Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39652 | |
Registrant Name | PLAYSTUDIOS, Inc. | |
Entity Incorporation, State Code | DE | |
Entity Tax Identification Number | 88-1802794 | |
Entity Address, Address Line One | 10150 Covington Cross Drive | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89144 | |
City Area Code | 725 | |
Local Phone Number | 877-7000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001823878 | |
Current Fiscal Year End Date | --12-31 | |
Class A common stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class A common stock | |
Trading Symbol | MYPS | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 117,573,136 | |
Redeemable warrants exercisable for one share of Class A common stock at an exercise price of $11.50 per share | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Redeemable warrants exercisable for one share of Class A common stock at an exercise price of $11.50 per share | |
Trading Symbol | MYPSW | |
Security Exchange Name | NASDAQ | |
Class B common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 16,457,769 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 129,807 | $ 134,000 |
Receivables | 29,501 | 27,016 |
Prepaid expenses and other current assets | 10,777 | 14,963 |
Total current assets | 170,085 | 175,979 |
Property and equipment, net | 18,027 | 17,532 |
Operating lease right-of-use assets | 10,212 | 15,562 |
Intangibles assets and internal-use software, net | 74,717 | 77,231 |
Goodwill | 47,133 | 47,133 |
Deferred income taxes | 20,991 | 13,969 |
Other long-term assets | 3,534 | 4,603 |
Total non-current assets | 174,614 | 176,030 |
Total assets | 344,699 | 352,009 |
Current liabilities: | ||
Accounts payable | 2,658 | 4,425 |
Warrant liabilities | 2,301 | 3,682 |
Operating lease liabilities, current | 4,219 | 4,571 |
Accrued liabilities | 25,413 | 21,473 |
Total current liabilities | 34,591 | 34,151 |
Minimum guarantee liability | 0 | 1,500 |
Operating lease liabilities, non-current | 6,545 | 11,660 |
Other long-term liabilities | 1,327 | 2,385 |
Total non-current liabilities | 7,872 | 15,545 |
Total liabilities | 42,463 | 49,696 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value (100,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022) | 0 | 0 |
Additional paid-in capital | 306,111 | 290,337 |
Retained earnings | 17,227 | 16,756 |
Accumulated other comprehensive loss | (1,022) | (151) |
Treasury stock, at cost, 4,723 and 1,166 shares at September 30, 2023 and December 31, 2022, respectively | (20,094) | (4,642) |
Total stockholders’ equity | 302,236 | 302,313 |
Total liabilities and stockholders’ equity | 344,699 | 352,009 |
Class A common stock | ||
Stockholders’ equity: | ||
Common stock | 12 | 11 |
Class B common stock | ||
Stockholders’ equity: | ||
Common stock | $ 2 | $ 2 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Treasury stock (shares) | 4,723,000 | 1,166,000 |
Class A common stock | ||
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (shares) | 122,090,000 | 116,756,000 |
Common stock, shares outstanding (shares) | 117,367,000 | 115,635,000 |
Class B common stock | ||
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (shares) | 25,000,000 | 25,000,000 |
Common stock, shares issued (shares) | 16,457,000 | 16,457,000 |
Common stock, shares outstanding (shares) | 16,457,000 | 16,457,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Income Statement [Abstract] | |||||
Net revenue | $ 75,858 | $ 72,127 | $ 233,774 | $ 210,931 | |
Operating expenses: | |||||
Cost of revenue | [1] | 19,862 | 21,703 | 58,276 | 63,657 |
Selling and marketing | 18,786 | 19,249 | 55,283 | 59,336 | |
Research and development | 17,367 | 15,110 | 53,503 | 46,561 | |
General and administrative | 10,747 | 9,864 | 33,688 | 28,763 | |
Depreciation and amortization | 11,537 | 8,583 | 33,686 | 25,265 | |
Restructuring and related | 1,280 | 796 | 7,112 | 10,968 | |
Total operating costs and expenses | 79,579 | 75,305 | 241,548 | 234,550 | |
Loss from operations | (3,721) | (3,178) | (7,774) | (23,619) | |
Other income (expense), net: | |||||
Change in fair value of warrant liabilities | 4,216 | 4,676 | 1,381 | 1,139 | |
Interest income, net | 1,364 | 843 | 3,521 | 1,050 | |
Other (loss) income, net | (198) | (475) | 906 | (836) | |
Total other income, net | 5,382 | 5,044 | 5,808 | 1,353 | |
Income (loss) before income taxes | 1,661 | 1,866 | (1,966) | (22,266) | |
Income tax benefit | 2,139 | 1,763 | 2,437 | 6,186 | |
Net income (loss) | $ 3,800 | $ 3,629 | $ 471 | $ (16,080) | |
Net income (loss) attributable to common stockholders per share: | |||||
Basic (USD per share) | $ 0.03 | $ 0.03 | $ 0 | $ (0.13) | |
Diluted (USD per share) | $ 0.03 | $ 0.02 | $ 0 | $ (0.13) | |
Weighted average shares of common stock outstanding: | |||||
Basic (shares) | 133,351 | 129,032 | 132,546 | 127,529 | |
Diluted (shares) | 149,655 | 146,920 | 148,911 | 127,529 | |
[1]Amounts exclude depreciation and amortization. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income (loss) | $ 3,800 | $ 3,629 | $ 471 | $ (16,080) | |
Other comprehensive loss: | |||||
Change in foreign currency translation adjustment | [1] | (393) | (159) | (871) | (561) |
Total other comprehensive loss | (393) | (159) | (871) | (561) | |
Comprehensive income (loss) | $ 3,407 | $ 3,470 | $ (400) | $ (16,641) | |
[1]These amounts are presented gross of the effect of income taxes. The total change in foreign currency translation adjustment and the corresponding effect of income taxes are immaterial. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Class A common stock | Class B common stock | Common Stock Class A common stock | Common Stock Class B common stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock |
Beginning balance (shares) at Dec. 31, 2021 | 110,066 | 16,130 | |||||||
Beginning balance at Dec. 31, 2021 | $ 303,467 | $ 11 | $ 2 | $ 268,522 | $ 393 | $ 34,539 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | (16,080) | (16,080) | |||||||
Exercise of stock options (shares) | 1,823 | ||||||||
Exercise of stock options | 1,148 | $ 327 | 1,148 | ||||||
Issuance of share upon vesting of restricted stock units (shares) | 1,518 | ||||||||
Stock-based compensation | 15,529 | 15,529 | |||||||
Other comprehensive loss | (561) | (561) | |||||||
Ending balance (shares) at Sep. 30, 2022 | 113,407 | 16,457 | |||||||
Ending balance at Sep. 30, 2022 | 303,503 | $ 11 | $ 2 | 285,199 | (168) | 18,459 | |||
Beginning balance (shares) at Jun. 30, 2022 | 111,883 | 16,130 | |||||||
Beginning balance at Jun. 30, 2022 | 295,590 | $ 11 | $ 2 | 280,756 | (9) | 14,830 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 3,629 | 3,629 | |||||||
Exercise of stock options (shares) | 1,037 | ||||||||
Exercise of stock options | 459 | $ 327 | 459 | ||||||
Issuance of share upon vesting of restricted stock units (shares) | 487 | ||||||||
Stock-based compensation | 3,984 | 3,984 | |||||||
Other comprehensive loss | (159) | (159) | |||||||
Ending balance (shares) at Sep. 30, 2022 | 113,407 | 16,457 | |||||||
Ending balance at Sep. 30, 2022 | 303,503 | $ 11 | $ 2 | 285,199 | (168) | 18,459 | |||
Beginning balance (shares) at Dec. 31, 2022 | 115,635 | 16,457 | 115,635 | 16,457 | |||||
Beginning balance at Dec. 31, 2022 | 302,313 | $ 11 | $ 2 | 290,337 | (151) | 16,756 | $ (4,642) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 471 | 471 | |||||||
Exercise of stock options (shares) | 3,234 | ||||||||
Exercise of stock options | 2,920 | 2,920 | |||||||
Restricted stock vesting, net of shares withheld (shares) | 2,055 | ||||||||
Restricted stock vesting, net of shares withheld | (2,876) | $ 1 | (2,877) | ||||||
Stock-based compensation | 15,731 | 15,731 | |||||||
Repurchase of common stock (shares) | (3,557) | ||||||||
Repurchase of common stock | (15,452) | (15,452) | |||||||
Other comprehensive loss | (871) | (871) | |||||||
Ending balance (shares) at Sep. 30, 2023 | 117,367 | 16,457 | 117,367 | 16,457 | |||||
Ending balance at Sep. 30, 2023 | 302,236 | $ 12 | $ 2 | 306,111 | (1,022) | 17,227 | (20,094) | ||
Beginning balance (shares) at Jun. 30, 2023 | 116,004 | 16,457 | |||||||
Beginning balance at Jun. 30, 2023 | 295,245 | $ 11 | $ 2 | 302,528 | (629) | 13,427 | (20,094) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 3,800 | 3,800 | |||||||
Exercise of stock options (shares) | 583 | ||||||||
Exercise of stock options | 464 | 464 | |||||||
Restricted stock vesting, net of shares withheld (shares) | 780 | ||||||||
Restricted stock vesting, net of shares withheld | (1,636) | $ 1 | (1,637) | ||||||
Stock-based compensation | 4,756 | 4,756 | |||||||
Other comprehensive loss | (393) | (393) | |||||||
Ending balance (shares) at Sep. 30, 2023 | 117,367 | 16,457 | 117,367 | 16,457 | |||||
Ending balance at Sep. 30, 2023 | $ 302,236 | $ 12 | $ 2 | $ 306,111 | $ (1,022) | $ 17,227 | $ (20,094) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 471 | $ (16,080) |
Adjustments: | ||
Depreciation and amortization | 33,686 | 25,265 |
Amortization of loan costs | 113 | 106 |
Stock-based compensation expense | 14,391 | 13,563 |
Change in fair value of warrant liabilities | (1,381) | (1,139) |
Change in fair value of contingent consideration | (950) | 0 |
Asset impairments | 2,042 | 8,353 |
Deferred income tax expense | (6,973) | (6,601) |
Other | (57) | 14 |
Changes in operating assets and liabilities | ||
Receivables | (3,780) | 1,777 |
Prepaid expenses and other current assets | 1,348 | 1,948 |
Income tax receivable | (936) | 190 |
Accounts payable & accrued liabilities | (2,269) | 4,430 |
Other | 691 | (595) |
Net cash provided by operating activities | 36,396 | 31,231 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (5,114) | (10,852) |
Additions to internal-use software | (16,516) | (15,597) |
Other | (225) | 346 |
Net cash used in investing activities | (21,855) | (26,103) |
Cash flows from financing activities: | ||
Proceeds from stock option exercises | 2,922 | 1,144 |
Payments for tax withholding of stock-based compensation | (2,877) | 0 |
Payment for tender offer of warrants | 0 | (1,792) |
Payments for minimum guarantee obligations | (2,360) | (5,000) |
Repurchases of treasury stock | (15,452) | 0 |
Net cash used in financing activities | (17,767) | (5,648) |
Foreign currency translation | (967) | (913) |
Net change in cash and cash equivalents | (4,193) | (1,433) |
Cash and cash equivalents at beginning of period | 134,000 | 213,502 |
Cash and cash equivalents at end of period | 129,807 | 212,069 |
Supplemental cash flow disclosures: | ||
Interest paid | 148 | 150 |
Income taxes paid, net of refunds | 2,308 | 411 |
Non-cash investing and financing activities: | ||
Capitalization of stock-based compensation | 1,340 | 1,966 |
Additions to intangible assets related to licensing agreements | 9,832 | 0 |
Exchange of notes receivable as consideration related to the WonderBlocks Acquisition | 0 | 1,055 |
Contingent consideration related to the WonderBlocks Acquisition | $ 0 | $ 1,564 |
BACKGROUND AND BASIS OF PRESENT
