The first quarter of the financial year is always a critical period for industries worldwide, serving as a barometer for annual performance. The gambling sector, with its dynamic blend of tradition and innovation, has once again demonstrated its resilience and adaptability amidst the ever-evolving market trends. Our in-depth analysis of Q1 earnings calls from publicly listed gambling companies provides an easy-to-digest snapshot highlighting both positive and negative sentiments. Alongside this, we have directly pulled any quotes or conversations that mentioned "technology," providing a direct link to the investor relation pages for those who wish to dive deeper.
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Earnings Call, Mar 26, 2024 - Flutter Entertainment plc
Positives -
Year-over-year, net debt remained stable, while an increase in further adjusted EBITDA contributed to a decrease in the net debt-to-EBITDA ratio to 3.1 times.
The firm elevated its medium-term debt target to a range of 2 to 2.5 times further adjusted EBITDA, up from the earlier aim of 1 to 2 times EBITDA.
In the United States, FanDuel achieved its inaugural year of positive further adjusted EBITDA, solidifying its premier status in sports betting during the crucial NFL and NBA seasons with a 53% market share of net gaming revenue in the fourth quarter.
Outside the United States, revenue grew by 6% in the current trading period.
Negatives -
The company saw a softness in the racing market across H2 2023, which is expected to persist into 2024.
The Australian business continues to face headwinds.
The company has seen a significant decline in its business as a result of the reversion of customer spend back to pre-COVID levels.
Mentions of Technology:
Jeremy Peter Jackson: CEO & Executive Director - "Revenue in Turkey grew 36% year-over-year on a pro forma basis despite a material foreign currency headwind as we doubled our footprint and drove increased online adoption. And within our Optimize and Maintain markets with efficiencies in our PokerStars business through leveraging the existing technology and marketing resources of our local hero brand portfolio. In January, we completed the acquisition of MaxBet in Serbia and launched an expanded sports-betting concession in Tunisia. These are further examples of the great opportunities we see in fast-growing markets and ensure we are seeing a greater proportion of the $200 billion TAM for our products."
Paul Russell Edgecliffe-Johnson: CFO & Executive Director - "So in terms of our continued investment into the U.S. market, our cost of sales on a U.S. GAAP basis is going to be, for 2024, 36.5%. Actually slightly less than it was last year. And that is the equivalent of 50% under an IFR basis. So as Peter said, we continue to invest to win new customers wherever we are able to, because the returns are extremely good. It's our #1 priority for use of capital in the business.
In terms of PokerStars, the impairment there is obviously one-off noncash accounting adjustments to the carrying value of the PokerStars brand on our balance sheet. It reflects that change in strategy that Peter just talked about, from being an individual business to making the PokerStars brand available to our local hero brands, like FanDuel, Junglee and Sisal to use in their markets for which they will then pay a royalty fee. And we expect that when fully enacted, this new strategy will both increase our profitability from PokerStars and will reduce the capital expenditure associated with it.
We have talked about the fact that it did come with an old tech stack, so maintaining that was quite difficult for us. The rate at which we've set the royalty fee that the businesses will pay to use the PokerStars brands. That requires us to reduce the value at which we carry the trademark on our balance sheet. So I hope that helps, Ed."
Jeremy Peter Jackson: CEO & Executive Director - "So you're on a slight fishing expedition wanting to know where we're going to do M&A. Look, we -- it is part of our strategy. We've been very clear about it. If you read our documentation, you can see that it is a key priority for us. I think if you mentioned Brazil, we're actually pleased with how our business is doing there. We managed a great year-on-year. It's an incredibly competitive environment. We've got 6.5%. I think it was a great result from the team. And what we've seen is that developing product that's more focused on what the local market needs, which we can do because the way the tech is set up, it's not all done centrally on a more perspective basis by market. The more we can do that, the better we're able to serve the local markets.
And when I think about the benefits we've had in Italy with the acquisition of Sisal, the product in Turkey, the experience in America, when we have -- the business we just bought in Sisal. When we buy a local hero business, we can provide them with access to our pricing risk management capabilities, other assets we have in the business, know-how, et cetera, we can really help those businesses fly. And so that lab that we think about when we look at International markets from an M&A perspective, and I think we've been very successful at doing that so far."
Earnings Call, Mar 07, 2024 - Entain Plc
Positives -
The company is wholly dedicated to its role as a betting and gaming entity.
It is content with the progress being made in Brazil and the favourable feedback from its clientele.
Although the company has relinquished a portion of its online market share to the leading competitor, along with three other entities, it still holds a significant stance in an expanding market.
In the UK and Ireland, it continues to be the most substantial retail operation, achieving a 2% growth in 2023 on a comparable sales basis.
The company has encountered nearly GBP 200 million in revenue, which has not contributed to its EBITDA.
Negatives -
The company has faced significant hurdles due to regulatory constraints in some regions.
Due to several acquisitions, the complexity of this company has escalated over time.
Mentions of Technology:
Satty Bhens, Chief Product and Technology Officer at Entain, recently shared an update on the company's progress and plans for the year, highlighting key developments and strategic focuses.
Entain, regulated in over 40 jurisdictions, offers a broad platform that includes sports betting, casino games, poker, and bingo across the US and European markets. Bhens emphasised the importance of "Brilliant Basics," simple yet reliable customer experiences, and how these have been a central theme in improving products, especially for BetMGM customers in the US.
Entain has made significant strides in product improvements, launching an integrated app in Nevada right before the Super Bowl, which demonstrated the app's success among fans. The company has also achieved notable gains in sports betting, particularly with NFL customers, and has expanded its game library to 3,600 games generating hundreds of millions of spins weekly. Efforts to enhance app speed have paid off, with app launch times now under 2.5 seconds.
Bhens detailed how Entain is accelerating product development through faster deployment of feature improvements, scaling dedicated market teams, and revamping the front-end sportsbook architecture for more cohesive and efficient design updates. These changes aim to deliver modern, user-friendly experiences that rival those of leading digital companies.
Looking ahead, Entain's 2024 roadmap includes expanding its offerings in the US with integrated sports models and innovative betting options, as well as adapting successful US features for markets in the UK and Brazil. This will involve building specific sports models, revamping bet builder capabilities, and updating designs to enhance user experience.
Entain's focus on Brilliant Basics, speed, and customer feedback is driving its ambition to lead in product capabilities and market share. Bhens concluded with a look forward to more innovations and product improvements slated for later in the year, signaling Entain's commitment to continuous improvement and market expansion.
Earnings Call, Feb 16, 2024 - DraftKings Inc., Q4 2023
Positives -
The Adjusted EBITDA saw a significant increase of approximately $600 million year-over-year in the fiscal year 2023.
There's an anticipated sharp rise in Adjusted EBITDA for the company, fueled by ongoing robust revenue expansion and an optimized fixed cost framework.
Thanks to its organizational culture and workforce, the company has proven its capabilities in 2023, positioning itself strongly for future operations.
The organization is optimizing its free cash flow to enhance shareholder value.
Negatives -
Implementing iLottery is contingent upon legislative approval, indicating a more gradual progress.
Year after year, the company continues to encounter fresh competitors.
The company experienced its most challenging two-week period in terms of sports outcomes, in terms of financial impact, since becoming a publicly traded entity.
The company remains prudent with its hold strategy, exploring additional revenue enhancement methods such as emphasizing more on live betting.
