11,896 
Special infrequent
 —  1,250 
Depreciation and amortization 28,884  28,743 
73,712  55,221 
Non-operating income (expense)
Change in fair value of contingent consideration
 8,308  (2,022)
Interest income, net 2,131  2,769 
Other expense (683) (748)
9,756  (1)
Loss before income taxes (32,867) (14,095)
Income tax expense (2,122) (851)
Net loss $ (34,989) $ (14,946)
(1)Consists of legal, rent, information technology, outside services, marketing, and other general and administrative expenses.
2026 Reorganization Plan
On March 10, 2026, the Company initiated an internal reorganization plan (the “2026 Reorganization Plan”) intended to enhance efficiency and reduce operating expenses. The 2026 Reorganization Plan provides for a reduction of approximately 27% of the Company’s current total global workforce as of March 10, 2026. The Company expects total 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 incurred under the 2026 Reorganization Plan, which are included 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 
Employee termination benefits 334  9  (47) 296 
Lease-related charges(1)
(379) 2  6  (371)
Asset-related charges(2)
69  —  —  69 
Other 74  21  56  151 
Three months ended September 30, 2026 98  32  15  145 
Nine months ended September 30, 2026 $ 4,683  $ 364  $ 839  $ 5,886 
(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 12—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 2026 Reorganization Plan:
Employee Termination Benefits Lease-Related Charges Asset-Related Charges Other Total
Balance as of December 31, 2025
 $ —  $ —  $ —  $ —  $ — 
Reorganization charges and adjustments 4,418  517  611  342  5,888 
Non-cash charges (138) (239) (611) (30) (1,018)
Payments (4,208) (266) —  (146) (4,620)
Balance as of September 30, 2026
 $ 72  $ 12  $ —  $ 166  $ 250