UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2021~~March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 001-39896

PLAYTIKA HOLDING CORP.

(Exact Name of Registrant as Specified in its Charter)


Delaware						81-3634591
(State of other jurisdiction						(I.R.S. Employer
of incorporation or organization)						Identification No.)


c/o Playtika Ltd.
HaChoshlim St 8
Herzliya ~~Pituarch,~~Pituach, Israel
972-73-316-3251

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	PLTK	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~August 3, 2021,~~May 5, 2022, the registrant had ~~409,634,218~~412,397,599 shares of common stock, $0.01 par value per share, outstanding.

PLAYTIKA HOLDING CORP.

FORM 10-Q

INDEX


		Page
PART I.	FINANCIAL INFORMATION	1
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	1
	Consolidated Balance Sheets as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021	1
	Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~	2
	Consolidated Statements of Stockholders’ Deficit for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~	3
	Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~	4
	Notes to the Consolidated Financial Statements	6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	23
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	31
ITEM 4.	CONTROLS AND PROCEDURES	32
PART II.	OTHER INFORMATION	3 4
ITEM 1.	LEGAL PROCEEDINGS	3 4
ITEM 1A.	RISK FACTORS	3 4
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	3736
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	3736
ITEM 4.	MINE SAFETY DISCLOSURES	3736
ITEM 5.	OTHER INFORMATION	37
ITEM 6.	EXHIBITS	38
SIGNATURES

CAUTIONARY NOTE ABOUT FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Exchange Act. All statements other than statements of historical facts contained in this quarterly report, including statements regarding our business strategy, plans and our objectives for future operations, are forward-looking statements. Further, statements that include words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “present,” “preserve,” “project,” “pursue,” “will,” or “would,” or the negative of these words or other words or expressions of similar meaning may identify forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. The achievement or success of the matters covered by such forward-looking statements involves significant risks, uncertainties and assumptions, including, but not limited to, the important factors discussed in Part I,II, Item 1A, “Risk Factors” in ~~our Annual~~this Quarterly Report on Form ~~10-K filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2021.~~10-Q. Moreover, we operate in a very competitive and rapidly changing environment and industry. As a result, it is not possible for our management to assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated, predicted or implied in the forward-looking statements.

Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include without limitation:

•our reliance on third-party platforms, such as the iOS App Store, Facebook, and Google Play Store, to distribute our games and collect revenues, and the risk that such platforms may adversely change their policies;

•our reliance on a limited number of games to generate the majority of our revenue;

•our reliance on a small percentage of total users to generate a majority of our revenue;

•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 ~~complete~~make acquisitions and integrate any acquired businesses successfully could limit our growth or disrupt our plans and operations;

•we may be unable to successfully develop new games;

•our ability to compete in a highly competitive industry with low barriers to entry;

•we have significant indebtedness and are subject to the obligations and restrictive covenants under our debt instruments;

•the impact of the COVID-19 pandemic on our business and the economy as a whole;

•our controlled company status;

•legal or regulatory restrictions or proceedings could adversely impact our business and limit the growth of our operations;

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

•our reliance on key personnel;

•security breaches or other disruptions could compromise our information or our players’ information and expose us to liability; and

•our inability to protect our intellectual property and proprietary information could adversely impact our business.

Additional factors that may cause future events and actual results, financial or otherwise, to differ, potentially materially, from those discussed in or implied by the forward-looking statements include the risks and uncertainties discussed in the

sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of

Operations” in this Quarterly Report on Form 10-Q and our Annual Report of Form 10-K filed with the ~~SEC~~Securities and Exchange Commission (the “SEC”) on ~~February 26, 2021.~~March 2, 2022. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur, and reported results should not be considered as an indication of future performance. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Except as required by law, we undertake no obligation to update any forward-looking statements for any reason to conform these statements to actual results or to changes in our expectations.

Part I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(In millions, except for per share data)

June 30,
2021 December 31,
2020
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $ 1,179.7 $ 520.1
Short-term bank deposits 50.0 0
Restricted cash 2.7 3.5
Accounts receivable 169.5 129.3
Prepaid expenses and other current assets 112.1 101.6
Total current assets 1,514.0 754.5
Property and equipment, net 98.1 98.5
Operating lease right-of-use assets 84.5 73.4
Intangible assets other than goodwill, net 309.7 327.7
Goodwill 481.0 484.8
Deferred tax assets, net 27.6 28.5
Other non-current assets 4.5 8.8
Total assets $ 2,519.4 $ 1,776.2
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Current maturities of long-term debt $ 12.3 $ 104.6
Accounts payable 42.9 34.6
Operating lease liabilities, current 18.1 16.4
Accrued expenses and other current liabilities 455.8 484.8
Total current liabilities 529.1 640.4
Long-term debt 2,428.5 2,209.8
Employee related benefits 21.8 16.1
Operating lease liabilities, long-term 74.6 67.0
Deferred tax liabilities 74.5 86.4
Total liabilities 3,128.5 3,019.7
Commitments and contingencies (Note 10)
Stockholders' equity (deficit)
Common stock of US $0.01 par value; 1,600.0 shares authorized and 409.6 issued and outstanding at June 30, 2021; 400.0 shares authorized and 391.1 shares issued and outstanding at December 31, 2020(1)
4.1 3.9
Additional paid-in capital 979.6 462.3
Accumulated other comprehensive income 7.9 16.7
Accumulated deficit (1,600.7) (1,726.4)
Total stockholders' deficit (609.1) (1,243.5)
Total liabilities and stockholders’ deficit $ 2,519.4 $ 1,776.2

~~_________~~


	March 31, 2022		December 31, 2021
ASSETS	(Unaudited)
Current assets
Cash and cash equivalents	$	885.8	$	1,017.0
Short-term bank deposits	222.1		100.1
Restricted cash	2.0		2.0
Accounts receivable	139.7		143.7
Prepaid expenses and other current assets	97.2		72.9
Total current assets	1,346.8		1,335.7
Property and equipment, net	105.6		103.3
Operating lease right-of-use assets	98.8		89.4
Intangible assets other than goodwill, net	419.3		417.3
Goodwill	829.3		788.1
Deferred tax assets, net	40.6		38.3
Investments in unconsolidated entities	17.8		17.8
Other non-current assets	30.7		13.4
Total assets	$	2,888.9	$	2,803.3

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Current maturities of long-term debt	$	12.2	$	12.2
Accounts payable	41.9		45.7
Operating lease liabilities, current	20.0		17.2
Accrued expenses and other current liabilities	457.4		494.6
Total current liabilities	531.5		569.7
Long-term debt	2,420.3		2,422.9
Contingent consideration	30.0		28.7
Employee related benefits and other long-term liabilities	3.1		23.7
Operating lease liabilities, long-term	87.9		82.3
Deferred tax liabilities	56.1		53.7
Total liabilities	3,128.9		3,181.0
Commitments and contingencies (Note 11)	0		0
Stockholders' equity (deficit)
Common stock of $0.01 par value; 1,600.0 shares authorized; 412.2 and 411.1 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	4.1		4.1
Additional paid-in capital	1,072.0		1,032.9
Accumulated other comprehensive income	18.6		3.2
Accumulated deficit	(1,334.7)		(1,417.9)
Total stockholders' deficit	(240.0)		(377.7)
Total liabilities and stockholders’ deficit	$	2,888.9	$	2,803.3

~~(1)~~ ~~Prior period results have been adjusted to reflect the 400-for-1 stock split effected in January 2021. See Note 7,~~ ~~Equity Transactions and Stock Incentive Plan, for details.~~

The accompanying notes are an integral part of these consolidated financial statements.

-1-

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~

(In millions, except for per share data)

(Unaudited)


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
		2021		2020		2021		2020				2022		2021
Revenues	Revenues	$	659.2	$	650.5	$	1,298.1	$	1,184.7	Revenues		$	676.9	$	638.9
Costs and expenses	Costs and expenses									Costs and expenses
Cost of revenue	Cost of revenue	183.9		192.6		366.9		358.5		Cost of revenue		186.9		183.0
Research and development	Research and development	91.8		65.8		177.0		126.6		Research and development		112.7		85.2
Sales and marketing	Sales and marketing	146.5		125.8		286.6		251.1		Sales and marketing		179.7		140.1
General and administrative	General and administrative	71.6		338.3		171.9		407.3		General and administrative		77.2		100.3
Total costs and expenses	Total costs and expenses	493.8		722.5		1,002.4		1,143.5		Total costs and expenses		556.5		508.6
Income (loss) from operations		165.4		(72.0)		295.7		41.2
Income from operations										Income from operations		120.4		130.3
Interest expense and other, net	Interest expense and other, net	24.0		46.0		99.7		104.3		Interest expense and other, net		27.5		75.7
Income (loss) before income taxes		141.4		(118.0)		196.0		(63.1)
Income before income taxes										Income before income taxes		92.9		54.6
Provision for income taxes	Provision for income taxes	51.4		21.6		70.3		40.7		Provision for income taxes		9.7		18.9
Net income (loss)		90.0		(139.6)		125.7		(103.8)
Net income										Net income		83.2		35.7
Other comprehensive income (loss)	Other comprehensive income (loss)									Other comprehensive income (loss)
Foreign currency translation	Foreign currency translation	2.8		2.3		(7.1)		0		Foreign currency translation		(3.3)		(9.9)
Change in fair value of derivatives	Change in fair value of derivatives	(1.6)		0		(1.7)		0		Change in fair value of derivatives		18.7		(0.1)
Total other comprehensive income (loss)	Total other comprehensive income (loss)	1.2		2.3		(8.8)		0		Total other comprehensive income (loss)		15.4		(10.0)
Comprehensive income (loss)		$	91.2	$	(137.3)	$	116.9	$	(103.8)
Comprehensive income										Comprehensive income		$	98.6	$	25.7

Net income (loss) per share attributable to common stockholders, basic		$	0.22	$	(0.37)	$	0.31	$	(0.27)
Net income (loss) per share attributable to common stockholders, diluted		$	0.22	$	(0.37)	$	0.31	$	(0.27)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic		409.6		378.6		408.1		378.3
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted		411.7		378.6		410.6		378.3
Net income per share attributable to common stockholders, basic										Net income per share attributable to common stockholders, basic		$	0.20	$	0.09
Net income per share attributable to common stockholders, diluted										Net income per share attributable to common stockholders, diluted		$	0.20	$	0.09
Weighted-average shares used in computing net income per share attributable to common stockholders, basic										Weighted-average shares used in computing net income per share attributable to common stockholders, basic		412.0		406.5
Weighted-average shares used in computing net income per share attributable to common stockholders, diluted										Weighted-average shares used in computing net income per share attributable to common stockholders, diluted		412.5		409.5

The accompanying notes are an integral part of these consolidated financial statements.

-2-

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In millions)

(Unaudited)


		Share capital												Share capital
		Shares	Amount		Additional paid-in capital		Accumulated other comprehensive income (loss)		Retained earnings (Accumulated deficit)		Total stockholders' equity (deficit)			Shares	Amount		Additional paid-in capital		Accumulated other comprehensive income (loss)		Retained earnings (Accumulated deficit)		Total stockholders' equity (deficit)
Balances at January 1, 2021		391.1	$	3.9	$	462.3	$	16.7	$	(1,726.4)	$	(1,243.5)
Net income		—	—		—		—		35.7		35.7
Issuance of common stock in the IPO, net of underwriting commission and offering costs		18.5	0.2		467.5		—		—		467.7
Stock-based compensation		—	—		24.3		—		—		24.3
Issuance of shares upon vesting of RSUs		*	*		—		—		—		*

Other comprehensive loss		—	—		—		(10.0)		—		(10.0)
Balances at March 31, 2021		409.6	$	4.1	$	954.1	$	6.7	$	(1,690.7)	$	(725.8)
Balances at January 1, 2022													Balances at January 1, 2022	411.1	$	4.1	$	1,032.9	$	3.2	$	(1,417.9)	$	(377.7)
Net income	Net income	—	—		—		—		90.0		90.0		Net income	—	—		—		—		83.2		83.2
Stock-based compensation	Stock-based compensation	—	—		25.5		—		—		25.5		Stock-based compensation	—	—		40.5		—		—		40.5
Issuance of shares upon vesting of RSUs	Issuance of shares upon vesting of RSUs	*	*		—		—		—		*		Issuance of shares upon vesting of RSUs	1.1	*		(*)		—		—		*
Income tax withholding related to vesting of restricted stock units and other													Income tax withholding related to vesting of restricted stock units and other	—	—		(1.4)		—		—		(1.4)
Other comprehensive income													Other comprehensive income	—	—		—		15.4		—		15.4
Balances at March 31, 2022													Balances at March 31, 2022	412.2	$	4.1	$	1,072.0	$	18.6	$	(1,334.7)	$	(240.0)

Other comprehensive income		—	—		—		1.2		—		1.2
Balances at June 30, 2021		409.6	$	4.1	$	979.6	$	7.9	$	(1,600.7)	$	(609.1)

Share capital(1)
Shares Amount
Additional
paid-in
capital
Accumulated
other comprehensive
loss
Retained earnings (Accumulated deficit) Total stockholders' equity (deficit)
Balances at January 1, 2020 378.0 $ 3.8 $ 202.1 $ (2.9) $ (1,818.5) $ (1,615.5)
Net income — — — — 35.8 35.8
Other comprehensive loss — — — (2.3) — (2.3)
Balances at March 31, 2020 378.0 $ 3.8 $ 202.1 $ (5.2) $ (1,782.7) $ (1,582.0)
Net loss — — — — (139.6) (139.6)
Share-based compensation — — 260.3 — — 260.3
Issuance of shares upon vesting of RSUs 13.1 0.1 (0.1) — — —
Shares held for tax withholdings — — (15.7) — — (15.7)
Other comprehensive income — — — 2.3 — 2.3
Balances at June 30, 2020 391.1 $ 3.9 $ 446.6 $ (2.9) $ (1,922.3) $ (1,474.7)


	Share capital
	Shares	Amount		Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings (Accumulated deficit)		Total stockholders' equity (deficit)
Balances at January 1, 2021	391.1	$	3.9	$	462.3	$	16.7	$	(1,726.4)	$	(1,243.5)
Net income	—	—		—		—		35.7		35.7
Issuance of common stock in the IPO, net of underwriting commission and offering costs	18.5	0.2		467.5		—		—		467.7
Stock-based compensation	—	—		24.3		—		—		24.3
Issuance of shares upon vesting of RSUs	*	*		(*)		—		—		—
Other comprehensive loss	—	—		—		(10.0)		—		(10.0)
Balances at March 31, 2021	409.6	$	4.1	$	954.1	$	6.7	$	(1,690.7)	$	(725.8)

________

~~(1)~~ ~~Prior period results have been adjusted to reflect the 400-for-1 stock split effected in January 2021. See Note 7,~~ ~~Equity Transactions and Stock Incentive Plan, for details.~~

* Represents an amount less than 0.1 or $0.1

The accompanying notes are an integral part of these consolidated financial statements.