Mentions of Technology:
Robin Margaret Farley:UBS Investment Bank, Research Division - "Okay. And just a follow-up in terms of your acquisition philosophy overall. Are you more likely to do things related to technology for your product? Or are you looking more for things like this that have to do with customer acquisition?"
Jason D. Robins:Co-Founder, Chairman & CEO - "I think we feel pretty good about our technology stack. I think that there may be small bolt-ons here and there that we think are helpful to enhance. But I really think it's more about these kind of strategic moves that are going to help us win in U.S. online gaming. And I think we're going to be super disciplined on M&A. I don't think you'll see us go in this rash of buying companies left and right. This is one we did a ton of diligence on.
We underwrote it very carefully with very conservative, I think, assumptions. And we feel like it has high potential to be a real home run. So I think you're going to see us pursuing things like that, that really make a lot of sense when you think about it. And I think you're going to see us continue to be super disciplined and you're going to see us look at all sorts of different ways to take the capital that we're accumulating and create shareholder value. This is -- M&A is not the only way to do it. There are many others. So I think that's the best way to describe it. And I think it fits with how we're disciplined in general as a company. If you look at the deals we do on the business development partnership side, thing, we use a lot of discretion. We're very careful when we underwrite with a very strong analytic process, and that's exactly how we approach this M&A deal."
Brandt Antoine Montour: Barclays Bank PLC, Research Division - "So the first one, another one on Jackpocket. I'm just thinking about the non-overlap portion of the database. I mean I think we think about lottery and think of sort of a very wide diversified range of demographic and income levels. And I'm just curious if you've done any work on the nonoverlapping piece, give us a sense on who those folks are? Is it older people? Is it men or women? And is that a richer cross-sell opportunity for iGaming or OSB in your mind? And how do you compare that?"
Jason D. Robins: Co-Founder, Chairman & CEO. -"Yes, great questions. I mean, so we did a ton of work on the overall customer base and also on the general lottery market. And what we find is that the people that are buying lottery tickets on Jackpocket, they're using mobile devices to do so. They're younger. They're a more tech-savvy customer -- it's a different demographic, I think, than the average lottery customer, and that's part of why it's growing the market, which is great.
So similar to kind of the online better versus the retail better, it's just -- it's a different person that's willing and also that has an iPhone and that sort of thing. And I think really, that's kind of what the appeal is, is that this is a disruptive new thing in a market that really the customer wants this, right? I mean people don't buy lottery tickets today, sometimes, I think, due to convenience. And just like being able to make a bet on your phone, shooting, I mean if you look at anywhere right now that's legalized betting. Online betting makes up a much larger portion of the handles than retail betting. It just makes sense when you give people a digital and mobile option that you're going to grow the market and also reach a new demographic of person. So that's really what we found when we dug in there.
And I'm sorry, what was the second part of the question? iGaming and OSB. So actually another interesting thing we saw, I had gone in thinking this was going to be much more propensity to cross-sell to iGaming this type of customer. But when we did the overlap analysis, it was actually quite similar -- the overlap between OSB customers and iGaming customers. So that gave us great confidence which makes sense in some ways, right, because the overlap between iGaming and OSB and the cross-sell rates are so high. So it kind of makes sense when you think about it, but I would have gone in and probably think it would skew a little more iGaming and it was actually very similar."
Brandt Antoine Montour: Barclays Bank PLC, Research Division - "That's really interesting. And then maybe more on the sort of maybe competitive landscape. This is a disruptive technology service that is growing based on penetration. And I think this is the #1 player in the space, but you guys mentioned that regulatory -- the regulatory structure wasn't exactly high problem. And so maybe we wonder about barrier to entry and if that's sort of low. And so -- are there sort of second, third, fourth sort of apps out there nipping at the heels of this one? And what's the competitive landscape look like?"
Jason D. Robins: Co-Founder, Chairman & CEO - "Well, no doubt, I think there will be more. And I think what you really have to think about is -- you're right. From a regulatory perspective, there are other -- it's not as hard. But I think that what really is hard is the technology side. It's a very complicated fulfillment process, and every state is a little bit different. So you have to build a solution that can be flexible and it's actually quite similar to what we've built in terms of our multistate regulatory structure in OSB and iGaming.
But I think the added piece for them is the fulfillment, and that's very complicated to do that at scale in a cost-effective manner and have a technology system, they have patents as well on various pieces that they've created -- to have a technology system that can support rapid launch of states is not something that you can build right overnight. So no doubt there will be more competition over time, but I think these guys have a big head start. And while the barriers to entry may not be super high, I think that head start is real."
Earnings Call, Feb 15, 2024 - Betsson AB, Q4 2023
Positives -
Group revenue increased by 14% and operating profit increased by 42% in Q4 compared to the same quarter last year.
EBIT margin is 22.6% compared to 18.1% YoY, driven by increased revenue and gross profit and maintained operating costs.
The company reported a 48% increase in dividend for 2023.
The company did well in customer acquisitions.
Negatives -
Revenue from the German market continues to decline for Betsson.
Personnel expenses increased by EUR 7 million in Q4 compared to the same period last year due to some 150 more employees, yearly salary revision, performance-related compensations, geographic expansion and increased investments in product and technology development.
The Sportsbook margin was lower than the historical average margin.
The low Sportsbook margin resulted in a 5% decrease in Sportsbook revenue YoY.
Revenue from Latvia decreased YoY due to lower Sportsbook margin.
Mentions of Technology:
Pontus Lindwall: CEO, President & Executive Director - "At the end of January, a new online casino offering was launched in Belgium under the brand name betFIRST based on the category A plus license that was obtained in October of last year. The license enables a full online casino offering, including slot games, table games and live casino. In November, an online sports betting offering was introduced in France with the Betsson brand under the local gaming license that was obtained in September.
Betsson continues to focus on investing in product and technology. Geographical expansion continued to be a strong focus during the quarter as well as strengthening the product offering. Technical preparations were made to be ready for the new regulation in Peru as well as significant enhancements to the product in Colombia, ahead of planned new marketing activities during 2024. During the quarter, especially a large focus was put into integrating and launching new payment solutions in several markets."
Martin Ohman: Chief Financial Officer - "Personnel expenses increased by EUR 7 million in the fourth quarter compared to the same period last year due to some 150 more employees, yearly salary revision, performance-related compensations, geographic expansion and increased investments in product and technology development. Depreciation and amortization costs increased by EUR 4 million following the acquisition of KickerTech Malta Ltd. in the fourth quarter 2022 and betFIRST acquisition made in July 2023."
"Cash flow from investing activities amounts to EUR 14 million, with the majority related to investments in own technology and product development and some EUR 4 million to paid earn-out for the KickerTech Malta Ltd. acquisition."
Earnings Call, Feb 15, 2024 - PENN Entertainment, Inc., Q4 2023
Positives -
Over the past few years, PENN Entertainment Inc has achieved significant milestones, including finalising its own technology platform, successfully launching theScore Bet in Ontario, and integrating its technology platform into the U.S. market.
PENN Interactive boasts a strong and deep team, with numerous skilled leaders poised to take on greater roles in the near future.
ESPN BET has enabled the company to attract new sports fan demographics, adding value to its digital database. This has led to a 63% increase in year-over-year parlay mix and higher engagement with non-NFL sports, especially NBA games.
There has been an impressive increase in the company's average monthly active users, surging from approximately 190,000 in the third quarter to over 770,000 in the fourth quarter.
Negatives -
The losses in EBITDA for the interactive segment in the fourth quarter exceeded expectations.
