However profits were squeezed, despite the revenue growth in the three months to 30 June.
Everi recorded $208.7m in revenue for the quarter, up 6% from the $197.2m reported in the same period the previous year. The company pointed to investments in development initiatives and several recent acquisition deals as responsible for the growth.
These included an April transaction the acquire the assets of electronic bingo provider Video King, the October 2022 purchase of certain assets from mobile tech provider Venuetize. Everi also purchased IP from Atlas Gaming and a number of properties from marketing provider XUVI in 2022.
Everi CEO: We’re ready to invest to grow
Everi chief executive Randy Taylor said the business was in a strong position for future growth in the second half of the year.
“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,” he added.
“We expect to continue to invest in development initiatives to sustain longer-term growth while remaining active in share repurchases. We are confident that we have the right product strategies and capital allocation priorities in place to continue creating value for shareholders.”
FinTech growth offsets difficulties in games
By segment, Everi reported 13% growth in its FinTech operations to $95.6m, which the company said resulted from a 26% increase in software sales, 9% rise in financial access revenue and 6% growth in hardware operations.
Meanwhile the news was less rosy for Everi’s Games segment, where revenue remained relatively stable rising only 1% in Q2. This reflected a 5% in the business’s gamign operations partially offset by an 8% decline in the business’ gaming equipment and systems sales revenue.
“While Games segment revenue continued to grow, gaming operations revenues and unit sales were impacted by near-term challenges during a transition period as we roll-out new cabinets and content,” said Taylor.
“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 added.
Everi sees moderate costs increases in Q2
In terms of costs, Everi reported expenses rising overall, but not across all business segments in the three-month period ended 30 June.
While gaming operations costs increased 37.0% from $6.1m to $8.4m in Q2, this trend did not repeat across the gaming equipment and systems sector in which costs fell 13.9% to $20.1m. Overall games costs of revenue fell slightly to $28.5m.
Meanwhile, the company’s FinTech segment saw costs increases across the board, with all business areas noting rising expenses. The total cost of revenue for the segment rose to $15.2m from $13.7m.
Everi’s total operating expenses increased 11.5% to $61.4m in Q2. Costs also rose in research and development and depreciation to $16.6m and $19.5m respectively. However, the companies amortisation costs fell slightly to $14.2m.
In total, Everi’s costs and expenses rose 9.0% to $155.4m from the $142.7m recorded the previous year. The business also paid an additional $20.1m in interest expenses, up from $12.3m.
Profits decline year-on-year
After costs are accounted for the company reported an operating income of $53.3m, down 2.3%. This resulted in a pre-tax income of $33.1m, down 21.6% from the previous year. The business paid $5.7m in tax for the year.
Despite the increase in revenue then, Everi’s net income declined 15.8% to $27.3m.
H1 results align with quarterly figures
On a six-month basis Everi saw revenue rise 6% to $153.1m, from $144.4m in 2022. This resulted in an operating income of $105.3m and a net income of $55.4m. Like the three-month period, the company’s revenue rose, even as wider profits were squeezed.
Original article: https://igamingbusiness.com/finance/half-year-results/everi-q2/
