Penn National Gaming Inc has published its 2021 fourth quarter and full year financial results, with President and CEO Jay Snowden declaring it a “transformative year” after revenues exceeded $1.5bn in the final quarter.
In Q4, which ended December 31, 2021, Penn National earned revenues of $1.6bn, an increase of $545.1m year-over-year and $231.3m versus 2019. It also recorded a net income of $44.8m and net income margin of 2.8% (2020: net income of $12.7m and net income margin of 1.2%, 2019: a net loss of $92.9m and net loss margin of 6.9%).
The operator noted that its retail operations delivered strong results through sustainable margin improvement, technology upgrades, and a growing database, adding that its interactive segment exceeded its expectations.
Penn National also initiated its 2022 full year guidance and has stated that its board of directors has authorized a $750m share repurchase program as well.
Snowden commented: “I am pleased to report a strong finish to another transformative year for Penn National. Our fourth quarter revenues of $1.6bn and adjusted EBITDAR of $480.5m exceeded both 2020 and 2019 levels as our best-in-class operating teams continue to deliver impressive results despite the ongoing pandemic.
“In addition, we accomplished several strategic objectives this quarter that have laid the foundation for future growth, including the completion of our acquisition of Score Media and Gaming Inc (theScore), the continued expansion of Penn Interactive operations, the opening of our fourth casino in Pennsylvania and the roll-out of new technology at many of our casinos.
“Given our confidence and improved visibility regarding both our retail and interactive segments, as well as our strong financial position, we are pleased to announce that our Board of Directors has authorized a $750m, three-year share repurchase program, and we are re-initiating guidance. For 2022, we are guiding to a net revenue range of $6.07bn to $6.39bn and an adjusted EBITDAR range of $1.85bn to $1.95bn.”
For the full year, Penn National recorded a revenue of $5.9bn through 2021, an increase on 2020’s $3.57bn and 2019’s $5.3bn, with adjusted EBITDA closing at $1.99bn (2020: $1.09bn & 2019: $1.6bn).
The operator’s Barstool Sportsbook mobile app saw growth in Q4, with Snowden noting: “We saw increased traction across the board during football season and quickly became one of the leading operators in the crowded New Jersey market despite launching years after most of our peers.
“Our growth has been fueled by organic customer acquisition from both the Barstool Sports audience and mychoice database, leading to what we believe are the lowest customer acquisition costs and best return on investment timelines in the industry. In addition, our casino footprint has provided us with direct market access in several key states as well as a source of recurring and meaningful third-party skin revenue.”
Snowden continued: “Our disciplined marketing approach and increased scale at Penn Interactive set us apart from the competition as we generated a lower-than-expected EBITDA loss in our interactive segment in the fourth quarter despite launching sports betting operations in two new states (Iowa and West Virginia), icasino in West Virginia and integrating theScore.
“These results were also achieved despite a frenzied competitive environment. With the launch of online sports betting in Louisiana on January 28, Penn National now operates sports betting in 12 states and icasino in four and looks forward to gaining additional scale in 2022 with anticipated launches in Ontario, Ohio and Maryland. As we expand, we will continue to focus on sustainable growth, organic customer acquisition and targeted marketing and promotional spend.”
For 2022, Penn National now anticipates an EBITDA loss of approximately $50m within its interactive segment as it continues to scale its operations and infrastructure ahead of bringing its technology in-house and launching in new jurisdictions.
Snowden said: “Looking ahead, our differentiated sports betting strategy, along with the integration of the Barstool Sportsbook into theScore media app in the US and continued improvements within our icasino offerings will enable us to generate meaningful EBITDA in 2023 within the Interactive segment especially as we transition to our wholly owned tech stack.
“As I think about the future of Penn National, I am immensely excited about our growth trajectory as we continue to execute on our omni-channel and media strategy and realize the benefits of several noteworthy accomplishments.
“In the near term, the acquisition of theScore fortifies our position as a leading North American digital sports content, gaming and technology company by widening our customer acquisition funnel and providing a path to full control of our product and technology roadmap.
“In early 2023, we look towards acquiring the remainder of Barstool Sports Inc, which will highly complement theScore’s strong media presence, sports brand and loyal audience, accelerating our transformation into a major media and entertainment company.
“Longer term, our leadership position in traditional gaming, digital and media will create material synergies and cross promotion benefits, and more importantly, provide us with numerous opportunities to be nimble in a rapidly evolving marketplace.”
