Playboy, Inc.PLBY
Playboy, Inc. Fair Value Disclosure
Fair Value Measurements
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 inputs: Based on unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 inputs: Based on observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 inputs: Based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities, and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.
For cash equivalents, receivables and certain other current assets and liabilities at December 31, 2025 and 2024, the amounts reported approximate fair value (Level 1) due to their short-term nature. For debt, based upon the refinancing of our senior secured debt in May 2021, its restatement in 2023 and subsequent amendments in 2023, 2024 and 2025, we believe that its carrying value as of December 31, 2025 and 2024 approximates fair value, as our debt is variable-rate debt that reprices to current market rates frequently. Refer to Note 9, Debt, for additional disclosures about our debt. Our debt is classified within Level 2 of the valuation hierarchy.
The fair value of our artwork is based on Level 2 inputs, which include market prices obtained from recent auctions of similar works of art, or management’s judgment as to their salable value.
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
The following table summarizes the fair value of our financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):
| December 31, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Contingent consideration liability | $ | — | $ | — | $ | (618) | $ | (618) | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Contingent consideration liability | $ | — | $ | — | $ | (513) | $ | (513) | |||||||||||||||
There were no transfers of Level 3 financial instruments during the periods presented.
Contingent consideration liability relates to the contingent consideration recorded in connection with our 2021 acquisition of GlowUp Digital Inc. (“GlowUp”), which was acquired to build our creator platform, and represents the fair value for shares which may be still be issued and cash which may be paid to the GlowUp sellers, subject to certain indemnification obligations that remained unsettled as of December 31, 2025 and 2024.
We recorded the acquisition-date fair value of these contingent liabilities as part of the consideration transferred. The fair value option was elected for these contingent liabilities, as we believe fair value best reflects the expected future economic value. The fair value of contingent and deferred consideration was estimated using either (i) a Monte Carlo simulation analysis in an option pricing framework, using revenue projections, volatility and stock price as key inputs or (ii) a scenario-based valuation model using probability of payment, certain cost projections, and either discounting (in the case of cash-settled consideration) or stock price (for share-settled consideration) as key inputs. The analysis approach was chosen based on the terms of the purchase agreement and our assessment of appropriate methodology. The contingent payments and value of stock issuances are subsequently remeasured to fair value each reporting date using the same fair value estimation method originally applied with updated estimates and inputs as of December 31, 2025. Fair value change as a result of contingent liabilities fair value remeasurement in 2025 and 2024 was immaterial. We classified financial liabilities associated with the contingent consideration as Level 3 due to the lack of relevant observable inputs. Changes in key inputs described above could have an impact on the payout of contingent consideration.
The following table provides a roll-forward of the fair value of the liabilities categorized as Level 3 for the year ended December 31, 2025 (in thousands):
| Contingent Consideration | |||||
| Balance at December 31, 2024 | $ | 513 | |||
| Change in fair value and other | 105 | ||||
| Balance at December 31, 2025 | $ | 618 | |||
The increase in the fair value of the contingent consideration for the year ended December 31, 2025 was primarily due to the increase in the price per share of our common stock.
The fair value of our digital assets held, the cryptocurrency “Ethereum”, is based on Level 1 inputs. Recognized losses related to the fair value remeasurement of our digital assets during the year ended December 31, 2025 were immaterial, and the fair value of our digital assets was immaterial as of December 31, 2025 and 2024. Periods prior to December 31, 2025 include digital assets at cost, net of impairment losses incurred since their acquisition, which were immaterial for the year ended December 31, 2024.
Assets Measured and Recorded at Fair Value on a Nonrecurring Basis
In addition to liabilities that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a nonrecurring basis. Generally, the Company’s non-financial instruments, which primarily consist of goodwill, intangible assets, right-of-use assets and property and equipment, are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), non-financial instruments are assessed for impairment and, if applicable, written-down to and recorded at fair value, considering market participant assumptions.
We use an income approach, using discounted cash flow and relief from royalty valuation models with Level 3 inputs to measure the fair value of our non-financial assets, including goodwill, indefinite-lived trademarks and definite-lived trade names, and liabilities. With respect to goodwill, key assumptions applied in an income approach using the discounted cash flow valuation model include revenue growth rates and discount rates. With respect to indefinite-lived trademarks, key assumptions used in the income approach and the relief from royalty valuation model include revenue growth rates, royalty rates, and discount rates. With respect to the definite-lived trade names, key assumptions used in the relief from royalty valuation model include revenue growth rates, royalty rates and discount rates. Our cash flow projections represent management’s most recent planning assumptions, which are based on a combination of industry outlooks, views on general economic conditions, our expected pricing plans and expected future savings. Terminal values are determined using a common methodology of capturing the present value of perpetual cash flow estimates beyond the last projected period assuming a constant weighted-average cost of capital and long-term growth rates. Changes in key assumptions, namely discount rates, royalty rates and growth rates, could have an impact on the fair value of our non-financial assets and liabilities. At the impairment date in the third quarter of 2024, we recorded non-cash asset impairment charges related to the write-down of goodwill of $17.0 million. There were no impairment charges on our goodwill during the year ended December 31, 2025.
