GGRAsia – Everi 2Q revenue at US$209mln, profit down 16pct y-o-y

Everi 2Q revenue at US$209mln, profit down 16pct y-o-y

Aug 09, 2023 Newsdesk Industry Talk, Latest News

Everi Holdings Inc reported revenue of US$208.7 million for the second quarter, up 5.8 percent from the prior-year period. “Recurring revenues increased 9 percent [year-on-year] to US$151.6 million … driven by growth in both the games and fintech [financial technology] segments,” stated the company in a Wednesday filing.

Everi is a provider of gaming equipment and products to the land-based and online casino sectors, and also supplies fintech and player-management technology.

Net income at Everi Holdings fell 15.7 percent year-on-year in the second quarter, to US$27.4 million. The decline was due to “lower operating income and higher interest expense” during the quarter, said the company.

Group-wide adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased 1.8 percent year-on-year, to US$96.1 million.

Revenue from gaming operations, equipment and systems stood at US$113.1 million, compared to US$112.3 million a year earlier. The group said the figure reflected a 5-percent increase in gaming operations revenues, inclusive of digital gaming operations, partially offset by an 8-percent decrease in revenues from gaming equipment and systems sales.

Everi stated it sold 1,597 gaming machines at an average selling price of US$20,512 in the second quarter, compared with 1,957 units sold at an average of US$18,800 in the prior-year period.

“The recent acquisition of Video King contributed US$4.1 million in revenues in the 2023 second quarter,” noted the firm.

Everi’s second-quarter fintech revenue rose 12.6 percent year-on-year, to US$95.6 million.

Randy Taylor, Everi chief executive, was cited as saying in the announcement: “Revenues for both our fintech and games segment grew as we continue to benefit from our investments in new product development as well as from several tuck-in acquisitions we completed since the beginning of 2022.”

He added: “Importantly, despite the impact from higher interest rates and inflationary pressures, we continued to generate strong free cash flow, which positions the company to invest in our growth initiatives and return capital to shareholders through share repurchases.”

The CEO said the firm’s gaming operations revenues and unit sales “were impacted by near-term challenges during a transition period” as the company launches “new cabinets and content”.

“Following several consecutive years of growth in our installed base and increased unit shipments, we expect our games segment revenue will be flat to slightly down in the second half of the year as compared to the second half of 2022,” he stated.

Mr Taylor added: “With the expected launch of several new cabinets in the back half of this year and first half of 2024, we expect our games segment will return to an attractive growth profile.”

Second-quarter free cash flow was US$47.7 million, compared with US$49.8 million in the prior-year quarter. The company repurchased 2.7 million shares for US$40.0 million in the April to June period under a US$180-million share repurchase programme.

Everi’s CEO said the company was “on track to deliver approximately US$150 million of free cash flow in 2023”.

The company revised its full-year 2023 outlook, raising its expected net income to a range of US$98 million to US$106 million. But it lowered its forecast for adjusted EBITDA to a range of US$380 million to US$386 million, “primarily due to lower gaming equipment sales in the second half of 2023 as compared to the second half of 2022,” it said.