Tuesday, November 29, 2022

Penn National sees 22% revenue growth in Q1 amid cashless expansion; outlook for full year increased | Yogonet International

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Penn National Gaming on Thursday released its financial results for the quarter ended March 31, 2022, where the company reported revenues of $1.56 billion, an increase of 22.7% year-over-year.

The business further delivered an Adjusted EBITDA of $434.6 million, an increase of 29.1% year-over-year. PNG’s net income during the period was $51.6 million and a net income margin of 3.3%, down when compared to a net income of $90.9 million and a net income margin of 7.1% in the previous year. 

In an official report published by the company, Jay Snowden, President and CEO of Penn National Gaming, expressed: “These results reflect our continued progress in meeting our strategic objectives. We are growing our active (loyalty rewards program) mychoice database and are seeing early benefits from our technology investment.”  

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

The company has seen a “strong” property-level performance across all segments supported by active database growth, with revenues reaching $1.42 billion, and Adjusted EBITDAR of $528.4 million.  

“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 $6.15 billion to $6.55 billion and $1.875 billion to $2.00 billion, respectively”, Snowden said.

The company said it remains encouraged by the ongoing visitation from younger demographics and is focused on continuing to “reimagine” its properties and offerings to enhance the entertainment appeal to this steadily growing segment of consumers.

Database grew across all worth segments by 14%, led by 28% year-over-year growth in the VIP segment and 11% in core segments driven by new online and retail sportsbook offerings and the recently opened Hollywood Casino York and Morgantown casinos in Pennsylvania.

Hollywood Casino York, Pennsylvania

“We are also starting to see the early benefits of our investment in our cashless, cardless and contactless technology, which powers our mywallet experience,” commented Snowden. “This technology is now live at nine properties in three states and has increased the value of the guest in terms of visitation frequency and time on device. We plan to introduce the 3C’s in an additional 14 properties in eight states over the next two quarters pending regulatory approvals.

The company’s interactive segment saw revenues of $141.5 million, with an Adjusted EBITDA loss of $10 million, in a period that saw the successful launch of the Barstool Sportsbook mobile app in Louisiana, and theScore Bet mobile app in Ontario. 

“The Interactive Segment generated meaningful growth year over year and our profitability objectives are unchanged. Our launches in Louisiana and Ontario have demonstrated the value of both our omni-channel strategy and our investment in new technology,” added the company’s CEO.

In Louisiana, the company benefited from both its best-in-class regional casinos and grass-roots marketing by Barstool Sports personalities, the business said. In Ontario, the company launched theScore Bet mobile app on April 4th to “impressive demand.”

Barstool Sportsbook's permanent venue at L'Auberge Casino, Louisiana

Additionally, theScore Bet launched on theScore’s cutting edge PAM and bonus engine, which allows the company “to provide highly-customized features and seamless integration into theScore media app.” Although early, the company has 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,” Snowden noted. “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.”

The company’s media business is building momentum, as theScore grew revenue 42.0% year over year in Q1 2022 and continues to garner high levels of engagement. Barstool Sports Inc. has also continued to expand its audience and reach while pursuing new growth opportunities.

On March 18th, the second stand-alone Barstool sports bar opened in Philadelphia to high demand. In addition, on May 7th, Barstool will broadcast an alternative commentary to the Canelo v. Bivol boxing match on DAZN, representing another extension of the Barstool brand into live sporting events.

“Looking forward, we believe there is upside for the media business as we begin to realize the benefits of cross-promotion with Barstool Sports and additional monetization opportunities,” Snowden concluded.

During the first quarter of 2022, the company repurchased 3,802,408 shares of its common stock in open market transactions for $175.1 million at an average price of $46.04 per share. There is $574.9 million remaining under its $750 million authorization. 

Total liquidity as of March 31, 2022, was $2.48 billion inclusive of $1.81 billion in cash and cash equivalents. Total net debt as of the end of the quarter was $923.5 million, an increase of $37.3 million from December 31, 2021, due to a lower cash balance as it executed on its share repurchase program.


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