GGRAsia – Everi’s EBITDA growth likely from 4Q: analyst

Everi’s EBITDA growth likely from 4Q: analyst

Sep 09, 2024 Newsdesk Industry Talk, Latest News, World

Brokerage B.Riley Securities Inc has lowered its estimates for adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) at casino equipment maker and financial technology (fintech) supplier Everi Holdings Inc.

The institution reduced its forecast for Everi’s EBITDA to US$325.4 million this year, from a previous estimate of US$340.0 million. The forecast for 2025 was lowered to US$346.9 million, from an earlier figure of US$366.4 million.

“Changes mostly reflect a more conservative product transition timeline in Everi’s games business, partially due to potential customer delays in platform purchases ahead of its merger with IGT’s games business,” wrote analyst David Bain in a Sunday memo.

“We continue to anticipate fourth-quarter 2024 to be Everi’s inflection point for positive year-on-year EBITDA growth, in part driven by its VLT undefined market entrance,” he added.

In late July, it was announced that private equity firm Apollo Global Management Inc would simultaneously acquire Everi and casino equipment International Game Technology Plc (IGT).

Everi’s stockholders will receive US$14.25 per share in cash, representing a 56-percent premium over Everi’s closing share price on July 25. It is anticipated the deal will be closed by the end of the third quarter of 2025.

Mr Bain said in Sunday’s note: “We do not see significant risks to the anticipated third-quarter 2025 transaction close.”

“While increased competition in the mechanical reel and portrait segment continues, Everi’s new Dynasty Sol and Dynasty Vue are still in the early stages of customer adoption,” observed the analyst.

“Based on checks, we believe there is a relatively small negative impact on Everi games sales due to its upcoming merger with IGT’s games business,” he added.

In October, Everi said it would have a “full cabinet refresh” by early 2024, with the new cabinets debuting alongside the group’s “most diverse-ever portfolio of new content,” featuring more than 70 new themes across all product categories.

Everi’s adjusted EBITDA stood at US$80.3 million in the three months to March 31, down 13.2 percent from a year earlier. The firm reported first-quarter net income of US$4.6 million, on revenue that fell 5.6 percent year-on-year, to US$189.3 million. The company is still to report its second-quarter results.