BACKGROUND AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BACKGROUND AND BASIS OF PRESENTATION | NOTE 1—BACKGROUND AND BASIS OF PRESENTATION Organization and Description of Business On June 21, 2021 (the “Closing Date”), Acies Acquisition Corp., a Cayman Islands exempted company (prior to the Closing Date, “Acies”), consummated the previously announced business combination (“Acies Merger”) with PlayStudios, Inc., a Delaware corporation (“Old PLAYSTUDIOS”) pursuant to the Agreement and Plan of Merger, dated as of February 1, 2021 (the “Merger Agreement”), by and among Acies, Catalyst Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Acies, Catalyst Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Acies, and Old PLAYSTUDIOS. PLAYSTUDIOS, Inc., formerly known as Acies Acquisition Corp. (the "Company” or "PLAYSTUDIOS"), was incorporated on August 14, 2020 as a Cayman Islands exempted company, and domesticated into a Delaware corporation on June 21, 2021. The Company's legal name became PLAYSTUDIOS, Inc. following the closing of the Acies Merger. The Company develops and operates online and mobile social gaming applications (“games” or “game”) each of which incorporate a unique loyalty program offering “real world” rewards provided by a collection of rewards partners. The Company’s games are free-to-play and available via the Apple App Store, Google Play Store, Amazon Appstore, and Facebook (collectively, “platforms” or “platform operators”). The Company creates games based on its own original content as well as third-party licensed brands. The Company generates revenue through the in-game sale of virtual currency and through advertising. Unless the context indicates otherwise, all references herein to “PLAYSTUDIOS,” the “Company,” “we,” “us,” and “our” are used to refer collectively to PLAYSTUDIOS, Inc. and its subsidiaries. Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements include the accounts of PLAYSTUDIOS, Inc. and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Certain reclassifications in these financial statements have been made to comply with US GAAP applicable to public companies and SEC Regulation S-X. The significant accounting policies referenced in the annual consolidated financial statements of the Company as of December 31, 2022 have been applied consistently in these unaudited interim condensed consolidated financial statements. In the opinion of the Company, the accompanying unaudited financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position as of September 30, 2023, and its results of operations for the three and nine months ended September 30, 2023, and 2022, and cash flows for the nine months ended September 30, 2023, and 2022. The Condensed Consolidated Balance Sheet as of December 31, 2022 was derived from the audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The Company made certain reclassifications to the comparative balances in the condensed consolidated financial statements to conform with current year presentation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and notes thereto. Significant estimates and assumptions reflected in the Company’s condensed consolidated financial statements include the estimated consumption rate of virtual goods that is used in the determination of revenue recognition, useful lives of property and equipment and definite-lived intangible assets, the expensing and capitalization of research and development costs for internal-use software, assumptions used in accounting for income taxes, stock-based compensation and the evaluation of goodwill and long-lived assets for impairment. The Company believes the accounting estimates are appropriate and reasonably determined. Due to the inherent uncertainties in making these estimates, actual amounts could differ materially. Emerging Growth Company At September 30, 2023, the Company qualified as an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and the Company has taken and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has opted to take advantage of such extended transition period available to emerging growth companies which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company can adopt the new or revised standard at the time private companies adopt the new or revised standard. The Company did not lose its emerging growth company status through December 31, 2023. As a result, the Company does not expect to adopt any accounting pronouncements currently deferred based on private company standards until a year subsequent to 2023. The Company will reevaluate its eligibility to retain emerging growth company status at the end of its second quarter of 2024, and otherwise as required. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES For a discussion of our significant accounting policies and estimates, please refer to our 2022 Annual Report on Form 10-K filed on March 10, 2023. Recently Issued Accounting Pronouncements Not Yet Adopted The Company’s management has evaluated all of the recently issued, but not yet effective, accounting standards that have been issued or proposed by the Financial Accounting Standards Board (“FASB”) or other standards-setting bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements will have a material effect on the Company’s condensed consolidated financial statements. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). The new guidance replaces the incurred loss impairment methodology in current guidance with a current expected credit loss model (“CECL”) that incorporates a broader range of reasonable and supportable information including the forward-looking information. The Company adopted this standard on January 1, 2023. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION | NOTE 3—BUSINESS COMBINATIONS WonderBlocks Acquisition On August 2, 2022, playBLOCKS, Inc., a newly formed wholly-owned subsidiary of the Company ("playBLOCKS") entered into an agreement with WonderBlocks Labs, Inc. (“WonderBlocks"), which provides tools for the development of a play-to-earn loyalty platform for digital entertainment on the Ethereum blockchain, pursuant to which playBLOCKS acquired substantially all of the assets of WonderBlocks. playBLOCKS paid WonderBlocks $2.0 million less Indebtedness (borrowed money and accrued interest, including debt to the Company) at closing. We believe this acquisition will allow us to enhance our playAWARDS model with new Web3 features and capabilities. The Company recorded the excess of the fair value of the consideration transferred in the acquisition over the fair value of net assets acquired as goodwill. The goodwill reflects our expectations of favorable future growth opportunities and anticipated synergies through the scale of our operations. The Company expects that none of the goodwill will be deductible for federal income tax purposes. The following table summarizes the consideration paid for WonderBlocks and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date: Consideration: August 2, Cash consideration $ 945 Note receivable plus accrued interest conversion 1,055 Contingent consideration 1,564 Total consideration transferred $ 3,564 Identifiable assets acquired and liabilities assumed: Developed technology (weighted-average useful life of 5 years) 2,403 Liabilities assumed (15) Total identifiable net assets $ 2,388 Goodwill $ 1,176 Brainium Studios Acquisition On October 7, 2022, PLAYSTUDIOS US, LLC, a direct wholly-owned subsidiary of the Company entered into a membership interest purchase agreement to acquire all of the issued and outstanding membership interests in Brainium Studios LLC (“Brainium"), a mobile game publisher. The closing of the acquisition occurred on October 12, 2022, and Brainium became an indirect wholly-owned subsidiary of the Company. The purchase price for the membership interests was $70.0 million at closing, as adjusted for cash, indebtedness, and working capital. The Company recorded the excess of the fair value of the consideration transferred in the acquisition over the fair value of net assets acquired as goodwill. The goodwill reflects our expectations of favorable future growth opportunities and anticipated synergies through the scale of our operations. The Company expects that substantially all of the goodwill will be deductible for federal income tax purposes. The following table summarizes the consideration paid for Brainium and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date: Consideration: October 12, Cash consideration $ 73,457 Contingent consideration 1,797 Total consideration transferred $ 75,254 Identifiable assets acquired and liabilities assumed: Cash and cash equivalents $ 3,738 Accounts receivable 3,190 Property and equipment 4,042 Operating lease assets 4,195 Trade names (weighted-average useful life of 10 years) 1,500 Developed technology (weighted-average useful life of 5 years) 12,600 Customer relationships (weighted-average useful life of 5 years) 12,000 Other assets 740 Liabilities assumed (7,649) Total identifiable net assets $ 34,356 Goodwill $ 40,898 |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | NOTE 4—RELATED-PARTY TRANSACTIONS The following table is a summary of balance sheet assets and liabilities from related parties: September 30, December 31, Financial Statement Line Item Marketing Agreement $ 1,000 $ 1,000 Intangibles, net The Company’s revenues and expenses recognized from related parties were immaterial during the three and nine months ended September 30, 2023 and 2022. MGM Resorts International (“MGM”) MGM is a stockholder and MGM's Chief Commercial Officer also serves on the Company’s Board of Directors. MGM owned approximately 16.6 million and 16.6 million shares of the Company's outstanding Class A common stock as of September 30, 2023 and December 31, 2022, respectively. In April 2011, the Company entered into a joint marketing agreement with MGM (as amended, the “Marketing Agreement”) in exchange for assistance with marketing campaigns and the certain rights to utilize MGM’s licensed marks and licensed copyrights for the development of certain of the Company’s social casino games. The initial term of the Marketing Agreement was for one year from the go-live date of the first such game in July 2012, with automatic renewal provisions based on the games achieving specified performance criteria. As further described in Note 9— Intangible Assets and Internal-Use Software, Net |
RECEIVABLES
RECEIVABLES | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
RECEIVABLES | NOTE 5—RECEIVABLES Receivables consist of the following: September 30, December 31, Trade receivables $ 28,802 $ 25,020 Other receivables 699 1,996 Total receivables $ 29,501 $ 27,016 Trade receivables generally represent amounts due to the Company from social and mobile platform operators, including Apple, Google, Amazon and Facebook. Trade receivables are recorded when the right to consideration becomes unconditional. No allowance for doubtful accounts was considered necessary as of September 30, 2023 and December 31, 2022. Concentration of Credit Risk The following table summarizes the major receivables of the Company as a percentage of the total receivables as of the dates indicated: September 30, December 31, Apple, Inc. 47.8 % 33.6 % Google, Inc. 20.9 % 27.2 % As of September 30, 2023 and December 31, 2022, the Company did not have any additional counterparties that exceeded 10% of the Company’s net accounts receivable. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 6—PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: September 30, December 31, Prepaid expenses $ 4,168 5,148 Income tax receivable 3,559 1,372 Other current assets 3,050 8,443 Total other current assets $ 10,777 $ 14,963 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 7—FAIR VALUE MEASUREMENT The carrying values of the Company’s cash and cash equivalents, trade receivables and accounts payable approximate fair value due to their short maturities. The following tables present the liabilities measured at fair value on a recurring basis, by input level, in the Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022: September 30, 2023 Level 1 Level 2 Level 3 Total Financial liabilities: Public Warrants $ 1,346 — — 1,346 Private Warrants — 955 — 955 Total financial liabilities $ 1,346 $ 955 $ — $ 2,301 December 31, 2022 Level 1 Level 2 Level 3 Total Financial liabilities: Public Warrants $ 2,153 — — 2,153 Private Warrants — 1,529 — 1,529 Total financial liabilities $ 2,153 $ 1,529 $ — $ 3,682 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 8—PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: September 30, December 31, Land and land improvements $ 1,680 1,382 Building and building improvements 5,763 3,705 Computer equipment 8,795 9,423 Leasehold improvements 9,610 10,204 Purchased software 2,309 4,471 Furniture and fixtures 4,288 3,553 Construction in progress 144 648 Total property and equipment 32,589 33,386 Less: accumulated depreciation (14,562) (15,854) Total property and equipment, net $ 18,027 $ 17,532 The aggregate depreciation expense for property and equipment, net is reflected in “Depreciation and amortization” in the Condensed Consolidated Statements of Operations. During the three months ended September 30, 2023 and 2022, depreciation expense was $1.2 million and $1.2 million, respectively, and during the nine months ended September 30, 2023 and 2022, depreciation expense was $4.2 million and $3.1 million, respectively. No impairment charges or material write-offs were recorded for the three and nine months ended September 30, 2023 and 2022. Property and equipment, net by region consists of the following: September 30, December 31, United States $ 14,048 $ 12,331 EMEA (1)(2) 2,667 3,756 All other countries (2) 1,312 1,445 Total property and equipment, net $ 18,027 $ 17,532 (1) Europe, Middle East, and Africa (“EMEA”). (2) Amounts primarily represent leasehold improvements of local office space and computer equipment. |