-3-

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


		Six months ended June 30,					Three months ended March 31,
		2021		2020			2022		2021
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income (loss)		$	125.7	$	(103.8)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Net income						Net income	$	83.2	$	35.7
Adjustments to reconcile net income to net cash from operating activities:						Adjustments to reconcile net income to net cash from operating activities:
Depreciation	Depreciation	20.5		17.0		Depreciation	10.8		9.9
Amortization of intangible assets	Amortization of intangible assets	46.0		39.7		Amortization of intangible assets	28.7		23.3
Stock-based compensation	Stock-based compensation	49.8		260.3		Stock-based compensation	39.8		24.3
Amortization of loan discount	Amortization of loan discount	27.7		7.4		Amortization of loan discount	2.1		26.1
Change in fair value of contingent consideration						Change in fair value of contingent consideration	(22.1)		—
Change in deferred tax, net	Change in deferred tax, net	(10.0)		(6.4)		Change in deferred tax, net	(4.1)		0.3
Loss from foreign currency	Loss from foreign currency	1.2		0		Loss from foreign currency	2.1		3.3
Non-cash lease expenses	Non-cash lease expenses	(1.8)		1.1		Non-cash lease expenses	(1.1)		(2.1)
Capital gain from sale of investment	Capital gain from sale of investment	(1.2)		0		Capital gain from sale of investment	—		(1.2)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(41.2)		(61.6)		Accounts receivable	4.0		(54.4)
Prepaid expenses and other current assets		(8.4)		10.8
Prepaid expenses and other current and non-current assets						Prepaid expenses and other current and non-current assets	(19.8)		6.6
Accounts payable	Accounts payable	8.5		(22.3)		Accounts payable	(3.5)		(7.5)
Accrued expenses and other current liabilities		(26.9)		40.9
Net cash provided by operating activities		189.9		183.1
Accrued expenses and other current and non-current liabilities						Accrued expenses and other current and non-current liabilities	(62.0)		(120.7)
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	58.1		(56.4)
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Purchase of property and equipment	Purchase of property and equipment	(20.2)		(24.5)		Purchase of property and equipment	(13.0)		(7.5)
Capitalization of internal use software costs	Capitalization of internal use software costs	(23.9)		(4.4)		Capitalization of internal use software costs	(13.5)		(13.3)
Purchase of intangible assets	Purchase of intangible assets	(6.6)		(12.8)		Purchase of intangible assets	(2.4)		(3.3)
Short-term bank deposits	Short-term bank deposits	(50.0)		0		Short-term bank deposits	(122.1)		(50.0)

Payments for business combination, net of cash acquired						Payments for business combination, net of cash acquired	(29.3)		—
Other investing activities	Other investing activities	2.1		0		Other investing activities	—		2.2
Net cash used in investing activities	Net cash used in investing activities	(98.6)		(41.7)		Net cash used in investing activities	(180.3)		(71.9)
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Proceeds from bank borrowings, net	Proceeds from bank borrowings, net	887.7		0		Proceeds from bank borrowings, net	—		880.7
Repayments on bank borrowings	Repayments on bank borrowings	(955.8)		0		Repayments on bank borrowings	(4.8)		(951.0)
Proceeds from issuance of unsecured notes	Proceeds from issuance of unsecured notes	178.9		0		Proceeds from issuance of unsecured notes	—		176.9
Proceeds from issuance of common stock, net	Proceeds from issuance of common stock, net	470.4		0		Proceeds from issuance of common stock, net	—		470.4
Payment of debt issuance costs		(10.5)		0
Borrowings under revolving credit facility		0		250.0
Repayment of term loan and revolving credit facility		—		(345.8)

Payment of tax withholdings on stock-based payments	Payment of tax withholdings on stock-based payments	0		(15.7)		Payment of tax withholdings on stock-based payments	(1.4)		—
Net cash out flow for business acquisitions and other		0		(1.3)

Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	570.7		(112.8)		Net cash provided by (used in) financing activities	(6.2)		577.0
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(3.2)		(0.1)		Effect of exchange rate changes on cash and cash equivalents	(2.8)		(5.9)
Net change in cash, cash equivalents and restricted cash	Net change in cash, cash equivalents and restricted cash	658.8		28.5		Net change in cash, cash equivalents and restricted cash	(131.2)		442.8
Cash, cash equivalents and restricted cash at the beginning of the period	Cash, cash equivalents and restricted cash at the beginning of the period	523.6		272.0		Cash, cash equivalents and restricted cash at the beginning of the period	1,019.0		523.6
Cash, cash equivalents and restricted cash at the end of the period	Cash, cash equivalents and restricted cash at the end of the period	$	1,182.4	$	300.5	Cash, cash equivalents and restricted cash at the end of the period	$	887.8	$	966.4

-4-


		Six months ended June 30,					Three months ended March 31,
		2021		2020			2022		2021
Supplemental cash flow disclosures	Supplemental cash flow disclosures					Supplemental cash flow disclosures
Cash paid for income taxes	Cash paid for income taxes	$	45.0	$	58.4	Cash paid for income taxes	$	24.8	$	21.4
Cash paid for interest	Cash paid for interest	$	50.1	$	94.8	Cash paid for interest	$	27.7	$	35.6

Cash received for interest						Cash received for interest	$	0.1	$	—
Non-cash financing and investing activities	Non-cash financing and investing activities					Non-cash financing and investing activities
Lease asset additions		$	25.9	$	12.8
Accrued debt issuance costs		$	1.6	$	0
Right-of-use assets acquired under operating leases						Right-of-use assets acquired under operating leases	$	14.1	$	11.2
Contingent consideration related to business acquisition						Contingent consideration related to business acquisition	$	30.0	$	—
Capitalization of stock-based compensation costs						Capitalization of stock-based compensation costs	$	0.7	$	—
Accrued offering costs						Accrued offering costs	$	—	$	0.3

The accompanying notes are an integral part of these consolidated financial statements.

-5-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In millions, unless specified otherwise)

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of business and organization

Playtika Holding ~~Corporation~~Corp. (“Playtika”) and its subsidiaries (together with Playtika, the “Company”) is one of the world’s leading developers of mobile games creating fun, innovative experiences that entertain and engage its users. It has built best-in-class live game operations services and a proprietary technology platform to support its portfolio of games which enable it to drive strong user engagement and monetization. The Company’s games are free-to-play, and the Company seeks to provide novel, curated in-game content and offers to its users, at optimal points in their game journeys to drive user engagement and monetization.

Basis of presentation and consolidation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and include Playtika and all subsidiaries in which the Company has a controlling financial interest. Control generally equates to ownership percentage, whereby (i) affiliates that are more than 50% owned are consolidated; (ii) investments in affiliates of 50% or less but greater than 20% are generally accounted for using the equity method where the Company has determined that it has significant influence over the entities; and (iii) investments in affiliates of 20% or less are generally accounted for using cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

The significant accounting policies referenced in the annual consolidated financial statements of the Company as of December 31, ~~2020~~2021 have been applied consistently in these unaudited interim consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been recorded within the accompanying financial statements, consisting of normal, recurring adjustments, and all intercompany balances and transactions have been eliminated in the consolidation. Operating results for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2021.~~2022. For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company's financial statements for the year ended December 31, ~~2020.~~2021.

Investment in unconsolidated entities

The Company holds certain equity investments in various unconsolidated entities that, based upon the structure of the investment, are not within the scope of equity method investment accounting that would lead to the consolidation conclusions above. Instead, these investments fall within the scope of ASC 321, Investments - Equity Securities. As permitted within that guidance, the Company has elected to account for these investments at cost less impairment, adjusted for changes in fair value from observable transactions for identical or similar investments of the same issuer as of the respective transaction dates. No change to the carrying amounts were recorded in the three months ended March 31, 2022.

Use of estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~Significant factors, assumptions, and methodologies used in estimating fair value of equity~~

Prior to its initial public offering of equity in January 2021, the Company, with the assistance of third-party valuation experts, used a combination of the income approach (the discounted cash flow method) and the market approach (a combination of the guideline public company method and the guideline transaction method) to estimate its equity value in connection with its stock-based compensation program discussed below. The income approach involves applying an appropriate risk-adjusted discount rate to projected cash flows based on forecasted revenue and costs. The guideline public company method estimates the value of a company by applying market multiples of publicly traded companies in the same or similar lines of business to the results and projected results of the company being valued. The guideline transaction method estimates the value of a company by applying valuation multiples paid in actual transactions for comparable public and private companies.

-6-

The valuation of the Company’s equity considers a number of objective and subjective factors that it believes market participants would consider, including (a) the Company’s business, financial condition, and results of operations, including related industry trends affecting its operations; (b) its forecasted operating performance and projected future cash flows; (c) the liquid or illiquid nature of its common stock; (d) the rights and privileges of its common stock; (e) market multiples of its most comparable public peers; and (f) market conditions affecting its industry.

As of the valuation date, financial forecasts were prepared and used in the computation of the estimated fair value of the Company’s equity using both the market and income approaches. The financial forecasts were based on assumed revenue growth rates and operating margin levels that considered past experience and future expectations. The assumed risks associated with achieving these forecasts were assessed in selecting the appropriate cost of capital rates.

The values derived under the market and income approaches were used to determine an initial estimated fair market value of the Company’s equity. The initial estimated value was then subjected to a discount for the lack of marketability based on the impediments to liquidity as a result of the Company’s previous status as a private company, including the lack of publicly available information and the lack of a trading market.

Subsequent to the Company’s initial public offering of equity in January 2021, the Company uses the public trading price of its common stock on the Nasdaq stock exchange as the basis for determining the fair market value for its common stock for purposes of its stock based compensation expense.

There is inherent uncertainty in the Company’s forecasts and projections, and if different assumptions and estimates had been made than those described previously, the amount of the equity valuation and stock-based compensation expense could have been materially different.

Concentration of credit risk and significant customers

Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, short-term bank deposits, restricted cash, accounts receivable and derivative contracts. A ~~significant~~large percentage of the Company’s cash is maintained with three financial institutions with high credit standings. The Company performs periodic evaluations of the relative credit standing of these financial institutions.

Apple, Facebook and Google are significant distribution, marketing, promotion and payment platforms for the Company's games. A significant portion of the Company’s revenues has been generated from players who accessed the Company's games through these platforms. Therefore, the Company's accounts receivable are derived mainly from sales through these three platforms. Accounts receivable are recorded at their transaction amounts and do not bear interest. The Company performs ongoing credit evaluations of its customers.

The following table summarizes the major accounts receivable of the Company as a percentage of the total accounts receivable as of the dates indicated:


		June 30, 2021	December 31, 2020		March 31, 2022	December 31, 2021

Apple	Apple	54%	38%	Apple	42%	42%
Google	Google	27%	35%	Google	37%	34%
Facebook	Facebook	7%	11%	Facebook	7%	8%

Cash and cash equivalents

Cash and cash equivalents consist of cash and highly liquid investments with maturities of three months or less from the date of purchase and are stated at the lower of cost or market value. Cash equivalents include investments in money market funds that can be redeemed immediately at the current net asset ~~value per share.~~

~~-7-~~

value.

Restricted cash

Restricted cash primarily consists of deposits to secure obligations under the Company's operating lease agreements and to secure company-issued credit cards.

Short-term bank deposits

Bank deposits with maturities of more than three months but less than one year are included in short-term bank deposits. Such short-term bank deposits are stated at cost which approximates fair market value.

Stock-based compensation expense

The Company has a stock-based compensation program which provides for equity awards including time-based stock options, ~~and~~ restricted stock units (“RSUs”) and performance stock units (“PSUs”). Stock-based compensation expense is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense on a straight-line basis over the requisite service period for ~~the award.~~options and RSUs and on an accelerated basis for PSUs. The Company records forfeitures as a reduction of stock-based compensation expense as those forfeitures occur.

The Company used the Black-Scholes option pricing model to estimate the fair value and compensation cost associated with stock options. As it does not have a long history of market prices for its common stock because the stock was not publicly traded prior to January 2021, the Company used observable data for a group of peer companies that grant options with substantially similar terms to assist in developing its ~~pre-IPO~~ volatility ~~assumption.~~assumptions. The expected volatility of the stock was determined using weighted average measures of the implied volatility and the historical volatility for the Company’s peer group of companies for a period equal to the expected life of the ~~option.~~options. The weighted-average risk-free interest rates were based on the interest rate for U.S. Treasury bonds. The expected term ~~assumption was~~assumptions were derived using the simplified method, which is based on an average between ~~the~~each vesting date and the expiration date of an option. This method was chosen

-7-

because there was no historical option exercise experience due to the Company being privately held. ~~The weighted-average risk-free interest rate was based on the interest rate for U.S. Treasury bonds.~~ The Company does not anticipate paying cash dividends on its shares of common stock in the future. The stock options have a contractual term of 10 years. Except as otherwise provided in an option agreement between the Company 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 the Company employs different assumptions, stock-based compensation cost on future awards may differ significantly from what the Company has recorded in the past. Higher volatility and longer expected terms result in an increase to stock-based compensation determined at the date of grant. Future stock-based compensation cost and unrecognized stock-based compensation will increase to the extent that the Company grants additional equity awards to employees or assumes unvested equity awards in connection with acquisitions. If there are any modifications or cancellations of the underlying unvested ~~securities,~~equity awards, the Company may be required to accelerate any remaining unearned stock-based compensation cost or incur incremental cost.

The Company uses the associated per-share value at the time of grant to determine the compensation cost to be recognized associated with RSUs and PSUs granted. The Company periodically reviews the estimates of performance against the defined criteria to assess the expected payout of each outstanding PSU grant and adjusts 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 the Company on behalf of its employees. 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.

The Company’s stock-based compensation expense is recorded in the financial statement line item relevant to each of the award recipients. See Note 7, 8, Equity Transactions and Stock Incentive Plan, for additional discussion.

Employee related benefits

Appreciation and retention plan

In August 2019, the Company adopted the Playtika Holding Corp. Retention Plan (the “2021-2024 Retention Plan”) in order to retain key employees and reward them for contributing to the success of the Company. Under the 2021-2024 Retention Plan, eligible employees may be granted retention awards that let them receive their pro rata portion of a retention pool of $25 million per year for each of the plan years, and may also be granted appreciation units which allow the employee to receive their pro-rata portion of an appreciation pool calculated as a specified percentage of Adjusted EBITDA ~~as described further in Note 12,~~ ~~Appreciation and Retention Plan~~.for each of the plan years.

~~-8-~~

The value of each unit of the 2021-2024 Retention Plan has been amortized into compensation expense using the straight-line method, which will result in the recognition of compensation costs in the same years as the underlying EBITDA used in the plan measurement is earned.

Derivative ~~Instruments~~instruments

The Company uses interest rate swap contracts to reduce its exposure to fluctuating interest rates associated with the Company’s variable rate debt, and to effectively increase the portion of debt upon which the Company pays a fixed interest rate. The Company’s interest rate swap agreements are designated as cash flow hedges under ASC 815. These hedges are highly effective in offsetting changes in the Company’s future expected cash flows due to the fluctuation on the one-month LIBOR rate associated with its variable rate debt. Interest rate swap is designated as a cash flow hedge815 involving the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreement, without the exchange of the underlying notional amount. These hedges are highly effective in offsetting changes in the Company’s future expected cash flows due to the fluctuation of the USD one-month LIBOR rate associated with its variable rate debt.

The Company monitors the effectiveness of its hedges on a quarterly basis, both qualitatively and quantitatively. The Company 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 30 observations that are based on historical swap rates. Based on the regression results, the Company believes that, at inception and at period end, the hedging instrument is

-8-

expected to be highly effective at offsetting changes in the hedged transactions attributable to the risk being hedged. For each future reporting period, the Company 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 Company uses ~~forward~~foreign currency derivative contracts to reduce its exposure to fluctuating exchange rates between the United States dollar (as the Company’s functional currency) and ~~the Company’s local payroll~~certain revenue or expense ~~incurred in Israel and~~lines denominated in Israeli Shekels (“ILS”), Polish Zloty (“PLN”), Romanian Leu (“RON”) and Canadian Dollar (“CAD”). The Company’s ~~forward~~derivative contracts are designated as cash flow hedges under ASC 815. AsThe Company monitors the effectiveness of its hedges on a ~~result of substantially matching the critical terms between its forward contracts~~quarterly basis, both qualitatively and ~~the fluctuating exchange rates the Company~~quantitatively, and expects these hedges to remain highly effective at offsetting fluctuations in exchange rates through their respective maturity dates.

The fair value of derivative financial instruments is recognized as an asset or liability at each balance sheet date, with changes in fair value recorded in other comprehensive income on the consolidated statements of comprehensive income until the future underlying transactions occur. The fair value approximates the amount the Company would pay if these contracts were settled at the respective valuation dates. The inputs used to measure the fair value of the Company’s interest rate swap agreements are categorized as Level 2 in the fair value hierarchy as established by ASC 820. The inputs used to measure the fair value of the Company’s ~~forward~~foreign currency derivative contracts are categorized as Level 2 in the fair value hierarchy as established by ASC 820.

Net income ~~(loss)~~ per share attributable to common stockholders

For all periods presented herein, basic net income ~~(loss)~~ per share is calculated by dividing net income by the weighted-average common shares outstanding. Diluted net income ~~(loss)~~ per share ~~in profitable periods~~ reflects the effect of all potentially dilutive common shares outstanding by dividing net income by the weighted-average of all common and potentially dilutive shares outstanding. Performance Stock Units are considered potentially dilutive as of the first day of the reporting period in which the underlying performance metric is achieved. In the event of a loss, diluted shares are not considered because of their anti-dilutive effect.

Accounting standards recently adopted by the Company

~~In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes~~. ASU 2019-12 eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. This guidance is effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted this standard as of January 1, 2021. The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

~~-9-~~

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of LIBOR or by another reference rate expected to be discontinued. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the ~~six months~~year ended ~~June 30,~~December 31, 2021, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. The Company continues to evaluate the potential impacts of ASU 2020-04 and may apply other elections as applicable as additional changes in the market occur.

