10-K: PLBY Group Reports \$79.4 Million Net Loss for 2024, Revenue Declines

Sentiment:

Annual Results 13 March 2025 4:48 PM

PLBY Group's 2024 results reveal a \$79.4 million net loss and a decrease in revenue to \$116.1 million, driven by non-cash asset impairments and digital business revamps.

Delay expectedWe will rely on the cure period set forth in Nasdaq Listing Rule 5605(b)(1)(A) with respect to the composition of our Board, which cure period is expected to expire as of August 11, 2025.

Capital raiseOn November 5, 2024, we issued 14,900,000 unregistered shares of our common stock in a private placement to a third-party investor, at a price of \$1.50 per share, for total proceeds of \$22.4 million.On December 14, 2024, we entered into a second securities purchase agreement (the Additional SPA) with a Byborg affiliate, pursuant to which we agreed to sell to such affiliate an additional 16,956,842 shares of the our common stock at a price of \$1.50 per share, subject to the approval of such sale and issuance of shares by our stockholders, which would increase Byborgs beneficial ownership of our common stock to approximately 28.8%.

Worse than expectedThe company's revenue decreased from \$143.0 million in 2023 to \$116.1 million in 2024.The company's net loss was \$79.4 million in 2024, although an improvement from the \$180.4 million net loss in 2023, it still indicates underperformance.The company identified material weaknesses in its internal control over financial reporting.

Summary

PLBY Group, Inc., a pleasure and leisure company, reported its financial results for the fiscal year ended December 31, 2024.
Consolidated revenue decreased to \$116.1 million from \$143.0 million in 2023.
The company experienced a consolidated net loss of \$79.4 million, compared to a net loss of \$180.4 million in the previous year.
The 2024 net loss was primarily attributed to non-cash asset impairment charges of \$26.1 million, a \$24.8 million decrease in licensing gross profit, and an \$8.2 million increase in expenses related to the digital business revamp.
The company operates through three segments: Direct-to-Consumer, Licensing, and Digital Subscriptions and Content.
In the fourth quarter of 2024, PLBY Group entered into a licensing agreement with Byborg Enterprises SA for \$300 million in minimum guaranteed payments over 15 years, impacting the Digital Subscriptions and Content segment.
The company is shifting towards a capital-light business model, focusing on higher-margin revenue streams and expanding its licensing business.
As of December 31, 2024, PLBY Group had 615 employees.
The company faces risks related to brand reputation, competition, intellectual property, and government regulations.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While the net loss has decreased significantly, revenue is down, and the company faces numerous risks and challenges. The shift towards a capital-light model and the Byborg licensing agreement are positive developments, but the material weaknesses in internal control and the need for additional capital raise concerns.

Positives

The net loss decreased significantly from \$180.4 million in 2023 to \$79.4 million in 2024.
The company is shifting towards a capital-light business model, which is expected to improve margins and lower working capital requirements.
The licensing agreement with Byborg Enterprises SA provides a guaranteed revenue stream of \$300 million over 15 years.
The company is focusing on the U.S. market for Honey Birdette, which has better economics than the Australian market.
The company is working to remediate material weaknesses in its internal control over financial reporting.

Negatives

The company experienced a consolidated net loss of \$79.4 million in 2024.
Consolidated revenue decreased from \$143.0 million in 2023 to \$116.1 million in 2024.
The Digital Subscriptions and Content segment had a significant operating loss of \$27.2 million.
The company identified material weaknesses in its internal control over financial reporting.
The company's variable rate debt subjects it to interest rate risk that could cause its debt service obligations to increase significantly.

Risks

The company's ability to maintain the value and reputation of the Playboy brand is critical to its success.
The company operates in highly competitive industries.
The market for the company's physical and digital products is changing rapidly.
The company may be unable to obtain, maintain, and protect its intellectual property rights.
The company's business includes the provision of sexually explicit content, which can create negative publicity, lawsuits, and boycotts.
The company has identified material weaknesses in its internal control over financial reporting.
The company is subject to taxation-related risks in multiple jurisdictions.
The company's digital operations are subject to systems failures and disruptions.
The company is subject to data security and privacy risks.
The company's variable rate debt subjects it to interest rate risk.
The company is subject to risks resulting from its operations outside the U.S.
Global economic conditions could have a material adverse effect on the company's business.
The company has a material amount of goodwill and other intangible assets recorded on its balance sheet, which may be subject to impairment.