For the first quarter of 2024, the company anticipates the losses in adjusted EBITDA for the interactive segment to be about half of the fourth quarter of 2023's interactive EBITDA losses, with the first quarter expected to be the period of greatest EBITDA loss for the year.
Despite observing a historically high Parlay mix, it still falls short of market expectations.
For the initial quarter of 2024, the anticipated interactive EBITDA losses are expected to approximate half of the final quarter of 2023's interactive EBITDA results.
Mentions of Technology:
Jay A. Snowden:President, CEO & Director - "Speaking of the digital business, earlier this month, we announced that the founding family behind theScore, John, Benjie, Aubrey and Noah Levy will be transitioning from their leadership of theScore and PENN Interactive. John departed earlier this week, while Benjie, Aubrey and Noah will be leaving in early April. We have been working closely with the Levys over the last several months on this plan and timing to ensure a smooth operational transition. Their departure comes at a natural inflection point for our interactive business.
We've achieved a lot over the last several years, including the completion of our proprietary tech stack, the successful launch of theScore Bet in Ontario, the migration of our tech stack into the U.S. and now the launch of ESPN BET. Even more importantly, we have developed an incredibly deep bench across PENN Interactive and we have several talented leaders ready to step up and take on more responsibility in the coming months."
"The introduction of new technologies and our ongoing reimagination of our properties, while providing a best-in-class customer experience is continuing to drive demand for PENN.
As you know, our industry-leading customer loyalty program, PENN Play, is supported by our 3 Cs technology, which is now deployed at 21 properties collectively representing approximately 70% of our retail EBITDAR. During the quarter, we've also grown our total PENN wallet customers to 110,000, and we've received $300 million in total PENN deposits. As we've often said, those guests who use the digital wallet demonstrates superior loyalty through increased visitation, time on device and total [ theoretic events ]."
Earnings Call, Feb 15, 2024 - La Française des Jeux Q4 2023
Positives -
The company is proud to have 27 million players in the definition, which is a good sound element to sustain growth.=
The company is able to maintain positive growth in point-of-sales.
The company continues to grow online.
Negatives -
Other cost of sales are up 3.3%, and it's relating in particular to instant games tickets with a volume effect, but also the price effect due to inflation.
The point-of-sale commission follows the net worth stakes like in the lottery part and other cost of sales rose by 11.7%.
The company is facing a negative impact on Amigo sales.
Mentions of Technology:
Stephane Pallez: Chairwoman, President & CEO - "And in the meantime, of course, will develop and implement the commitments that we have been taking to the French Competition Authority when we acquired ZEturf to more separate our players' accounts and to have, over time, a legal entity that will regroup all our online activities to separate them from exclusive rights on a more, I would say, even clearer base. So that's important because it's important also for our acquisition of Kindred, which, of course, goes in the same direction. So to talk a little bit about the tender offer that we announced for Kindred, probably you know, already most of what we said when we announced it on the 22nd of January. So we announced the launch, which is going to be next week actually of an all-cash recommended offer, one on Kindred, one of the leading European online betting and gaming operator with strong capabilities, iconic brands and best-in-class technology. We have structured this offer -- for this offer to be friendly, so it's been recommended by Kindred's Board of Directors."
Earnings Call, Feb 22, 2024 - Churchill Downs Inc, Q4 2023
Positives -
Record Q4 net revenue and adjusted EBITDA for the overall company and across all 3 reporting segments.
The company generated $528 million or $6.94 per share of FCF in 2023, up 16% YoY.
The company grew substantially, accomplished a number of key strategic and operational objectives and positioned the company for exceptional growth in 2024 and beyond.
The company expanded its HRM business in Kentucky with the new hotel, sportsbook, and gaming floor expansion at Derby City Gaming and the opening of Derby City Gaming Downtown.
The company has a strong initial pipeline of growth opportunities beyond the ones announced.
Negatives -
The company lost 1,700 races in 2023.
The company saw a decline in races in Q1.
The company faced construction challenges and wet winter weather environment, which caused delays in the roadway project.
The company is facing inflation, increased cost, and race day cancellations and shifts in race schedules in 2023, which impacted retail wagering.
Mentions of Technology:
William C. Carstanjen: CEO & Director - "We also successfully launched our TwinSpires B2B business in 2023. Our B2B strategy is focused on integrating para-mutual wagering on horse racing directly into the online sports wagering platforms through our suite of technology and operational capabilities. Our deals with FanDuel and DraftKings are still in their early stages. This year's Kentucky Derby will be a nice test of our progress, and we are planning to expand our B2B business to other online sports wagering platforms in the future."
"Second, we began to realize the benefits of our strategy to vertically integrate Exacta and its HRM central determinant system technology. We acquired Exacta for $250 million in August of 2023. In the fourth quarter, Exacta contributed nearly $9 million of adjusted EBITDA to the TwinSpires segment and more than $5 million of improved economics for our Virginia HRM properties."
Chad C. Beynon: Macquarie Research - Bill, I wanted to ask another one on, I guess, the mid- or long-term growth of the company. You guys did a nice job kind of laying it out at the onset in terms of what's already embedded in future growth. P2E, it looks like the multiple is already down under 9%, and you still have some opportunities here, Exacta based on the math that you gave us under $5 million. But as we think about the future of the portfolio, I'm sure there's a lot of stuff that comes across your desk. What makes the most sense in terms of growth in different segments? Is it tech? Is it gaming opportunities, racing, anything that you would like to double down on over the next 5 years?
William C. Carstanjen: CEO & Director - "Yes. So first, thanks for that question, Chad. And there's a lot there, and I appreciate that question, and I'll try to walk us through this concisely. So first, when you think about our company, always remember, we have the special asset called the Kentucky Derby. And while it's 150 years old and is the oldest continuously run sporting event in the United States, in our mind, it's still a young, young property with a lot of opportunities. So that's a component of our growth story going forward.
Next, this HRM development that happened in the U.S. gaming environment, that's been a great development for our company. And whether you look at our B2C properties, our actual facilities or if you look at our technological capabilities, our technology services, you see a lot of growth there. So we like HRMs from both the perspective of being a B2C operator, we think that there are efficient uses of capital. We think we've demonstrated we know what to do in that space as a B2C operator. And there'll be opportunities there that we're executing on and perhaps more in the future.
And then the transition to offering some of the technology services, I think that's just been a really important development for our company. It serves us both from the perspective of efficiency in our own operations, but also from the perspective of opening up other avenues for us to achieve returns by servicing well the needs of other B2C operators where we don't have the opportunity ourselves to be that operator.
So I think you'll continue to see growth and opportunity there. I think the U.S. Gaming environment generally is fairly dynamic. And that's that harkens back to one of the earlier questions, lots of legislatures every year are looking at tweaks in the gaming laws and changes, and we have to watch those both defensively, but also offensively as opportunities for our businesses.
And then coupling with this technology theme for a second, the TwinSpires business is an example of what started as a B2C business and has been remarkably robust as a B2C business even as other forms of online wagering have started to develop in the country like online sports wagering, it's been remarkably robust. The thing I've been most thoughtful about there is just the unusual occurrence in 2023 have lost races as opposed to other things that might have affected the business.
We lost somewhere around 1,700 races in 2023. And in the first quarter, we've also seen a decline in races. And those have been whether other things outside of anybody's particular control, but that business as a B2C business has been robust, but also those technology services have been the basis for how we think we can take that business into other things like providing B2B services to sports wagering platforms."
