PENN Entertainment has praised its progress in Ontario and its omnichannel execution in its financial report for the third quarter.
CEO Jay Snowden also gave attention to PENN’s strong results in its igaming and retail segments, which saw the operator’s revenue grow by 7.5% year-over-year.
Speaking on PENN’s Q3 earnings call, Snowden highlighted the progress the operator is making in Ontario so far with theScore Bet. The region has quickly become its top market in North America for both sports betting and icasino, and they’re seeing “nice momentum” as the football season rolls on.
The CEO noted that the operator’s transition in the Canadian province to its proprietary tech platform has exceeded expectations “by performing seamlessly with increased utilization, new betting markets, and other features”.
As a result, PENN remains “on track” to migrate the Barstool Sportsbook to its proprietary tech platform in mid-2023, after which the operator will begin to realize “cost savings and improved marketing capabilities” in the US.
For icasino, Snowden stated that PENN saw “continued momentum” in Q3 with the introduction of 226 new party games across all platforms, while PENN game studios have recently launched Barstool Roulette and have developed its own multiline slot game, which is set to go live in December.
The CEO also brought attention to PENN’s initial icasino results and retention KPIs in Ontario, which was driven by the “advanced promotional capabilities” of its player account management system.
PENN Entertainment Q3 financials
For Q3, PENN has published revenues of $1.6bn, a 7.5% increase YoY (Q3 2021: $1.51bn), while net income came in at $123.2m with a margin of 7.6% (2021: $86.1m, 5.7%).
Gaming generated $1.3bn in revenue during the quarter (2021: $1.2bn), with $158.7m coming from its interactive segment, a 70% improvement YoY (2021: $93m).
The operator’s adjusted EBITDA came in at $440.4m, an increase of 20.9% YoY (2021: $364.3m).
Snowden stated: “Our strong retail results were highlighted by ongoing database growth and stable margin performance, which continued through October. Meanwhile, our successful sports betting launch in Kansas, from both a retail and online perspective, underscores the advantage of our leading omnichannel strategy.
“In Ontario, we are enjoying early success during our first football season while benefitting from theScore Bet’s seamless transition to our own fully-integrated, proprietary tech stack.”
The CEO added: “Our Interactive segment experienced strong year-over-year revenue and user growth in the quarter and was profitable in October. Results for the quarter included costs associated with the launch of Kansas, our first football season in Ontario and Louisiana, the $12.5m lobbying expense for the California sports betting initiative, and a payment processing fee adjustment of $7.9m.
“Given our strong revenue growth and disciplined approach to marketing, we remain confident in our ability to deliver profitability in 2023.”
Following its Q3 results and its “continued consistent performance, Snowden reiterated PENN’s revenue and adjusted EBITDAR guidance for 2022 with a range of $6.15bn to $6.55bn and $1.875bn to $2bn, respectively.