In the third quarter of 2024, we had impairment indicators with respect to our Playboy Club creator digital platform associated with a decrease in its revenue projections, and we determined that its carrying value was not recoverable as of September 30, 2024. As a result, we recorded $4.7 million of related to the write-off of its internally developed software during the year ended December 31, 2024. There were no such impairment charges during the year ended December 31, 2025.
During the year ended December 31, 2025, we recorded impairment charges of $1.5 million on our right-of-use assets related to our corporate leases and wrote off certain of our property, plant and equipment items in the aggregate amount of $0.4 million due to our decision to sublease certain of our corporate office space. Impairment charges on right-of-use assets pertaining to our corporate leases during the year ended December 31, 2024 were $0.6 million.
The following table provides information regarding significant unobservable inputs used in the valuation of our goodwill measured and recorded at fair value at the impairment date (dollar amounts in thousands):
| Fair Value | Valuation Technique | Unobservable Inputs | Range | |||||||||||||||||||||||
| September 30, 2024 | ||||||||||||||||||||||||||
| Goodwill | $ | 16,084 | Discounted cash flow | Revenue growth rate | 3.0% - 25.4% | |||||||||||||||||||||
Discount rate | 19.0 | % | ||||||||||||||||||||||||
Assets Held for Sale
In the fourth quarter of 2023, in connection with our transition to a more capital-light business model and to release additional working capital, we initiated the sale of certain pieces of our artwork at auction, but they were not fully disposed of as of December 31, 2025 or 2024. As of December 31, 2025 and 2024, unsold artwork assets met the criteria discussed in Note 1, Basis of Presentation and Summary of Significant Accounting Policies, to be classified as current assets held for sale in our consolidated balance sheets as of December 31, 2025 and 2024.
During the year ended December 31, 2025 and 2024, we sold certain pieces of our artwork held for sale for $0.8 million and $2.7 million, respectively, recording a $0.4 million loss on sale in each of the years of 2025 and 2024.
Additionally, we recorded $0.5 million and $3.8 million of impairment charges on our artwork in 2025 and 2024, respectively. Artwork classified as current assets held for sale in our accompanying consolidated balance sheets totaled $3.1 million and $4.8 million as of December 31, 2025 and 2024, respectively.
The assumptions used in measuring fair value of our artwork held for sale are considered Level 2 inputs, which include market prices obtained from recent auctions of similar works of art, or management’s judgment as to their salable value.
Series B Convertible Preferred Stock
On November 13, 2024, pursuant to the Exchange Agreement (as defined in Note 9 below), we issued an aggregate of 28,000.00001 shares of a newly created series of our preferred stock, par value $0.0001 per share, designated as “Series B Convertible Preferred Stock” (the “Series B Convertible Preferred Stock”), as consideration in exchange for approximately $6.4 million of Tranche A loans and approximately $58.9 million of Tranche B loans under the A&R Credit Agreement (as such terms are defined in Note 9, Debt, refer to such Note 9, Debt, for additional details).
The fair value of our only currently authorized (but no longer issued or outstanding as of December 31, 2025) preferred stock (our “Series B Convertible Preferred Stock”), initially measured as of November 13, 2024 (the initial issuance date), was estimated using a binomial lattice model in a risk-neutral framework (a special case of the income approach). Considering the conversion feature was out-of-the-money as of the issuance date and the Series B Convertible Preferred Stock is redeemable by us without penalty, we valued the Series B Convertible Preferred Stock as a non-convertible callable note. Specifically, our future yield is modeled using the Black-Derman-Toy interest rate model in a risk-neutral framework. For each modeled future yield, the value of the Series B Convertible Preferred Stock was calculated incorporating any optimal early prepayment/redemption. The value of the Series B Convertible Preferred Stock was then calculated as the probability-weighted present value over all future modeled payoffs.
Our Series B Convertible Preferred Stock is classified as mezzanine equity in our consolidated balance sheets as of December 31, 2025 and December 31, 2024. No subsequent fair value remeasurement is required. We classified our Series B Convertible Preferred Stock as Level 3 due to the lack of relevant observable inputs. Refer to Note 12, Convertible Preferred Stock, for further information on our Series B Convertible Preferred Stock and its conversion resulting in the elimination of all outstanding shares of our Series B Convertible Preferred Stock as of August 22, 2025.
The following table provides information regarding significant unobservable inputs used in the valuation of our Series B Convertible Preferred Stock measured and recorded at fair value at the measurement date:
| Fair Value per Share | Unobservable Inputs | Value | ||||||||||||||||||
| November 13, 2024 | $823 | Yield volatility | 40.0% | |||||||||||||||||
| Risk-free rate | 4.30% | |||||||||||||||||||
| Credit spread | 11.0% | |||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Mar 29, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 16, 2022 | |
| 2020 | Apr 15, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.