Scientific Games Corporation has published its Q2 results for the period ended June 30, 2021, highlighting progress in its key objective of shifting focus towards content and digital markets and recording growth across gaming, digital and lottery.
Second quarter consolidated revenue was ahead by 63% year-on-year at $880m (2020: $539m). Gaming business delivered over 300% growth compared to the prior year period and 50% growth compared to the prior quarter, driven by the strength of its new product roadmap, record US gross gaming revenue and a rebound in the UK and Europe.
The firm’s Lottery and Digital businesses both delivered record quarters fueled by strong instant sales and its original content offering respectively.
Net income was $113m compared to a net loss of $198m in the prior year period primarily due to strong revenues in the gaming business segment, which were significantly impacted by COVID-19 disruptions in the prior year period, coupled with $63m non-cash gain associated with the SportCast acquisition.
The prior year period also included temporary austerity measures that were implemented due to COVID-19 disruptions.
Consolidated adjusted EBITDA, a non-GAAP financial measure, was $383m compared to $121m, up 217% year-on-year, driven by double-digit adjusted EBITDA growth in gaming, lottery and digital. Consolidated adjusted EBITDA in the quarter was the highest in the company’s history.
Barry Cottle, President and CEO, said, “I am very pleased that we continue to make tremendous progress on all of our key strategic pillars while also driving significant growth in the quarter. We have emerged from the pandemic a much stronger company with significant momentum.
“All of our businesses grew sequentially on both the top and bottom lines in the quarter. Gaming delivered its highest revenue quarter since the fourth quarter of 2019, Lottery and Digital achieved record results and SciPlay delivered its second highest revenue quarter in its history.
“Following our strategic review, we will be singularly focused on becoming a leading cross-platform global game company with focus on content and digital markets. We are moving rapidly to transform our company and I have never been more optimistic about our path forward.”
Michael Eklund, Executive Vice President and CFO, added: “In concert with our Board, we announced a strategic action plan to transform our company and unlock value. We are taking decisive steps to optimize our portfolio, de-lever our balance sheet and invest to grow.
“I am very encouraged by the interest and discussions we are having around our proposed divestitures, and we are making great progress as we move quickly to unlock shareholder value. We are proud of the team as they continue to execute during this exciting time, delivering a quarter with strong revenue, profit and cash flow growth.”
In its quarterly missive, SG told investors that the company is moving rapidly to execute on its vision with a singular focus to become a leading cross-platform global game company, accelerating efforts to de-lever and invest for sustainable growth.
It added that it was moving quickly on planned divestitures of both the Lottery and Sports Betting businesses.
Efforts to de-lever and transform the balance sheet have also shown meaningful progress organically, it said, with net debt leverage ratio reduced by nearly a third to 7.2x since the beginning of the year.
Net debt of $8,204m decreased by $325m compared to the prior year period. During the second quarter, the Company made a $150m voluntary repayment under SGI’s revolving credit facility. Subsequent to the quarter end, the company made another voluntary $150m payment on the revolving credit facility.