NOTE 2. ACQUISITION

Acquisition of JustPlay.LOL Ltd

On March 23, 2022, the Company announced the acquisition of JustPlay.LOL Ltd. (“JustPlay”) consistent with the Company’s strategy to increase its breadth of entertainment genres and leverage the Company’s Boost platform to enhance game-operations. The acquisition was accounted for as a business combination.

Within the accompanying consolidated financial statements, management has recorded its initial estimate of the assets acquired and liabilities assumed in the acquisition, along with an estimate of the fair value for contingent consideration payable, based upon management’s financial models for this acquisition, and upon similar allocations from prior acquisitions. The Company has engaged a third-party valuation specialist to assist the Company with finalizing these estimates, with such finalization expected to be completed during the second quarter of 2022. As such, the Company expects that the initial purchase price allocation may change.

-9-

Given the timing of the acquisition immediately before the quarter end reporting date, and given the immateriality of the income statement of JustPlay for the period from March 22, 2022 through March 31, 2022, the profit and loss activity for this period has been excluded from the consolidated financial statements herein. These amounts will be recorded to the profit and loss statement during the second quarter of 2022.

The goodwill, which is non-deductible for tax purposes, is generally attributable to synergies between the Company's and JustPlay's respective studio operations and games.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed (in millions):


Consideration
Total Consideration	$	59.9
Less: Cash acquired	(0.6)
Total consideration, net of cash acquired	59.3
Less: Acquisition date fair value of contingent consideration	(30.0)
Consideration paid as of March 23, 2022	$	29.3

Identifiable assets acquired and liabilities assumed
Accounts receivable	$	1.1
Property and equipment	0.1
Intangible assets other than goodwill	$	15.1
Goodwill	43.3

Liabilities assumed	(0.3)

Total identifiable assets acquired and liabilities assumed	$	59.3

The developed game assets acquired and included in the above table are being amortized on a straight-line basis over their estimated useful life of six years, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized.

Pro forma results of operations for this acquisition subsequent to the March 23, 2022 acquisition date have not been presented because the incremental results from JustPlay are not material to the consolidated statements of comprehensive income presented herein.

NOTE 3. GOODWILL

Changes in goodwill for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 were as follows (in millions):


	~~Six~~Three months ended ~~June 30, 2021~~March 31, 2022
Balance at beginning of period	$	~~484.8~~788.1
Goodwill acquired during the ~~year~~period	043.3
Foreign currency translation adjustments	~~(3.8)~~(2.1)
Balance at end of period	$	~~481.0~~829.3

-10-

NOTE 3.4. INTANGIBLE ASSETS OTHER THAN GOODWILL, NET

The carrying amounts and accumulated amortization ~~expenses~~ of the acquired intangible assets other than goodwill, net, including the impact of foreign currency exchange translation, at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, were as follows (in millions):


		June 30, 2021						March 31, 2022
		Weighted average remaining useful life (in years)	Balance		December 31, 2020			Weighted average remaining useful life (in years)	Balance		December 31, 2021
Historical cost basis	Historical cost basis						Historical cost basis
Developed games and acquired technology	Developed games and acquired technology	5.2	$	486.4	$	481.5	Developed games and acquired technology	4.9	$	606.1	$	591.0
Trademarks and user base	Trademarks and user base	—	19.1		19.1		Trademarks and user base	0.4	31.2		31.2
Internal use software	Internal use software	2.8	85.3		61.5		Internal use software	2.8	111.2		97.0
			590.8		562.1				748.5		719.2
Accumulated amortization	Accumulated amortization						Accumulated amortization
Developed games and acquired technology	Developed games and acquired technology		(242.9)		(206.2)		Developed games and acquired technology		(265.8)		(247.9)
Trademarks and user base	Trademarks and user base		(19.0)		(19.0)		Trademarks and user base		(26.0)		(23.0)
Internal use software	Internal use software		(19.2)		(9.2)		Internal use software		(37.4)		(31.0)
			(281.1)		(234.4)				(329.2)		(301.9)
Intangible assets other than goodwill, net	Intangible assets other than goodwill, net		$	309.7	$	327.7	Intangible assets other than goodwill, net		$	419.3	$	417.3

During the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company recorded amortization expense in the amounts of ~~$22.7~~$28.7 million and ~~$20.7~~$23.3 million, respectively. ~~During the six months ended June 30, 2021 and 2020, the Company recorded amortization expense in the amounts of $46.0 million and $39.7 million, respectively.~~

~~-10-~~

As of ~~June 30, 2021,~~March 31, 2022, the total expected future amortization related to intangible assets was as follows (in millions):


		Amortization to be included in cost of revenue
Remaining 2021		$	45.4
2022		73.2
Remaining 2022				Remaining 2022	$	81.1
2023	2023	63.3		2023	95.8
2024	2024	43.2		2024	82.2
2025				2025	70.1
2025 and thereafter	2025 and thereafter	84.6		2025 and thereafter	90.1
Total	Total	$	309.7	Total	$	419.3

NOTE 4.5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 were as follows (in millions):


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Tax accruals	Tax accruals	$	167.2	$	130.5	Tax accruals	$	162.9	$	162.5
Accrued expenses						Accrued expenses	140.8		132.7
Employees and related expenses	Employees and related expenses	137.5		173.8		Employees and related expenses	116.1		167.8
Accrued expenses		128.6		121.6
Deferred revenues	Deferred revenues	22.5		21.3		Deferred revenues	31.0		31.6
Accrued litigation		0		37.6

Contingent consideration						Contingent consideration	6.6		—

Total accrued expenses and other current liabilities	Total accrued expenses and other current liabilities	$	455.8	$	484.8	Total accrued expenses and other current liabilities	$	457.4	$	494.6

-11-

~~NOTE 5. LEASES~~

~~The facilities of the Company are leased under various operating lease agreements, which expire on various dates, the latest of which is April 2031.~~NOTE 6. LEASES

The Company's leases include office real estate and data center leases for its facilities worldwide, which are all classified as operating leases, and which expire on various dates, the latest of which is April 2031. Certain lease agreements include rental payments that are adjusted periodically for the consumer price index (“CPI”). ~~The~~For these specific leases the ROU asset and lease liability were calculated using the initial CPI and will not be subsequently adjusted. Certain leases include renewal options that are reasonably certain to be exercised.

Supplemental balance sheet information related to leases is as follows (in millions):


	~~June 30, 2021~~March 31, 2022
Operating lease right-of-use assets, gross	$	~~119.2~~148.4
Accumulated amortization	~~(34.7)~~(49.6)
Operating lease right-of-use assets, net	$	~~84.5~~98.8

The following is a summary of weighted average remaining lease terms and discount rates for all of the Company's operating leases:


	~~June 30, 2021~~March 31, 2022
Weighted average remaining lease term (years)	~~6.1~~5.9
Weighted average discount rates	~~3.8~~3.2	%

Total operating lease ~~cost~~expense was ~~and~~ $6.0 million and ~~$3.9~~$4.6 million during the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively and $10.6 million and $7.6 million during the six months ended June 30, 2021 and 2020,~~ respectively.

~~-11-~~

Cash paid for amounts included in the measurement of operating lease liabilities was ~~$5.4~~$6.0 million and ~~$3.0~~$5.1 million during the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively and $10.5 million and $6.4 million during the six months ended June 30, 2021 and 2020,~~ respectively.

Maturities of lease liabilities are as follows as of ~~June 30, 2021~~March 31, 2022 (in millions):


Remaining 2021		$	10.9
2022		21.0
Remaining 2022				Remaining 2022	$	16.2
2023	2023	18.6		2023	24.8
2024	2024	16.5		2024	22.0
2025 and thereafter		34.4
2025				2025	17.0
2026 and thereafter				2026 and thereafter	37.6
Total undiscounted cash flows	Total undiscounted cash flows	101.4		Total undiscounted cash flows	117.6
Less: imputed interest	Less: imputed interest	(8.7)		Less: imputed interest	(9.7)
Present value of lease liabilities	Present value of lease liabilities	$	92.7	Present value of lease liabilities	$	107.9

The table above excludes approximately $7 million in lease obligations associated with leases that are currently under negotiation or that start after April 1, 2022.

-12-

NOTE 6.7. DEBT


		June 30, 2021						December 31, 2020			March 31, 2022						December 31, 2021
		Maturity	Interest rate(s)	Book value		Face value		Book value

(in millions, except interest rates)										(in millions, except interest rates)	Maturity	Interest rate	Book value		Face value		Book value
				(in millions)
Term Loan	Term Loan	2028	2.843%	$	1,850.1	$	1,895.3	$	2,314.4	Term Loan	2028	2.959%	$	1,841.0	$	1,881.0	$	1,843.8
Senior Notes	Senior Notes	2029	4.250%	590.7		600.0		0		Senior Notes	2029	4.250%	591.5		600.0		591.3
Revolving Credit Facility	Revolving Credit Facility	2026	n/a	—		—		—		Revolving Credit Facility	2026	n/a	—		—		—
Total debt	Total debt			2,440.8		2,495.3		2,314.4		Total debt			2,432.5		2,481.0		2,435.1
Less: Current portion of long-term debt	Less: Current portion of long-term debt			(12.3)		(19.0)		(104.6)		Less: Current portion of long-term debt			(12.2)		(19.0)		(12.2)
Long-term debt	Long-term debt			$	2,428.5	$	2,476.3	$	2,209.8	Long-term debt			$	2,420.3	$	2,462.0	$	2,422.9

Book value of debt in the table above is reported net of deferred financing costs and original issue discount of ~~$54.5~~$48.5 million at ~~June 30, 2021~~March 31, 2022 and deferred financing costs of ~~$60.6~~$50.7 million at December 31, ~~2020,~~2021, respectively.

Credit Agreement

On December 10, 2019, the Company entered into $2,750 million of senior secured credit facilities (the "Credit Facilities"), consisting of a $250 million revolving credit facility (the "Revolving Credit Facility"), and a $2,500 million first lien term loan (the "Old Term Loan"). The Credit Facilities were provided pursuant to a Credit Agreement, dated as of December 10, 2019 (the "Credit Agreement"), 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"). ~~Proceeds borrowed under the Credit Facilities on the closing date were used to pay off the outstanding balance on the Company’s prior debt facility.~~ On June 15, 2020, the Company increased the capacity of the Revolving Credit Facility to $350 million. On January 15, 2021, the Company increased the borrowing capacity of the Revolving Credit Facility from $350 million to $550 million.

On March 11, 2021, the Company amended the Credit Agreement pursuant to an Incremental Assumption Agreement No. 3 and Second Amendment to Credit Agreement (the “Second Amendment”).

The Second Amendment, among other things, effected a refinancing of the Old Term Loan with a new $1.9 billion senior secured first lien term loan borrowed under the Credit Agreement (the “New Term Loan”), increased the Revolving Credit Facility to $600 million and extended the maturity of the Revolving Credit Facility to March 11, 2026. 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.

~~-12-~~

The ~~Credit Agreement allows the Company to request one or more incremental term loan facilities, incremental revolving credit facilities and/or increases to the New Term Loan or the~~ Revolving Credit Facility in an aggregate amount of up to the sum of (x) the greater of (1) $800 million and (2) 1.00 times EBITDA (as defined in the Credit Agreement) plus (y) the amount of certain voluntary prepayments of indebtedness plus (z) such additional amount so long as, (i) in the case of loans under additional credit facilities that are secured by liens on the collateral securing the Credit Agreement, the Company'sincludes a maximum first-priority net ~~total~~senior secured leverage ratio ~~on a pro forma basis would not exceed 3.50~~financial maintenance covenant of 6.25 to ~~1.00 (or in~~1.0. At March 31, 2022, the ~~case of incremental facilities to fund certain investments and acquisitions, the~~Company’s first-priority net ~~total~~senior secured leverage ratio ~~immediately prior~~was 0.94 to such incurrence) and (iii) in the case of any other loans under additional credit facilities, the Company's fixed charge coverage ratio on a pro forma basis would not be less than 2.00 to 1.00 (or in the case of incremental facilities to fund certain investments and acquisitions, the fixed charge coverage ratio immediately prior to such incurrence), in each case, subject to certain conditions and receipt of commitments by existing or additional financial institutions or institutional lenders.1.0.

~~All future borrowings~~The Company was in compliance with its financial and other covenants under the Credit Agreement ~~are subject to the satisfaction~~as of ~~customary conditions, including the absence of a default and the accuracy of representations and warranties, subject to certain exceptions.~~March 31, 2022.

Interest and Fees

Borrowings under the Credit Agreement bear interest at a rate equal to, at the Company’s option, either (a) LIBOR determined by reference to the cost of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a floor of 0% or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as determined by the administrative agent and (iii) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable margin. Such applicable margin is (x) with respect to the New Term Loan, 2.75% per annum in the case of any LIBOR loan or 1.75% per annum in the case of any base rate loan, subject to one 0.25% step-down based on the Company’s credit ratings and (y) in the case of the Revolving Credit Facility, a range from 2.25% to 3.00% per annum in the case of any LIBOR loan and a range from 1.25% to 2.00% per annum in the case of any base rate loan, based on the Company’s net senior secured leverage ratio.

-13-

In addition, on a quarterly basis, the Company is required to pay each lender under the Revolving Credit Facility a commitment fee in respect of any unused commitments under the Revolving Credit Facility in the amount of 0.50% of the principal amount of the daily unused commitments of such lender, subject to ~~stepdowns~~step-downs to 0.375% and 0.25% based upon the Company’s ~~net~~ senior secured leverage ratio. The Company is also required to pay customary agency fees as well as letter of credit participation fees on outstanding letters of credit.

The Credit Agreement ~~contains~~ permits voluntary prepayments and requires mandatory prepayments in certain events including, among others, 50% (subject to step-downs to 25% and 0% based upon the Company’s net total secured leverage ratio) of the Company's excess cash flow to the extent such amount exceeds $10 million, certain net cash proceeds from non-ordinary ~~assets~~asset sale transactions (subject to reinvestment rights), and 100% of net proceeds of any issuance of debt (except for debt permitted to be incurred by the Credit Agreement). If the Company’s total secured leverage ratio remains below 2.0 to 1.0, consistent with the ratio for the year ended December 31, 2021, the Company’s required excess cash flow percentage for 2022 will step down to 0%.

~~Collateral~~The significant terms and ~~Guarantors~~

~~The borrowings under~~conditions of the Credit Agreement are guaranteed by certain material, wholly-owned restricted subsidiaries of the Company, and are secured by a pledge of substantially all of the existing and future property and assets of the Company and the guarantors (subject to exceptions), including a pledge of the capital stock of the domestic subsidiaries held by the Company and the domestic guarantors and 65% (or 100%have not changed from what was disclosed in ~~the case of certain of the guarantors) of the capital stock of the first-tier foreign subsidiaries held by the Company and the domestic guarantors,~~Note 9, Debt in ~~each case subject to exceptions.~~

The Credit Agreement requires that the Company and the guarantors (a) generate at least 80.0% of the EBITDA of the Company and its restricted subsidiaries for the four fiscal quarters most recently ended prior to the end of each fiscal quarter and (b) own all "Material Intellectual Property" (defined as any intellectual property rights consisting of registered trademarks or copyrights subsisting in the name or logo of any game that generates more than 5% of the EBITDA of the Company and its restricted subsidiaries for the then most recently ended four fiscal quarters)our Annual Report on the last day of the four fiscal quarters most recently ended prior to the end of each fiscal quarter. If the Company and the guarantors do not satisfy such requirement, then the Company must cause sufficient additional subsidiaries (which, subject to certain limitations, may

~~-13-~~

include guarantors located in jurisdictions other than the United States, England and Wales and the State of Israel) to become guarantors in order to satisfy such requirement. As of June 30, 2021, the Company was in compliance with these requirements.

~~Restrictive Covenants~~

The Revolving Credit Facility includes a maximum first-priority net senior secured leverage ratio financial maintenance covenant of 6.25 to 1.0. At June 30, 2021, the Company’s first-priority net senior secured leverage ratio was 0.75 to 1.0.

In addition, the Credit Agreement includes negative covenants, subject to certain exceptions, restricting or limiting the Company's ability and the ability of its restricted subsidiaries to, among other things: (i) make non-ordinary course dispositions of assets; (ii) make certain mergers and acquisitions; (iii) complete dividends and stock repurchases and optional redemptions (and optional prepayments) of subordinated debt; (iv) incur indebtedness; (v) make certain loans and investments; (vi) incur liens and certain fixed charges; (vii) transact with affiliates; (viii) change the business of the Company and its restricted subsidiaries; (ix) enter into sale/leaseback transactions; (x) allow limitations on negative pledges and the ability of restricted subsidiaries to pay dividends or make distributions; (xi) change the fiscal year and (xii) modify subordinated debt documents. Under the Credit Agreement, the Company may be required to meet specified leverage ratios or fixed charge coverage ratios in order to take certain actions, such as incurring certain debt or liens or making certain investments.