INTANGIBLE ASSETS AND INTERNAL-
INTANGIBLE ASSETS AND INTERNAL-USE SOFTWARE, NET | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND INTERNAL-USE SOFTWARE, NET | NOTE 9—INTANGIBLE ASSETS AND INTERNAL-USE SOFTWARE, NET Intangible Assets The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset other than goodwill: September 30, 2023 December 31, 2022 Gross Accumulated Net Gross Accumulated Net Amortizable intangible assets: Licenses $ 31,121 $ (16,336) $ 14,785 $ 21,040 $ (7,962) $ 13,078 Acquired technology 15,003 (3,081) 11,922 15,003 (830) 14,173 Customer relationships 12,000 (2,400) 9,600 12,000 (600) 11,400 Trade names 2,740 (1,390) 1,350 2,740 (1,278) 1,462 Internal-use software 162,547 (126,624) 35,923 145,798 (109,680) 36,118 Other 139 (2) 137 — — — 223,550 (149,833) 73,717 196,581 (120,350) 76,231 Nonamortizable intangible assets: Marketing Agreement with a related party 1,000 — 1,000 1,000 — 1,000 Total intangible assets $ 224,550 $ (149,833) $ 74,717 $ 197,581 $ (120,350) $ 77,231 During the three months ended September 30, 2023 and 2022, the Company capitalized internal-use software development costs of $5.5 million and $5.6 million, and during the nine months ended September 30, 2023 and 2022, capitalized internal-use software development costs were $17.9 million and $17.6 million, respectively. During the three months ended September 30, 2023 and 2022, intangible asset and internal-use software amortization was $10.3 million and $7.4 million, respectively, and during the nine months ended September 30, 2023 and 2022, intangible asset and internal-use software amortization were $29.5 million and $22.2 million, respectively. The aggregate amortization expense for amortizable intangible assets and internal-use software is reflected in “Depreciation and amortization” in the Condensed Consolidated Statements of Operations. The Company recorded a $1.1 million non-cash impairment charge within "Restructuring and related" in the Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2023. There were no impairment charges for intangible assets or internal-use software for the three months ended September 30, 2022. The Company recorded an $8.4 million non-cash impairment charge within "Restructuring and related" in the Condensed Consolidated Statements of Operations during the nine months ended September 30, 2022. Subsequent to September 30, 2023, the Company entered into certain licensing arrangements resulting in an increase of $32.0 million in "Intangible assets and internal-use software, net" within the Condensed Consolidated Balance Sheets with an offsetting liability related to the minimum guarantee liabilities. As of September 30, 2023, the estimated annual amortization expense is as follows: Year Ending December 31, Projected Amortization Remaining 2023 $ 10,691 2024 34,346 2025 15,468 2026 8,269 2027 4,129 Thereafter 814 Total $ 73,717 |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 10—GOODWILL Goodwill The following table provides the changes in the carrying amount of goodwill for the nine months ended September 30, 2023: Goodwill, Gross Accumulated Impairment Goodwill, Net Balance as of December 31, 2022 47,133 — 47,133 Additions from acquisitions — — — Measurement period adjustments — — — Balance as of September 30, 2023 $ 47,133 $ — $ 47,133 |
WARRANT LIABILITIES
WARRANT LIABILITIES | 9 Months Ended |
Sep. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | |
WARRANT LIABILITIES | NOTE 11—WARRANT LIABILITIES Public Warrants and Private Warrants Upon the closing of the Acies Merger, there were approximately 7.2 million publicly-traded redeemable warrants to purchase shares of Class A common stock (the "Public Warrants") and 3.8 million redeemable warrants to purchase shares of Class A common stock initially issued to Acies Acquisition, LLC (the "Sponsor") in a private placement (the "Private Warrants") by Acies. Each whole Public Warrant entitles the registered holder to purchase one whole share of the Company’s Class A common stock at a price of $11.50 in cash per share, subject to adjustment as discussed below, as of October 27, 2021. Pursuant to the Warrant Agreement, a holder of Public Warrants may exercise the Public Warrants only for a whole number of shares of Class A common stock. The Public Warrants will expire 5 years after the completion of the Acies Merger, or earlier upon redemption or liquidation. The Private Warrants are identical to the Public Warrants, except that the Private Warrants and the shares of Class A common stock issuable upon exercise of the Private Warrants were not transferable until after the completion of the Acies Merger, subject to certain limited exceptions. Additionally, the Private Warrants are non-redeemable so long as they are held by the initial holder or any of its permitted transferees. If the Private Warrants are held by someone other than the initial holder or its permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Private Warrants may be exercised on a cashless basis so long as held by the Sponsor or certain permitted transferees. The Company may redeem the outstanding Public Warrants in whole, but not in part, at a price of $0.01 per Public Warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20-trading days within a 30-trading day period ending three On April 1, 2022, the Company commenced (i) an offer to each holder of its outstanding Public Warrants and Private Warrants (collectively, the “Warrants”) the opportunity to receive $1.00 in cash, without interest, for each outstanding Warrant tendered by the holder pursuant to the offer (the “Offer to Purchase”), and (ii) the solicitation of consents (the “Consent Solicitation”) from holders of the outstanding Warrants to amend the Warrant Agreement, dated as of October 22, 2020, by and between the Company (formerly Acies Acquisition Corp.) and Continental Stock Transfer & Trust Company, which governs all of the Warrants (the “Warrant Amendment”) (collectively the "Tender Offer"). The Tender Offer expired midnight, Eastern Time, at the end of the day on May 13, 2022 (the “Expiration Date”), in accordance with its terms. Broadridge Corporate Issuer Solutions, Inc., the depositary for the Tender Offer, indicated that as of the Expiration Date, (i) 1,792,463 outstanding Public Warrants, or approximately 25% of the outstanding Public Warrants were validly tendered in and not withdrawn from the Offer to Purchase, and (ii) none of the outstanding Private Warrants were validly tendered in and not withdrawn from the Offer to Purchase. The Warrant Amendment was not approved. The Company paid $1.8 million for all Public Warrants tendered by the holders pursuant to the Offer to Purchase and $1.1 million of fees, expenses, and other related amounts incurred in connection with the Tender Offer. At September 30, 2023, there were approximately 5.4 million Public Warrants and 3.8 million Private Warrants outstanding. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | NOTE 12—ACCRUED LIABILITIES Accrued liabilities consist of the following: September 30, December 31, Accrued payroll and vacation 8,991 9,666 Accrued user acquisition 5,867 4,183 Income taxes payable 1,954 702 Minimum guarantee liability 4,790 1,500 Other accruals 3,811 5,422 Total accrued liabilities $ 25,413 $ 21,473 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
LEASES | NOTE 13—LEASES The Company's operating leases primarily consist of real estate leases such as offices. During the three months ended September 30, 2023 and 2022, operating lease expense was $1.2 million and $1.0 million, respectively, and during the nine ended September 30, 2023 and 2022, operating lease expense was $3.7 million and $2.9 million, respectively. The Company does not have any finance leases. Total variable and short-term lease payments were immaterial for all periods presented. Supplemental balance sheet information related to operating leases are as follows: September 30, 2023 December 31, 2022 Operating lease right-of-use assets, net $ 10,212 $ 15,562 Operating lease liabilities, current $ 4,219 $ 4,571 Operating lease liabilities, noncurrent 6,545 11,660 Operating lease liabilities, total $ 10,764 $ 16,231 Weighted average remaining lease term, years 3.2 4.0 Weighted average discount rate 4.5 % 3.3 % Operating lease liability maturities: Year ending December 31, Operating Leases Remaining 2023 $ 1,083 2024 4,512 2025 2,292 2026 1,963 2027 1,356 Thereafter 382 Total undiscounted cash flows $ 11,588 Less: imputed interest (824) Lease liabilities, total $ 10,764 As of September 30, 2023, the Company did not have material additional operating leases that have not yet commenced. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 14—LONG-TERM DEBT Credit Agreement On June 24, 2021, in connection with the closing of the Acies Merger, the Company terminated and replaced its previous credit facility. The Company, a subsidiary of the Company, JPMorgan Chase Bank, N.A., as administrative agent and JPMorgan Chase Bank, N.A., Silicon Valley Bank and Wells Fargo Securities, LLC, as joint bookrunners and joint lead arrangers entered into a credit agreement (the “Credit Agreement”) which provides for a five-year revolving credit facility in an aggregate principal amount of $75.0 million. Borrowings under the Credit Agreement may be borrowed, repaid and re-borrowed by the Company, and are available for working capital, general corporate purposes and permitted acquisitions. Commitment fees and interest rates are determined on the basis of either a Eurodollar rate or an Alternate Base Rate plus an applicable margin. The applicable margins are initially 2.50%, in the case of Eurodollar loans, and 1.50%, in the case of Alternate Base Rate loans. The applicable margin is subject to adjustment based upon the Company's Total Net Leverage Ratio (as defined in the Credit Agreement). Eurodollar rates and the Alternate Base Rate are subject to floors of 0.00% and 1.00%, respectively. The Credit Agreement contains various affirmative and negative financial and operational covenants applicable to the Company and its subsidiaries. The Credit Agreement includes customary reporting requirements, conditions precedent to borrowing and affirmative, negative and financial covenants. Specific financial covenants include the following, commencing with the quarter ended September 30, 2021: • Total Net Leverage Ratio of 3.50:1.00 (subject to increase to 4.00:1.00 following consummation of certain material acquisitions) • Fixed Charge Coverage Ratio of 1.25:1.00. On May 13, 2022, the Company entered into the Amendment No. 1 to the Credit Agreement, which amended the Credit Agreement to, among other things, exclude from the definition of Fixed Charge Coverage Ratio certain funds, up to $15.0 million, expended or to be expended by the Company in connection with the Tender Offer. On August 9, 2022, the Company entered into the Amendment No. 2 to the Credit Agreement, which further amended the Credit Agreement (as amended by Amendment No. 1 to the Credit Agreement) to, among other things, (i) increase the total current available line of credit from $75.0 million to $81.0 million, (ii) change the basis for calculation of interest under the facility from LIBOR to SOFR, and (iii) exclude from the calculation of the Fixed Charge Coverage Ratio (A) up to $6.0 million for the acquisition of, and improvements to, the real property located at 10150 Covington Cross Drive, Las Vegas, Nevada 89144 incurred on or prior to the first anniversary of the effective date of Amendment No. 2 to the Credit Agreement, and (B) up to $20.0 million for the redemption or repurchase of up to 11.0 million warrants to purchase shares of Class A common stock of the Company, and shares of Class A common stock of the Company, on or before December 31, 2023, of which as of the date of Amendment No. 2 to the Credit Agreement the Company had used $1.8 million to redeem outstanding warrants to purchase Class A common stock in connection with the Tender Offer. On August 16, 2023, the Company, a subsidiary of the Company, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, entered into an Amendment No. 3 to Credit Agreement (the “Amendment No. 3”), to, among other things, exclude from the Restricted Payments covenant certain repurchases of Equity Interests of the Company deemed to occur upon the exercise, settlement or vesting of stock options, warrants or other equity-based awards if and to the extent such Equity Interests represent a portion of the exercise price of, or satisfy any tax withholding obligations with respect to, such options, warrants or other equity-based awards. The Company capitalized a total of $0.7 million in debt issuance costs related to the Credit Agreement and subsequent amendments. As of September 30, 2023, the Company did not have any balances outstanding under the Credit Agreement. