Playtika Holding Corp.PLTK

Playtika Holding Corp. Fair Value Disclosure

10-KFiled Feb 26, 20263 min read
FAIR VALUE MEASUREMENTS
The Company’s assessment of goodwill and other intangible assets for impairment includes an assessment using various Level 2 (discount rate) and Level 3 (forecasted cash flows) inputs.

The following table summarizes the fair value measurement of the Company’s long-term debt (in millions):
December 31, 2025
Face ValueFair ValueFair Value Hierarchy
Term Loan$1,809.8 $1,746.5 Level 2
Senior Notes600.0 539.3 Level 2
Total debt$2,409.8 $2,285.8 

December 31, 2024
Face ValueFair ValueFair Value Hierarchy
Term Loan$1,828.8 $1,831.1 Level 2
Senior Notes600.0 541.5 Level 2
Total debt$2,428.8 $2,372.6 

The estimated fair value of the Company’s term loan is based upon the prices at which the Company’s debt traded in the days immediately preceding the balance sheet date. As the trading volume of the Company’s debt is low relative to the overall debt balance, the Company does not believe that the associated transactions represent an active market, and therefore this indication of value represents a level 2 fair value input.
The following table sets forth the assets and liabilities measured at fair value on a recurring basis in the Company’s consolidated balance sheet (in millions):
Fair Value at
Pricing
Category		December 31, 2025December 31, 2024
Cash equivalents
Money market fundsLevel 1$291.3 $331.4 
Term depositsLevel 2198.5 93.1 
Commercial papersLevel 239.8 10.0 
Short-term investments
Term depositsLevel 1$71.8 $— 
Commercial papersLevel 264.2 — 
Prepaid expenses and other current assets
Derivative instruments - interest rate swapsLevel 2$4.9 $19.4 
Derivative instruments - foreign currency derivative contractsLevel 212.9 1.1 
Other non-current assets:
Derivative instruments - interest rate swapsLevel 2$— $9.8 
Accrued expenses and other current liabilities:
Derivative instruments - interest rate swapsLevel 2$0.6 $— 
Derivative instruments - foreign currency derivative contractsLevel 2*3.3 
Other long-term liabilities
Derivative instruments - interest rate swapsLevel 2$1.5 $— 
__________
*    Represents an amount less than 0.1 or 0.1

The carrying value of accounts receivable, accounts payables, restricted cash, and the majority of cash equivalents approximates fair value due to the short time to expected payment or receipt of cash.

The Company classifies its short-term investments, derivative financial instruments and some cash equivalents within Level 2 because they are valued using inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded.
The change in fair value of contingent consideration payable was valued using significant unobservable inputs (Level 3), was included in the general and administrative expenses in the Company’s consolidated statements of comprehensive income and consisted of the following (in millions):

Balance as of January 1, 2024
$66.8 
Recorded in connection with SuperPlay acquisition350.0 
Payment of contingent consideration(26.7)
Fair value adjustments based upon post-acquisition performance(9.8)
Reclassification to accrued expenses(0.7)
Balance as of December 31, 2024(1)
379.6 
Payment of contingent consideration(44.2)
Fair value adjustments based upon post-acquisition performance398.6 
Balance as of December 31, 2025(2)
$734.0 
_______
(1)    Amount comprised of $354.6 million and $25.0 million for SuperPlay and InnPlay acquisitions, respectively.
(2)    Amount comprised of $734.0 million for SuperPlay acquisition.

The Company estimated the fair value of its contingent consideration liabilities using a Monte Carlo simulation to model components of cash flow analyses. The significant assumptions used in the SuperPlay model as of December 31, 2025 include revenue volatility of 20%, discount rate of 12.3% and a risk free rate of 4.8%. These fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements as defined in ASC 820. The extent to which the actual results differ from assumptions made within the Monte Carlo simulation cash flow analysis will result in adjustments to this liability in future periods.

The Company has not elected the fair value measurement option under ASC 825 for any financial assets or liabilities.
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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.

Other Available Disclosures

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