Earnings Call, Feb 08, 2024 - Boyd Gaming Corporation, Q4 2023
Positives -
Company-wide revenues rose 3% to $954 million in Q4, driven by growth in the online segment.
Gaming revenues in Southern Nevada reached a record $13.5 billion in 2023, a 5.5% increase over 2022.
Hotel revenues were up 4% in Q4.
Midwest and South segment returned to growth in Q4, with revenue and EBITDAR increasing over the prior year.
Negatives -
Gaming revenues for Q4 were down by less than 1%.
The company expects to see increases but not to the levels or the pressure that it has seen over the last 2 years
The company has got a difficult comparison in Q1 related to LVL.
The company is facing challenges with respect to the Las Vegas Locals with the new competitor.
Mentions of Technology:
No mentions of Technology during the earnings call.
Earnings Call, Feb 13, 2024 - MGM Resorts International, Q4 2023
Positives -
MGM China had a record high in Q4.
The company ended 2023 with an all-time record adjusted EBITDAR for Q4 and the full year in Macau.
BetMGM met its 2023 targets by reporting positive EBITDA in H2 and reaching the upper limit of its net revenue from operations guidance of $1.8 billion to $2 billion.
The company is encouraged by the metrics it has seen in its business, including room and rates on the books, in-the-year group attendance, and future bookings as well as the robust event calendar for the city.
Negatives -
The company realised pressure on regional margins in Q4.
The company lost share in both instances.
The company faced labor cost increases.
The company is facing some impacts in its regional markets due to weather effects and the calendar coming off of New Year's.
The company has a number of tools at its disposal but is facing some labor cost increases.
Mentions of Technology:
William Joseph Hornbuckle: President, CEO & Director - "In digital, BetMGM made its full year 2023 targets in both net revenue and second half profitability. They also made significant strides in the technology road map with the launching of a new app design and with single account, single wallet capabilities being available now in those states."
"Turning to BetMGM. In 2024, we will soon be live in 29 markets with the launch of North Carolina next month. We had a noteworthy technology achievement in January with the approval and subsequent migration of the Entain platform in Nevada. This sets the stage for integration of single account, single wallet in Nevada later this spring, which is critical to our omnichannel thesis and will fully unlock one of the key differentiators for BetMGM by fully leveraging our Las Vegas properties.
Within our international digital space, in the U.K., LeoVegas, BetMGM's KPIs have exceeded our initial projections, demonstrating again the strength of MGM's brand. In fact, by leveraging the MGM Resorts' balance sheet, we now offer the highest jackpot payouts amongst all competitors in the U.S., making our offers even that much more compelling."
"We are on the heels of buying Sports Technology. We want to obviously be in our own sports betting business with our own technology. And over time, we have Kambi that we use for LeoVegas.
We are on the heels of a deal for Live Dealer where we've talked about and had a vision of broadcasting live games from Las Vegas to rest of world with some celebrities and entertainment tied to them, and we're on the heels of that. I'm heading down to South America next week or the week after to look at a large JV. Brazil is going to put Internet gaming in play for both casino and sports betting, and we plan to be there when that launches.
And so we're focused on building that business at its core into a real business. We've taken BetMGM U.K., as we've talked about. We've got well over 100,000 first-time depositors already in the 4.5 short months. And we're looking at another country already to do the same thing. And so we're going to grow the business. And if we ultimately acquire something else, time to tell, but for now staying focused on that is paramount to us."
Special Call - Q1 - Aristocrat Leisure Limited
Positives -
Aristocrat Leisure Limited continues to see solid demand for its core products sold outright, noting its competitive strengths in both Class II and Class III games as well as long-term partnerships with customers.
Aristocrat Leisure Limited is focused on investing in competitive product portfolios to drive market share gains.
Aristocrat Leisure Limited expects its proposed acquisition of NeoGames to close shortly after April 2024, which should help accelerate Aristocrat's growth.[3]
Aristocrat Leisure Limited's Pixel United division has a new multiyear agreement with the NFL to develop free-to-play social casino games, starting with an NFL-themed mobile slots app.
Aristocrat Leisure Limited's Product Madness division retained its market-leading position in slots in the first quarter of 2024, while Pixel United focused on portfolio profitability and operational efficiencies.
Negatives -
Industry gaming revenue (GGR) has been more volatile in the first half of this calendar year, but overall remains positive without any major change in consumer sentiment.
Mentions of Technology:
Sally Denby: Chief Financial Officer - "On a talent basis, we recently promoted Matthew Primmer to the role of Group Chief Product Officer, raising product leadership team to the -- raising product leadership to the leadership team. This complements Andy Hendrickson, who is our Chief Technology Officer, and we recently appointed Superna Kalle as the Chief Strategy and Content Distribution Officer. We will continue to develop, retain our internal teams and also recruit new talent to accelerate our strategy and build strong and diverse teams at Aristocrat"
Matthew H. Ryan: Barrenjoey Markets Pty Limited, Research Division - "Okay. And just with the closing of NeoGames, I think you've sort of talked about a May close or that's your expectation at the moment. Just keen to get an understanding of sort of what happens after that in regards to integration and just what the first, I guess, 6, 12 months looks like as that business comes under Aristocrat."
Trevor J. Croker: CEO, MD & Director - "Yes. Thanks, Matt. There's a full integration plan going on, as you'd expect. A couple of first things is, obviously, we've been working to build the technology platforms to integrate our games on to the Pariplay network and that is actually rolling out now and starting to roll out through Europe. Pariplay has also been approved and is building customers in the North American market, which we'll be able to put our content on their platform in North America. So there will be content that will start to flow on to the technology platforms.
Obviously, building partnerships and conversations with customers, both in Europe and in North America and other markets that are looking for content access, working with the Neo team around their technology and scaling their technology into new jurisdictions and at the same time, working with the iLottery part of the Neo business and looking at continuing to expand that iLottery noting that they have had 2 iLotteries approved since we announced the acquisition. So a lot of work going on there, a lot of work of integrating with our customers, working with regulators and streamlining our technology and increasing our product flow into their portfolio and also leveraging the product from Roxor at the same time."
Simon Thackray: Jefferies LLC, Research Division- "That's super helpful. And then just in Australia, your share has been amazingly strong and -- as you've executed and supported the industry over a long period of time. And so some share rebalancing sort of makes sense to me. But in the U.S., how are you thinking about floor manager conversations around the share of premium gaming ops machines, the floor share of link machines and your ability to hold that share?"
Trevor J. Croker: CEO, MD & Director - "Well, I think -- first, thanks for the complement on Australia, but we've got to continue to work hard. You don't just get to that level and then stop. We continue to remain focused on the Australian business, as I said in my comments, and we're got to continue to invest. We've got a portfolio of games that we will continue to bring through from that perspective.
In North America, we're just not at the same levels of penetration that we are in Australia, and I still see opportunity to take more share. And you might look at some of our numbers and say, "Well, it's a big statement." But we actually still have great market share opportunities, and that's the good thing about the North American market for us now, whether it's gaming operations, whether it's for-sale, whether it's going into new adjacencies or even just expanding in adjacencies where we've already got new share that we haven't had. So I feel confident in the North American market.
Regardless of the size of the market, we'll continue to take share, and that's really what we invest in behind D&D and -- with new hardware cabinets and technology and also focus on excellent execution with strong and deep partnerships with our customers. We've more customers now on longer-term agreements and partnerships. And I think we're well placed for it, Simon, to be honest with you. And our job is to continue to take share."
