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US – SciPlay report annual revenue growth

By - 19 February 2020

SciPlay have reported annual and fourth quarter results for the year ended December 31, 2019. Key highlights included record mobile revenue across the fourth quarter and a 12 per cent revenue growth across the year leading to strong cash generation.

Across the full year of 2019, revenue grew 11.9 per cent to $465.8m, beating the market growth rate of 8.1 per cent estimated by Eilers and Krejcik. Full year revenue included a negative $4.2m adjustment in the fourth quarter to correct data errors from inception through 2018 primarily relating to SciPlay’s previous process for recording revenue related to foreign transactions. Without this adjustment, the company would have met its revenue guidance of $470-475m for the year.

Net income increased $54.5m to $93.5m, which includes a negative $2.3m impact from the adjustment. Net income margin of 20.1 per cent, up from 9.4 per cent. AEBITDA was $122.3m, including a negative $2.9m impact from the adjustment, an increase of 30.1 per cent. AEBITDA margin was 26.3 per cent, an increase of 370 bps.

Net cash provided by operating activities was $93m, including $25.2m of payments related to contingent acquisition consideration. Cash and cash equivalents increased by over $100m to $110.6m as of year-end 2019.

Josh Wilson, Chief Executive Officer of SciPlay, commented: “We grew our annual revenue by 12 per cent, beating the market growth rate by nearly 1.5 times, and delivered a 30 per cent increase in AEBITDA. We increased ARPDAU 9 per cent to $0.50 and average monthly revenue per payer increased 15 per cent to a quarterly record of $88.06. We believe we are in the very early stages of a multi-year revenue growth and earnings expansion cycle at SciPlay, and we couldn’t be more excited by our future prospects and opportunities.”

Fourth quarter revenue was $112.9m, including a negative $6.3m impact from an out of period adjustment recorded during the fourth quarter versus $113.7m in the prior year period. Mobile revenue was $98.2m, including a negative $2.4m from the same adjustment. Mobile revenue established a quarterly record.

Net income was $28.6m including a negative $3.6m impact from the adjustment. Net income margin was 25.3 per cent, up from $18.7m and 16.4 per cent. AEBITDA was $32.1m, including a negative $4.4m impact from the adjustment, an increase of 31 per cent, AEBITDA margin was 28.4 per cent, an increase of 690 bps.

Net cash provided by operating activities was $32.7m reflecting strong results, including a $3m payment related to contingent acquisition consideration. Cash and cash equivalents increased $29.3m to $110.6m from the third quarter of 2019.

In the fourth quarter, player conversion rates was six per cent. Average monthly revenue per paying user increased 15.3 per cent to $88.06. ARPDAU increased 8.7 per cent from the prior year period to $0.50. Mobile penetration increased 300 basis points from the prior year to 84 per cent. Jackpot Party is in the Top three for the Social Casino Games Category in the latest report by Eilers & Krejcik whilst SciPlay re-launched Gold Fish Casino and MONOPOLY Slots during the fourth quarter with new updates and features.

Mike Cody, Chief Financial Officer of SciPlay, added: “The strong profitability and cash generation this quarter highlight the strength of our evergreen franchises and business model. We are excited about our organic opportunities as well as the flexibility we have through our balance sheet to explore other avenues of growth.”

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