~~Expenses Related to Modification of Debt~~

~~The Company accounts for the restructuring of its debt agreements in accordance~~Form 10-K filed with the ~~accounting standards applicable to troubled debt restructuring, debt modification and debt extinguishment. Under the applicable accounting standards, the Company determined that the~~SEC on March 2021 financing transactions qualified for modification accounting. As a result, the Company expensed $14.5 million related to the debt modification, wrote off $22.9 million of previously deferred financing costs related to the modification of debt related to the Company’s Old Term Loan and carried over $34.9 million of deferred financing costs to the New Term Loan.2, 2022.

Offering of 4.250% Senior Notes due 2029

Indenture

On March 11, 2021, the Company issued $600.0 million aggregate principal amount of its 4.250% senior notes due 2029 (the “Notes”) under an indenture, dated March 11, 2021 (the “Indenture”), among the Company, the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee (the “Trustee”).

Maturity and Interest

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.~~year.

~~Guarantees~~

The ~~Notes are fully~~significant terms and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Company’s existing and future restricted subsidiaries that guarantee the obligations under the Credit Agreement (as defined below) (the “subsidiary guarantors”).

~~Ranking~~

The Notes and the note guarantees rank equally in right of payment to all of the Company’s and the subsidiary guarantors’ existing and future senior indebtedness and senior in right of payment to all of the Company’s and the subsidiary guarantors’ future subordinated indebtedness. The Notes and the note guarantees are effectively subordinated to any of the Company’s and the subsidiary guarantors’ existing and future secured indebtedness to the extent of the value of the assets securing such

~~-14-~~

indebtedness, including indebtedness outstanding under the Credit Agreement. In addition, the Notes and the note guarantees are structurally subordinated to the existing and future liabilities of the Company’s non-guarantor subsidiaries.

~~Redemption~~

The Company may redeem the Notes at any time prior to March 15, 2024, in whole or in part, at a redemption price equal to 100% of the accrued principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the redemption date, plus a make-whole premium.

The Company may redeem the Notes at any time on or after March 15, 2024, in whole or in part, at a redemption price equal to (i) 102.125% of the principal amount thereof, should such redemption occur before March 15, 2025, (ii) 101.063% of the principal amount thereof, should such redemption occur before March 15, 2026, and (iii) 100.000% of the principal amount thereof, should such redemption occur on or after March 15, 2026, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

In addition, at any time prior to March 15, 2024, the Company may redeem up to 40% of the original aggregate principal amount of all Notes issued with the net cash proceeds from certain equity offerings at a redemption price of 104.250% of the principal amount redeemed plus accrued and unpaid interest, if any, to, but excluding, the redemption date, so long as at least 50% of the aggregate principal amountconditions of the Notes ~~remains outstanding immediately after~~have not changed from what was disclosed in Note 9, Debt in our Annual Report on Form 10-K filed with the ~~occurrence of such redemption, and the redemption date is within 90 days of the consummation of any such equity offering.~~

~~Covenants~~

~~The Indenture contains customary covenants that limit the Company’s ability and, in certain instances, the ability of the Company’s subsidiaries, to borrow money, create liens~~SEC on assets, make distributions and pay dividends on or redeem or repurchase stock, make certain types of investments, sell stock in certain subsidiaries, enter into agreements that restrict dividends or other payments from subsidiaries, enter into transactions with affiliates, issue guarantees of indebtedness, and sell assets or merge with other companies. These limitations are subject to a number of important exceptions and qualifications set forth in the Indenture.

March 2, 2022.

~~Change of Control~~

In the event of a change of control, the Company must offer to repurchase the Notes at a repurchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.

~~Events of Default~~

Events of default under the Indenture include, among others, the following with respect to the Notes: default which continues for 30 days in the payment of interest on the Notes; default in payment of the principal of, or premium, if any, on the Notes; failure to comply with certain covenants in the Indenture for 60 days (or 120 days with respect to the covenant relating to the provision of financial reports) upon the receipt of notice from the Trustee or holders of at least 25% in aggregate principal amount of the Notes; acceleration or payment default of indebtedness of the Company or certain of its subsidiaries in excess of a specified amount that remains uncured following the applicable grace period provided in such indebtedness; final judgments against the Company or certain of its subsidiaries in excess of a specified amount that remains unpaid for 45 days; and certain events of bankruptcy or insolvency with respect to the Company or certain of its subsidiaries. In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or certain of its subsidiaries, all Notes then outstanding will become due and payable immediately without further action or notice. If any other event of default occurs with respect to the Notes, the Trustee or holders of at least 25% in aggregate principal amount of the Notes may declare all Notes then outstanding to be due and payable immediately.

~~-15-~~

~~Scheduled Principal Payments of Long-Term Debt~~

~~The scheduled principal payments due on long-term debt are as follows (in millions):~~

Amount
Remaining 2021 $ 9.5
2022 19.0
2023 19.0
2024 19.0
2025 and thereafter 2,428.8
Total $ 2,495.3

NOTE 7.8. EQUITY TRANSACTIONS AND STOCK INCENTIVE PLAN

~~Equity Transactions~~

On May 26, 2020, the Board of Directors of the Company approved an amendment to the Certificate of Incorporation of the Company (the “Stock Split”) to increase the authorized number of shares of the Company’s common stock from ten (10) shares to one million (1,000,000) shares, to decrease the par value of each share of common stock of the Company from $1.00 per share to $0.01 per share, and to reclassify each share of common stock issued and outstanding immediately prior to the Stock Split into 94,500 shares of common stock.

On January 5, 2021, the Company’s Board of Directors approved an amended and restated certificate of incorporation of the Company effecting an additional 400-for-1 stock split of the Company’s issued and outstanding shares of common stock and an increase to the authorized shares of our common stock and preferred stock to 1.6 billion shares and 100 million shares, respectively. The split and the increase in authorized shares of the Company’s common stock was effected on January 6, 2021 and without any change in the par value per shares.

~~All information herein related to the Company’s common stock and stock awards has been retroactively adjusted to give effect to both the May 26, 2020 stock split and the January 5, 2021 stock split.~~

Overview of Stock Incentive Plan

On May 26, 2020, the Board of Directors of the Company approved the Playtika Holding Corp. 2020 Incentive Award Plan (the “Plan”). The Plan authorizes the issuance of stock options, restricted stock, restricted stock units (“RSUs”), dividend equivalents, stock appreciation rights, performance bonus awards and other incentive awards. The Plan authorizes the grant of awards to employees, non-employee directors and consultants of the Company.

The maximum number of shares of the Company’s common stock for which grants may be made under the Plan was ~~42,190,299~~56,232,228 shares as of ~~June 30, 2021.~~March 31, 2022. As of ~~June 30, 2021,~~March 31, 2022, a total of ~~2,749,972~~4,294,832 shares of the Company’s common stock remained available for grants of awards under the Plan.

~~Stock Options~~

Outstanding stock option grants generally vest over four years, with 25% vesting on each of the four anniversaries of the grant date. The stock options have a contractual term of 10 years. Except as provided in an option agreement between the Company and the employee, if an employee is terminated (voluntarily or involuntarily), any unvested awards as of the date of termination will be forfeited.

~~-16-~~-14-

Stock Options

The following table summarizes the Company’s stock option activity during the ~~six~~three months ended ~~June 30, 2021:~~March 31, 2022:


			Weighted	Weighted						Weighted	Weighted
		Stock	Average	Average		Intrinsic			Stock	Average	Average		Intrinsic
		Options	Remaining	Exercise		Value			Options	Remaining	Exercise		Value
		Outstanding	Term (in years)	Price		(in millions)			Outstanding	Term (in years)	Price		(in millions)
Outstanding at January 1, 2021		8,000,000	9.5	$	18.71
Outstanding at January 1, 2022								Outstanding at January 1, 2022	15,849,693	8.8	$	22.70
Granted	Granted	8,006,297		$	27.00			Granted	2,423,042		$	15.65
Exercised	Exercised	0						Exercised	—
Cancelled	Cancelled	(369,084)		$	27.00			Cancelled	(869,102)		$	22.57
Expired	Expired	0						Expired	—
Outstanding at June 30, 2021		15,637,213	9.3	$	22.76	$	41.0
Exercisable at June 30, 2021		2,000,000	9.0	$	18.71	$	10.3
Outstanding at March 31, 2022								Outstanding at March 31, 2022	17,403,633	8.50	$	19.27	$	—
Exercisable at March 31, 2022								Exercisable at March 31, 2022	4,112,918	7.58	$	22.24	$	—

The Company ~~will issue new shares of common stock upon exercise of stock options.~~

~~The Company uses~~used the Black-Scholes option pricing model to estimate the fair value and compensation cost associated with employee stock options, which is affected by the following assumptions regarding complex and subjective variables. Any changes in these assumptions may materially affectfor determining the estimated fair value of stock-based compensation related to stock options. The table below summarizes the ~~stock-based award.~~assumptions used for the options granted in each respective period, as well as for options repriced during the three months ended March 31, 2022:

–Fair value of common stock - Prior to the Company’s initial public offering of equity in January 2021, as the Company’s common stock was not publicly traded, the fair value of common stock was estimated by valuation reports prepared by third-party valuation specialists. Subsequent to the Company’s initial public offering, the Company uses the public trading price of its common stock on the Nasdaq stock market to determine the fair value of its common stock.


	Three months ended March 31,
	2022	2021
Risk-free interest rate	0.67% - 1.82%	0.67%
Expected dividend yield	—	—
Expected term in years	6.1	6.1
Expected volatility	38.19% - 38.60%	38.56%

–~~Expected volatility – Prior to~~On February 7, 2022, the ~~Company’s initial public offering~~Compensation Committee of ~~equity in January 2021, as~~the Board of Directors of the Company was a private company at the time of valuation, the Company estimated volatility based on the volatilities exhibited by comparable public companies and the Company’s capital structure and utilized the observable data for a group of peer companies that grant options with substantially similar termsapproved an amendment to assist in developing its volatility assumption. Subsequent to the Company’s initial public offering, the Company continues to estimate volatility in the same manner as it has not yet established sufficient history to estimate volatility of its own.

–Risk-free interest rate - The risk-free interest rate was estimated based on the U.S. Treasury yield curve in effect at the time of grant and with maturities consistent with the expected term of the respective equity option award.

–~~Expected term - The Company estimated the expected term based on the average time between the vesting date and expiration date, ten years after the grant date, of the respective equity option award.~~

–~~Expected dividend yield - The Company does not anticipate paying cash dividends on its shares of common stock; therefore, the expected dividend yield was assumed to be 0.~~

~~The~~5,303,242 options granted ~~during 2020~~in 2021 that are scheduled to vest ~~over four years, with 25% vesting on each of the four anniversaries of the grant date. For options granted during January 2021, 25% of the options generally vest on~~after the first anniversary of the grant date (the “Adjusted Portion”). The Adjusted Portion was amended to reduce the per share exercise prices of such Adjusted Portion to $18.71. The company accounted for the repricing as a modification and will record incremental compensation expense of approximately $8.8 million over the remaining ~~75% of the options vest~~vesting period. There were no awards to any named executive officers or other Section 16 executives included in equal quarterly installments during the three years following the first anniversary of the grant date. The Company expects that future option grants generally will follow one of these two different vesting schedules. The stock options have a contractual term of ten years. Except as provided in an option agreement between the Company and the employee, if an employee is terminated (voluntarily or involuntarily), any unvested awards as of the date of termination will be forfeited.this repricing.

~~-17-~~

RSUs

~~The majority of RSUs granted on June 26, 2020 vested immediately, while the remaining RSUs granted on June 26, 2020 vested 25% immediately, and 25% vest on each of the first~~ ~~three~~ ~~anniversaries of the grant date.~~

In October 2020, the Company’s board of directors approved the issuance of 5,854,800 RSUs. The RSUs vest over four years, with 25% of the RSUs vesting on each of December 31, 2021, 2022, 2023 and 2024, subject to continued service on the applicable vesting date.

For RSUs granted during 2021, 25% of the RSUs generally vest on the first anniversary of the grant date, and the remaining 75% of the RSUs vest in equal quarterly installments during the three years following the first anniversary of the grant date. The Company expects that future RSU grants generally will follow the vesting schedule used in January 2021. Except as provided in an award agreement between the Company and the employee, if an employee is terminated (voluntarily or involuntarily), any unvested awards as of the date of termination will be forfeited. RSUs settle for outstanding shares of the Company’s common stock upon vesting.

The following table summarizes the Company’s RSU activity during the ~~six~~three months ended ~~June 30, 2021:~~March 31, 2022:


			Weighted		Total Fair				Weighted		Total Fair
			Average		Value of				Average		Value of
			Grant Date		Shares Vested				Grant Date		Shares Vested
		Shares	Fair Value		(in millions)			Shares	Fair Value		(in millions)
Outstanding at January 1, 2021		5,944,800	$	21.04
Outstanding at January 1, 2022							Outstanding at January 1, 2022	11,375,084	$	25.29
Granted	Granted	4,989,820	$	31.70			Granted	5,774,908	$	15.65
Vested	Vested	(48,518)	$	23.90	$	1.3	Vested	(1,170,026)	$	30.88	$	22.0
Cancelled	Cancelled	(198,706)	$	31.62			Cancelled	(427,074)	$	29.35
Outstanding at June 30, 2021		10,687,396	$	25.81
Outstanding at March 31, 2022							Outstanding at March 31, 2022	15,552,892	$	21.18

-15-

PSUs

On February 7, 2022, the Compensation Committee of the Board of Directors of the Company approved the grant of PSUs to certain employees pursuant to the Plan. For each annual performance period consisting of calendar years 2022 through 2025, up to 25% of the PSUs will be eligible to vest based on the Company’s annual revenue growth rate during the applicable performance period relative to threshold, target and maximum achievement levels.

If the Company’s annual revenue growth rate for a performance period is between two achievement levels, the achievement percentage will be determined by linear interpolation between the applicable achievement levels. Notwithstanding the foregoing, in no event shall less than 25 PSUs vest during each performance period for Israeli participants.

The following table summarizes the Company’s PSU activity during the three months ended March 31, 2022:


		Weighted		Total Fair
		Average		Value of
		Grant Date		Shares Vested
	Shares(1)	Fair Value		(in millions)
Outstanding at January 1, 2022	—	$	—
Granted	3,478,378	$	15.65
Vested	—	$	—	$	—
Cancelled	—	$	—
Outstanding at March 31, 2022	3,478,378	$	15.65

________

(1) The number of shares for the PSUs listed as granted represent the total number of PSUs granted to each recipient eligible to vest if the Company meets its highest specified performance goals for the applicable period.

Stock-Based Compensation

The following table summarizes stock-based compensation costs, ~~by award type (in millions):~~

Three months ended June 30, Six months ended June 30,
2021 2020 2021 2020
Stock options $ 8.9 $ 0.2 $ 17.4 $ 0.2
RSUs 16.6 260.1 32.4 260.1
Total stock-based compensation costs $ 25.5 $ 260.3 $ 49.8 $ 260.3

~~The following table summarizes stock-based compensation costs~~net of amounts capitalized, as reported on the Company’s consolidated statement of comprehensive income ~~(loss)~~ (in millions):


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
		2021		2020		2021		2020				2022		2021
Research and development expenses	Research and development expenses	$	7.0	$	0	$	13.5	$	0	Research and development expenses		$	13.8	$	6.5
Sales and marketing expenses	Sales and marketing expenses	3.2		0		6.0		0		Sales and marketing expenses		2.9		2.8
General and administrative expenses	General and administrative expenses	15.3		260.3		30.3		260.3		General and administrative expenses		23.1		15.0
Total stock-based compensation costs		$	25.5	$	260.3	$	49.8	$	260.3
Total stock-based compensation costs, net of amounts capitalized										Total stock-based compensation costs, net of amounts capitalized		$	39.8	$	24.3

During the three months ended March 31, 2022, the Company capitalized $0.7 million of stock-based compensation cost. There was 0 stock-based compensation cost capitalized during the three months ended March 31, 2021.