Rohan Gallagher: Jarden Limited, Research Division - "Just a follow-up for me, if I may. D&D has obviously been a massive shareholder value creation for you. You're outspending your peers, both in absolute dollars and percentage of sales, 12% to 13% of sales is sort of pushing $850 million. I'm not sure whether it's for Trevor or Sally. But how are you ensuring the efficacy of such investment and to get similar returns that we've done historically, given the significant size that you now are committed to?"
Trevor J. Croker: CEO, MD & Director - "Yes. Thanks, Rohan. And I appreciate the comment and the point. I think a couple of things. First of all, there was a step-up at Roxor. So when we bought Roxor, we bought in a D&D cost that came with that. We have been continuing to invest in technology now, and we will continue to invest in technology where we have the ability to move games across our platform and across our technology more efficiently, and that's an ongoing investment in the near term that will actually create efficiencies in the longer term.
We do have internal processes and discipline. And as we announced, Matt Primmer is now the Chief Product Officer. He has visibility of whole costs for the D&D across the group. And at the same time, we're also investing to support the growth of Anaxi. It's a build-and-buy strategy. And there is requiring investment from that perspective. So I feel confident that our historical measures and our historical management of D&D is in place, and we've now got both the management structure, the governance and the strategic priorities to support that."
Earnings Call, Feb 20, 2024 - Caesars Entertainment, Inc., Q4 2023
Positives -
Consolidated net revenue growth and stable YoY adjusted EBITDA in Q4.
The company expects to build upon 2023 momentum for several key events in the event calendar in Las Vegas.
The company introduced its new Caesars Palace online app in August 2023, which has seen active customer counts and volume growth grow sequentially each month.
The company expects to open the permanent facility in Columbus, Nebraska by midyear, and the permanent facility in Danville is expected to open by year-end.
The company expects to achieve $500 million of adjusted EBITDA in the years ahead.
Negatives -
Annual results were driven by new property openings, offset by new competition in certain markets, construction disruption at a few properties, and the negative impact of core weather.
Sports betting volumes grew over 12% with a hold rate of 6.4%, up YoY, but negatively impacted by November hold coming in below expected range.
The company had about 3 of the 4 weeks that were significantly weather-impacted.
The company had construction disruption in Indiana and New Orleans in Q4.
Legalisation has been challenging for the company, as there have been no real surprises in terms of jurisdictions that did or didn't legalise.
Mentions of Technology:
Anthony L. Carano: President & COO - "On the sports betting side, during 2023, we continued to focus our product and technology improvements on the overall experience for our customers. They responded favorably to improve same-game parlay, product enhancements, in-game wagering improvements and streaming technology. The percentage of customers making parlay wagers continues to improve, and the average legs per wager also continues to steadily increase. giving us confidence in our ability to improve hold throughout 2024."
Earnings Call, Feb 01, 2024 - Evolution AB, 2023
Positives -
The company saw continued growth in Asia, which amounted to 40.5% compared to 2022, and for Q4, the growth was 33.4%.
The company believes that Latin America is a region with great potential and good momentum, with a growth of close to 20% in Q4.
The company launched its most advanced and technically complex game show in 2024, which will make even Crazy Time nervous of being pushed off the throne.
The company feels it could do even better in RNG. It has been a very profitable high-margin addition to the group and a great expansion to the product portfolio.
Negatives -
The company was a little bit slow in investment in terms of the pace up of recruitment.
The FX headwind is on a similar level in Q3 and Q4.
The company added 1% last year due to instability and uncertainty with inflation and interest rates.
Mentions of Technology:
Martin Carlesund: Group Chief Executive Officer - "2024, 2025 will -- for Evolution will be the product lead years. We will be more determined
than ever with R&D, AI, new studios, new technology, take a leap forward and even -- to even higher entertainment for our end users. We will expand our portfolio of great games to all markets and with endless energy continue to develop the games of tomorrow."
Oscar Ronnkvist: ABG Sundal Collier Holding ASA, Research Division - "Okay. Okay. Then just -- I would like a comment on the shareholder, your remuneration, if you like. So it was 90% this year, as you mentioned. And obviously, the DPS was maybe a little bit higher than expected, a little bit higher than the 50% that you have been hovering around before. So just I know this is a question for the Board, obviously, but just from your side and from your sort of proposal, do you see still any M&A opportunities? Or do you think that we could maybe start like a sort of new outlook for the shareholder remuneration with more dividends and buybacks, please?
Martin Carlesund: Group Chief Executive Officer - "Yes, I can answer that. I mean the baseline of the dividend to the shareholders is the [indiscernible] dividend policy. There's no changes to that. And the decision on the buyback is a one-off taken by the Board. The future -- the long-term future of evolution is the most important thing we have. So we will constantly evaluate M&A and whatever technology or whatever we could add to that. And we would not put us in a situation where we take a dividend policy or any other type policy that would hinder that."
Earnings Call, Feb 28, 2024 - Galaxy Entertainment Group Limited, Q4 2023
Positives -
The company has confidence in the market and expects to regain some of the lost market share.
Macau has transformed successfully from a VIP junket-focused market to a more mass-centric, with surging demand from mass and premium mass customers.
The company invested $1.4 billion in Q4, bringing the full-year investment to $5.5 billion, and will increase its investment commitment by 20% over the terms of the concessions.
The company is opening overseas offices in Tokyo, Seoul, and Bangkok to support the government's goal of expanding international visitors to Macau.
The company believes that with the many additional facilities it has added and will continue to add in the future, it will be well positioned for longer-term growth.
Negatives -
Market share declined in recent quarters.
EBITDA for Q4 2023 was $2.8 billion, down by $103 million YoY and flat QoQ.
The company played unlucky in Q4, which reduced EBITDA by $103 million.
Mentions of Technology:
D. S. Kim: JPMorgan Chase & Co, Research Division - "First of all, I think our market share in fourth quarter did slightly below 18% in the last quarter. And I'm wondering if you could share with us how was our January market share given GGR was already public. That's the first question.
And secondly, as you also remarked in the prepared remarks, we noticed a number of updates and upgrades on the gaming floor and some of the F&Bs. And can you give us a summary or recap of what we are doing to achieve our fair share, if you will, in coming quarters and years, how some of those -- the premium mass areas and whatnot could help us achieve our goal?
And like [ there ], as you know, a lot of discussions on like smart chips, RFID tables and whatnot, like Walker Digital and those vendors. And can I ask what's our plan for this -- the use of technology, some time line and how we can fine tune operationally to help, again, gain our fair shares in coming quarters? And I may have a follow-on after this."
Ying Tat Chan: Chief Financial Officer - "Sure, D. S. I think allow me to answer the question in more details as the following. So first of all, I think I do not -- I'm not able to provide a number on this quarter, but I can surely acknowledge their share price. The market share decline recently was actually below 18%.
And look, I would like to offer the following thoughts. We believe the market share decline is not a fundamental shift from our players' preferences. And we strongly believe that what we've built is with very high quality and aligned with our customer expectations, to be honest. And we are also very proud of our service delivered by our team members.
So look, Macau has transformed successfully from a VIP junket-focused market to a more mass-centric. And the demand from this mass or premium mass customers actually is surging. And they are not purely looking at one price point on the gaming experience, but many, many others.
So we think that importance of non-gaming and particularly entertainment is important to drive and retain our discerning customers in this market. So we believe that GEG has built very high-quality resorts and especially in Phase 3. So we are not just ticking all the boxes, but we believe that we are the leader in terms of this in the regions.