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 15—REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of Revenue The following table summarizes the Company’s revenue disaggregated by type, and by over time or point in time recognition: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Virtual currency (over time) (1) $ 61,558 $ 65,607 $ 187,565 $ 195,377 Advertising (point in time) 14,190 3,807 41,608 11,364 Other revenue (point in time or over time) 110 2,713 4,601 4,190 Total net revenue $ 75,858 $ 72,127 $ 233,774 $ 210,931 (1) Virtual currency is recognized over the estimated consumption period. The following table summarizes the Company’s revenue disaggregated by geography: Three Months Ended Nine Months Ended 2023 2022 2023 2022 United States $ 64,414 $ 63,501 $ 200,566 $ 185,646 All other countries 11,444 8,626 33,208 25,285 Total net revenue $ 75,858 $ 72,127 $ 233,774 $ 210,931 Contract Balances Contract assets represent the Company’s ability to bill customers for performance obligations completed under a contract. As of September 30, 2023 and December 31, 2022, there were no contract assets recorded in the Company’s Condensed Consolidated Balance Sheets. The deferred revenue balance related to the purchase of virtual currency was immaterial as of September 30, 2023 and December 31, 2022. Trade receivables are described in Note 5— Receivables |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 16—INCOME TAXES The Company recorded an income tax benefit of $2.1 million and $1.8 million for the three months ended September 30, 2023 and 2022, respectively, and the Company recorded an income tax benefit of $2.4 million and $6.2 million for the nine months ended September 30, 2023 and 2022, respectively. Our effective tax rate was (128.8)% for the three months ended September 30, 2023 compared to (94.5)% for the three months ended September 30, 2022. Our effective tax rate was 124.0% for the nine months ended September 30, 2023 compared to 27.8% for the nine months ended September 30, 2022. The effective tax rates differ from the federal statutory rate of 21% primarily due to nondeductible stock compensation, the recognition of additional state tax liabilities due to an updated nexus study, the fair value adjustment to the warrant liability, foreign branch income, the effect of additional foreign taxes paid related to a settlement with the Israel Tax Authority, and other nondeductible expenses. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 17—COMMITMENTS AND CONTINGENCIES Minimum Guarantee Liability The following are the Company’s total minimum guaranteed obligations as of: September 30, December 31, Minimum guarantee liability-current $ 4,790 $ 1,500 Minimum guarantee liability-noncurrent — 1,500 Total minimum guarantee obligations $ 4,790 $ 3,000 Weighted-average remaining contractual term (in years) 1.3 2.0 The following are the Company’s remaining expected future payments of minimum guarantee obligations as of September 30, 2023: Year Ending December 31, Minimum Guarantee Remaining 2023 $ 1,960 2024 2,830 2025 — 2026 — 2027 — Total $ 4,790 N3TWORK, Inc. On November 22, 2021, the Company entered into agreements with N3TWORK Inc. and The Tetris Company, LLC pursuant to which the Company acquired the rights to develop and operate Tetris®-branded mobile games for an initial term through August 2024. The Company paid N3TWORK Inc. $13.0 million at closing and agreed to pay up to an additional $34.0 million subject to satisfaction of certain conditions (the "Contingent Payments"). As of September 30, 2023, the Company advanced $8.0 million of the Contingent Payments (the "Advance Payment"). $5.6 million of the Advance Payment was considered earned as of September 30, 2023. The remaining Advance Payment is included within "Prepaid expenses and other current assets" within the Condensed Consolidated Balance Sheets. Subsequent to September 30, 2023, certain conditions of the Contingent Payments have been satisfied. The Company's best estimate of $17.0 million of the Contingent Payments is an expected payment of between $3.5 million and $17.0 million, excluding any of the Advance Payment. The Company expects to record this payment within "Intangible assets and internal-use software, net" within the Condensed Consolidated Balance Sheets. Other The Company is party to ordinary and routine litigation incidental to its business. On a case-by-case basis, the Company engages inside and outside counsel to assess the probability of potential liability resulting from such litigation. After making such assessments, the Company makes an accrual for the estimated loss only when the loss is reasonably probable and an amount can be reasonably estimated. The Company does not expect the outcome of any pending litigation to have a material effect on the Company’s Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, or Condensed Consolidated Statements of Cash Flows. In May 2021, the Company became party to a litigation matter brought by TeamSava d.o.o. Beograd (“TeamSava”) and other related parties. The plaintiffs filed a Statement of Claim in May 2021 in Tel Aviv District Court in Israel, alleging claims, among other things, that the Company breached the terms of a commercial contract relating to services provided by TeamSava and related parties in connection with the sourcing and administrative management of personnel in Serbia who provided game development services exclusively for the Company. The pending litigation seeks damages of 27.3 million New Israeli Shekels ("NIS"). The Company believes that the claims are without merit and the Company intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of this litigation. The Company’s range of possible loss could be up to 27.3 million NIS based on the claim amount of the litigation, but the Company is not able to reasonably estimate the probability or amount of loss relating to this litigation and therefore has not made any accruals. On April 6, 2022, a class action lawsuit was filed in the United States District Court, Northern District of California, by a purported Company shareholder in connection with alleged federal securities law violations: Christian A. Felipe et. al. v. PLAYSTUDIOS, Inc. (the “Felipe Complaint”). On July 15, 2022, the Felipe Complaint was transferred to the United States District Court for the District of Nevada, Southern Division. On October 4, 2022, the plaintiffs filed an amendment to the Felipe Complaint. The Felipe Complaint names the Company, several current and former board members of the Company, board members and officers of Acies Acquisition Corp., and Andrew Pascal, the Company’s Chairman and CEO, as defendants. The Felipe Complaint alleges misrepresentations and omissions regarding the state of the Company’s development of the Kingdom Boss game and its financial projections and future prospects in the S-4 Registration Statement filed by Acies that was declared effective on May 25, 2021, the Proxy Statement filed by Acies on May 25, 2021, and other public statements that touted Old PLAYSTUDIOS’ and the Company’s financial performance and operations, including statements made on earnings calls and the Amended S-1 Registration Statement filed by the Company that was declared effective on July 30, 2021. The Felipe Complaint alleges that the misrepresentations and omissions resulted in stock price drops of 13% on August 12, 2021, and 5% on February 25, 2022, following (i) the Company’s release of financial results for the second quarter of 2021, ended on June 30, 2021, and (ii) the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and issuance of a press release summarizing financial results for the fourth quarter and year ended December 31, 2021, respectively. The Felipe Complaint seeks an award of damages for an unspecified amount. The Company believes that the claims are without merit and the Company intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of this litigation. The Company is not able to reasonably estimate the probability or amount of loss relating to this litigation and therefore has not made any accruals. On March 8, 2023, a civil lawsuit was filed against PLAYSTUDIOS US, LLC in the Circuit Court of Franklin County Alabama, by a purported player of a game operated by PLAYSTUDIOS US, LLC claiming that the games operated by PLAYSTUDIOS US, LLC constitute illegal gambling under Alabama law and seeking to recover, under Alabama’s loss recovery act, all sums paid by Alabama residents to PLAYSTUDIOS US, LLC in its online gambling games during the period beginning one year before the filing of the complaint until the case is resolved. The Company believes the claims are without merit and intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of this litigation. The Company is not able to reasonably estimate the probability or amount of loss relating to this litigation and therefore has not made any accruals. The Company received four demands for arbitration between the first quarter and third quarter of 2023 claiming that the games operated by PLAYSTUDIOS US, LLC constitute illegal gambling under the laws of various states. These demands generally attempt to recover amounts spent by third parties on the Company’s games by relying on state gambling loss recovery statutes and/or by seeking to have the applicable Terms of Service declared invalid. The Company believes that the claims are without merit and the Company intends to vigorously defend against them; however, there can be no assurance that the Company will be successful in the defense of this litigation. The Company is not able to reasonably estimate the probability or amount of loss and therefore has not made any accruals . On February 28, 2023, the Company initiated an internal reorganization plan which is intended to enhance efficiency and reduce operating expenses. The reorganization plan included a reduction of the Company’s total global employee headcount by approximately 14 percent, which was substantially completed by the end of the second quarter of fiscal year 2023. For the three and nine months ended September 30, 2023, t he Company incurred $0.2 million and $3.4 million,respectively, of costs related to the internal reorganization plan, which is substantially all of