Future Outlook

The company aims to build the leading pleasure and leisure lifestyle platform for all people around the world, focusing on expanding its licensing business and improving the profitability of its Honey Birdette business. In 2025, the company is focusing on the U.S. market.

Management Comments

For Playboy, we are now focused on expanding our licensing business into new geographies and categories by partnering with best-in-class operators and supporting them with brand marketing in the form of content, experiences and editorial works.
For our Honey Birdette business, in 2024, we were focused on reducing inventory levels and days on sale and improving the profitability of the business.
In 2025, we are focusing on the U.S. market.

Industry Context

The company operates in the consumer goods space across a variety of different industries and faces competition from broad direct-to-consumer platforms such as Amazon and Douyin, as well as brands and retailers that are more targeted to particular markets. The company competes with much larger companies that have significantly greater financial and operational resources.

Comparison to Industry Standards

The company's licensed Playboy-branded products and Honey Birdette brand compete with Agent Provocateur, Skims, Fleur du Mal, Victorias Secret, Fashion Nova and other brands and retailers.
The company's Playboy-branded collection of toys competes with sexual wellness e-commerce platforms and brick and mortar retail chains, such as Lovehoney and Adam & Eve.
The company's licensed digital products and games compete with other real-money and social casino-style games available in the iOS and Android app stores.
The company's venues licensing partner that operates award-winning beer gardens and clubs across India competes with other premium hospitality venues.

Legal Proceedings

In March 2020, our subsidiary Playboy Enterprises International, Inc. (together with its subsidiaries, PEII) terminated its license agreement with a licensee, AVS Products, LLC (AVS), for AVSs failure to make required payments to PEII under the agreement, following notice of breach and an opportunity to cure.
On February 8, 2024, PEII and certain of its subsidiaries initiated arbitration in the Hong Kong International Arbitration Centre (the Arbitration) against PEIIs terminated China licensee, New Handong Investment (Guangdong) Co., Ltd. (New Handong).
On July 5, 2024, a former Playboy model filed a complaint against the Company, certain of the Companys affiliates and A&E Television Networks LLC (A&E, and collectively, with the Company and its affiliates, the Defendants) in California Superior Court for claims arising from A&Es Secrets of Playboy show (the A&E Show) which showed certain Playboy videos that depicted the former model.

Related Party Transactions

In the first quarter of 2023, we entered into a joint venture for Playboys China business (the China JV) with CT Licensing Limited, a brand management unit of Fung Group, representing many global brands in China, to jointly own and operate the Playboy licensed business in China (including Hong Kong and Macau).
On November 5, 2024, The Million S.a.r.l (a subsidiary of Byborg) completed the purchase of 14,900,000 shares of common stock of the Company, and it became a significant stockholder of the Company as of such date.
In addition, on December 14, 2024, we entered into a License & Management Agreement (the LMA) with Byborg, pursuant to which Byborg agreed to operate our Playboy Plus, Playboy TV (digital and linear) and Playboy Club businesses and to license the right to use certain Playboy trademarks and other intellectual property for related businesses and certain other categories.
On December 14, 2024, the Company also entered into a Securities Purchase Agreement (the December SPA) with The Million S.a.r.l, pursuant to which the Company agreed to sell to such purchaser 16,956,842 shares of the Companys common stock, par value \$0.0001 per share, at a price of \$1.50 per share.

Stakeholder Impact

Shareholders may experience dilution as a result of future equity offerings.
Employees may be affected by potential cost reduction measures and changes to the workforce.
Customers may experience changes in product offerings and service quality as the company shifts its business model.
Suppliers and licensees may be impacted by the company's strategic decisions and financial performance.
Creditors are subject to the terms and covenants of the company's debt agreements.