But having said so, we do recognize that the market share declined in recent quarters, and we identified there could be some technical issues. It's not a fundamental shift. And that technical issues really demand us to pay more attention to our sales and whole system in our company. And I can assure you that we are addressing it now.
And looking forward and as I mentioned earlier in my opening remarks, we've done some gaming floor reconfigurations, so basically relocating the central high-limit area to the south part of the area. And we also added some F&B option into that. The whole area is actually completed before the Chinese New Year. We are also adding some high-limit slot area going forward. So effectively, we believe that, that will be reflected into a number perhaps in the next few months.
So looking at some of the technologies that you mentioned, the RFID, of course, that will contribute to a lot of improvement in effectiveness and efficiency of the gaming floor as well as the integrity of the floor. We're already starting the process, and we are planning to launch out all these technology-related initiatives during the year.
So trust us, GEG really maintained the most stable senior management team. We are no stranger to the competition environment, and we are confident that we're addressing the market. But in general, in the end, we believe the market is picking up that all of us can share our fair share. And in large, we believe that we should be competing in quality, service, size, creativity and variety of products, which place Macau as the top destination of our customers.
I hope that my long elaborations of my answer could actually address some of your concerns, D. S."
Earnings Call, Mar 20, 2024 - ZEAL Network SE, 2023
Positives -
The company increased its online lottery market share.
The company expects midterm revenue growth based on 2023 and until 2026 in the mid- to high teens.
The company's aided brand awareness has increased to 47% compared to 40% before the launch of the campaign.
The company has made effective and increasingly efficient investments in marketing.
Negatives
Marketing expenses increased by 6% due to the start of the brand campaign in Q3 and higher investments during a peak jackpot phase in Q2.
The jackpot environment in 2023 was very challenging.
Direct operating costs increased in line with billings.
The growth in underlying personnel expenses was driven by a 7% increase in the number of FTEs and higher variable compensation.
Mentions of Technology:
Sebastian Bielski: CFO & Member of Management Board - "Our indirect operating expenses increased by 14% and were mainly driven by increased cost for technology and software. "
Earnings Call, Feb 27, 2024 - Light & Wonder, Inc., Q4 2023
Positives -
Gaming operations revenue in Q4 increased by 7% YoY, driven by growth in the North American installed base and revenue per day.
AEBITDA increased 17% to $69 million YoY, with AEBITDA margins up 200 bps to 34%.
The company expects to expand on the higher margin and recurring revenue segments of the gaming business over time, and expects 2024 to be another year of robust sales.
Negatives -
Tables revenue was flat YoY due to the timing of product sales.
The company saw some isolated softness in January in the U.S. land-based market in certain areas, attributed to weather.
Mentions of Technology:
Oliver Chow: Executive VP, CFO & Treasurer - "Over the past year, we've diligently managed our cost base and drove margin expansion. Operational excellence remains a top priority as we further integrate our businesses and identify efficiencies. Importantly, with the results and healthy business that we saw this year, we will continue to reinvest back into all 3 platforms through R&D and CapEx to propel our growth pillars.
We will maintain a strategic approach that ensures optimised output with a rigorous assessment of ROI. More importantly, we will continue to invest in our people and technology, the backbone of Light & Wonder that drove our success throughout this transformation and into the execution phase. As our business scales, we also expect associated corporate costs to increase proportionally, providing support for the business units through shared services and other functions."
Jeffrey Austin Stantial: Stifel, Nicolaus & Company, Incorporated, Research Division - "Hey, Matt and Oliver. So another strong quarter here in SciPlay ARPDAU, up 15% year-on-year on an 18% comp. Matt, can you just spend a minute here on the forward outlook? More specifically, what inning would you say you're in with regards to harvesting returns on some of the investments that you've made into the centralization engine and ad-tech capabilities? And to add to that, can you just expand a bit more on the DTC rollout? What's left in terms of execution on product development? What levers can you pull to encourage user adoption? And how should we think about the cadence of adoption, maybe relative to peers out there with more mature DC offerings? That's all from me."
Matthew R. Wilson: CEO, President & Director - "Yes. No, great question. I think SciPlay is becoming quite metronomic about the way they just deliver outstanding result after outstanding result. Clearly, the fastest-growing social casino company in the industry and taking wild amounts of share. And I think it all comes back to -- we've got a best-in-class team with a really focused strategy. So we've made the right strategic investments about 2 years ago in the SciPlay engine, which just really gave us all the tools that we needed to make sure that we were driving each of our games efficiently.
So again, nice uptick in ARPDAU. Rally holding on to our DAU across all the 4 major games. It was a collective effort across many games that drove this result. So in this business, the trend is your friend or your enemy. I mean, so for us, we're kind of up into the right with SciPlay, and we have been for the last few years. So nothing suggests that that will stall anytime soon, great momentum leading into Q1. Yes, but a fantastic result for SciPlay in what is apparently a challenged market. Oliver, anything to add or subtract?"
Earnings Call, Mar 06, 2024 - Super Group (SGHC) Limited, Q4 2023
Positives -
Total operating costs as a percentage of net revenue in Q4 were 19%, down from 22% YoY.
Ex-U.S. total revenue for 2023 was EUR 1.406 billion, up 8% YoY and 19% in constant currency.
The company made a strong recovery in Q4, setting some new records.
The company is investing in technology, AI, and enhanced processes to drive long-term efficiencies and innovation.
The company reduced its headcount by more than 11% over the year.
Negatives -
Sportsbook revenue declined in Q4 to EUR 53 million, down by 39% YoY and 34% in constant currency.
The company is not pleased with the status quo in the U.S.
The company had a quarter of strong revenue growth in Africa, despite the negative sports margin for the business in October.
The company expects the UK Gambling Commission's plan to introduce a cap per spin for online slot games later this year to have a limited impact on revenue.
The margin was impacted by robust sports results, resulting in negative EBITDA for the month.
Mentions of Technology:
Neal Menashe: CEO & Director. -"Our customer retention remains strong, and this, along with new customer acquisitions, drove us to new highs, for daily customers and daily deposits. Each quarter this year, we set records on each of those fronts, and consistently surpassed them. We are a technology-driven business, with customers being at the center of our universe. And it's great to see continuous engagement, from both new and existing customers, some of which have been playing with us for over 20 years. These strong metrics make us confident that we will achieve the double-digit top-line growth that we are projecting for 2024.
Now to provide an update, on some of our key jurisdictions. Starting with Africa, we had another quarter of strong revenue growth. We accomplished this, even though the African market was a key driver, behind the negative sports margin for the business in October. Moving forward, we continue to explore the introduction of new products and brands, into both new and existing markets. Just last month, we successfully launched our Jackpot City brand into our first African market. And we are super excited about the prospects that [ Asena ] brand presents for us across the continent.
In Europe, we're encouraged to see growth in markets, which we would typically define as more mature and established. In particular, Italy and Spain were standout performers. Both regions grew their casino segments significantly year-on-year, by offering new localized gaming content.
In the UK, Betway delivered strong growth. Jumpman delivered its most profitable quarter ever. And similar to Africa, we rolled out the Jackpot City brand. We are well positioned to handle the UK Gambling Commission's plan to introduce a cap per spin for online slot games later this year. We expect this to have a limited impact on revenue, because of the nature of our UK business, and the composition of the customer base.