the expected charges in connection with the plan. Substantially all of the charges relate to employee transition, severance payments, employee benefits, and stock-based compensation. The charges related to lease termination costs were immaterial. All costs are included within "Restructuring and related" within the Condensed Consolidated Statements of Operations. The Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including charges in connection with the implementation of the reorganization plan. For the three and nine months ended September 30, 2023 , changes in liabilities resulting from the severance charges and related accruals were as follows: Total Balance as of December 31, 2022 $ — Charges 3,185 Payments (2,135) Balance as of June 30, 2023 $ 1,050 Charges 187 Payments (1,108) Balance as of September 30, 2023 $ 129 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 18—STOCKHOLDERS’ EQUITY Common Stock Subject to the prior rights of the holders of any preferred stock, the holders of common stock are entitled to receive dividends out of the funds legally available at the times and in the amounts determined by the Company's Board of Directors. Each holder of Class A common stock is entitled to one vote for each share of Class A common stock held and each holder of Class B common stock is entitled to twenty votes for each share of Class B common stock held. After the full preferential amounts due to preferred stockholders have been paid or set aside, the remaining assets of the Company available for distribution to its stockholders, if any, are distributed to the holders of common stock ratably in proportion to the number of shares of common stock then held by each such holder. None of the Company’s common stock is entitled to preemptive rights or subject to redemption. With the exception of the conversion of the Class B common stock into Class A common stock as described below, the Company’s common stock is not convertible into any other shares of the Company’s capital stock. The shares of Class B common stock are subject to a “sunset” provision if any member of the Founder Group (as defined in the Certificate of Incorporation of the Company) transfers shares of Class B common stock outside the Founder Group (except for certain permitted transfers). In the event of such non-permitted transfers, any share transferred will automatically convert into shares of Class A common stock. In addition, the outstanding shares of Class B common stock will be subject to a “sunset” provision by which all outstanding shares of Class B common stock will automatically convert into shares of Class A common stock (i) if holders representing a majority of the Class B common stock vote to convert the Class B common stock into Class A common stock, (ii) if the Founder Group and its permitted transferees collectively no longer beneficially own at least 20% of the number of shares of Class B common stock collectively held by the Founder Group as of the closing of the Acies Merger, or (iii) on the nine-month anniversary of the Founder’s death or disability, unless such date is extended by a majority of independent directors of the Company. Accumulated Other Comprehensive Loss The following tables shows a summary of changes in accumulated other comprehensive loss: Currency Total Accumulated Other Comprehensive Loss Balance as of December 31, 2022 $ (151) $ (151) Foreign currency translation (871) (871) Balance as of September 30, 2023 $ (1,022) $ (1,022) Currency Total Accumulated Other Comprehensive Income (Loss) Balance as of December 31, 2021 $ 393 $ 393 Foreign currency translation (561) (561) Balance as of September 30, 2022 $ (168) $ (168) Stock Repurchase Program On November 10, 2021, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to purchase up to $50.0 million of the Company’s Class A common stock over a period of 12 months. On November 2, 2022, the Company's Board of Directors extended such period for an additional 12 months. Subject to applicable rules and regulations, the shares may be purchased from time to time in the open market or in privately negotiated transactions. Such purchases will be at times and in amounts as the Company deems appropriate, based on factors such as market conditions, legal requirements and other business considerations. As of September 30, 2023, the Company has acquired 4.7 million shares of its Class A common stock under this program at an aggregate value of $20.0 million and an average of $4.23 per share. Repurchased shares were held in treasury. The remaining availability under the $50.0 million stock repurchase program was $30.0 million as of September 30, 2023. On November 1, 2023, the Company's Board of Directors extended the stock repurchase program through November 10, 2024 and increased the remaining amount authorized to $50.0 million. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 19—STOCK-BASED COMPENSATION The following table summarizes stock-based compensation expense for the periods shown: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Selling and marketing $ 205 $ 165 $ 585 $ 646 General and administrative 1,975 1,767 7,086 6,319 Research and development 2,164 1,622 6,720 6,598 Stock-based compensation expense $ 4,344 $ 3,554 $ 14,391 $ 13,563 Capitalized stock-based compensation $ 412 $ 430 $ 1,340 $ 1,966 As of September 30, 2023, there was approximately $0.5 million and $39.3 million in unrecognized stock-based compensation expense related to stock options and restricted stock units, respectively, that are expected to be recognized over a weighted-average expected vesting period of 0.9 years and 2.7 years, respectively. During the three months ended September 30, 2023 and 2022, the Company granted 0.4 million and 1.8 million restricted stock units, respectively, and during the nine months ended September 30, 2023 and 2022, the Company granted 4.4 million and 10.3 million restricted stock units, respectively. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NOTE 20—NET INCOME (LOSS) PER SHARE The following table sets forth the computation of basic and diluted net income (loss) attributable to Class A and Class B common stockholders per share (in thousands except per share data): Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Class A Class B Class A Class B Numerator Net income attributable to common stockholders – basic $ 3,331 $ 469 $ 3,175 $ 454 Potential dilutive effect of derivative instruments 16 (16) 21 (21) Net income attributable to common stockholders – diluted $ 3,347 $ 453 $ 3,196 $ 433 Denominator Weighted average shares of common stock outstanding - basic 116,893 16,458 112,873 16,159 Potential dilutive effect of stock options 2,773 1,391 8,206 1,371 Potential dilutive effect of restricted stock units 12,140 — 8,311 — Weighted average shares of common stock outstanding - diluted 131,806 17,849 129,390 17,530 Net income attributable to common stockholders per share Basic $ 0.03 $ 0.03 $ 0.03 $ 0.03 Diluted $ 0.03 $ 0.03 $ 0.02 $ 0.02 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Class A Class B Class A Class B Numerator Net income (loss) attributable to common stockholders – basic $ 413 $ 58 $ (14,045) $ (2,035) Potential dilutive effect of derivative instruments 2 (2) — — Net income (loss) attributable to common stockholders – diluted $ 415 $ 56 $ (14,045) $ (2,035) Denominator Weighted average shares of common stock outstanding - basic 116,088 16,458 111,389 16,140 Potential dilutive effect of derivative instruments 2,816 1,409 — — Potential dilutive effect of restricted stock units 12,140 — — — Weighted average shares of common stock outstanding - diluted 131,044 17,867 111,389 16,140 Net income (loss) attributable to common stockholders per share Basic $ 0.00 $ 0.00 $ (0.13) $ (0.13) Diluted $ 0.00 $ 0.00 $ (0.13) $ (0.13) For the periods presented above, the net income (loss) per share amounts are the same for Class A and Class B common stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with the Certificate of Incorporation. The undistributed earnings (losses) for each period are allocated based on the contractual participation rights of the Class A and Class B common stock as if the earnings (losses) for the period had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings (losses) are allocated on a proportionate basis. The following equity awards outstanding at the end of each period presented have been excluded from the computation of diluted net income (loss) per share of common stock for the periods presented due to their anti-dilutive effect: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Stock options 128 133 100 12,262 Restricted stock units — — — 8,311 Public Warrants 5,382 5,382 5,382 5,382 Private Warrants 3,822 3,821 3,822 3,821 Earnout Shares 15,000 15,000 15,000 15,000 24,332 24,336 24,304 44,776 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income (loss) | $ 3,800 | $ 3,629 | $ 471 | $ (16,080) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements include the accounts of PLAYSTUDIOS, Inc. and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Certain reclassifications in these financial statements have been made to comply with US GAAP applicable to public companies and SEC Regulation S-X. The significant accounting policies referenced in the annual consolidated financial statements of the Company as of December 31, 2022 have been applied consistently in these unaudited interim condensed consolidated financial statements. In the opinion of the Company, the accompanying unaudited financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position as of September 30, 2023, and its results of operations for the three and nine months ended September 30, 2023, and 2022, and cash flows for the nine months ended September 30, 2023, and 2022. The Condensed Consolidated Balance Sheet as of December 31, 2022 was derived from the audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The Company made certain reclassifications to the comparative balances in the condensed consolidated financial statements to conform with current year presentation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and notes thereto. Significant estimates and assumptions reflected in the Company’s condensed consolidated financial statements include the estimated consumption rate of virtual goods that is used in the determination of revenue recognition, useful lives of property and equipment and definite-lived intangible assets, the expensing and capitalization of research and development costs for internal-use software, assumptions used in accounting for income taxes, stock-based compensation and the evaluation of goodwill and long-lived assets for impairment. The Company believes the accounting estimates are appropriate and reasonably determined. Due to the inherent uncertainties in making these estimates, actual amounts could differ materially. |
