Firy Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Reported revenue of $31.0 million for the quarter ended June 30, 2026, representing a 6% sequential increase and a 23% year-over-year increase.
• Gross profit was $27.1 million.
• Net loss was $24.5 million, compared to a net loss of $17.9 million in the prior year quarter.
• Adjusted EBITDA loss was $2.7 million (excluding litigation expense), a 63% sequential improvement from $7.1 million in the first quarter of 2026.
• Total operating expenses (excluding cost of revenue) were $48.6 million.
• Cash and cash equivalents were $163.991 million as of June 30, 2026, down from $194.513 million as of December 31, 2025.
• Total liabilities were $190.271 million as of June 30, 2026.
• Net cash used in operating activities was $21.608 million for the six months ended June 30, 2026.

Guidance and Future Outlook

• Management stated the company is advancing the transition from turnaround to growth.
• The company intends to pursue legal rights available regarding the Papaya Gaming judgment and will provide additional commentary on the conference call.
• Management is in active dialogue regarding alternatives to further strengthen the capital structure.

Business Segments and Product Lines

• RZR revenue exceeded $10 million for the quarter for the first time.
• RZR delivered its fourth consecutive profitable quarter.
• The company completed its rebrand to FIRY.
• The portfolio includes Skillz, RZR, and Beamable.

Market and Competitive Landscape

• Paying monthly active users (PMAUs) were 117 thousand.
• Average revenue per PMAU (ARPPU) was $59.1.
• Gross marketplace volume (GMV) was $135.594 million for the quarter.

Risks and Challenges

• The company faces ongoing litigation with Papaya Gaming, which resulted in a judgment of $719 million in disgorgement of unjust profits plus approximately $10 million in fees and costs.
• Papaya Gaming has sought a court-supervised payment arrangement in Israel and filed a Chapter 15 petition in Delaware.
• Forward-looking statements note risks including the ability to sustain profitability if revenue declines, competition in global entertainment and gaming industries, and the need to remediate material weaknesses in internal controls over financial reporting.

Management Commentary and Tone

• CEO Andrew Paradise described Q2 2026 as "the most consequential period in the Company's recent history," citing the rebrand and the shift from turnaround to growth.
• CFO Alex Walsh highlighted that the business is moving forward fueled by RZR's revenue growth and strong operating leverage.
• Management expressed belief that the company has significant unrecognized value, including federal net operating loss carryforwards of approximately $702 million and state net operating loss carryforwards of approximately $280 million.

Other Key Points

• In August, the company announced the redemption of $80 million of debt, leaving approximately $50 million outstanding.
• The court rejected Papaya Gaming's post-trial challenges and entered judgment in favor of FIRY.
• The company expects to collect an additional $15 million from the Avia Games settlement.
• Unrecognized value includes the company's owned Las Vegas building and its 10% interest in Exit Games.
• The company holds non-marketable equity securities valued at $52.768 million.