In Canada, casino grew well, and overall this remains a strong market for us. In Ontario, industry regulation prompted an initial dip. But our customer attention is now exceeding, what it was before the new rules took effect. Customer values are as good as they ever were. And revenues, which initially stabilized, are now great.
In the U.S., while we continue with our previously communicated technology, migration and marketing plan, we are not pleased with the status quo. Given the size of the investment required, the competitive landscape, and the relatively small number of states that are currently regulated for iGaming, we are actively evaluating our U.S. strategy on a state-by-state basis and will make changes as required.
We announced in February that, we completed the sale of DGC's B2B assets to Games Global. The B2B division of DGC is in great hands, and we wish all the parties, the best of luck moving forward. The completion of the transaction aligns with our goals, which is the growth of our worldwide B2C business.
Finally, I'm pleased to let you know that we are very close to finalizing commercial terms and agreements with Apricot to assume full control of our Betway Global sportsbook technology. This includes a favorable risk-sharing deal structure, which comprises an upfront consideration, and an earn-out. Once completed, this will be a monumental milestone for our business, and will allow the global rollout of the software to new and existing markets, whether built organically, or through M&A. We look forward to getting this wrapped up, and will provide an update before the end of the month."
Alinda Van Wyk: CFO & Director - "We are not about cutting costs for the sake of improved margins. Instead, we continuously analyze our costs, and understand the areas where we can operate more efficiently. We are investing in technology, AI and enhanced processes to drive long-term efficiencies and innovation. All of this allowed us to reduce our headcount over the year by more than 11%.
This focus has led to our total operating costs as a percentage of net revenue in the fourth quarter falling to 19% compared to 22% in the same quarter of last year. This is a huge saving of 3% of net revenue. Another area where we will continue to invest is our marketing. We spent 29% of net revenue on marketing during the fourth quarter. We scrutinized the return on investment per market and per channel to ensure optimal delivery of our revenue targets, and to deliver top-line growth. We never want to sacrifice long-term growth for the sake of short-term margin improvements."
Neal Menashe: CEO & Director - "We have a clear, very clear game plan for 2024. We are focused on a number of areas, including the continued optimization of our global footprint, including the U.S. Ongoing investment into marketing channels, which yield the highest return on investment, fine-tuning our product and technology, realization of further cost efficiencies in the right areas, the rollout of our Jackpot City casino brand, across new and existing markets. The delivery of these objectives will help us achieve our projections of double-digit growth on the top line, continued increase in our EBITDA, and meaningful free cash flow. We have high expectations for 2024, and look forward to continued success."
Jed Kelly: Oppenheimer & Co. Inc., Research Division - "Just given your outlook, can you talk about, what regions, you're baking in, probably maybe like the most upside from? And then just can you talk about how your tech migration is coming and what percentage of your technology is vertically integrated and [indiscernible] owned?"
Alinda Van Wyk: CFO & Director - "Jed, on tech migration, I think Richard will just --you're referring to the tech migration in the USA. I mean, you'll get an update on the acquisition of Apricot software. Can you just repeat your first question again? You want to know…"
Jed Kelly: Oppenheimer & Co. Inc., Research Division - "Yes, just on your outlook, like can you tell us what regions, you're -- where you're seeing the best growth?"
Alinda Van Wyk: CFO & Director - "Jed, as we pulled out, Neal also went into quite a few detail on our countries that we listed out but Africa is always on top of the list. It's really doing very well in that couple of African countries, and also some of the Central European. Neal called out Spain and Italy is doing very well. And then rest of Canada has really lifted its head as well with really, really strong growth this year. And there was also a good overview of Ontario that, we say is getting back to the standards we saw before."
Richard Hasson: President, COO & Director - "Jed, touching on the U.S., on the technology migration, 7 of the 9 states that we're live in have currently migrated, with the 2 last states expected within the next month or so. But, of course, that migration is being considered as part of our wider assessment of the various options that we're currently looking at."
Neal Menashe: CEO & Director - "And then I just wanted to update. One of the questions was asked on our tech, on our new tech stack. So this is obviously with Apricot almost there. It means the sportsbook is simple. We've got our 1 sportsbook that we can use across the globe, including Africa. Jumpman has its own proprietary tech stack, Betway Global. And Africa, we will then own it from beginning to end.
And that means that we can then deliver all our products, and all our pricing, et cetera, across the globe. So, we're super excited about that. It has taken long, but we're almost there now."
Earnings Call, Feb 21, 2024 - Bally's Corporation, Q4 2023
Positives -
International Interactive generated record-adjusted EBITDAR of $93.2 million in Q4, a 4.3% increase YoY.
Casinos & Resorts exhibited robust performance across most of the portfolio with revenues up 7% in Q4 and up 11% for the year.
The company's U.K. operations continue to excel in Q4, making its strongest adjusted EBITDA performance to date.
EBITDAR margins excluding Atlantic City, Tropicana, and Chicago were a solid 34%.
The company is close to securing incremental construction financing for the permanent facility.
Negatives -
The company experienced market softness during the back half of 2023, but saw some real impact in October, a lot of softening.
Asia had a significant decline in 2023.
The company ran into the weather, which impacted it just like most of the regional operators.
Mentions of Technology:
Robeson Mandela Reeves: CEO & Director - "We continue to optimize our marketing investments and expected to further benefit in 2024 as we transition more functionality to our technology partners, Kambi and White Hat Gaming. We have launched web-based versions of our apps recently and eagerly await the launch of iGaming in our home state of Rhode Island later in the first quarter, where Bally's will be the sole provider."
Jonnathan A. Navarrete: TD Cowen, Research Division - "Great. In terms of CapEx, you call that $165 million. Can we just get the split of maintenance versus growth?"
Marcus Glover: Executive VP & CFO - "Yes. Think of it this way, there's about probably $65 million, $70 million that will go to maintenance for the Casino & Resort side. We have some growth that's probably in the neighborhood of $35 million to $40 million capital that will go into the properties, but probably will not see the ROI on that until 2025. So we'll activate and develop this year, bring online for 2025. And then a significant portion for continued development and investment in our development efforts for interactive. That includes both North America and International Interactive, and then a very, very small portion for some enabling technology for centralization and integration efforts across the enterprise."
Earnings Call, Mar 21, 2024 - Gambling.com Group Limited, Q4 2023
Positives -
FCF grew by 71% to $16.2 million.
Adjusted EBITDA rose by 54% to $10.6 million YoY.
Revenue from the U.K. and Ireland was down modestly in Q4 compared to the year-ago period, but for the full year, these revenues rose 11%, outpacing the overall market growth.
The company has built one of the largest performance marketing businesses in North America over the past 4 years, having taken revenue from $7 million in 2021 to over $60 million in 2023.
Negatives -
Cash as at December 31 totaled $25.4 million, a $1.5 million QoQ decrease due to strong operating cash flow offset by capital expenditures and share buybacks in Q4.
Revenues from the U.K. and Ireland were down modestly in Q4 compared to the YoY period.
Mentions of Technology:
Charles Hanson Gillespie: Co-Founder, CEO & Director - "I am delighted to announce the addition of some new assets into our portfolio today. We have signed a definitive agreement to acquire complementary assets in a highly accretive transaction which gives us additional scale. With the addition of Freebets.com and its related European casino assets, we expect to be able to drive additional growth in the U.K. and Ireland and substantial growth in the rest of Europe. We look forward to welcoming our new team members who will join us in early April when the transaction closes. We expect the acquisition to be highly accretive to our adjusted EBITDA and free cash flow immediately upon closing. We are confident that over time we will scale the revenue and cash flow generating capabilities of the acquired assets as we put our operating excellence and technology platforms to work just as we have done with our earlier acquisitions of BonusFinder and RotoWire."