Recently Issued Accounting Pronouncements Not Yet Adopted and Recently Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements Not Yet Adopted The Company’s management has evaluated all of the recently issued, but not yet effective, accounting standards that have been issued or proposed by the Financial Accounting Standards Board (“FASB”) or other standards-setting bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements will have a material effect on the Company’s condensed consolidated financial statements. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). The new guidance replaces the incurred loss impairment methodology in current guidance with a current expected credit loss model (“CECL”) that incorporates a broader range of reasonable and supportable information including the forward-looking information. The Company adopted this standard on January 1, 2023. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements. |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed Recognized at the Acquisition Date | The following table summarizes the consideration paid for WonderBlocks and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date: Consideration: August 2, Cash consideration $ 945 Note receivable plus accrued interest conversion 1,055 Contingent consideration 1,564 Total consideration transferred $ 3,564 Identifiable assets acquired and liabilities assumed: Developed technology (weighted-average useful life of 5 years) 2,403 Liabilities assumed (15) Total identifiable net assets $ 2,388 Goodwill $ 1,176 Consideration: October 12, Cash consideration $ 73,457 Contingent consideration 1,797 Total consideration transferred $ 75,254 Identifiable assets acquired and liabilities assumed: Cash and cash equivalents $ 3,738 Accounts receivable 3,190 Property and equipment 4,042 Operating lease assets 4,195 Trade names (weighted-average useful life of 10 years) 1,500 Developed technology (weighted-average useful life of 5 years) 12,600 Customer relationships (weighted-average useful life of 5 years) 12,000 Other assets 740 Liabilities assumed (7,649) Total identifiable net assets $ 34,356 Goodwill $ 40,898 |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Balance Sheet Assets and Liabilities from Related Parties | The following table is a summary of balance sheet assets and liabilities from related parties: September 30, December 31, Financial Statement Line Item Marketing Agreement $ 1,000 $ 1,000 Intangibles, net |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of Receivables | Receivables consist of the following: September 30, December 31, Trade receivables $ 28,802 $ 25,020 Other receivables 699 1,996 Total receivables $ 29,501 $ 27,016 |
Schedule of Major Receivables | The following table summarizes the major receivables of the Company as a percentage of the total receivables as of the dates indicated: September 30, December 31, Apple, Inc. 47.8 % 33.6 % Google, Inc. 20.9 % 27.2 % |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following: September 30, December 31, Prepaid expenses $ 4,168 5,148 Income tax receivable 3,559 1,372 Other current assets 3,050 8,443 Total other current assets $ 10,777 $ 14,963 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Liabilities Measured at Fair Value on a Recurring Basis | The following tables present the liabilities measured at fair value on a recurring basis, by input level, in the Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022: September 30, 2023 Level 1 Level 2 Level 3 Total Financial liabilities: Public Warrants $ 1,346 — — 1,346 Private Warrants — 955 — 955 Total financial liabilities $ 1,346 $ 955 $ — $ 2,301 December 31, 2022 Level 1 Level 2 Level 3 Total Financial liabilities: Public Warrants $ 2,153 — — 2,153 Private Warrants — 1,529 — 1,529 Total financial liabilities $ 2,153 $ 1,529 $ — $ 3,682 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, net | Property and equipment, net consists of the following: September 30, December 31, Land and land improvements $ 1,680 1,382 Building and building improvements 5,763 3,705 Computer equipment 8,795 9,423 Leasehold improvements 9,610 10,204 Purchased software 2,309 4,471 Furniture and fixtures 4,288 3,553 Construction in progress 144 648 Total property and equipment 32,589 33,386 Less: accumulated depreciation (14,562) (15,854) Total property and equipment, net $ 18,027 $ 17,532 |
Schedule of Property and Equipment, Net by Region | Property and equipment, net by region consists of the following: September 30, December 31, United States $ 14,048 $ 12,331 EMEA (1)(2) 2,667 3,756 All other countries (2) 1,312 1,445 Total property and equipment, net $ 18,027 $ 17,532 (1) Europe, Middle East, and Africa (“EMEA”). (2) Amounts primarily represent leasehold improvements of local office space and computer equipment. |
INTANGIBLE ASSETS AND INTERNA_2
INTANGIBLE ASSETS AND INTERNAL-USE SOFTWARE, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset other than goodwill: September 30, 2023 December 31, 2022 Gross Accumulated Net Gross Accumulated Net Amortizable intangible assets: Licenses $ 31,121 $ (16,336) $ 14,785 $ 21,040 $ (7,962) $ 13,078 Acquired technology 15,003 (3,081) 11,922 15,003 (830) 14,173 Customer relationships 12,000 (2,400) 9,600 12,000 (600) 11,400 Trade names 2,740 (1,390) 1,350 2,740 (1,278) 1,462 Internal-use software 162,547 (126,624) 35,923 145,798 (109,680) 36,118 Other 139 (2) 137 — — — 223,550 (149,833) 73,717 196,581 (120,350) 76,231 Nonamortizable intangible assets: Marketing Agreement with a related party 1,000 — 1,000 1,000 — 1,000 Total intangible assets $ 224,550 $ (149,833) $ 74,717 $ 197,581 $ (120,350) $ 77,231 |
Schedule of Indefinite-Lived Intangible Assets | The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset other than goodwill: September 30, 2023 December 31, 2022 Gross Accumulated Net Gross Accumulated Net Amortizable intangible assets: Licenses $ 31,121 $ (16,336) $ 14,785 $ 21,040 $ (7,962) $ 13,078 Acquired technology 15,003 (3,081) 11,922 15,003 (830) 14,173 Customer relationships 12,000 (2,400) 9,600 12,000 (600) 11,400 Trade names 2,740 (1,390) 1,350 2,740 (1,278) 1,462 Internal-use software 162,547 (126,624) 35,923 145,798 (109,680) 36,118 Other 139 (2) 137 — — — 223,550 (149,833) 73,717 196,581 (120,350) 76,231 Nonamortizable intangible assets: Marketing Agreement with a related party 1,000 — 1,000 1,000 — 1,000 Total intangible assets $ 224,550 $ (149,833) $ 74,717 $ 197,581 $ (120,350) $ 77,231 |
Schedule of Estimated Annual Amortization Expense | As of September 30, 2023, the estimated annual amortization expense is as follows: Year Ending December 31, Projected Amortization Remaining 2023 $ 10,691 2024 34,346 2025 15,468 2026 8,269 2027 4,129 Thereafter 814 Total $ 73,717 |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table provides the changes in the carrying amount of goodwill for the nine months ended September 30, 2023: Goodwill, Gross Accumulated Impairment Goodwill, Net Balance as of December 31, 2022 47,133 — 47,133 Additions from acquisitions — — — Measurement period adjustments — — — Balance as of September 30, 2023 $ 47,133 $ — $ 47,133 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: September 30, December 31, Accrued payroll and vacation 8,991 9,666 Accrued user acquisition 5,867 4,183 Income taxes payable 1,954 702 Minimum guarantee liability 4,790 1,500 Other accruals 3,811 5,422 Total accrued liabilities $ 25,413 $ 21,473 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Operating Leases | Supplemental balance sheet information related to operating leases are as follows: September 30, 2023 December 31, 2022 Operating lease right-of-use assets, net $ 10,212 $ 15,562 Operating lease liabilities, current $ 4,219 $ 4,571 Operating lease liabilities, noncurrent 6,545 11,660 Operating lease liabilities, total $ 10,764 $ 16,231 Weighted average remaining lease term, years 3.2 4.0 Weighted average discount rate 4.5 % 3.3 % |
Schedule of Operating Lease Liability Maturities | Operating lease liability maturities: Year ending December 31, Operating Leases Remaining 2023 $ 1,083 2024 4,512 2025 2,292 2026 1,963 2027 1,356 Thereafter 382 Total undiscounted cash flows $ 11,588 Less: imputed interest (824) Lease liabilities, total $ 10,764 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Type | The following table summarizes the Company’s revenue disaggregated by type, and by over time or point in time recognition: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Virtual currency (over time) (1) $ 61,558 $ 65,607 $ 187,565 $ 195,377 Advertising (point in time) 14,190 3,807 41,608 11,364 Other revenue (point in time or over time) 110 2,713 4,601 4,190 Total net revenue $ 75,858 $ 72,127 $ 233,774 $ 210,931 (1) Virtual currency is recognized over the estimated consumption period. |
Schedule of Disaggregation of Revenue by Geography | The following table summarizes the Company’s revenue disaggregated by geography: Three Months Ended Nine Months Ended 2023 2022 2023 2022 United States $ 64,414 $ 63,501 $ 200,566 $ 185,646 All other countries 11,444 8,626 33,208 25,285 Total net revenue $ 75,858 $ 72,127 $ 233,774 $ 210,931 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Minimum Guaranteed Obligations | The following are the Company’s total minimum guaranteed obligations as of: September 30, December 31, Minimum guarantee liability-current $ 4,790 $ 1,500 Minimum guarantee liability-noncurrent — 1,500 Total minimum guarantee obligations $ 4,790 $ 3,000 Weighted-average remaining contractual term (in years) 1.3 2.0 |
Schedule of Remaining Expected Future Minimum Guarantee Obligations | The following are the Company’s remaining expected future payments of minimum guarantee obligations as of September 30, 2023: Year Ending December 31, Minimum Guarantee Remaining 2023 $ 1,960 2024 2,830 2025 — 2026 — 2027 — Total $ 4,790 |
Schedule of Changes in Severance Charges and Related Accruals | For the three and nine months ended September 30, 2023 , changes in liabilities resulting from the severance charges and related accruals were as follows: Total Balance as of December 31, 2022 $ — Charges 3,185 Payments (2,135) Balance as of June 30, 2023 $ 1,050 Charges 187 Payments (1,108) Balance as of September 30, 2023 $ 129 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Loss | The following tables shows a summary of changes in accumulated other comprehensive loss: Currency Total Accumulated Other Comprehensive Loss Balance as of December 31, 2022 $ (151) $ (151) Foreign currency translation (871) (871) Balance as of September 30, 2023 $ (1,022) $ (1,022) Currency Total Accumulated Other Comprehensive Income (Loss) Balance as of December 31, 2021 $ 393 $ 393 Foreign currency translation (561) (561) Balance as of September 30, 2022 $ (168) $ (168) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The following table summarizes stock-based compensation expense for the periods shown: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Selling and marketing $ 205 $ 165 $ 585 $ 646 General and administrative 1,975 1,767 7,086 6,319 Research and development 2,164 1,622 6,720 6,598 Stock-based compensation expense $ 4,344 $ 3,554 $ 14,391 $ 13,563 Capitalized stock-based compensation $ 412 $ 430 $ 1,340 $ 1,966 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule Basic and Diluted Net Loss Attributable to Common Stockholders | The following table sets forth the computation of basic and diluted net income (loss) attributable to Class A and Class B common stockholders per share (in thousands except per share data): Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Class A Class B Class A Class B Numerator Net income attributable to common stockholders – basic $ 3,331 $ 469 $ 3,175 $ 454 Potential dilutive effect of derivative instruments 16 (16) 21 (21) Net income attributable to common stockholders – diluted $ 3,347 $ 453 $ 3,196 $ 433 Denominator Weighted average shares of common stock outstanding - basic 116,893 16,458 112,873 16,159 Potential dilutive effect of stock options 2,773 1,391 8,206 1,371 Potential dilutive effect of restricted stock units 12,140 — 8,311 — Weighted average shares of common stock outstanding - diluted 131,806 17,849 129,390 17,530 Net income attributable to common stockholders per share Basic $ 0.03 $ 0.03 $ 0.03 $ 0.03 Diluted $ 0.03 $ 0.03 $ 0.02 $ 0.02 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Class A Class B Class A Class B Numerator Net income (loss) attributable to common stockholders – basic $ 413 $ 58 $ (14,045) $ (2,035) Potential dilutive effect of derivative instruments 2 (2) — — Net income (loss) attributable to common stockholders – diluted $ 415 $ 56 $ (14,045) $ (2,035) Denominator Weighted average shares of common stock outstanding - basic 116,088 16,458 111,389 16,140 Potential dilutive effect of derivative instruments 2,816 1,409 — — Potential dilutive effect of restricted stock units 12,140 — — — Weighted average shares of common stock outstanding - diluted 131,044 17,867 111,389 16,140 Net income (loss) attributable to common stockholders per share Basic $ 0.00 $ 0.00 $ (0.13) $ (0.13) Diluted $ 0.00 $ 0.00 $ (0.13) $ (0.13) |
