Penn Entertainment has reported its financial results for the second quarter of the year. For the three months ended June 30, the operator delivered revenues of $1.67 billion, an increase of 2.9% year-over-year; and net income of $78.1 million, up $52 million from last year. Meanwhile, Adjusted EBITDA fell 30.7% to $330.4 million. The company expects significant growth as it divests the Barstool brand and launches ESPN Bet later this year, following a major deal with the media brand earlier this week.
“The company experienced stable property level performance this quarter with each month showing sequential improvement,” said Jay Snowden, Chief Executive Officer and President.
In terms of revenue, $1.29 billion came from gaming, while $382 million were attributed to food, hotel, beverage, and other activities. As noted by Snowden, the Northeast segment led the way, generating $688 million during the quarter, up from $684.9 million from the previous year. However, the operator noted declines across its South, West, and Midwest segments.
As for the interactive segment, revenue amounted to $257.5 million, up from $154.9 million the prior year. This hike follows the relaunch of the company’s online gaming operations on a proprietary tech stack, rolling out first with TheScore in Ontario followed by Barstool across the US after the quarter ended in July.
“We are excited to have successfully relaunched our sportsbook app, which features major product improvements that significantly upgrade the user experience, including streamlined navigation, faster load times, expanded wagering markets, enhanced promotions, and deeper media integrations. The migration reflects a significant achievement for our company that was completed seamlessly and with minimal disruption to our customers,” Snowden explained.
MAJOR NEWS! We are excited to introduce a new and improved @BSSportsbook following the successful migration to our proprietary online gaming platform.
The enhanced app is loaded with additional features for a fully upgraded experience.
Read more: https://t.co/vxYBpv5aAk pic.twitter.com/8e9yQps3ao
— PENNEntertainment (@PENNEntertain) July 14, 2023
Other revenue reached $6.2 million, and intersegment eliminations totaled a $8.5 million loss. In terms of spend, operating costs for Q2 were 10.9% higher at $1.46 billion, bringing the operating income for the quarter to $205.5 million. This operating income signified a decline of 32%.
Other income consisted of $115.6 million in interest expense, $9.9 million in interest income, and $7.2 million in income from unconsolidated affiliates. After considering $5.8 million in other costs, total other expenses came to $92.7 million. This brought the pre-tax income to $112.8 million, up by 36.9%. With tax totaling $34.7 million, the total net income for the quarter was $78.1 million, an improvement of $52 million.
Total liquidity as of June 30, 2023, was $2.2 billion. Additionally, traditional net debt as of the end of the quarter was $2.68 billion, an increase of $190,000 from December 31, 2022.
H1 Highlights and ESPN deal
For the six months that ended on June 30, revenue stood at $3.34 billion, a rise of 4.9% year-on-year. A total of $2.61 billion came from gaming, up by just under $1 million on a yearly basis. Food, beverage, hotel, and other revenue was $730.7 million.
Operating expenses for the six months came to $2.93 billion, up by 13.3%. Once these were factored in, Penn’s operating profit for H1 stood at $404.6 million.
However, the company foresees significant growth in the near future, following its recent long-term agreement with ESPN. As announced earlier this week, under the terms of the new deal, the operator will have the 10-year right to use the ESPN Bet name in the US.
As per the announcement, Penn will rebrand its Barstool sportsbook with ESPN starting this fall. However, the company will continue to operate as theScore Bet in Canada. The rebranding includes the mobile app, website, and mobile website.
In the quarterly update, Snowden said the deal will allow Penn to “significantly” expand the company’s digital footprint by combining its operation expertise with “the number one sports brands in both the US and Canada with ESPN and TheScore.” In conversation with investors, the CEO said the deal will follow the success of Penn’s acquisition of Canadian brand TheScore.
As part of its ESPN deal announcement, Penn raised long-term Adjusted EBITDA projections for the interactive division, now standing between $500 million and $1billion. “We have seen first-hand the integration of media and betting from TheScore,” stated Snowden. “This is a proven playbook and will be effective in the US.”
You can see PENN Entertainment’s Q2 full report here.
Original article: https://www.yogonet.com/international/noticias/2023/08/11/68271-penn-entertainment-sees-slight-revenue-increase-to-167b-in-q2-expects-futher-growth-with-espn-deal
