Everi’s digital operations drive all-time Q3 revenue high

Everi's record revenues in 2022 have continued in Q3 as its digital operations continue to grow.
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Everi Holdings has stated its record revenues in 2022 have rolled into the third quarter, as its gaming machines and fintech hardware are in consistent demand and its digital operations continue to grow.

CEO Randy Taylor also mentioned that he believes the casino gaming content provider can keep its operating momentum and strong cash flow in 2023 due to “favorable feedback combined with the growth prospects” related to its recent acquisitions.

Everi’s Q3 financials

Posting its Q3 results, Everi declared group revenues reached a new all-time quarterly high of $204.3m, a 21% increase year-over-year (Q3 2021: $168.3m), driven by its gaming machines and fintech hardware sales.

Recurring revenue improved by 9% YoY to $143.6m (2021: $131.2m), while non-recurring revenues grew by 64% to $60.7m (2021: $37.1m). 

The provider’s net income increased by 339% YoY to $29.4m, or $0.30 per diluted share (2021: $6.7m or $0.07 per diluted share), while adjusted EBITDA rose by 7% YoY to an all-time quarterly record $96.6m (2021: $90.6m).

Meanwhile, free cash flow for Q3 was $43.9m (2021: $56.3m), following “a change in the timing of the $10m semi-annual interest payment on the company’s 5% senior unsecured notes”.

Taylor commented: “The third quarter year-over-year increases in revenues, net income and Adjusted EBITDA and our consistent improvement in our financial results throughout 2022 reflect the operating momentum across each of our businesses due to the continued broad-based demand for our products.”

Digital operations drive growth

Per vertical, Everi’s gaming segment revenues rose by 17% YoY to $112.5m (2021: $95.8m), driven by a 34% increase in digital operations and a 57% increase in the number of gaming machines sold to 1,841 units. Gaming operations grew by 5% YoY to $75m (2021: $71.6m).

Broken down, land-based casinos earned $69.9m (2021: $67.8m), and digital gaming reported $5.1m (2021: $3.8m), while gaming equipment saw revenues of $37.5m (2021: $24.2m).

Everi noted that its digital operations grew thanks to an expansion in the number of gaming operator sites featuring its games along with growth in the library of available slot content.

Meanwhile, the provider’s FinTech segment revenues rose by 27% YoY to $91.8m (2021: $72.4m).

Hardware revenue grew by 81% YoY to $16.3m (2021: $9m), software and other revenues rose by 31% to $22.2m (2021: $17m), while financial access revenues improved by 15% YoY to $53.3m (2021: $46.4m), driven by $10.9bn of funds delivered to casino floors. 

Taylor stated: “Our strong financial results this year have been driven by steady growth in our recurring revenue streams together with a record level of revenues from gaming machine and FinTech hardware sales.

“Our focus on top-line growth and operational excellence is delivering consistent year-over-year earnings growth and strong free cash flow generation.”

2022 guidance

Looking ahead, Everi updated its full-year 2022 guidance to a net income of $112m to $117m, an adjusted EBITDA of $371m to $376m, and a free cash flow of $190m to $197m.

“We received tremendous positive customer response to the launch of our newest products displayed at the Global Gaming Expo (G2E) in early October, quite possibly our best-ever show,” noted Taylor.

“This favorable feedback combined with the growth prospects related to our recent acquisitions, fortifies our confidence for continued operating momentum and strong cash flow in 2023. 

“Our capital allocation priorities remain directed toward extending the success we have achieved through investments in high-return internal product development to grow our core businesses and prudent acquisitions that extend our product and service capabilities to expand our addressable markets, as well as continuing to return capital to our shareholders. 

The CEO added: “With our confidence in our long-term growth prospects and a belief that the current valuation of our company does not fully reflect our underlying strength and growth opportunities, we have been returning capital to shareholders through opportunistic repurchases of our shares as part of our focus on creating additional long-term shareholder value.”