Schedule of Excluded Securities from Computation of Diluted Net Loss Per Share | The following equity awards outstanding at the end of each period presented have been excluded from the computation of diluted net income (loss) per share of common stock for the periods presented due to their anti-dilutive effect: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Stock options 128 133 100 12,262 Restricted stock units — — — 8,311 Public Warrants 5,382 5,382 5,382 5,382 Private Warrants 3,822 3,821 3,822 3,821 Earnout Shares 15,000 15,000 15,000 15,000 24,332 24,336 24,304 44,776 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) | Oct. 12, 2022 | Aug. 02, 2022 |
WonderBlocks Labs, Inc. | ||
Schedule of Reverse Recapitalization [Line Items] | ||
Consideration transferred | $ 2,000,000 | |
Goodwill deductible for federal income tax purposes | $ 0 | |
Brainium Studios LLC (“Brainium") | ||
Schedule of Reverse Recapitalization [Line Items] | ||
Acquisition of subsidiary, net of cash | $ 70,000,000 |
BUSINESS COMBINATIONS - Schedul
BUSINESS COMBINATIONS - Schedule of Assets Acquired and Liabilities Assumed Recognized at the Acquisition Date (Details) - USD ($) $ in Thousands | Oct. 12, 2022 | Aug. 02, 2022 | Sep. 30, 2023 | Dec. 31, 2022 |
Asset Acquisition [Line Items] | ||||
Goodwill | $ 47,133 | $ 47,133 | ||
WonderBlocks Labs, Inc. | ||||
Asset Acquisition [Line Items] | ||||
Cash consideration | $ 945 | |||
Note receivable plus accrued interest conversion | 1,055 | |||
Contingent consideration | 1,564 | |||
Total consideration transferred | 3,564 | |||
Weighted average useful life | 2,403 | |||
Liabilities assumed | (15) | |||
Total identifiable net assets | 2,388 | |||
Goodwill | $ 1,176 | |||
WonderBlocks Labs, Inc. | Developed technology | ||||
Asset Acquisition [Line Items] | ||||
Weighted average useful life | 5 years | |||
Brainium Studios LLC (“Brainium") | ||||
Asset Acquisition [Line Items] | ||||
Cash consideration | $ 73,457 | |||
Contingent consideration | 1,797 | |||
Total consideration transferred | 75,254 | |||
Cash and cash equivalents | 3,738 | |||
Accounts receivable | 3,190 | |||
Property and equipment | 4,042 | |||
Operating lease assets | 4,195 | |||
Other assets | 740 | |||
Liabilities assumed | (7,649) | |||
Total identifiable net assets | 34,356 | |||
Goodwill | 40,898 | |||
Brainium Studios LLC (“Brainium") | Trade names | ||||
Asset Acquisition [Line Items] | ||||
Weighted average useful life | $ 1,500 | |||
Weighted average useful life | 10 years | |||
Brainium Studios LLC (“Brainium") | Developed technology | ||||
Asset Acquisition [Line Items] | ||||
Weighted average useful life | $ 12,600 | |||
Weighted average useful life | 5 years | |||
Brainium Studios LLC (“Brainium") | Customer relationships | ||||
Asset Acquisition [Line Items] | ||||
Weighted average useful life | $ 12,000 | |||
Weighted average useful life | 5 years |
RELATED-PARTY TRANSACTIONS - Sc
RELATED-PARTY TRANSACTIONS - Schedule of Balance Sheet Assets and Liabilities from Related Parties (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Intangibles, net | $ 74,717 | $ 77,231 |
Related Party | Marketing Agreement | ||
Related Party Transaction [Line Items] | ||
Intangibles, net | $ 1,000 | $ 1,000 |
RELATED-PARTY TRANSACTIONS - Na
RELATED-PARTY TRANSACTIONS - Narrative (Details) - Related Party - MGM - shares shares in Millions | 1 Months Ended | ||
Jul. 31, 2012 | Sep. 30, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Common stock, shares outstanding (shares) | 16.6 | 16.6 | |
Marketing Agreement | |||
Related Party Transaction [Line Items] | |||
Initial term | 1 year |
RECEIVABLES - Schedule Receivab
RECEIVABLES - Schedule Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Trade receivables | $ 28,802 | $ 25,020 |
Other receivables | 699 | 1,996 |
Total receivables | $ 29,501 | $ 27,016 |
RECEIVABLES - Narrative (Detail
RECEIVABLES - Narrative (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
RECEIVABLES - Schedule of Major
RECEIVABLES - Schedule of Major Receivables (Details) - Total receivables - Customer concentration | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Apple, Inc. | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 47.80% | 33.60% |
Google, Inc. | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 20.90% | 27.20% |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 4,168 | $ 5,148 |
Income tax receivable | 3,559 | 1,372 |
Other current assets | 3,050 | 8,443 |
Total other current assets | $ 10,777 | $ 14,963 |
FAIR VALUE MEASUREMENT - Liabil
FAIR VALUE MEASUREMENT - Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | $ 2,301 | $ 3,682 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 2,301 | 3,682 |
Recurring | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 1,346 | 2,153 |
Recurring | Private Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 955 | 1,529 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 1,346 | 2,153 |
Recurring | Level 1 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 1,346 | 2,153 |
Recurring | Level 1 | Private Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 0 | 0 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 955 | 1,529 |
Recurring | Level 2 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 0 | 0 |
Recurring | Level 2 | Private Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 955 | 1,529 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 0 | 0 |
Recurring | Level 3 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 0 | 0 |
Recurring | Level 3 | Private Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | $ 0 | $ 0 |
PROPERTY AND EQUIPMENT, NET - P
PROPERTY AND EQUIPMENT, NET - Property, and Equipment, net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 32,589 | $ 33,386 |
Less: accumulated depreciation | (14,562) | (15,854) |
Total property and equipment, net | 18,027 | 17,532 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,680 | 1,382 |
Building and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 5,763 | 3,705 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 8,795 | 9,423 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 9,610 | 10,204 |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,309 | 4,471 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 4,288 | 3,553 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 144 | $ 648 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 1,200,000 | $ 1,200,000 | $ 4,200,000 | $ 3,100,000 |
Impairment charges or write-offs | $ 0 | $ 0 | $ 0 | $ 0 |
PROPERTY AND EQUIPMENT, NET -_2
PROPERTY AND EQUIPMENT, NET - Property and Equipment, net by Region (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, net | $ 18,027 | $ 17,532 |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, net | 14,048 | 12,331 |
EMEA | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, net | 2,667 | 3,756 |
All Other Countries | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, net | $ 1,312 | $ 1,445 |
INTANGIBLE ASSETS AND INTERNA_3
INTANGIBLE ASSETS AND INTERNAL-USE SOFTWARE, NET - Intangible Asset Other Than Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable intangible assets, Gross Carrying Amount | $ 223,550 | $ 196,581 |
Amortizable intangible assets, Accumulated Amortization | (149,833) | (120,350) |
Total | 73,717 | 76,231 |
Indefinite-lived Intangible Assets [Line Items] | ||
Total intangible assets, Gross Carrying Amount | 224,550 | 197,581 |
Total intangible assets, Net Carrying Amount | 74,717 | 77,231 |
Marketing Agreement with a related party | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Nonamortizable intangible assets: | 1,000 | 1,000 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable intangible assets, Gross Carrying Amount | 31,121 | 21,040 |
Amortizable intangible assets, Accumulated Amortization | (16,336) | (7,962) |
Total | 14,785 | 13,078 |
Acquired technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable intangible assets, Gross Carrying Amount | 15,003 | 15,003 |
Amortizable intangible assets, Accumulated Amortization | (3,081) | (830) |
Total | 11,922 | 14,173 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable intangible assets, Gross Carrying Amount | 12,000 | 12,000 |
Amortizable intangible assets, Accumulated Amortization | (2,400) | (600) |
Total | 9,600 | 11,400 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable intangible assets, Gross Carrying Amount | 2,740 | 2,740 |
Amortizable intangible assets, Accumulated Amortization | (1,390) | (1,278) |
Total | 1,350 | 1,462 |
Internal-use software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable intangible assets, Gross Carrying Amount | 162,547 | 145,798 |
Amortizable intangible assets, Accumulated Amortization | (126,624) | (109,680) |
Total | 35,923 | 36,118 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable intangible assets, Gross Carrying Amount | 139 | 0 |
Amortizable intangible assets, Accumulated Amortization | (2) | 0 |
Total | $ 137 | $ 0 |
INTANGIBLE ASSETS AND INTERNA_4
INTANGIBLE ASSETS AND INTERNAL-USE SOFTWARE, NET - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Nov. 03, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Capitalized internal-use software development costs | $ 5,500,000 | $ 5,600,000 | $ 17,900,000 | $ 17,600,000 | ||
Amortization | 10,300,000 | $ 7,400,000 | 29,500,000 | 22,200,000 | ||
Impairment charges for internal-use software | $ 1,100,000 | $ 0 | $ 1,100,000 | $ 8,400,000 | ||
Subsequent Event | Licenses | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Increase in intangible assets and internal-use software, net | $ 32,000,000 | |||||
Minimum guarantee liabilities | $ 32,000,000 |
INTANGIBLE ASSETS AND INTERNA_5
INTANGIBLE ASSETS AND INTERNAL-USE SOFTWARE, NET - Estimated Annual Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remaining 2023 | $ 10,691 | |
2024 | 34,346 | |
2025 | 15,468 | |
2026 | 8,269 | |
2027 | 4,129 | |
Thereafter | 814 | |
Total | $ 73,717 | $ 76,231 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Goodwill, Gross beginning balance | $ 47,133 | |
Accumulated Impairment | 0 | $ 0 |
Goodwill, Net beginning balance | 47,133 | |
Additions from acquisitions | 0 | |
Measurement period adjustments | 0 | |
Goodwill, Gross ending balance | 47,133 | |
Goodwill, Net ending balance | $ 47,133 |
WARRANT LIABILITIES (Details)
WARRANT LIABILITIES (Details) - USD ($) $ / shares in Units, $ in Millions | May 13, 2022 | Jun. 21, 2021 | Sep. 30, 2023 | Apr. 01, 2022 | Oct. 27, 2021 |
Public Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants outstanding (shares) | 7,200,000 | 5,400,000 | |||
Redemption price (USD per share) | $ 11.50 | ||||
Warrants expiration term | 5 years | ||||
Redemption price (USD per share) | $ 0.01 | ||||
Minimum days notice to redeem | 30 days | ||||
Threshold stock price for warrant redemption (USD per share) | $ 18 | ||||
Threshold trading days | 20 days | ||||
Threshold consecutive trading days | 30 days | ||||
Days before redemption notice | 3 days | ||||
Warrant tendered, outstanding (shares) | 1,792,463 | ||||
Percentage of outstanding warrant valid for tender | 25% | ||||
Public Warrants | Offer to Purchase | |||||
Class of Warrant or Right [Line Items] | |||||
Redemption price (USD per share) | $ 1 | ||||
Payment for each warrant tendered by holders | $ 1.8 | ||||
Payment of warrant tendered fees, expenses and other related amounts incurred | $ 1.1 | ||||
Private Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants outstanding (shares) | 3,800,000 | 3,800,000 | |||
Warrant to share conversion (shares) | 1 | ||||
Private Warrants | Offer to Purchase | |||||
Class of Warrant or Right [Line Items] | |||||
Redemption price (USD per share) | $ 1 |
ACCRUED LIABILITIES - Schedule
ACCRUED LIABILITIES - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued payroll and vacation | $ 8,991 | $ 9,666 |
Accrued user acquisition | 5,867 | 4,183 |
Income taxes payable | 1,954 | 702 |
Minimum guarantee liability | 4,790 | 1,500 |
Other accruals | 3,811 | 5,422 |