As of ~~June 30, 2021,~~March 31, 2022, the Company’s unrecognized stock-based compensation expenses related to stock options, RSUs and PSUs was approximately ~~$120.6~~$108.9 million, ~~which~~$297.8 million and $50.0 million, respectively. The expense related to stock options, RSUs and PSUs are expected to be recognized over a weighted average period of 3.31 years. As of June 30, 2021, the Company’s unrecognized stock-based compensation expenses related to unvested restricted stock units was approximately $237.6 million, which are expected to be recognized over a period of 3.52 years.

~~-18-~~

2.8 years, 3.0 years and 2.3 years, respectively.

NOTE 8.9. DERIVATIVE INSTRUMENTS

Interest Rate Swap Agreements

In March 2021, the Company entered into ~~two~~2 interest rate swap agreements, each with a notional value of $250 million. Each of these swap agreements is with a different financial institution as the counterparty to reduce the Company’s

-16-

counterparty risk. Each swap requires the Company 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. The estimated fair value of the Company’s interest rate swap agreements is derived from a discounted cash flow analysis. The aggregate fair value of the Company’s interest rate swap agreements was ~~a liability~~an asset of ~~$2.5~~$29.2 million as of ~~June 30, 2021~~March 31, 2022 and was recorded between ~~accrued~~prepaid expenses and other current ~~liabilities~~assets and other non-current assets in the accompanying consolidated balance sheets based upon the timing of the underlying expected cash flows.

Foreign currency hedge agreements

The Company has also entered into multiple ~~forward~~derivative contracts for the future purchase of ~~ILS.~~ILS, RON, PLN and CAD. At ~~June 30, 2021,~~March 31, 2022, the Company had ~~forward~~entered into derivative contracts ~~outstanding for an aggregate~~to purchase certain foreign currencies, including ILS, RON, PLN and CAD at future dates. The approximate amount of ~~130.6~~hedges was equal to $191.3 million, ~~ILS,~~and all ~~which~~contracts are expected to mature ~~within~~during the ~~following~~upcoming 12 months. The aggregate fair value of the Company’s ~~forward~~derivative contracts was ~~$0.3~~an asset of $1.3 million as of ~~June 30, 2021~~March 31, 2022 and was recorded in ~~accrued~~prepaid expenses and other current ~~liabilities and other non-current~~ assets in the accompanying consolidated balance sheets.

NOTE 9.10. FAIR VALUE MEASUREMENTS

The Company accounts for fair value in accordance with ASC 820, Fair Value Measurements and Disclosures ("ASC 820"). Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a three-tier hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The first two levels in the hierarchy are considered observable inputs and the last is considered unobservable. The carrying value of accounts receivable and payables and the Company's cash and cash equivalents, short-term bank deposits and restricted cash, approximates fair value due to the short time to expected payment or receipt of cash.

The following table summarizes the fair value measurement of the Company’s long-term debt at ~~June 30, 2021~~March 31, 2022 (in millions):


		June 30, 2021						March 31, 2022
		Face Value		Fair Value		Fair Value Hierarchy		Face Value		Fair Value		Fair Value Hierarchy
Term Loan	Term Loan	$	1,895.3	$	1,883.4	Level 2	Term Loan	$	1,881.0	$	1,843.4	Level 2
Senior Notes	Senior Notes	600.0		597.8		Level 2	Senior Notes	600.0		551.3		Level 2
Total debt	Total debt	$	2,495.3	$	2,481.2		Total debt	$	2,481.0	$	2,394.7

~~-19-~~

The estimated fair value of the Company’s term loan is based upon the prices at which the Company’s debt traded in the days immediately preceding the balance sheet date. As the trading volume of the Company’s debt is low relative to the overall debt balance, the Company does not believe that the associated transactions represent an active market, and therefore this indication of value represents a level 2 fair value input.

-17-

The following table sets forth the assets and liabilities measured at fair value on a recurring basis in the Company’s consolidated balance sheets at ~~June 30, 2021~~March 31, 2022 (in millions):

~~Pricing~~

~~Fair Value at~~

~~Category~~

~~June 30, 2021~~

~~Other non-current assets:~~

~~Derivative instruments - interest rate swaps~~

~~Level 2~~

~~1.5~~

~~Derivative instruments - FX forward contracts~~

~~Level 2~~

~~0.4~~

~~Accrued expenses and other current liabilities:~~

~~Derivative instruments - interest rate swaps~~

~~Level 2~~

~~4.0~~

~~Derivative instruments - FX forward contracts~~

~~Level 2~~

~~0.1~~


	Fair Value at
	Pricing Category	March 31, 2022		December 31, 2021
Cash and cash equivalents
Money market funds	Level 1	$	184.5	$	310.2

Prepaid expenses and other current assets
Derivative instruments - foreign currency derivative contracts	Level 2	$	1.3	$	1.3
Derivative instruments - interest rate swaps	Level 2	4.2		—

Other non-current assets:
Derivative instruments - interest rate swaps	Level 2	$	25.0	$	7.9


Accrued expenses and other current liabilities:
Derivative instruments - interest rate swaps	Level 2	$	—	$	2.4
Contingent consideration - current	Level 3	6.6		—

Contingent consideration	Level 3	$	30.0	$	28.7

The Company estimates the fair value of interest rate swap contracts by discounting the future cash flows of both the fixed rate and variable rate interest payments based on market yield curves. The inputs used to measure the fair value of the Company’s interest rate swap contracts are categorized as Level 2 in the fair value hierarchy as established by ASC 820.

The fair value of the Company’s foreign currency contracts approximates the amount the Company would pay or receive if these contracts were settled at the respective valuation dates. The inputs used to measure the fair value of the Company’s foreign currency contracts are categorized as Level 2 in the fair value hierarchy as established by ASC 820.

The change in fair value of contingent consideration payable was valued using significant unobservable inputs (Level 3), was

included in the general and administrative expenses in the Company’s consolidated statements of comprehensive income and

consisted of the following (in millions):


Balance as of January 1, 2022	$	28.7
Recorded in connection with acquisition transaction	30.0
Fair value adjustment	(22.1)
Balance as of March 31, 2022	$	36.6

The Company ~~had 0 financial assets or liabilities measured at~~estimated the fair value of its contingent consideration liabilities using probability-weighted discounted cash flow analyses. These fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements as ~~of December 31, 2020.~~defined in ASC 820. The extent to which the actual results differ from assumptions made within the probability-weighted analyses will result in adjustments to this liability in future periods.

The Company has not elected the fair value measurement option available under U.S. GAAP for any of its assets or liabilities that meet the option for ~~this~~these criteria.

NOTE ~~10.~~11. COMMITMENTS AND CONTINGENCIES

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

-18-

Wooga's games and alleged reuse of parts of that storyline in one of Wooga’s other games. As of ~~June 30, 2021,~~March 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.

In November 2013, the Company’s subsidiary, Playtika, Ltd., sent an initial demand letter to Enigmatus s.r.o., a game developer in the Czech Republic, which owns various U.S. trademark registrations that resemble the Company’s Sloto-formative trademark names, demanding that it cease use of the trademark Slotopoly. 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 December 2016, Enigmatus s.r.o., filed a trademark infringement lawsuit, Enigmatus, s.r.o. v. Playtika LTD and Caesars Interactive Entertainment, Inc., against Playtika, Ltd. and Caesars Interactive Entertainment LLC in the Federal Court of Canada asserting that the Company’s use of the Slotomania trademarks violates its proprietary and trademark rights. The plaintiff sought injunctive relief and monetary damages. Pleadings have been exchanged and the lawsuit is in the discovery stage. No trial date has been scheduled. The Company has defended this case vigorously and will continue to do so. 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 October 26, 2020, a patent infringement claim was filed against Playtika Holding Corp., Playtika Ltd. and Caesars Interactive Entertainment LLC in U.S. District Court, District of Nevada. The Plaintiff alleged that the defendants are infringing certain patents in the field of communication and the transferring of images between the gaming server and the end device on certain of its social casino games. The Plaintiff is seeking monetary damages. On April 7, 2021, following the Company’s preliminary motions for dismissal and stay, the Company’s motion for stay was approved by the court pending ruling on motions to dismiss. On July 7, 2021, the Court issued an order finding each of the Plaintiff’s asserted patents

~~-20-~~

invalid as failing to comply with certain legal requirements and dismissing the lawsuit as to all parties. ~~The~~On July 19, 2021, the Plaintiff ~~has~~ filed an ~~intent to appeal.~~appeal, and a hearing on the appeal was held on May 6, 2022 before the United States Court of Appeals for the Federal Circuit. Playtika Holding Corp. and Playtika Ltd. intend to ~~defend~~continue defending the case ~~vigorously if the Plaintiff appeals the ruling.~~vigorously.

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.). 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. On March 10, 2022, the court appointed LBMotion Ltd as lead plaintiff, and the plaintiff filed an amended complaint on May 6, 2022. The amended complaint alleges violations of Section 11 and 15 of the Securities Act of 1933 and seeks, among other things, damages and attorneys’ fees and costs on behalf of the putative class. The amended complaint also added the companies that served as underwriters for the Company’s IPO as defendants in the lawsuit. 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.

-19-

NOTE ~~11.~~12. REVENUE FROM CONTRACTS WITH CUSTOMERS

The following ~~tables provide~~table provides information about disaggregated revenue by geographic location of the Company’s players and by type of platform (in millions):


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
		2021		2020		2021		2020				2022		2021
Geographic location	Geographic location									Geographic location
USA	USA	$	468.7	$	470.4	$	923.4	$	845.8	USA		$	474.4	$	454.7
EMEA	EMEA	94.8		85.3		186.5		166.0		EMEA		104.2		91.7
APAC	APAC	49.7		51.7		99.6		93.1		APAC		52.3		49.9
Other	Other	46.0		43.1		88.6		79.8		Other		46.0		42.6
Total	Total	$	659.2	$	650.5	$	1,298.1	$	1,184.7	Total		$	676.9	$	638.9

Platform type	Platform type									Platform type
Mobile	Mobile	$	525.6	$	522.4	$	1,038.8	$	952.1	Mobile		$	546.0	$	513.2
Web	Web	133.6		128.1		259.3		232.6		Web		130.9		125.7
Total	Total	$	659.2	$	650.5	$	1,298.1	$	1,184.7	Total		$	676.9	$	638.9

Revenues through third-party platforms and through the Company’s own ~~proprietary~~direct-to-consumer platforms were as follows (in millions):


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
		2021		2020		2021		2020				2022		2021
Revenues	Revenues									Revenues
Third-party platforms	Third-party platforms	$	524.7	$	566.2	$	1,047.7	$	1,039.2	Third-party platforms		$	524.5	$	523.0
Internal proprietary platforms		134.5		84.3		250.4		145.5
Direct-to-consumer platforms										Direct-to-consumer platforms		152.4		115.9
Total	Total	$	659.2	$	650.5	$	1,298.1	$	1,184.7	Total		$	676.9	$	638.9

Contract balances

Payments from players for virtual items are collected by platform providers or payment processors and remitted to the Company (net of the platform or clearing fees) generally within 45 days after the player transaction. The Company’s right to receive the payments collected by the platform providers or payment processors is recorded as an accounts receivable as the right to receive payment is unconditional. Deferred revenues, which represent a contract liability, represent mostly unrecognized fees billed for virtual items which have not yet been consumed at the balance sheet date. Platform fees paid to platform providers or payment processors and associated with deferred revenues represent a contract asset.

~~-21-~~

Balances of the Company’s contract assets and liabilities are as follows (in millions):


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Accounts receivable	Accounts receivable	$	169.5	$	129.3	Accounts receivable	$	139.7	$	143.7
Contract assets (1)	Contract assets (1)	6.0		5.8		Contract assets (1)	9.3		9.4
Contract liabilities (2)	Contract liabilities (2)	22.5		21.3		Contract liabilities (2)	31.0		31.6

_______

(1) Contract assets are included within prepaid expenses and other current assets in the Company’s consolidated balance sheets.

(2) Contract liabilities are included within accrued expenses and other current liabilities as “deferred revenues” in the Company’s consolidated balance sheets.

-20-

During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, the Company recognized ~~the all~~$24.0 million of its contract liabilities ~~balance~~that were outstanding as of December 31, ~~2020.~~2021.

Unsatisfied performance obligations

Substantially all of the Company’s unsatisfied performance obligations relate to contracts with an original expected length of one year or less.

NOTE ~~12.~~13. APPRECIATION AND RETENTION PLAN

In August 2019, the Board approved the 2021-2024 Retention Plan. Under the 2021-2024 Retention Plan, eligible employees may be granted retention ~~units~~awards that let them receive their pro rata portion of a retention pool of $25 million per year for each of the plan years, and may also be granted appreciation units which allow the employee to receive their pro-rata portion of an appreciation pool calculated as a specified percentage of Adjusted EBITDA in each of the plan ~~years, determined as follows:~~

~~For 2021, (A) 14% of the 2021-2024 Retention Plan Adjusted EBITDA for such calendar year, less (B) $25,000,000.~~

~~For 2022, (A) 14.5% of the 2021-2024 Retention Plan Adjusted EBITDA for such calendar year, less (B) $25,000,000.~~

~~For each of 2023 and 2024, (A) 15.0% of the 2021-2024 Retention Plan Adjusted EBITDA for such calendar year, less (B) $25,000,000.~~

Initial awards were granted under the 2021-2024 Retention Plan in August 2019, with subsequent awards to employees or consultants hired or retained after such date granted at the discretion of the administrator.

For certain participants in the event of the participant’s termination without cause or resignation for good reason, or termination by reason of death or disability, he or she will be eligible to receive a lump sum cash payment equal to his or her proportionate share (based on the number of retention units outstanding and eligible for payment as of such date) of the unpaid portion of the total retention pool for the remaining term of the 2021-2024 Retention Plan as of the date of termination, which amount shall be paid in cash within 60 days following the date of termination. In the event of such a termination, such participant will also remain eligible to receive payments in respect of his or her appreciation units for all vesting dates that have not yet occurred prior to the date of such termination, which payments will be made as and when such payments are made to other appreciation unit holders.

For all other participants, in the event of termination due to death or disability on or after January 1, 2021, but prior to December 31, 2024, the participant will receive a payment in respect of his or her proportionate share (based on the number of retention units outstanding and eligible for payment as of such date) of the unpaid portion of the total retention pool for the remaining term of the 2021-2024 Retention Plan as of the date of termination, pro-rated for the portion of the period between January 1, 2021 and December 31, 2024 that has elapsed prior to termination, payable within 60 days following termination. In addition, the participant will retain the right to receive payments for a pro-rated portion of his or her appreciation units for

~~-22-~~

~~all vesting dates that have not yet occurred prior to the date of such termination, which payments will be made as and when such payments are made to other appreciation unit holders.~~

All payments triggered by a termination of employment or service will be subject to the execution of a general release of claims in favor of the Company. If a participant terminates service for any reason other than as described above, the participant will immediately forfeit all unvested retention units and appreciation units.

In October 2020, 43,000 appreciation units under the 2021-2024 Retention Plan were cancelled. Pursuant to an amendment to the 2017-2020 Retention Plan adopted in October 2020, these cancelled appreciation units are considered “retired units” for purposes of the plan, and will be deemed to be outstanding and eligible for payment solely for purposes of determining the per unit value to be paid to participants, but 0 amounts will be paid with respect to such retired units.years.

The Company recognized compensation expenses in respect of retention bonus and appreciation unit awards under its appreciation and retention plans of ~~$30.2~~$24.9 million and ~~$21.2~~$29.8 million during the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $60.0 million and $32.2 million during the six months ended June 30, 2021 and 2020,~~ respectively.

The Company has also granted retention awards to key individuals associated with acquired companies as an incentive to retain those individuals on a long-term basis. The Company recognized compensation expenses associated with these development-related retention payments of ~~$3.7~~$0.6 million and ~~$4.6~~$3.1 million during the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $6.8 million and $9.5 million during the six months ended June 30, 2021 and 2020,~~ respectively.

