INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of Income (Loss) Before Income Taxes

The components of income (loss) before income taxes were as follows:


	Years Ended December 31,
(in thousands)	2025		2024
United States	$	(29,928)	$	(31,268)
Foreign	3,227		3,980
Total loss	$	(26,701)	$	(27,288)

Schedule of Provision for Income Taxes

The provision for income taxes consisted of the following:


	Years Ended December 31,
(in thousands)	2025		2024
Current tax expense:
Federal	$	360	$	(11)
State	304		710
Foreign	1,513		2,071
Total current tax expense	$	2,177	$	2,770

Deferred tax expense:
Federal	$	42	$	(634)
State	(526)		364
Foreign	245		(1,101)
Total deferred tax expense	$	(239)	$	(1,371)

Provision for Income Taxes	$	1,938	$	1,399

Schedule of Reconciliation of Effective Tax Rate

The following is a reconciliation between the U.S. federal statutory tax rate and our effective tax rate for the current year, expressed in thousands and as a percentage of pre-tax income:


	December 31, 2025
(in thousands)	Amount		Percent
Tax expense (benefit) computed at U.S. federal statutory rate	$	(5,607)	21.0	%
State and Local Income Taxes, Net of Federal Income Tax Effect (1)	(78)		0.3
Foreign tax effects
Israel:
Stock-based compensation(2)	611		(2.3)
Other	235		(0.9)
Other foreign jurisdictions	558		(2.1)
Effects of cross-border tax laws
Foreign branch income	582		(2.2)
Deduction for foreign taxes	(281)		1.1
Other effects	122		(0.5)
Tax credits:
R&D tax credits	(160)		0.6
Changes in valuation allowance	3,974		(14.9)
Nontaxable or nondeductible items:
Stock-based compensation(2)	1,683		(6.3)
Section 162(m) - executive compensation	284		(1.1)
Other nontaxable or nondeductible items	277		(1.0)
Changes in unrecognized tax benefits	7		—
Other adjustments	(269)		1.0
Effective income tax rate	$	1,938	(7.3)	%

(1)States that make up the majority (>50%) of state and local taxes are California, Texas, and Illinois.

(2)Stock-based compensation includes non-deductible equity compensation and tax effects of shortfalls and windfalls.


	December 31, 2024
Statutory rate	21.0	%
Foreign provision	(0.2)
State/province income tax	2.7
Stock compensation	(9.6)
Unrecognized tax benefits	(0.1)
Research credit	2.5
Return to provision	5.8
Other foreign branch impacts	(4.6)
Valuation allowance	(17.5)
Foreign-derived intangible income deduction (FDII)	0.2
Global intangible low taxed income (GILTI)	(0.5)
Non-deductible expenses-other	(4.0)
Foreign branch income	(3.1)
Foreign tax deduction	1.8
Fair value adjustment on warrants	0.8
Foreign tax settlement	—
Other	(0.3)
Effective tax rate	(5.1)	%

Schedule of Income Tax Payments, Net of Refunds Received

The Company made income tax payments (net of refunds received) during the year ended December 31, 2025, as follows:


(in thousands)	Year Ended December 31, 2025
Federal		$	—
State		132
Foreign:
Israel		920
Serbia		363
Singapore		152
Other foreign jurisdictions		(13)
Total cash paid for income taxes (net of refunds received)		$	1,554

Schedule of Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities consist of the following (in thousands):


	December 31,
	2025		2024
Deferred tax assets:
Net operating loss carryforwards	$	3,300	$	2,941
Tax credit carryforwards	1,884		2,545
Accrued liabilities	2,990		3,782
Stock compensation	5,113		5,954
Charitable contribution	399		1
Intangibles	4,327		—

Section 174 amortization(1)	14,663		15,671
Operating lease liabilities	2,495		2,231
Other	182		84
Total gross deferred tax assets	$	35,353	$	33,209
Less: Valuation allowance	(27,911)		(23,827)
Total deferred tax assets	$	7,442	$	9,382
Deferred tax liabilities:
Intangibles	—		638
Property and equipment	917		2,486
Prepaid expenses	1,148		1,100
Operating lease assets	1,816		2,140
Other	37		—
Total deferred tax liabilities	$	3,918	$	6,364
Deferred tax assets (liability), net	$	3,524	$	3,018

(1)Section 174 amortization for the year ended December 31, 2024 has been reclassified to conform to the current year presentation.

Schedule of Unrecognized Tax Benefits Roll Forward

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:


	Years Ended December 31,
	2025		2024
Balance at beginning of period	$	525	$	347
Increases for tax positions of prior years	—		170
Increases for tax positions of current year	98		170
Decreases for tax positions of prior years	(68)		(14)

Decreases for lapses in statute of limitations	(77)		$	(148)
Balance at end of period	$	478	$	525

PLAYSTUDIOS, Inc. 10-K