In the first quarter, Las Vegas-based SciPlay stood out as a green dot in an ocean of red ink. As other gambling companies struggled amid infection curve-flattening casino shutdowns, SciPlay surged as cooped-up Americans amused themselves with the company’s mobile games.
SciPlay’s upward trend continued in the second quarter. Earnings, revenue, and a key cash flow measure all surged. Earnings per share and revenue topped Wall Street forecasts.
In a statement, the mobile games unit spun off from Scientific Games in May 2019, said its net income was $48.8 million, or 27 cents per diluted share, for the three months ended June 30, up from net income of $26.2 million, or 25 cents per diluted share, a year earlier. The latest results topped the 24-cents-per share average forecast of analysts polled by Seeking Alpha.
Adjusted earnings before interest, taxes, depreciation, and amortization, a cash flow measure that excludes one-time costs, rose 79.5% to $59.6 million to $33.2 million.
Revenue rose 40.2% to $165.6 million from $118.1 million and smashed the $137 million average revenue forecast of Seeking Alpha-polled analysts.
“We saw this spike starting in the back half of March … then May outpaced April and really was the peak of the stay-at-home impact with everybody with a lot of free time on their hands,” SciPlay CEO Josh Wilson said in a Thursday conference call with analysts. “So, June has now softened a little bit relative to main as the stay at home order’s lifted. But we’ve remained at a higher baseline relative to the pre COVID period.”
SciPlay’s shares rose 15 cents, or 1.01% Friday to close at $14.99 on the Nasdaq. The shares fell after hours, though, sinking 16 cents, or 1.07% to reach $14.83 at 5 p.m. PDT.
“SciPlay was again a beneficiary of shelter-in-place orders as existing, new and returning users turned to mobile social casino play as a form of entertainment during the quarter,” Macquarie Securities gaming analyst Chad Beynon told investors. “Results were strong in the first two months of the quarter but dropped off slightly in June as the stay-at-home orders were lifted.”
Wilson said the strong performance from SciPlay’s Gold Fish game and growth from Jackpot Party, Quick Hit, and Monopoly drove the second-quarter results.
Wilson said the company’s June 22 acquisition Come2Play, an Israel-based mobile game developer and manager, for an undisclosed price, will expand SciPlay’s market beyond social casino apps and drive player engagement. He said Come2Play’s Solitaire Pet Adventure, a game now in the technical launch, had hit potential.
Wilson added that SciPlay will continue exploring acquisitions, although he didn’t name possible targets.
“Our team is eager to execute our winning strategy, explore new growth opportunities, keep improving our games and drive enhanced results,” he said. “We continue to believe we are in very early stages of multiyear revenue growth and earnings expansion cycle and pipeline, and we couldn’t be more excited by our future prospects and opportunities.”
As the business tech news site builtinaustin.com reported, SciPlay has prepared for growth by building its Austin, Texas, operations to 130 workers over the past four years.
SciPlay officials told builtinaustin.com the company planned to add 30 more Austin workers, including software engineers, product managers, and game artists, by year’s end. SciPlay’s overall team includes 500 workers worldwide, the site said.
Follow Matthew Crowley on Twitter @copyjockey.
