Penn National boasts record Q1 results as ‘meaningful growth’ delivered

Penn National boasts record Q1 results as ‘meaningful growth’ delivered
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Penn National Gaming CEO, Jay Snowden, has praised the ‘continued progress’ the company has made towards multiple strategic objectives in Q1 as it delivered record financial results. 

Snowden was pleased that Penn National was displaying growth in both retail and digital realms during the first quarter of 2022 and boasted the ‘ongoing visitation of younger demographics’ in pushing top-line revenues.

Revenues for Q1 reached $1.56bn for the period ending March 31, up 22.7% year-on-year following numerous successful launches, including in Louisiana and the opening of Hollywood Casino York and Morgantown casinos in Pennsylvania. 

Property revenues accounted for $1.42bn of total revenues whilst interactive revenues reached $141.5m. 

However, net income dropped to $51.6m from $90.9m one year ago and net income margin of 3.3%, down from 7.1% in the prior year. This displays the investment made by the company to expand into new areas, with Snowden noting that ‘whilst it is early, we are encouraged by the results’.

Displaying profitability from operations, the company’s adjusted EBITDAR stood at $494.7m, an increase of 10.7% YoY whilst adjusted EBITDA was $434.6m, up 29.1% YoY.

Snowden commented: “These results reflect our continued progress in meeting our strategic objectives. We are growing our active ‘mychoice’ database and are seeing early benefits from our technology investments. 

“We are also driving momentum at our Interactive Segment with ongoing sports betting and iCasino growth in the US, and the successful launch of mobile sports betting and iCasino in Ontario on April 4th on theScore’s proprietary player account management system and bonusing engine. 

“Based on the strength of our first-quarter performance and our outlook for the remainder of the year, we are increasing our prior 2022 revenue and Adjusted EBITDAR guidance range to $6.15bn to $6.55bn and $1.875bn to $2.00bn, respectively.”

Q1 was a particularly important period for Penn National’s interactive segment, with the launch of the Barstool Sportsbook mobile app in Louisiana on January 28, and the lead-up to theScore Bet mobile app launch in Ontario on April 4.

Whilst interactive revenues totaled $141.5m, the division posted an adjusted EBITDA loss of $10m, largely due to the high costs associated with such launches. 

Snowden expressed that there was ‘meaningful growth’ on display in the segment, with its profitability objectives ‘unchanged’. 

Snowden added: “Our launches in Louisiana and Ontario have demonstrated the value of both our omni-channel strategy and our investment in new technology. In Louisiana, we benefited from both our best-in-class regional casinos and grass-roots marketing by Barstool Sports personalities. 

“In Ontario, we successfully launched theScore Bet mobile app on April 4th to impressive demand. Additionally, theScore Bet launched on theScore’s cutting edge PAM and bonus engine, which allows us to provide highly-customized features and seamless integration into theScore media app. Although early, we have been very encouraged by the results. 

“In Q3 2022, we expect to transition theScore Bet in Ontario to theScore’s proprietary risk and trading platform, which will allow us to significantly bolster the product’s features and capabilities, including expanded betting markets and exclusive bet features. We also remain on track to transition the Barstool Sportsbook to theScore’s PAM and trading platform in Q3 2023, which will provide meaningful cost and revenue synergy opportunities.”