Elias Mark: Chief Financial Officer - "New depositing customers in the quarter grew 95% compared to the prior year to more than 159,000. NDC growth was faster than revenue growth as sports betting made up the highest percentage of our quarterly NDCs yet. Q4 cost of sales were $5.1 million, which, as we have previously discussed, reflects a significant ramp in our media partnership revenue. Total operating expenses were $19.3 million, down $1.8 million from the year ago period. Fourth quarter 2022 operating expense included $4.3 million of fair value movements on contingent consideration. Adjusted for this fair value movement, operating expenses grew 15% year-over-year or 10% in constant currency even as revenue rose 52%, reflecting the operating leverage from our platform of technologies and brands. Net income in the quarter adjusted for unwinding of the third consideration was $6.8 million or $0.18 per diluted share compared to adjusted net income of $600,000 or $0.02 per diluted share in the prior year. Adjusted EBITDA rose 54% to $10.6 million compared to $6.9 million in the prior year. Adjusted EBITDA margin in the quarter was 32%."
Elias Mark: Chief Financial Officer - "We keep prudently investing in our products and technologies with a firm focus on return of investments, although we have significantly eased the pace of our hiring. We remain able to entirely fund our organic growth initiatives solely from operating cash flow while also continuing to generate significant positive free cash flow. This flexibility enables us to be opportunistic and pursue acquisitions and share buybacks to enhance shareholder value. Our recently announced $50 million credit facility with Wells Fargo gives us additional liquidity and financial flexibility. We continue to see strong consumer demand to sign up for new player accounts and operator demand for performance marketing services. We expect to drive organic growth across all our geographical segments in 2024, including in North America, despite starting with a higher base of revenue than ever and with only 1 new state launch versus 3 in 2023. This will be complemented by incremental contribution from the acquisition of Freebets.com and related assets announced today and expected to close in the beginning of April."
Earnings Call, Mar 12, 2024 - International Game Technology PLC, Q4 2023
Positives -
Adjusted EPS rose 40% to $0.56 per share, driven by the strong increase in operating income.
Total liquidity remains robust at $1.8 billion at year-end, which includes $1.2 billion in additional borrowing capacity from undrawn credit facilities.
The business has an attractive recurring revenue model with recurring revenue streams from gaming operations, iGaming and fintech solutions, representing over 60% of pro forma revenue.
The company delivered a strong finish to 2023 with Q4 operating income growing 11%, yielding 160 basis points of operating margin expansion and strong free cash flow generation.[
The company delivered strong financial performance in 2023 with results that met upgraded financial targets.
Negatives -
The company is slightly behind in terms of product sales in Lottery YoY.
The macro environment in Australia and New Zealand continues to be challenging.
The company is expecting a slowdown in unit sales and an increase in installed base in 2024.
The company is facing some macro-related weaknesses in Argentina and Mexico, and new import restrictions imposed by the Mexican government impact all suppliers.
Mentions of Technology:
David Brian Katz: Jefferies LLC, Research Division - "Perfect. And just one quick follow-up. With respect to fintech and systems, putting those together, it strikes as something that's a much longer-term opportunity. Are there shorter-term singles and doubles and ways that you can leverage each other more immediately post-closing? It's just a discussion we've had with a lot of investors past weeks since we learned about this."
Vincent L. Sadusky: President, CEO & Executive Director - "Yes. I would say, overall, again, the longer-term play is -- as you point out, is to be the leading tech and content company in the B2B space. We've got a lot of work to do to get there. We're working on our detailed integration plans collectively with leaders from both organizations. And we think the combination has really strong operating and financial merit. So that's really our focus. It's not on the short-term, it's really on th"e long-term.
Earnings Call, Mar 06, 2024 - Rush Street Interactive, Inc., Q4 2023
Positives -
The company is initiating full-year revenue guidance for 2024, which reflects strong momentum in Q4 and early 2024.
Revenue projections for the year 2024 are anticipated to range from $770 million to $830 million, marking a 16% increase compared to the previous year.
During the fourth quarter, there was a minimal cash expenditure related to the timing of working capital, yet the corporation anticipates a positive cash flow throughout 2024.
Negatives -
The company was below its expected hold percentage in online sports betting due to generally unfavourable sports outcomes during Q4.
The company expects a run rate increase in G&A in Q1 due to annual compensation adjustments for employees.
The company is facing a challenge in finding a replacement for the chief regulator who recently resigned.
Mentions of Technology:
Richard Todd Schwartz: Co-Founder, CEO & Director - "Our 2023 outperformance and the momentum in the new year are the result of us continuing to execute on 3 key operating principles: first, the customer. I've said it time and again, product and user experience wins in the end. We have felt this way since we started the business in 2012, and we continue to feel it today. We feel we have a competitive advantage not easily replicated, in that we have spent the past 10-plus years focused on enhancing the user experience as our top priority. We are all about offering customers a world-class user experience that minimizes friction and drives retention. This ethos is fundamental to our success.
Second is technology, investing and continuously improving our best-in-class technology platform is what allows us to support our wide and ever growing range of differentiated product features and functions and accomplish our customer and financial goals. Third is operating leverage that grows as we scale. With each year, as we drive growth in a diversified set of markets, we expect to deliver improving earnings and cash flow. This past year not only did we improve EBITDA by $100 million, as I referenced earlier, but we did so on $100 million increase in revenue. We saw continued progress in each of these areas throughout the year, culminating in a very strong fourth quarter."
Richard Todd Schwartz: Co-Founder, CEO & Director - "Moving south, we continue to execute extremely well, demonstrated by the fact that LATAM continues to show very strong performance. Revenue in Colombia grew over 65% year over year, while in Mexico it was up approximately 60% quarter over quarter. This brings fourth quarter LATAM revenue contribution to over 13% of total revenues, the highest level in our history. Latin America remains topical both for us as well as within the broader industry landscape as several countries are planning for iCasino and online sports betting expansion. Simply stated, we are a proven leader in Latin America. We have a demonstrated track record of success, powered by significant infrastructure investment, technology localized and customized for the region, and the know-how that only comes from on-the-ground experience."
Richard Todd Schwartz: Co-Founder, CEO & Director - "There are many regulations and complexities still to be worked through for the Brazilian market, but we have spent a long time preparing to leverage our technology and capabilities in the country and plan to participate. We look forward to updating you on our progress in coming quarters."
Richard Todd Schwartz: Co-Founder, CEO & Director - "So I think, for us, the opportunity that we've been focused on is to be able to continue to grow our Latin America business because it's such a dynamic, high growing, challenging market to break into and develop an expertise to do well in there is something that's very challenging as I mentioned in my notes, my earlier comments. There are fewer people who've been able to be successful there just by a lot of effort, because it does take being in the market early, localizing your technology, having a very experienced team on the ground, and really developing a brand from many years ago that now gives you a lift in other jurisdictions in that region as you launch there. So for us, I think the opportunity, when you have many of these markets, are also including casino and sports betting, which hasn't been the case as much in the U.S. So for those reasons, the tax rates, the competitive intensity being a little bit different, and our expertise there, it's an area that we've obviously focused on, more so than we have on some of the newer sports betting markets where we felt like it was better for us to direct our capital to markets with higher returns for us."
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