NOTE ~~13.~~14. INTEREST EXPENSE AND OTHER, NET

Interest expense and other, net are as follows (in millions):


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
		2021		2020		2021		2020				2022		2021
Interest expense	Interest expense	$	23.1	$	48.4	$	101.1	$	101.8	Interest expense		$	23.7	$	78.0
Interest income	Interest income	(0.1)		(0.2)		(0.3)		(0.3)		Interest income		(0.8)		(0.2)
Foreign currency exchange, net		0.6		(2.5)		(0.2)		2.4
Foreign currency translation differences, net										Foreign currency translation differences, net		4.6		(0.8)
Other	Other	0.4		0.3		(0.9)		0.4		Other		—		(1.3)
Total interest expense and other, net	Total interest expense and other, net	$	24.0	$	46.0	$	99.7	$	104.3	Total interest expense and other, net		$	27.5	$	75.7

NOTE ~~14.~~15. INCOME TAXES


		Three months ended June 30,						Six months ended June 30,							Three months ended March 31,
(in millions, except tax rate)	(in millions, except tax rate)	2021			2020			2021			2020			(in millions, except tax rate)		2022			2021
Income before income taxes	Income before income taxes	$	141.4		$	(118.0)		$	196.0		$	(63.1)		Income before income taxes		$	92.9		$	54.6
Provision for income taxes	Provision for income taxes	$	51.4		$	21.6		$	70.3		$	40.7		Provision for income taxes		$	9.7		$	18.9
Effective tax rate	Effective tax rate	36.4		%	(18.3)		%	35.9		%	(64.5)		%	Effective tax rate		10.4		%	34.6		%

The effective income tax rate for the three months ended ~~June 30, 2021~~March 31, 2022 was ~~36.4%~~10.4% compared to ~~(18.3)%~~34.6% for the three months ended ~~June 30, 2020. The effective income tax rate for the six months ended June 30, 2021 was 35.9% compared to (64.5)% for the six months ended June 30, 2020.~~March 31, 2021. The effective tax rates were determined using a worldwide estimated annual effective tax rate and took discrete items into consideration. The primary ~~differences~~difference between the effective tax rate and the 21% federal statutory rate for the three ~~and six~~ months ended ~~June 30, 2021 include~~March 31, 2022 was due to a discrete tax ~~positions that do not meet~~benefit for the ~~more likely than not standard, the impact~~release of ~~repatriation of the undistributed earnings of~~a valuation allowance on certain foreign ~~subsidiaries and~~deferred tax ~~rates in foreign jurisdictions &~~assets resulting from the ~~relative amounts~~commencement of ~~income earned in those jurisdictions.~~changes to our organizational structure. The primary differences between the effective tax rate and the 21% federal statutory rate for the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 were

-21-

due to tax rates in foreign jurisdictions &and the relative amounts of income earned in those jurisdictions, ~~and significant non-deductible stock-based compensation expense for certain restricted stock units granted during~~ the ~~period.~~

~~-23-~~

The Company continues to monitor tax implications resulting from new legislation passed in response to the COVID-19 pandemic in the federal, state and foreign jurisdictions where it has an income tax expense. The impact of ~~COVID-19 pandemic related tax-measures recently enacted were not material for~~repatriation of the ~~three~~undistributed earnings of certain foreign subsidiaries and ~~six months ended June 30, 2021.~~the inclusion of Global Intangible Low-Taxed Income.

NOTE ~~15.~~16. ACCUMULATED OTHER COMPREHENSIVE INCOME

The following ~~table shows~~tables show a summary of changes in accumulated other comprehensive income (loss), net of tax, by component for the three ~~and six~~ months ended ~~June 30, 2021:~~March 31, 2022 and 2021 (in millions):

Foreign Currency Translation Interest Rate Swaps Forward Contracts Total
Balance as of January 1, 2021 $ 16.7 $ 0 $ 0 $ 16.7
Other comprehensive income (loss) before reclassifications (9.9) 0.7 (1.1) (10.3)
Amounts reclassified from accumulated other comprehensive income (loss) 0 0 0.3 0.3
Balance as of March 31, 2021 6.8 0.7 (0.8) 6.7
Other comprehensive income (loss) before reclassifications 2.8 (3.2) 1.1 0.7
Amounts reclassified from accumulated other comprehensive income (loss) 0 0.5 0 0.5
Balance as of June 30, 2021 $ 9.6 $ (2.0) $ 0.3 $ 7.9


	Foreign Currency Translation		Interest Rate Swaps		Foreign Currency Derivative Contracts		Total
Balance as of January 1, 2022	$	(1.9)	$	4.2	$	0.9	$	3.2
Other comprehensive income (loss) before reclassifications	(3.3)		17.7		0.3		14.7
Amounts reclassified from accumulated other comprehensive income (loss)	—		0.8		(0.1)		0.7
Balance as of March 31, 2022	$	(5.2)	$	22.7	$	1.1	$	18.6


	Foreign Currency Translation		Interest Rate Swaps		Foreign Currency Derivative Contracts		Total
Balance as of January 1, 2021	$	16.7	$	—	$	—	$	16.7
Other comprehensive income (loss) before reclassifications	(9.9)		0.7		(1.1)		(10.3)
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		0.3		0.3
Balance as of March 31, 2021	$	6.8	$	0.7	$	(0.8)	$	6.7

NOTE ~~16.~~17. NET INCOME ~~(LOSS)~~ ATTRIBUTABLE TO COMMON STOCKHOLDERS

The following table sets forth the computation of basic and diluted net income ~~(loss)~~ per share attributable to common stockholders (in millions, except per share data):

Three months ended
June 30, Six months ended
June 30,
2021 2020 2021 2020
Numerator:
Net income (loss) $ 90.0 $ (139.6) $ 125.7 $ (103.8)
Denominator:
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic 409.6 378.6 408.1 378.3
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted 411.7 378.6 410.6 378.3
Net income (loss) per share, basic $ 0.22 $ (0.37) $ 0.31 $ (0.27)
Net income (loss) per share, diluted $ 0.22 $ (0.37) $ 0.31 $ (0.27)


	Three months ended March 31,
		2022		2021
Numerator:
Net income		$	83.2	$	35.7
Denominator:
Weighted-average shares used in computing net income per share attributable to common stockholders, basic		412.0		406.5
Weighted-average shares used in computing net income per share attributable to common stockholders, diluted		412.5		409.5
Net income per share, basic		$	0.20	$	0.09
Net income per share, diluted		$	0.20	$	0.09

-22-

The following outstanding employee equity awards were excluded from the calculation of diluted net income ~~(loss)~~ per share because their effect would have been anti-dilutive for the periods presented:


		June 30,			Three months ended March 31,
		2021	2020		2022	2021
Stock options	Stock options	7,637,213	8,000,000	Stock options	17,258,351	7,942,431
RSUs	RSUs	4,761,896	90,000	RSUs	9,798,613	4,937,521
Total	Total	12,399,109	8,090,000	Total	27,056,964	12,879,952

~~-24-~~In addition, 3,478,378 PSUs were excluded from the calculation of diluted net income per share for the three months ended March 31, 2022 because the minimum performance measures have not yet been met.

NOTE ~~17.~~18. SUBSEQUENT EVENTS

The Company performed a review for subsequent events through the date of these financial statements and noted no ~~other~~ material items for disclosure.

~~-25-~~-23-

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Overview

We are one of the world’s leading developers of mobile games creating fun, innovative experiences that entertain and engage our users. We have built best-in-class live game operations services and a proprietary technology platform to support our portfolio of games which enable us to drive strong user engagement and monetization. Our games are free-to-play, and we are experts in providing novel, curated in-game content and offers to our users, at optimal points in their game journeys. We own some of the most iconic free-to-play mobile games in the world, many of which are the #1 games in their respective genres, based on total in-app purchases on iOS App Store and Google Play Store for the six months ended June 30, 2021 worldwide, according to App Annie. Our players love our games because they are fun, creative, engaging, and kept fresh through a steady release of new features that are customized for different player segments.

Components of our Results of Operations

Revenues

We primarily derive revenue from the sale of virtual items associated with online games.

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

Our games are played primarily on various third-party platforms for which the platform providers collect proceeds from our customers and pay us an amount after deducting platform fees. We are primarily responsible for fulfilling the virtual items, have the control over the content and functionality of games and have the discretion to establish the virtual items’ prices. Therefore, we are the principal and, accordingly revenues are recorded on a gross basis. Payment processing fees paid to platform providers are recorded within cost of revenue.

Cost of revenue

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

Research and development

Research and development consists of salaries, bonuses, benefits, other compensation, including stock-based compensation and allocated overhead, related to engineering, research, and development. In addition, research and development expenses include depreciation and amortization expenses associated with assets associated with our research and development efforts. We expect research and development expenses will increase in absolute dollars as our business expands and as we increase our personnel headcount to support the expected growth in our technical development and operating activities. We also 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. In addition, sales and

~~-26-~~

marketing expenses include depreciation and amortization expenses associated with assets related to our sales and marketing

-24-

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.

General and administrative

General and administrative expenses consist of salaries, bonuses, benefits, and other compensation, including stock-based compensation, for all our corporate support functional areas, including our senior leadership. In addition, general and administrative expenses include outsourced professional services such as consulting, legal and accounting services, taxes and dues, insurance premiums, and costs associated with maintaining our property and infrastructure. 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, and legal settlement expenses, as components of general and administrative expense. We expect non-discrete general and administrative expenses will increase in absolute dollars to support our expected growth initiatives.

Interest expense and other, net

Interest expense is primarily related to borrowings under our Credit Agreement dated as of December 10, 2019 ~~(the "Credit Agreement"~~(as amended, the “Credit Agreement”). ~~We amended our Credit Agreement in March 2021, including amending the interest rates thereunder.~~ Our interest expense includes amortization of deferred financing costs and is offset by interest income earned on the investment of excess cash and cash ~~equivalents and short-term bank deposits.~~equivalents. 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.

Provision for income taxes

The provision for income taxes consists of current income taxes in the various jurisdictions where we are subject to taxation, primarily the United States, the United Kingdom and Israel, as well as deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and ~~was determined using a worldwide estimated annual effective~~liabilities in each of these jurisdictions for financial reporting purposes and the amounts used for income tax ~~rate and took discrete items into consideration.~~purposes. Under current U.S. tax law, the federal statutory tax rate applicable to corporations is 21%. Our effective tax rate can fluctuate based on various factors, including our financial results and the geographic mix to which they relate, the applicability of special tax regimes, changes in our business or operations, examination-related developments and uncertain tax positions, and changes in tax law.

Consolidated Operating Results of Playtika Holding Corp

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

Daily Active Users

We define Daily Active Users, or DAUs, as the number of individuals who played one of our games during a particular day. Under this metric, an individual who plays two different games on the same day is counted as two DAUs. Similarly, an individual who plays the same game on two different platforms (e.g., web and mobile) or on two different social networks on the same day would be counted as two Daily Active Users. Average Daily Active Users for a particular period is the average of the DAUs for each day during that period. We believe that Daily Active Users is a useful metric to measure the scale and usage of our game platform.

Daily Paying Users

We define Daily Paying Users, or DPUs, as the number of individuals who purchased, with real world currency, virtual currency or items in any of our games on a particular day. Under this metric, an individual who makes a purchase of virtual

-25-

currency or items in two different games on the same day is counted as two DPUs. Similarly, an individual who makes a purchase of virtual currency or items in any of our games on two different platforms (e.g., web and mobile) or on two different social networks on the same day ~~would~~could be counted as two DPUs. Average DPUs for a particular period is the

~~-27-~~

average of the DPUs for each day during that period. We believe that Daily Paying Users is a useful metric to measure game monetization.

Daily Payer Conversion

We define Daily Payer Conversion as (i) the total number of DPUs, (ii) divided by the number of DAUs on a particular day. Average Daily Payer Conversion for a particular period is the average of the Daily Payer Conversion rates for each day during that period. We believe that Daily Payer Conversion is a useful metric to describe the monetization of our users.

Average Revenue per Daily Active User

We define Average Revenue per Daily Active User, or ARPDAU, as (i) the total revenue in a given period, (ii) divided by the number of days in that period, (iii) divided by the average DAUs during the period. We believe that ARPDAU is a useful metric to describe monetization.

Monthly Active Users

We define Monthly Active Users, or MAUs, as the number of individuals who played one of our games during a calendar month. Under this metric, an individual who plays two different games in the same calendar month is counted as two MAUs. Similarly, an individual who plays the same game on two different platforms (e.g., web and mobile) or on two different social networks during the same month would be counted as two MAUs. Average Monthly Active Users for a particular period is the average of the MAUs for each month during that period. We believe that Monthly Active Users is a useful metric to measure the scale and reach of our platform, but we base our business decisions primarily on daily performance metrics, which we believe more accurately reflect user engagement with our games.

Results of Operations

The table below shows 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. Dollars, user statistics are presented in millions of users, and ARPDAU is presented in U.S. Dollars.


		Three months ended June 30,						Six months ended June 30,							Three months ended March 31,
(in millions, except percentages, Average DPUs and ARPDAU)	(in millions, except percentages, Average DPUs and ARPDAU)	2021			2020			2021			2020			(in millions, except percentages, Average DPUs and ARPDAU)		2022			2021
Revenues	Revenues	$	659.2		$	650.5		$	1,298.1		$	1,184.7		Revenues		$	676.9		$	638.9
Total cost and expenses	Total cost and expenses	493.8			722.5			1,002.4			1,143.5			Total cost and expenses		556.5			508.6
Operating income (loss)		165.4			(72.0)			295.7			41.2
Operating income														Operating income		120.4			130.3
Net income														Net income		83.2			35.7
Adjusted EBITDA	Adjusted EBITDA	264.4			283.2			522.4			469.4			Adjusted EBITDA		220.5			258.0

Non-financial performance metrics	Non-financial performance metrics													Non-financial performance metrics
Average DAUs	Average DAUs	10.4			11.8			10.4			11.7			Average DAUs		10.1			10.4
Average DPUs (in thousands)	Average DPUs (in thousands)	300			315			298			293			Average DPUs (in thousands)		323			296
Average Daily Payer Conversion	Average Daily Payer Conversion	2.9		%	2.7		%	2.9		%	2.5		%	Average Daily Payer Conversion		3.2		%	2.8		%
ARPDAU	ARPDAU	$	0.70		$	0.61		$	0.69		$	0.56		ARPDAU		$	0.74		$	0.68
Average MAUs	Average MAUs	36.1			36.1			33.7			36.6			Average MAUs		31.7			31.4

~~-28-~~-26-

Comparison of the three and ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 versus the three and ~~six~~three months ended ~~June 30, 2020~~March 31, 2021


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
		2021		2020		2021		2020				2022	2021
(in millions)	(in millions)	(Unaudited)								(in millions)			(Unaudited)
Revenues	Revenues	$	659.2	$	650.5	$	1,298.1	$	1,184.7	Revenues			$	676.9	$	638.9
Cost of revenue	Cost of revenue	$	183.9	$	192.6	$	366.9	$	358.5	Cost of revenue			$	186.9	$	183.0
Research and development	Research and development	91.8		65.8		177.0		126.6		Research and development			112.7		85.2
Sales and marketing	Sales and marketing	146.5		125.8		286.6		251.1		Sales and marketing			179.7		140.1
General and administrative	General and administrative	71.6		338.3		171.9		407.3		General and administrative			77.2		100.3
Total costs and expenses	Total costs and expenses	$	493.8	$	722.5	$	1,002.4	$	1,143.5	Total costs and expenses			$	556.5	$	508.6

Revenues

Revenues for the three months ended ~~June 30, 2021~~March 31, 2022 increased by ~~$8.7~~$38.0 million when compared with the same period of ~~2020. Revenues for the six months ended June 30, 2021 increased by $113.4 million when compared with the same period of 2020.~~2021. The increase in revenues was primarily due to the acquisition of Reworks in the third quarter of 2021, our ongoing improvements to monetization, new content and product features, and increased engagement across our broader portfolio of games.

Cost of revenue

Cost of revenue for the three ~~month~~months ended ~~June 30, 2021 decreased~~March 31, 2022 increased by ~~$8.7~~$3.9 million when compared with the same period of ~~2020, primarily as a result~~2021. The favorable impact of ~~a larger percentage of our revenues being derived through our proprietary platforms where we pay lower fees to facilitate the revenue transactions.~~

Cost of revenue for the six months ended June 30, 2021 increased by $8.4 million when compared with the same period of 2020. The increase in cost of revenue was primarily due to increased platform fees associated with increased revenues and increased amortization expense for recently capitalized software development costs, both of which were partially offset by the reduced platform fees associated with a higher percentage of our revenues being derived through our ~~proprietary platforms.~~direct-to-consumer platforms was more than offset by the increased platform fees associated with revenue from Reworks, and an increase in amortization expense for recently capitalized software development costs.