Next Steps

The company is focusing on expanding its licensing business and improving the profitability of its Honey Birdette business.
In 2025, the company is focusing on the U.S. market.
We and Byborg are in the process of identifying a new independent director to appoint to the Board to fill the vacancy created by the expansion of the Board from five to seven directors and the appointment of Gyorgy Gattyan to the Board.

Key Dates

Date	Description
1953	Playboy was founded as a men's lifestyle magazine.
1973 to 2011	Playboy's stock was publicly traded on the New York Stock Exchange.
2011	Playboy became a private company again.
September 30, 2020	Agreement and Plan of Merger was dated.
February 10, 2021	Playboy consummated a merger transaction with Mountain Crest Acquisition Corp (MCAC).
August 2021	Acquisition of the luxury lingerie brand Honey Birdette.
October 2021	Acquisition of a content creator platform which has since been redeveloped into the new Playboy Club.
December 22, 2017	The Tax Cuts and Jobs Act (the Tax Act) was enacted.
May 25, 2018	The European Union adopted the GDPR, which became effective.
January 1, 2020	California passed the CCPA, which became effective.
March 2020	Playboy Enterprises International, Inc. terminated its license agreement with AVS Products, LLC.
February 6, 2021	PEII received a letter from counsel to AVS alleging that the termination of the contract was improper.
February 25, 2021	PEII brought suit against AVS in Los Angeles Superior Court.
March 1, 2021	PEII also brought a claim in arbitration against AVS for outstanding and unpaid license fees.
April 23, 2021	The parties entered into and filed a stipulation to that effect with the court.
May 18, 2021	AVS filed a demurrer, asking for the court to remove an individual defendant and dismiss PEIIs request for a permanent injunction.
June 10, 2021	The court denied AVSs demurrer.
July 2, 2021	AVS filed an opposition to PEIIs motion for a preliminary injunction to enjoin AVS from continuing to sell or market Playboy-branded products.
July 28, 2021	The court denied PEIIs motion for a preliminary injunction.
August 10, 2021	AVS filed a cross-complaint for breach of contract, breach of the implied covenant of good faith and fair dealing, quantum meruit and declaratory relief.
June 10, 2022	The SEC declared effective our resale registration statement on Form S-3 (File No. 333-264515).
September 13, 2022	The SEC declared effective our shelf registration statement on Form S-3 (File No. 333-267273).
January 30, 2023	We entered into a standstill agreement (the RT Standstill) with RT in connection with the Company's public rights offering.
January 24, 2023	We took down \$16.25 million of such shelf registration for the issuance of 6,357,341 shares of our common stock in a registered direct offering.
February 2023	We completed a rights offering, pursuant to which we took down \$50 million of the shelf registration for the issuance of 19,561,050 shares of common stock.
February 17, 2023	We entered into Amendment No. 4 to our senior secured Credit and Guaranty Agreement.
March 2023	We entered into the China JV.
April 4, 2023	We completed the sale of our wholly-owned subsidiary, Yandy Enterprises, LLC (the Yandy Sale).
May 10, 2023	We entered into an amendment and restatement of the Credit Agreement for our senior secured debt (the A&R Credit Agreement).
June 6, 2023	The court heard PEIIs motion for summary judgment on June 6, 2023, and dismissed six out of 10 of AVS causes of action.
July 2023	Licensed operation of our Playboy e-commerce platform.
October 2023	We terminated licensing agreements with certain Chinese licensees.
November 3, 2023	We completed the sale of TLA Acquisition Corp. (TLA).
November 2, 2023	We entered into Amendment No. 1 to the A&R Credit Agreement.
November 2023	Sold our Lovers business.
November 3, 2023	We received a letter from Nasdaq indicating that, for the prior thirty consecutive business days, the bid price for PLBYs common stock had closed below the minimum \$1.00 per share requirement.
January 9, 2024	We then regained compliance with such rule as of January 9, 2024.
February 8, 2024	PEII and certain of its subsidiaries initiated arbitration in the Hong Kong International Arbitration Centre (the Arbitration) against PEIIs terminated China licensee, New Handong Investment (Guangdong) Co., Ltd. (New Handong).
March 27, 2024	We entered into Amendment No. 2 to the A&R Credit Agreement.
June 27, 2024	We again received a Nasdaq Staff Deficiency Letter relating to the Minimum Bid Price Rule.
