US – Everi up 21 per cent with record levels of revenue from gaming machinesBy Phil - 8 November 2022
Fintech and slot manufacturer Everi saw its revenues grow by 21 per cent to $204.3m for the three-month period ended September 30, compared to $168.3m in the third quarter of 2021.
Recurring revenues increased nine per cent driven by growth in both the Games and FinTech segments to $143.6m from $131.2m in the prior-year period. Revenues from non-recurring sales increased 64 per cent to $60.7m compared with $37.1m in the prior-year period.
Higher research and development expense that supports the step-up in the company’s focus on internal new product development and increased depreciation and amortization also impacted the operating margin comparison.
Randy Taylor, Chief Executive Officer of Everi, said: “The third quarter year-over-year increases in revenues, net income and Adjusted EBITDA and our consistent improvement in our financial results throughout 2022 reflect the operating momentum across each of our businesses due to the continued broad-based demand for our products. Our strong financial results this year have been driven by steady growth in our recurring revenue streams together with a record level of revenues from gaming machine and FinTech hardware sales. Our focus on top-line growth and operational excellence is delivering consistent year-over-year earnings growth and strong Free Cash Flow generation.
“We received tremendous positive customer response to the launch of our newest products displayed at the Global Gaming Expo (“G2E”) in early October, quite possibly our best-ever show. This favorable feedback combined with the growth prospects related to our recent acquisitions, fortifies our confidence for continued operating momentum and strong cash flow in 2023. Our capital allocation priorities remain directed toward extending the success we have achieved through investments in high-return internal product development to grow our core businesses and prudent acquisitions that extend our product and service capabilities to expand our addressable markets, as well as continuing to return capital to our shareholders. With our confidence in our long-term growth prospects and a belief that the current valuation of our Company does not fully reflect our underlying strength and growth opportunities, we have been returning capital to shareholders through.”
The company’s games segment revenues grew 17 per cent to $112.5m compared to $95.8min the third quarter of 2021, primarily driven by a 57 per cent increase in the number of gaming machines sold, as well as further growth in gaming operations revenues, including from digital gaming operations.
The company sold 1,841 gaming machines at an average selling price of $18,496 in the 2022 third quarter, up 665 units or 57 per cent, from the 1,176 units sold at an ASP of $18,014 in the 2021 third quarter. The company estimates its quarterly industry ship share expanded year over year, primarily driven by sales of the newly launched Player Classic Signature mechanical reel cabinet, ongoing sales of the Player Classic mechanical reel cabinet, and demand for the expanding game library supporting the Empire Flex video reel cabinet.
FinTech revenues for the 2022 third quarter increased 27 per cent to $91.8m compared to $72.4m in the 2021 third quarter, reflecting a 15 per cent increase in financial access services, a 31 per cent increase in software and other revenues, and an 81 per cent improvement in revenues from hardware sales. Revenues from the recent acquisition of ecash Holdings contributed $4m in the 2022 third quarter.
Financial access services revenues, which include cashless and cash-dispensing debit and credit card transactions and check services, increased 15 per cent versus the 2021 third quarter to $53.3m, reflecting continued strength in same-store financial funding transactions, as well as growth from new customer additions. Funds delivered to casino floors increased 10 per cent to $10.9bn on a two per cent increase in the number of completed financial transactions together with an increase in average transaction size. While representing less than five per cent of funding transactions, cashless transactions (including both digital wallet and paper gaming voucher transactions) increased 58 per cent year over year. The Company’s CashClub Wallet technology is currently deployed at or being deployed across 14 jurisdictions at 38 casinos.