Casino equipment maker and financial technology (fintech) supplier Everi Holdings Inc posted first-quarter net income of US$4.6 million, on revenue that fell 5.6 percent year-on-year, to US$189.3 million, according to a Wednesday press release.
Judged sequentially, the firm’s net income rose 142.1 percent, despite a 1.4-percent quarter-on-quarter decline in revenue.
The announcement quoted Randy Taylor, Everi’s chief executive, as saying that the company was “making progress” on the proposed merger with the gaming and digital businesses of International Game Technology Plc. The deal is expected to close “later this year or in early 2025,” he stated.
The CEO added: “We are excited about the significant growth opportunities we believe this combination will unlock. This transaction will bring together a comprehensive and complementary product set focused on our customers and their diverse needs which we believe will deliver substantial long-term value to our shareholders.”
Everi’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) stood at US$80.3 million in the three months to March 31, down 13.2 percent from a year earlier.
Revenue in the games segment – including gaming operations and equipment and system sales – was US$97.1 million in in the first quarter, flat on a quarterly sequential basis, but down 9.5 percent from the prior-year period.
The company said the result in the segment was due to a “transition to its new family of cabinets and content”.
It added: “Approximately half of the decline in the installed base during the quarter is attributable to the company’s proactive decisions not to replace cabinets in lower performing locations.”
The firm sold 1,021 gaming units in the first quarter of this year, compared with 1,546 units a year ago.
In October, Everi said it would have a “full cabinet refresh” by early 2024, with the new cabinets debuting alongside the group’s “most diverse-ever portfolio of new content,” featuring more than 70 new themes across all product categories.
The firm launched its “Dynasty Sol” cabinet in late 2023, and its new, premium-leased “Dynasty Sol Sync” cabinet late in the first quarter this year.
“These cabinets are expected to continue to grow in popularity as new games are introduced,” the company said in its Wednesday update.
Everi’s CEO acknowledged that the transition to the group’s “newest family of cabinets … has been slower than anticipated”.
But he added: “We are gaining momentum with these efforts and expect our progress will continue to accelerate throughout the back half of the year.
“Starting in the second quarter we expect this momentum to translate into improvements in sequential quarterly unit sales,” noted Mr Taylor. “We will continue to support our portfolio of game products following the closing of the proposed merger.”
Everi’s first-quarter fintech revenues of US$92.2 million “were down slightly” year-on-year and on a quarterly sequential basis, stated the company.
Mr Taylor said on Wednesday that Everi was “on track to begin to deliver” in the second half of 2024 on several of the group’s initiatives, “including our initial video lottery terminal placements and our first gaming products for Australia”.
He added: “We believe investing in new products for our fintech segment, for-sale and for-lease gaming products and products focused on new segments and jurisdictions will drive revenue growth in the second half of 2024 and position the company for long-term success.”
Everi said in a separate announcement on Monday that it had terminated its stock repurchase programme with effect from May 2, as it might declare a special dividend prior to the consummation of the merger with the IGT businesses.