July 5, 2024	A former Playboy model filed a complaint against the Company, certain of the Companys affiliates and A&E Television Networks LLC (A&E, and collectively, with the Company and its affiliates, the Defendants) in California Superior Court for claims arising from A&Es Secrets of Playboy show (the A&E Show) which showed certain Playboy videos that depicted the former model.
August 8, 2024	We took down \$15 million of the shelf registration for an at-the-market offering, which remains active but has not sold any shares to date.
December 3, 2024	Nasdaq confirmed we regained compliance with such rule on December 3, 2024.
October 30, 2024	We also entered into a standstill agreement (together with the RT Standstill, the Standstill Agreements) with Byborg.
October 30, 2024	We issued 14,900,000 unregistered shares of our common stock in a private placement to a third-party investor, at a price of \$1.50 per share, for total proceeds of \$22.4 million.
November 5, 2024	We issued 14,900,000 unregistered shares of our common stock in a private placement to a third-party investor, at a price of \$1.50 per share, for total proceeds of \$22.4 million.
November 11, 2024	We entered into Amendment No. 3 to the A&R Credit Agreement.
November 11, 2024	Pursuant to an Exchange Agreement, dated November 11, 2024 (the Exchange Agreement), between us and our senior secured lenders (the Investors), we issued to the Investors an aggregate of 28,000.00001 shares of Series B Convertible Preferred Stock on November 13, 2024, in exchange for an aggregate reduction by the Investors of approximately \$65.3 million of the outstanding principal under our senior secured debt.
November 13, 2024	Pursuant to an Exchange Agreement, dated November 11, 2024 (the Exchange Agreement), between us and our senior secured lenders (the Investors), we issued to the Investors an aggregate of 28,000.00001 shares of Series B Convertible Preferred Stock on November 13, 2024, in exchange for an aggregate reduction by the Investors of approximately \$65.3 million of the outstanding principal under our senior secured debt.
December 14, 2024	We entered into a second securities purchase agreement (the Additional SPA) with a Byborg affiliate, pursuant to which we agreed to sell to such affiliate an additional 16,956,842 shares of the our common stock at a price of \$1.50 per share, subject to the approval of such sale and issuance of shares by our stockholders, which would increase Byborgs beneficial ownership of our common stock to approximately 28.8%.
December 14, 2024	We entered into a licensing agreement with Byborg to license intellectual property and certain Playboy digital assets for \$300 million in minimum guaranteed payments over the initial 15-year term of the license, which began as of January 1, 2025.
January 1, 2025	Playboy Club, Playboy Plus and Playboy TV operations switched from an owned-and-operated model to a licensing model effective January 1, 2025.
January 29, 2025	We completed the conversion (the Conversion) of 7,000 shares of our 28,000.00001 outstanding shares of Series B Convertible Preferred Stock into 3,784,688 shares of our common stock, at a conversion price of \$1.84956 per share, in accordance with the terms of the Series B Convertible Preferred Stock.
February 11, 2025	We notified Nasdaq of our temporary noncompliance with the continued listing requirements as set forth in Nasdaq Listing Rule 5605(b) regarding the composition of the Board, because there was not a majority of independent directors on the Board as of that date.
February 11, 2025	The SEC declared effective our resale registration statement on Form S-3 (File No. 333-284632), pursuant to which certain existing stockholders of the Company are able to sell up to 25,494,268 shares of common stock in the public market.
February 14, 2025	We received a Nasdaq Staff Deficiency Letter notifying us that we were not in compliance with Nasdaq Listing Rule 5605.
March 10, 2025	As of March 10, 2025, there were 93,747,069 shares of the registrants common stock outstanding.
March 12, 2025	We entered into Amendment No. 4 to the A&R Credit Agreement.
August 11, 2025	We will rely on the cure period set forth in Nasdaq Listing Rule 5605(b)(1)(A) with respect to the composition of our Board, which cure period is expected to expire as of August 11, 2025.
September 2025	AVS contract-related claims remain to be determined at trial, which is set for September 2025.

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