Research and development expenses

Research and development expenses for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 increased by ~~$26.0~~$27.5 million ~~and $50.4 million, respectively,~~ when compared with the same periods of 2020. The formula for determining the payment amounts under the 2017-2020 retention plan resulted in expense under that plan being recognized on an accelerated basis, with higher expense recognized in the earlier years of the plan. Based upon a change2021. In addition to the ~~structure~~impact of how award payments are determined within the terms of the Playtika Holding Corp. Retention Plan (the “2021-2024 Retention Plan”) as compared to the 2017-2020 plan, expense under the current plan is required to be recognized ratably over the term of the plan. As a result, when comparing the three and six month periods ended June 30, 2021increased expenses associated with the ~~same periods~~acquisition of ~~2020, long-term compensation expense under~~Reworks, the respective retention plan included within research and development expenses has increased by approximately $1.5 million and $3.1 million, respectively. In addition, the introduction of stock-based compensation plans has resulted in approximately $7.0 million and $13.5 million, respectively, in additional research and development expense for the three and six month periods ended June 30, 2021 when compared to the same periods of 2020. The remaining increase in research and development expenses was primarily due to increased headcount and payroll costs, ~~partially offset by a reduction in our third-party hosting costs.~~and increased facilities costs associated with additional leased premises.

~~-29-~~

Sales and marketing expenses

Sales and marketing expenses for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 increased by ~~$20.7~~$39.6 million ~~and $35.5 million, respectively,~~ when compared with the same period of ~~2020. As discussed above, the accelerated recognition of long-term compensation expense under the 2017-2020 retention plan as opposed~~2021. In addition to the ~~ratable recognition~~impact of ~~such expense under the 2021-2024 Retention Plan resulted in an increase in expense within sales and marketing~~increased expenses ~~of approximately $2.8 million and $6.1 million, respectively, when comparing the three and six month periods ended June 30, 2021~~associated with the ~~prior year periods. In addition, our stock-based compensation plans resulted in approximately $3.2 million and $6.0 million, respectively, in additional sales and marketing expense for~~acquisition of Reworks, the ~~three and six month periods ended June 30, 2021, when compared with the prior year periods. The remaining~~ increases in sales and marketing expenses for ~~both~~ the three ~~and six~~ month ~~periods~~period ending ~~June 30, 2021~~March 31, 2022 were primarily due to increased media buy expenses, increased headcount and payroll costs, and increased ~~media buy expenses.~~facilities costs associated with additional leased premises.

General and administrative expenses

General and administrative expenses for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 decreased by ~~$266.7~~$23.1 million ~~and $235.4 million, respectively,~~ when compared with the same period of 2020. General and Administrative expense includes $15.3 million and $30.3 million, respectively, of stock-based compensation expense for the three and six months ended June 30, 2021, as compared with $260.3 million and $260.3 million, respectively, for the comparable periods of 2020. Also included in general and administrative expenses for the three and six months ended June 30, 2020, with no comparable amounts for the same periods of 2021, are expenses associated with a legal settlement of approximately $37.6 million. Also included in general and administrative expenses for the six months ended June 30, 2020 are expenses for contingent consideration and merger and acquisition related activity of approximately $29.9 million, compared with $6.8 million for the six months ended June 30, 2021. Included in general and administrative expenses for the ~~six~~three months ended ~~June 30,~~March 31, 2022, with no comparable amounts for the three months ended March 31, 2021, is a reduction of contingent consideration of $23.0 million. Included in general and administrative expenses for the three months ended March 31, 2021, with no comparable amounts for the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2022, are bonus expenses of approximately ~~$35.2~~$35.4 million paid as a result of the successful initial public offering of ~~the Company’s~~our stock in January 2021. ~~Adjusting for~~Excluding these specific discrete items, general and

-27-

administrative expenses ~~for the three and six months ended June 30, 2021~~ would have increased ~~by $15.9 million and $20.1 million, respectively,~~during the three months ending March 31, 2022 when compared ~~to the same periods of 2020. These increases were~~with 2021, primarily as a result of ~~an increase~~increased headcount and payroll costs and expenses incurred in ~~long-term compensation expense under~~connection with the ~~retention plan, partially offset by other immaterial changes.~~evaluation of strategic alternatives for the Company.

Other Factors Affecting Net Income


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
		2021		2020		2021		2020				2022		2021
(in millions)	(in millions)	(Unaudited)								(in millions)		(Unaudited)
Interest expense	Interest expense	$	23.1	$	48.4	$	101.1	$	101.8	Interest expense		$	23.7	$	78.0
Interest income	Interest income	(0.1)		(0.2)		(0.3)		(0.3)		Interest income		(0.8)		(0.2)
Foreign currency exchange, net	Foreign currency exchange, net	0.6		(2.5)		(0.2)		2.4		Foreign currency exchange, net		4.6		(0.8)
Other	Other	0.4		0.3		(0.9)		0.4		Other		—		(1.3)
Provision for income taxes	Provision for income taxes	51.4		21.6		70.3		40.7		Provision for income taxes		9.7		18.9

Interest expense

In March 2021, ~~the Company~~we refinanced ~~its~~our existing term loan with a combination of a new term loan and fixed-rate senior notes. The refinancing transaction was considered a debt-modification for accounting purposes. As a result, a portion of the original issue discount incurred when the original term loan was entered into has been carried over to the new term loan, and approximately $22.9 million of this original issue discount was written off as interest expense during the first quarter 2021. In addition, ~~the Company~~we recorded approximately $14.5 million in expense associated with the Refinancing Transaction. ~~Prior to~~Excluding the impact of these ~~one-time charges to~~discrete components of interest expense, interest expense declined by approximately $16.9 million for the ~~six~~three months ended ~~June 30,~~March 31, 2022 when compared to 2021, ~~was lower than interest expense in the same period~~primarily as a result of ~~2020 due to~~ lower interest ~~rates.~~

~~-30-~~

rates on our outstanding indebtedness.

Provision for income taxes

The effective income tax rate for the three months ended ~~June 30, 2021~~March 31, 2022 was ~~36.4%~~10.4% compared to ~~(18.3)%~~34.6% for the three months ended ~~June 30, 2020. The effective income tax rate for the six months ended June 30, 2021 was 35.9% compared to (64.5)% for the six months ended June 30, 2020.~~March 31, 2021. The effective tax rates were determined using a worldwide estimated annual effective tax rate and took discrete items into consideration. The primary ~~differences~~difference between the effective tax rate and the 21% federal statutory rate for the three ~~and six~~ months ended ~~June 30, 2021 include~~March 31, 2022 was due to a discrete tax ~~positions that do not meet~~benefit for the ~~more likely than not standard, the impact~~release of ~~repatriation of the undistributed earnings of~~a valuation allowance on certain foreign ~~subsidiaries and~~deferred tax ~~rates in foreign jurisdictions &~~assets resulting from the ~~relative amounts~~commencement of ~~income earned in those jurisdictions.~~changes to our organizational structure. The primary ~~differences~~difference between the effective tax rate and the 21% federal statutory rate for the three ~~and six~~ months ended ~~June 30, 2020 were~~March 31, 2021 was due to a discrete tax ~~rates in~~benefit for the release of a valuation allowance on certain foreign jurisdictions & the relative amounts of income earned in those jurisdictions and significant non-deductible stock-based compensation expense for certain restricted stock units granted during the period.deferred tax assets.

Reconciliation of Adjusted EBITDA to Net Income

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

Below is a reconciliation of Adjusted EBITDA to net income, the closest GAAP financial measure. We define 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)~~(vii) acquisition and related expenses, ~~(ix)~~(viii) expense under our long-term compensation plans, ~~(x)~~(ix) M&A-related retention payments, and ~~(xi)~~(x) certain other ~~items, including impairments.~~items. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by revenues.

We supplementally present Adjusted EBITDA and Adjusted EBITDA Margin because these are key operating measures used by our management to assess our financial performance. Adjusted EBITDA adjusts for items that we believe do not reflect the ongoing operating performance of our business, such as certain noncash items, unusual or infrequent items or items that change from period to period without any material relevance to our operating performance. Management believes Adjusted EBITDA and Adjusted EBITDA Margin are useful to investors and analysts in highlighting trends in our operating

-28-

performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management uses Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against other peer companies using similar measures. We evaluate Adjusted EBITDA and Adjusted EBITDA Margin in conjunction with our results according to GAAP because we believe they provide investors and analysts a more complete understanding of factors and trends affecting our business than GAAP measures alone.

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

~~-31-~~


		Three months ended June 30,						Six months ended June 30,							Three months ended March 31,
(in millions)	(in millions)	2021			2020			2021			2020			(in millions)		2022			2021
Net income (loss)		$	90.0		$	(139.6)		$	125.7		$	(103.8)
Net income														Net income		$	83.2		$	35.7
Provision for income taxes	Provision for income taxes	51.4			21.6			70.3			40.7			Provision for income taxes		9.7			18.9
Interest expense and other, net	Interest expense and other, net	24.0			46.0			99.7			104.3			Interest expense and other, net		27.5			75.7
Depreciation and amortization	Depreciation and amortization	33.3			29.5			66.5			56.7			Depreciation and amortization		39.5			33.2
EBITDA	EBITDA	198.7			(42.5)			362.2			97.9			EBITDA		159.9			163.5
Stock-based compensation(1)	Stock-based compensation(1)	25.5			260.3			49.8			260.3			Stock-based compensation(1)		39.8			24.3
Acquisition and related expenses(2)		6.3			0.4			42.0			29.9
Legal settlement(3)		—			37.6			—			37.6
Long-term cash compensation(4)		30.2			21.2			60.0			32.2
Contingent consideration														Contingent consideration		(23.0)			—
Long-term cash compensation(2)														Long-term cash compensation(2)		24.9			29.8
Acquisition and related expenses(3)														Acquisition and related expenses(3)		9.0			35.7
M&A related retention payments~~(5)~~(4)	M&A related retention payments~~(5)~~(4)	3.7			4.6			6.8			9.5			M&A related retention payments~~(5)~~(4)		(1.9)			3.1
Other one-time items(5)	Other one-time items(5)	—			1.6			1.6			2.0			Other one-time items(5)		11.8			1.6
Adjusted EBITDA	Adjusted EBITDA	$	264.4		$	283.2		$	522.4		$	469.4		Adjusted EBITDA		$	220.5		$	258.0
Net income (loss) margin		13.7		%	(21.5)		%	9.7		%	(8.8)		%
Net income margin														Net income margin		12.3		%	5.6		%
Adjusted EBITDA margin	Adjusted EBITDA margin	40.1		%	43.5		%	40.2		%	39.6		%	Adjusted EBITDA margin		32.6		%	40.4		%

_______

(1) Reflects, for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ stock-based compensation expense related to the issuance of equity awards to certain of our employees.

(2)Amounts for the six months ended June 30, 2021 primarily relate to bonus expenses paid as a result of the successful initial public offering of the Company’s stock in January 2021. Amounts for the three and six months ended June 30, 2020 include (i) contingent consideration expense with respect to our acquisitions of Seriously and Supertreat, and (ii) third-party fees for actual or planned acquisitions, including related legal, consulting and other expenditures.

~~(3)~~ ~~Reflects a legal settlement expense of $37.6 million for the three and six months ended June 30, 2020.~~

~~(4)~~ Includes expenses recognized for grants of annual cash awards to employees pursuant to our Retention Plans, which awards are incremental to salary and bonus payments, and which plans expire in 2024. For more information, see Note ~~12,~~ 13, Appreciation and Retention Plan, of our consolidated financial statements included in this document.

~~(5)~~(3) Amount for the three months ended March 31, 2022, primarily relates to expenses incurred by the Company in connection with the evaluation of strategic alternatives for the Company. Amount for the three months ended March 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.

(4) Includes retention awards to key individuals associated with acquired companies as an incentive to retain those individuals on a long-term basis. ~~For more information, see Note 12,~~ The amount for the three months ended March 31, 2022, primarily relates to the reduction of contingent consideration payable to employees of the Company that were also selling Shareholders of Reworks. This portion of the contingent consideration is being accounted for as an M&A retention payment to these employees, with changes in the amounts recognized as compensation expense.

(5)~~Appreciation~~ Amount for the three months ended March 31, 2022, consists of $8.8 million incurred by the Company severance and ~~Retention Plan, of our consolidated financial statements included~~$3.0 million incurred by the Company for relocation and support provided to employees due to the war in ~~this document.~~Ukraine.

-29-

Liquidity and Capital Resources

Capital ~~Spending~~spending

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

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 ~~pursuant to the~~under our Credit ~~Agreement.~~Facility and Revolver. Our cash and cash equivalents and short-term bank deposits totaled ~~$1,229.7~~$1,107.9 million and ~~$520.1~~$1,117.1 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. As of ~~June 30, 2021~~both March 31, 2022 and December 31, ~~2020,~~2021, we had $600 ~~million and $350~~ million in additional borrowing capacity pursuant to our Revolving Credit ~~Facility (as defined below), respectively.~~Facility. Payments of short-term debt obligations and other commitments are expected to be made from cash on ~~hand~~the balance sheet and operating cash flows. Long-term obligations are expected to be paid through operating cash flows, or, if necessary, borrowings under our Revolving Credit Facility or, if necessary, additional term loans or issuances of equity.

~~-32-~~

Our restricted cash totaled ~~$2.7~~$2.0 million at ~~June 30, 2021~~both March 31, 2022 and ~~$3.5 million at~~ December 31, ~~2020.~~2021. 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.

Our ability to fund our operations, pay our debt obligations and fund planned capital expenditures depends, in part, upon economic and other factors that are beyond our control, and disruptions in capital markets could impact our ability to secure additional funds through financing activities. We believe that our cash and cash equivalents balance, short-term 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.

Cash ~~Flows~~flows

The following tables present a summary of our cash flows for the periods ~~indicated:~~indicated (in millions):


		Six months ended June 30,					Three months ended March 31,
(in millions)		2021		2020
Net cash flows provided by operating activities		$	189.9	$	183.1
							2022		2021
Net cash flows provided by (used in ) operating activities						Net cash flows provided by (used in ) operating activities	$	58.1	$	(56.4)
Net cash flows used in investing activities	Net cash flows used in investing activities	(98.6)		(41.7)		Net cash flows used in investing activities	(180.3)		(71.9)
Net cash flows provided by (used in) financing activities	Net cash flows provided by (used in) financing activities	570.7		(112.8)		Net cash flows provided by (used in) financing activities	(6.2)		577.0
Effect of foreign exchange rate changes on cash and cash equivalents	Effect of foreign exchange rate changes on cash and cash equivalents	(3.2)		(0.1)		Effect of foreign exchange rate changes on cash and cash equivalents	(2.8)		(5.9)
Net change in cash, cash equivalents and restricted cash	Net change in cash, cash equivalents and restricted cash	$	658.8	$	28.5	Net change in cash, cash equivalents and restricted cash	$	(131.2)	$	442.8

Operating ~~Activities~~activities

Net cash flows provided by operating activities for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 was ~~$189.9~~$58.1 million ~~when~~ compared with ~~$183.1~~cash flows used in operating activities of $56.4 million for the same period of ~~2020.~~2021. Net cash flows provided by operating activities for each period primarily consisted of net income generated during the period, exclusive of non-cash expenses such as depreciation, amortization, ~~and~~ stock-based compensation and changes in the fair value of contingent consideration payable,

-30-

with changes in working capital impacted by the payment of annual and incentive bonuses ~~the payment of our prior-year legal settlement,~~ and payment of long-term cash compensation during the first ~~half of 2021, combined with~~quarter and other normal working-capital timing differences.

Investing ~~Activities~~activities

Net cash flow used in investing activities for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 was ~~$98.6~~$180.3 million when compared with ~~$41.7~~$71.9 million for the same period of ~~2020.~~2021. Cash flows used in investing activities generally includes outflows related to business combinations, the purchase and capitalization of ~~assets. In addition, cash outflows for~~assets and the ~~six months ended June 30, 2021 includes $50 million for amounts placed into~~investment in short-term bank deposits.

