Penn Entertainment has reported its financial results for the first quarter of the year. For the three months that ended March 31, the business delivered revenues of $1.67 billion, an increase of 7% year-over-year, and net income of $514.4 million, up an 896.9% from last year. Adjusted EBITDA fell 23.6% to $332.2 million.
“We are pleased to report that Penn delivered another solid quarter in what remains an uncertain macroeconomic environment,” said Jay Snowden, Chief Executive Officer and President. “In addition, our proprietary sports betting and iCasino technology platform, which is live in Ontario, continues to drive compelling results and market share.”
In terms of revenue, $1.32 billion came from gaming, while $348.7 million were attributed to food, hotel, beverage, and other activities. As noted by Snowden, the Northeast segment led the way in revenue terms, generating $700.5 million during the quarter, up 6.4% from the previous year. Midwest revenue also increased, but the operator noted declines across its South and West segments.
Interactive revenue was 65% higher year-on-year at $233.5 million, helped by the launch of the company’s sports betting offerings in Massachusetts and Ohio during the quarter, as well as the initial impact of the Barstool acquisition, completed on February 17.
Other revenue reached $5.8 million, and intersegment eliminations totaled a $6.3 million loss. “Our mobile launches on January 1 in Ohio and March 10 in Massachusetts highlight the advantages of our organic, omnichannel customer acquisition strategy, as we leveraged our Penn Play database and the Barstool Sports audience to drive incremental revenue both online and at our retail properties,” Snowden said.
“Additionally, during March Madness, top Barstool personalities performed live streams from our market-leading retail sportsbooks in Ohio and Louisiana, leading to increased brand awareness and digital engagement,” the CEO added.
Jay Snowden, Chief Executive Officer and President
In terms of spend, operating costs for Q1 were 15.9% higher at $1.47 billion, though a $500.8 million gain on REIT transactions and an $83.4 million gain on the Barstool acquisition more than offset interest income, meaning net finance income amounted to $483.2 million.
As such, pre-tax profit was $682.3 million, up 587.8% year-on-year, while after paying $167.9 million in income tax, net profit reached $514.4 million. Penn also noted a $100,000 loss attributable to non-controlling interest, meaning net profit attributable to the group was $514.5 million.
During the quarter, the company repurchased 1,646,963 shares of its common stock in open market transactions for $50.0 million at an average price of $30.36 per share. However, since then, the company’s stock prices have dropped significantly since it was announced that a presenter on Barstool Sports had been fired for saying a racial slur while on air.
The company’s stocks tumbled, reaching a low of $26 by 4 p.m. ET on Thursday, a drop of more than 13%. Prior to that, they had been trending upwards, and the last point they were below $27 was March 15. The slide represents the lowest price for the stock since May 2020.
Total liquidity as of March 31, 2023, was $2.3 billion, inclusive of $1.3 billion in cash and cash equivalents. Traditional net debt as of the end of the quarter was $1.4 billion, an increase of $302.6 million from December 31, 2022.
You can see PENN Entertainment’s Q1 full report here.
Original article: https://www.yogonet.com/international/news/2023/05/05/67056-penn-entertainment-sees-7-revenue-increase-in-q1-driven-by-northeast-segment-barstool-acquisition