Total accrued liabilities | $ 25,413 | $ 21,473 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease expense | $ 1.2 | $ 1 | $ 3.7 | $ 2.9 |
LEASES - Schedule of Supplement
LEASES - Schedule of Supplemental Balance Sheet Information Related to Operating Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating lease right-of-use assets, net | $ 10,212 | $ 15,562 |
Operating lease liabilities, current | 4,219 | 4,571 |
Operating lease liabilities, non-current | 6,545 | 11,660 |
Operating lease liabilities, total | $ 10,764 | $ 16,231 |
Weighted average remaining lease term, years | 3 years 2 months 12 days | 4 years |
Weighted average discount rate | 4.50% | 3.30% |
LEASES - Schedule of Operating
LEASES - Schedule of Operating Lease Liability Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Remaining 2023 | $ 1,083 | |
2024 | 4,512 | |
2025 | 2,292 | |
2026 | 1,963 | |
2027 | 1,356 | |
Thereafter | 382 | |
Total undiscounted cash flows | 11,588 | |
Less: imputed interest | (824) | |
Lease liabilities, total | $ 10,764 | $ 16,231 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | Aug. 09, 2022 USD ($) | Jun. 24, 2021 USD ($) | Aug. 08, 2022 USD ($) | May 13, 2022 USD ($) |
Amendment No. 2 to the Credit Agreement | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Warrants repurchased or redeemed | $ 11,000,000 | |||
Revolver | Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Expiration period | 5 years | |||
Maximum borrowing amount | $ 75,000,000 | |||
Maximum net leverage ratio | 3.50 | |||
Maximum net leverage ratio for material acquisitions | 4 | |||
Minimum fixed charge coverage ratio | 1.25 | |||
Debt issuance costs capitalized | 700,000 | |||
Revolver | Credit Agreement | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing amount | 81,000,000 | $ 75,000,000 | $ 15,000,000 | |
Drew down amount | 1,800,000 | |||
Revolver | Credit Agreement | Line of Credit | 10150 Covington Cross Drive, Las Vegas, Nevada 89144 | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing amount | 6,000,000 | |||
Revolver | Credit Agreement | Eurodollar | ||||
Line of Credit Facility [Line Items] | ||||
Applicable margin | 2.50% | |||
Applicable floor margin | 0% | |||
Revolver | Credit Agreement | Alternate Base Rate | ||||
Line of Credit Facility [Line Items] | ||||
Applicable margin | 1.50% | |||
Applicable floor margin | 1% | |||
Revolver | Amendment No. 2 to the Credit Agreement | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing amount | $ 20,000,000 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||||
Total net revenue | $ 75,858,000 | $ 72,127,000 | $ 233,774,000 | $ 210,931,000 | |
Contract assets | 0 | 0 | $ 0 | ||
United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Total net revenue | 64,414,000 | 63,501,000 | 200,566,000 | 185,646,000 | |
All other countries | |||||
Disaggregation of Revenue [Line Items] | |||||
Total net revenue | 11,444,000 | 8,626,000 | 33,208,000 | 25,285,000 | |
Virtual currency (over time) | |||||
Disaggregation of Revenue [Line Items] | |||||
Total net revenue | 61,558,000 | 65,607,000 | 187,565,000 | 195,377,000 | |
Advertising (point in time) | |||||
Disaggregation of Revenue [Line Items] | |||||
Total net revenue | 14,190,000 | 3,807,000 | 41,608,000 | 11,364,000 | |
Other revenue (point in time or over time) | |||||
Disaggregation of Revenue [Line Items] | |||||
Total net revenue | $ 110,000 | $ 2,713,000 | $ 4,601,000 | $ 4,190,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit | $ 2,139 | $ 1,763 | $ 2,437 | $ 6,186 |
Effective tax rate | (128.80%) | (94.50%) | 124% | 27.80% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Schedule of Minimum Guaranteed Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Minimum guarantee liability-current | $ 4,790 | $ 1,500 |
Minimum guarantee liability-noncurrent | 0 | 1,500 |
Total minimum guarantee obligations | $ 4,790 | $ 3,000 |
Weighted-average remaining contractual term (in years) | 1 year 3 months 18 days | 2 years |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Schedule of Remaining Expected Future Minimum Guarantee Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remaining 2023 | $ 1,960 | |
2024 | 2,830 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Total minimum guarantee obligations | $ 4,790 | $ 3,000 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Narrative (Details) ₪ in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Nov. 22, 2021 USD ($) | Nov. 03, 2023 USD ($) | May 31, 2021 ILS (₪) | Sep. 30, 2023 USD ($) demand | Jun. 30, 2023 | Sep. 30, 2023 USD ($) demand | Feb. 25, 2022 | Aug. 12, 2021 | |
Internal Reorganization Plan | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Reduction of current total global workforce | 14% | |||||||
Costs incurred | $ 0.2 | $ 3.4 | ||||||
TeamSava and other related parties | Pending litigation | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Damages sought | ₪ | ₪ 27.3 | |||||||
Shareholder Class Action | Pending litigation | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Share price decrease percentage | 5% | 13% | ||||||
Demand For Arbitration | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Number of demands | demand | 4 | 4 | ||||||
Licenses | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Payment on conditions | $ 13 | |||||||
Licenses | Subject to Satisfaction of Certain Conditions | N3TWORK Inc | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Additional contingent payment | $ 34 | |||||||
Contingent consideration payment | $ 8 | |||||||
Advance Payment | $ 5.6 | $ 5.6 | ||||||
Licenses | Subject to Satisfaction of Certain Conditions | N3TWORK Inc | Subsequent Event | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Remaining contingent consideration, high | $ 17 | |||||||
Remaining contingent consideration, low | $ 3.5 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Schedule of Changes in Severance Charges and Related Accruals (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Restructuring Reserve [Roll Forward] | |||||
Charges | $ 1,280 | $ 796 | $ 7,112 | $ 10,968 | |
Internal Reorganization Plan | |||||
Restructuring Reserve [Roll Forward] | |||||
Balance as of December 31, 2022 | 1,050 | $ 0 | 0 | ||
Charges | 187 | 3,185 | |||
Payments | (1,108) | (2,135) | |||
Balance as of September 30, 2023 | $ 129 | $ 1,050 | $ 129 |
STOCKHOLDERS_ EQUITY - Narrativ
STOCKHOLDERS’ EQUITY - Narrative (Details) $ / shares in Units, shares in Millions | 9 Months Ended | |||
Nov. 02, 2022 | Nov. 10, 2021 USD ($) | Sep. 30, 2023 USD ($) vote $ / shares shares | Nov. 01, 2023 USD ($) | |
Class of Stock [Line Items] | ||||
Ownership conversion trigger percent | 20% | |||
Founder's death anniversary trigger | 9 months | |||
Stock repurchase program (up to) | $ 50,000,000 | |||
Stock repurchase program period | 12 months | 12 months | ||
Remaining availability | $ 30,000,000 | |||
Subsequent Event | ||||
Class of Stock [Line Items] | ||||
Remaining availability | $ 50,000,000 | |||
Class A common stock | ||||
Class of Stock [Line Items] | ||||
Votes per share | vote | 1 | |||
Acquired shares (shares) | shares | 4.7 | |||
Acquired shares | $ 20,000,000 | |||
Acquired shares average cost (USD per share) | $ / shares | $ 4.23 | |||
Class B common stock | ||||
Class of Stock [Line Items] | ||||
Votes per share | vote | 20 |
STOCKHOLDERS_ EQUITY - Schedule
STOCKHOLDERS’ EQUITY - Schedule of Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 295,245 | $ 295,590 | $ 302,313 | $ 303,467 |
Foreign currency translation | (393) | (159) | (871) | (561) |
Ending balance | 302,236 | 303,503 | 302,236 | 303,503 |
Currency Translation Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (151) | 393 | ||
Foreign currency translation | (871) | (561) | ||
Ending balance | (1,022) | (168) | (1,022) | (168) |
Total Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (629) | (9) | (151) | 393 |
Foreign currency translation | (393) | (159) | (871) | (561) |
Ending balance | $ (1,022) | $ (168) | $ (1,022) | $ (168) |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 4,344 | $ 3,554 | $ 14,391 | $ 13,563 |
Capitalized stock-based compensation | 412 | 430 | 1,340 | 1,966 |
Selling and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 205 | 165 | 585 | 646 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 1,975 | 1,767 | 7,086 | 6,319 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 2,164 | $ 1,622 | $ 6,720 | $ 6,598 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Stock options | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total unrecognized compensation expense, option | $ 0.5 | $ 0.5 | ||
Remaining average period cost expected to be recognized over | 10 months 24 days | |||
Restricted stock units | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total unrecognized compensation expense, option | $ 39.3 | $ 39.3 | ||
Remaining average period cost expected to be recognized over | 2 years 8 months 12 days | |||
Granted (shares) | 0.4 | 1.8 | 4.4 | 10.3 |
NET INCOME (LOSS) PER SHARE - S
NET INCOME (LOSS) PER SHARE - Schedule Basic and Diluted Net Income Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Denominator | ||||
Weighted average shares of common stock outstanding - basic (shares) | 133,351 | 129,032 | 132,546 | 127,529 |
Weighted average shares of common stock outstanding - diluted (shares) | 149,655 | 146,920 | 148,911 | 127,529 |
Net income (loss) attributable to common stockholders per share | ||||
Basic (USD per share) | $ 0.03 | $ 0.03 | $ 0 | $ (0.13) |
Diluted (USD per share) | $ 0.03 | $ 0.02 | $ 0 | $ (0.13) |
Class A common stock | ||||
Numerator | ||||
Net income (loss) attributable to common stockholders – basic | $ 3,331 | $ 3,175 | $ 413 | $ (14,045) |
Potential dilutive effect of derivative instruments | 16 | 21 | 2 | 0 |
Net income (loss) attributable to common stockholders – diluted | $ 3,347 | $ 3,196 | $ 415 | $ (14,045) |
Denominator | ||||
Weighted average shares of common stock outstanding - basic (shares) | 116,893 | 112,873 | 116,088 | 111,389 |
Potential dilutive effect of stock options (shares) | 2,773 | 8,206 | 2,816 | 0 |
Potential dilutive effect of restricted stock units (shares) | 12,140 | 8,311 | 12,140 | 0 |
Weighted average shares of common stock outstanding - diluted (shares) | 131,806 | 129,390 | 131,044 | 111,389 |
Net income (loss) attributable to common stockholders per share | ||||
Basic (USD per share) | $ 0.03 | $ 0.03 | $ 0 | $ (0.13) |
Diluted (USD per share) | $ 0.03 | $ 0.02 | $ 0 | $ (0.13) |
Class B common stock | ||||
Numerator | ||||
Net income (loss) attributable to common stockholders – basic | $ 469 | $ 454 | $ 58 | $ (2,035) |
Potential dilutive effect of derivative instruments | (16) | (21) | (2) | 0 |
Net income (loss) attributable to common stockholders – diluted | $ 453 | $ 433 | $ 56 | $ (2,035) |
Denominator | ||||
Weighted average shares of common stock outstanding - basic (shares) | 16,458 | 16,159 | 16,458 | 16,140 |
Potential dilutive effect of stock options (shares) | 1,391 | 1,371 | 1,409 | 0 |
Potential dilutive effect of restricted stock units (shares) | 0 | 0 | 0 | 0 |
Weighted average shares of common stock outstanding - diluted (shares) | 17,849 | 17,530 | 17,867 | 16,140 |
Net income (loss) attributable to common stockholders per share | ||||
Basic (USD per share) | $ 0.03 | $ 0.03 | $ 0 | $ (0.13) |
Diluted (USD per share) | $ 0.03 | $ 0.02 | $ 0 | $ (0.13) |
NET INCOME (LOSS) PER SHARE -_2
NET INCOME (LOSS) PER SHARE - Schedule of Excluded Securities from Computation of Diluted Net Income Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 24,332 | 24,336 | 24,304 | 44,776 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 128 | 133 | 100 | 12,262 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 0 | 0 | 0 | 8,311 |
Public Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 5,382 | 5,382 | 5,382 | 5,382 |
Private Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 3,822 | 3,821 | 3,822 | 3,821 |
Earnout Shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 15,000 | 15,000 | 15,000 | 15,000 |