Higher net interest costs prompted a drop in second-quarter earnings for gaming-equipment and cash-access provider Everi Holdings. The results topped earnings-per-share forecasts, although rising revenue missed.
In a statement Thursday, Las Vegas-based Everi reported net income of $27.4 million, or 29 cents per diluted share, in the three months ended June 30, down from $32.5 million, or 33 cents per diluted share, in net income a year earlier. The company said $7.8 million in higher interest costs in the quarter dampened the latest earnings.
Adjusted earnings, which exclude one-time costs, were 41 cents per share, which topped the 28-cents-per-share average forecast of analysts forecast by Seeking Alpha had expected.
Nevertheless, the company’s shares sold off, dropping $1.66, or 11.36%, Thursday, to close at $12.95 on the New York Stock Exchange. The shares moved higher after hours, rising 50 cents, or 3.86% to settle at $13.45.
Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that also excludes one-time costs, rose 1.8% to $96.1 million from $94.4 million.
Revenue rose 5.8% to $208.7 million from $197.2 million, but missed the $209.3 million forecast of Seeking Alpha-polled analysts.
Everi’s financial-technology revenue rose 13% to $95.6 million, buoyed by a 26% increase in software and other revenue and a 9% rise in financial-access revenues and a 6% increase in hardware revenue.
“Our fintech business continues to perform well … driven by growth in dollars delivered to the casino floor for our customers and the expansion of products and services to new and existing customers,” Chief Executive Officer Randy Taylor said in a conference call with analysts and journalists. “This creates a green field of growth opportunity that we believe will provide a runway of high-single-digit revenue growth for the full year.”
Games-segment revenue rose 1% to $113.1 million, boosted by a 5% rise in gaming operations, partially offset by an 8% dip in revenue from gaming equipment and systems sales. The company’s installed base increased 1.9% to 17,812 units from 17,464 units in the prior year. Daily win per unit was $37.22, down from $39.94 a year earlier.
During the quarter, Everi bought back 2.7 million shares for $40 million, following the company’s $180 million share-repurchase authorization. Everi also closed the deal to acquire VKGS LLC, a.k.a. Video King, an Omaha, Nebraska, provider of integrated electronic bingo gaming tablets, video gaming content, instant win game, and systems, for $59 million in cash.
Everi revised its 2023 outlook, including a net income range of $98 million to $106 million