Financing ~~Activities~~activities

Net cash flows ~~provided by~~used in financing activities for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 was ~~$570.7~~$6.2 million, compared to cash flows ~~used in~~provided by financing activities of ~~$112.8~~$577.0 million for the same period of ~~2020.~~2021. Financing activity cash flows for the ~~six~~three months ended ~~June 30,~~March 31, 2022 primarily relate to repayments on our bank borrowings. Financing activity cash flows for the three months ended March 31, 2021 primarily relate to ~~the Company’s~~our initial public offering of its equity in January 2021, and the refinancing of its Old Term Loan (as defined below) in March 2021. ~~Financing activity cash flows for the six months ended June 30, 2020 primarily relate to repayments on the Company’s bank borrowings.~~

Capital ~~Resources~~resources

On December 10, 2019, we entered into $2,750 million of senior secured credit facilities (the “Credit Facilities”), consisting of a $250 million revolving credit facility (the “Revolving Credit Facility”), and a $2,500 million first lien term loan (the “Old Term Loan”). 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

~~-33-~~

such capacity, the "Administrative Agent") and collateral agent (in such capacity, the "Collateral Agent"). Proceeds borrowed under the Credit Facilities on the closing date were used to pay off the outstanding balance on our prior debt facility. On June 15, 2020, we increased the capacity of the Revolving Credit Facility to $350 million. On January 15, 2021, we increased the borrowing capacity of the Revolving Credit Facility from $350 million to $550 million.

On March 11, 2021, ~~amended~~ the Credit Agreement was amended pursuant to an Incremental Assumption Agreement No. 3 and Second Amendment to Credit Agreement (the “Second Amendment”).

The Second Amendment, among other things, effected a refinancing of Old Term Loan with a new $1.9 billion senior secured first lien term loan borrowed under the Credit Agreement (the “New Term Loan”), increased the Revolving Credit Facility to $600 million and extended the maturity of the Revolving Credit Facility to March 11, 2026. 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 Notes mature on March 15, 2029. Interest on the Notes will accrue at a rate of 4.250% per annum. Interest on the Notes ~~will be~~is payable semi-annually in cash in arrears on March 15 and September 15 of each year, commencing on September 15, 2021.

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 6,7, Debt, to the accompanying consolidated financial ~~statements.~~statements and in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2022.

COVID-19

The global pandemic associated with COVID-19 has caused major disruption to all aspects of the global economy and daily ~~life in recent months, particularly as quarantine and stay-at-home orders have been imposed by all levels of government.~~life. We have followed guidance by the United States, Israeli and other applicable foreign and local governments to protect our employees and operations during the pandemic and have implemented a remote working environment for our business. We cannot predict the potential impacts of the COVID-19 pandemic on our business or operations, but we continuously

-31-

monitor performance and other industry reports to assess the risk of future negative impacts as the disruptions of the COVID-19 pandemic continue to evolve.

Despite the challenges we have faced in light of the COVID-19 pandemic, the stay-at-home orders that were in place across the United States sporadically throughout the pandemic have generally been favorable to our business as a result of increased time spent with digital entertainment, including casual gaming and games involving socially interactive experiences.

The COVID-19 pandemic has resulted in and may continue to result in consumers spending a greater portion of their time at home and sustained demand for entertainment options, which may continue to benefit our financial results. We cannot predict the potential impacts of the COVID-19 pandemic on our business or operations, and there is no guarantee that these favorable trends will continue, particularly if the COVID-19 pandemic increases and the adverse consequences thereof in severity or continues for a protracted period of time, which could disrupt our operations, or put greater financial pressure on the economy and users’ discretionary income or spending habits. See “Risk Factors—Risks Related to Our Business—The recent COVID-19 pandemic and similar health epidemics, contagious disease outbreaks and public perception thereof, could significantly disrupt our operations and adversely affect our business, results of operations, cash flows or financial condition” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2022, for more information.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates.~~ We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate risk, investment risk, and foreign currency risk as follows:

Interest ~~Rate Risk~~rate risk

Our exposures to market risk for changes in interest rates relate primarily to our Term Loan and our Revolving Credit Facility. The Term Loan and our Revolving Credit Facility are floating rate facilities. Therefore, fluctuations in interest rates will impact the amount of interest expense we incur and have to pay.

In March 2021, we 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 as the counterparty to reduce our counterparty risk. Each swap requires ~~the Company~~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.

We had borrowings outstanding under our Term Loan with book values of ~~$1,850.1~~$1,841.0 million and ~~$2,314.4~~$1,843.8 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, which were subject to a weighted average interest rate of 2.89% and 2.85% ~~and 7.207%~~ for

~~-34-~~

the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 and the year ended December 31, ~~2020,~~2021, respectively. There were no borrowings against our Revolving Credit Facility at ~~June 30, 2021~~March 31, 2022 or December 31, ~~2020.~~2021.

A hypothetical 100 basis point increase or decrease in weighted average interest rates under our Term Loan would have increased or decreased our interest expense by $13.8 million over a twelve-month period.

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. A hypothetical 100 basis point increase or decrease in weighted average interest rates under our Term Loan and Revolving Credit Facility ~~based upon~~would not have had a material impact on the ~~face~~fair value of ~~such instruments and after consideration~~our Credit Facilities as of ~~the Company’s interest rate swap agreements, would increase our interest expense by $14.0 million over a twelve-month period.~~

~~We do not purchase or hold any derivative financial instruments for trading purposes.~~December 31, 2021.

Investment ~~Risk~~risk

We had cash and cash equivalents including restricted cash and cash equivalents totaling ~~$1,182.4~~$887.8 million and ~~$523.6~~$1,019.0 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. We also had short-term bank deposits of ~~$50.0~~$222.1 million and $100.1 million as of ~~June 30, 2021.~~March 31, 2022 and December 31, 2021, respectively. 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 deposits primarily consist of cash deposits and money market funds. We do not enter into

-32-

investments for trading or speculative purposes. Changes in rates would primarily impact interest income due to the relatively short-term nature of our investments. A hypothetical 100 basis point change in interest rates would have increased or decreased our interest income for a twelve-month period by an immaterial amount.

Foreign ~~Currency Risk~~currency risk

Our functional currency is the U.S. 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 ~~or ILS.~~(“ILS”). We 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, Canadian Dollar (“CAD”), Polish Zloty (“PLN”) and Romanian ~~Leu.~~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. Dollar is diversified across geographic regions and we incur expenses in the same currencies in these regions.

We have experienced and will continue to experience fluctuations in our net income as a result of transaction gains or losses related to remeasurement of our asset and liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded.

As of ~~June 30, 2021,~~March 31, 2022, we had ~~forward~~entered into derivative contracts ~~outstanding for an aggregate~~to purchase certain foreign currencies, including ILS, RON, PLN and CAD at future dates. The notional value of ~~130.6~~amounts hedged was approximately $191.3 million, ~~ILS,~~and all ~~which~~contracts are expected to mature during the ~~following~~upcoming 12 months.

Item 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the requirements of the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of ~~June 30, 2021,~~March 31, 2022, the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of ~~June 30, 2021.~~

~~-35-~~

March 31, 2022.

During the ~~three months~~quarter ended ~~June 30, 2021, the Company completed~~March 31, 2022, we migrated one of our acquired entities from their pre-existing general ledger system into our standard general ledger software, and we finalized the implementation of ~~an enterprise management performance~~a software package that automates our tracking of, accounting for and disclosure of our lease population. For the ~~Company will use~~quarter ended March 31, 2022, there were no other changes in internal control that have materially affected, or are reasonably likely to ~~facilitate consolidated~~materially affect, our internal control over financial reporting.

~~-36-~~-33-

Part II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

For a description of our legal proceedings, see Note 10, Commitments and Contingencies, included in Part I. Item I of this quarterly report on Form 10-Q.

Item 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, which factors could materially affect our business, financial condition, liquidity or future results. ~~There~~Other than the risk factors detailed below, there have been no material changes to the risk factors described in the “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, liquidity, results of operations, prospects or stock price.

Our systems and operations are vulnerable to damage or interruption from natural disasters, power losses, telecommunications failures, cyber-attacks, terrorist attacks, acts of war, human errors, break-ins and similar events.

We have in the past and may continue to experience disruption as a result of catastrophic events. For example, we have relocated personnel in our Ukraine and Belarus offices as a result of military conflict and political instability due to the Russian invasion of Ukraine. In addition, we previously maintained an office in Crimea, but were forced to close and relocate our personnel as a result of Crimea’s annexation by Russia in 2014. Additionally, our primary offices are located in Israel and we have several offices in Ukraine and a large office in Belarus, and are therefore subject to a heightened risk of military and political instability.

In the occurrence of a catastrophic event, including a global pandemic like the ongoing 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.

The ongoing military action between Russia and Ukraine could adversely affect our business, financial condition and results of operations, including our operations in Ukraine and Belarus.

On February 24, 2022, Russian military forces invaded Ukraine, with support from the government of Belarus, and sustained conflict and disruption in the region is likely. Although the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, increase in cyberattacks, as well as disruptions to our operations in Ukraine and Belarus.

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. We have also invested significant resources in Ukraine in the past. As a result, warfare, political turmoil or terrorist attacks in this region could negatively affect our Ukrainian operations and our business.

In addition, 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, including the impacts of the conflict in Ukraine. We have also invested significant resources in Belarus in the past. As a result, warfare, political turmoil or terrorist attacks in this region could negatively affect our operations in Belarus and our business.

-34-

We have developed and, in some cases, implemented humanitarian efforts, including food and medical supplies, as well as contingency plans to relocate work and/or personnel to other geographies, as appropriate. Our business continuity plans are designed to address known contingency scenarios to ensure that we have adequate processes and practices in place to protect the safety of our people and to handle potential impacts to our operations. Our humanitarian efforts, crisis management procedures, business continuity plans, and disaster recovery capabilities may not be effective at preventing or mitigating the effects of ongoing, prolonged or multiple crises, such as civil unrest, military conflict and a pandemic in a concentrated geographic area. The current events in the regions where we operate may pose security risks to our people, our facilities, our operations, and infrastructure, such as utilities and network services, and the disruption of any or all of them could materially adversely affect our business, financial conditions and results of operations, and cause volatility in the price of our securities. We are continuing to monitor the situation in Ukraine and Belarus and assess options in relation to our ongoing operations and our ability to continue to do business in the region.

Furthermore, due to the political uncertainty involving Russia and Ukraine, there is also an increased likelihood that the tensions could result in cyber-attacks or cybersecurity incidents that could either directly or indirectly impact our operations. Any attempts by cyber attackers to disrupt our services or systems, if successful, could harm our business, result in the misappropriation of funds, be expensive to remedy and damage our reputation or brand. Insurance may not be sufficient to cover significant expenses and losses related to such cyber-attacks and cybersecurity incidents.

We are actively monitoring the situation in Ukraine and assessing its impact on our business. We have no way to predict the progress or outcome of the conflict in Ukraine or its impacts in Ukraine, Russia or Belarus as the conflict, and any resulting government reactions, are rapidly developing and beyond our control. The extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have substantial impact on the global economy and our business for an unknown period of time. Any of the abovementioned factors could affect our business, financial condition and results of operations. Any such disruptions may also magnify the impact of other risks described in this Quarterly Report on Form 10-K or in our Annual Report on Form 10-K filed with the SEC on March 2, 2022.

Any disruption to our operations in Ukraine or Belarus may be prolonged and require us to reevaluate our operations in those countries, which may be more expensive and harm our business.

Our business may be affected by sanctions, export controls and similar measures targeting Russia and Belarus as well as other responses to Russia’s invasion of Ukraine.

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, launched an expansion of coordinated sanctions and export control measures, including:

•blocking sanctions on some of the largest state-owned and private Russian financial institutions (and their subsequent removal from SWIFT);

•blocking sanctions against Russian and Belarusian individuals, including the Russian 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;

•United Kingdom sanctions introducing restrictions on providing loans to, and dealing in securities issued by, persons connected with Russia;

•restrictions on access to the financial and capital markets in the European Union, as well as prohibitions on aircraft leasing operations;

•sanctions prohibiting most commercial activities of U.S. and EU persons in Crimea and Sevastopol; and

•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.

As the conflict in Ukraine continues, there can be no certainty regarding whether the governmental authorities in the United States, the European Union, the United Kingdom or other counties will impose additional sanctions, export controls or other measures targeting Russia, Belarus or other territories.

-35-

Our business must be conducted in compliance with applicable economic and trade sanctions laws and regulations, including those administered and enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the U.S. Department of Commerce, the United Nations Security Council and other relevant governmental authorities. We must be ready to comply with the existing and any other potential additional measures imposed in connection with the conflict in Ukraine. 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.

We review and monitor our contractual relationships with suppliers to establish whether any are target of the applicable sanctions. In the unlikely event that we identify a party with which we have a business relationship that is the target of applicable sanctions, we would immediately commence a legal analysis of what gives rise to the business relationship, including any contract, to estimate the most appropriate course of action to comply with the sanction regulations, together with the impact of a contractual termination according to the applicable law, and then proceed as required by the regulatory authorities. However, given the range of possible outcomes, the full costs, burdens, and limitations on our business may become significant.

Furthermore, even if an entity is not formally subject to sanctions, suppliers, customers and business partners of such entity may decide to reevaluate or cancel projects with such entity for reputational or other reasons. As result of the ongoing conflict in Ukraine, many U.S., European and other multi-national businesses across a variety of industries, including consumer goods and retail, food, energy, banking and finance, media and entertainment, tech, travel and logistics, manufacturing and others, have indefinitely suspended their operations and paused all commercial activities in Russia and Belarus. Depending on the extent and breadth of sanctions, export controls and other measures that may be imposed in connection with the conflict in Ukraine, it is possible that our business, financial condition and results of operations could be materially and adversely affected.

We may not be able to maintain adequate insurance, and our insurance may not provide adequate levels of coverage against claims.

We believe that we maintain insurance customary for businesses of our size and type. However, there are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure. 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. For example, in March 2022, our insurance broker notified us that we would be unable to renew our commercial general commercial liability insurance policy in Ukraine due to the current situation in Ukraine, resulting in loss of such insurance coverage in Ukraine, including for property damage, workers’ compensation and general commercial liability.

Such losses, or inability to maintain insurance, could adversely affect our business prospects, results of operations, cash flows and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

-36-

Item 5. Other Information

None.

-37-

Item 6. EXHIBITS


Exhibits						Description



~~4.1~~						Indenture, dated March 11, 2021, among Playtika Holding Corp., the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on March 11, 2021)
~~4.2~~						~~Form of 4.250% Senior Notes due 2029 (included in Exhibit 4.1) (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, as filed with the SEC on March 11, 202~~1)
~~10.1~~						Incremental Assumption Agreement No. 3 and Second Amendment to Credit Agreement, dated as of March 11, 2021, among Playtika Holding Corp., the subsidiary guarantors party thereto, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on March 11, 2021)
31.1						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1						Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2						Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document
101.SCH						Inline XBRL Taxonomy Extension Schema Document
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						Inline XBRL Taxonomy Extension Calculation Definition Document
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

__________

# Indicates management contract or compensatory plan.

-38-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.


			PLAYTIKA HOLDING CORP.
			Registrant

By:			/s/ Robert Antokol
			Robert Antokol
			Chief Executive Officer and Chairperson of the Board

By:			/s/ Craig Abrahams
			Craig Abrahams
			President and Chief Financial Officer
Dated as of ~~August 6, 2021~~May 10, 2022

-39-


	Share capital(1)
	Shares	Amount		Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings (Accumulated deficit)		Total stockholders' equity (deficit)
Balances at January 1, 2020	378.0	$	3.8	$	202.1	$	(2.9)	$	(1,818.5)	$	(1,615.5)
Net income	—	—		—		—		35.8		35.8
Other comprehensive loss	—	—		—		(2.3)		—		(2.3)
Balances at March 31, 2020	378.0	$	3.8	$	202.1	$	(5.2)	$	(1,782.7)	$	(1,582.0)
Net loss	—	—		—		—		(139.6)		(139.6)
Share-based compensation	—	—		260.3		—		—		260.3
Issuance of shares upon vesting of RSUs	13.1	0.1		(0.1)		—		—		—
Shares held for tax withholdings	—	—		(15.7)		—		—		(15.7)
Other comprehensive income	—	—		—		2.3		—		2.3
Balances at June 30, 2020	391.1	$	3.9	$	446.6	$	(2.9)	$	(1,922.3)	$	(1,474.7)


	Foreign Currency Translation		Interest Rate Swaps		Forward Contracts		Total
Balance as of January 1, 2021	$	16.7	$	0	$	0	$	16.7
Other comprehensive income (loss) before reclassifications	(9.9)		0.7		(1.1)		(10.3)
Amounts reclassified from accumulated other comprehensive income (loss)	0		0		0.3		0.3
Balance as of March 31, 2021	6.8		0.7		(0.8)		6.7
Other comprehensive income (loss) before reclassifications	2.8		(3.2)		1.1		0.7
Amounts reclassified from accumulated other comprehensive income (loss)	0		0.5		0		0.5
Balance as of June 30, 2021	$	9.6	$	(2.0)	$	0.3	$	7.9