Everi hails acquisitions impact as revenue rises 14.2% in Q1
Everi picked out a number of deals in 2022 that helped drive growth in Q1, including historical horse racing gaming company Intuicode Gaming Corporation in May last year, with this now operating as part of its gaming segment.
Everi said its financial technology solutions (fintech) arm also benefitted from acquisitions, with the purchase of Ecash Holdings in February 2022 helping to push hardware sales up in this area of the business.
It also acquired certain assets of mobile-first engagement platform Venuetize in October of 2022, which diversified Everi beyond the gaming sector, and the majority of assets in gaming device and systems provider Video King this month. Chief executive Randy Taylor said this sets the group up further growth.
“Overall, our first quarter results continued to demonstrate our consistent growth profile, as we further execute on our organic growth initiatives and benefit from several acquisitions we completed over the last 12 months,” Taylor said.
“As a result, and despite the uncertainty of the macroeconomic environment and higher interest rates, we continue to be favourably positioned to deliver solid top-line growth that we expect will generate at least $92.0m of net income and at least $150.0m in free cash flow this year.”
Fintech growth drives revenue in Everi Q1
Revenue for the three months to 31 March amounted to $200.5m (£159.0m/€183.2m), up from $175.6m in the same period last year.
Games segment revenue was 9.3% higher year-on-year at $107.4m, reflecting a 14.6% rise in revenues from gaming equipment sales to $32.1m and a 7.1% increase in gaming operations revenues, inclusive of digital gaming operations, to $75.3m.
Revenue from the fintech segment also increased by 20.4% to $93.1m. Everi put this down to a 12.6% rise in financial access services revenue to $56.2m, while software and other revenue increased 35.2% to $24.2m and hardware sales revenue 30.5% to $12.7m.
Turning to spending, total costs and expenses for the quarter were 20.7% higher at $148.4m, with revenue costs up across both the gaming and fintech segments. Everi also reported a rise in operating expenses and research and development spend, while both depreciation and amortisation were up due to acquisition costs.
When also including $18.0m in interest expenses, this left a pre-tax profit of $34.1m, down 17.2% on the previous year. Everi paid $6.0m in tax and also accounted for a $186,000 net loss from foreign currency translation.
As a result, net profit for Q1 amounted to $27.9m, a 13.1% drop from the previous year. However, adjusted EBITDA was 3.2% higher year-on-year at $92.5m.
“Our financial results continue to benefit from our capital allocation priorities, including our focus on high-value internal product development efforts and our ability to execute on strategic tuck-in acquisitions for businesses that we expect to scale and optimise, such as our recent acquisition of the assets of Video King,” Taylor said.
“With our anticipated strong free cash flow generation, we expect to continue returning capital to our shareholders through our increased share repurchase programme, while we focus on integrating recent acquisitions that provide incremental growth opportunities in 2023 and beyond.”