Everi Holdings Inc (EVRI) Reports Modest Revenue Growth Amidst Market Headwinds
Everi Holdings Inc (NYSE:EVRI) announces a slight revenue increase of 1% year-over-year to $206.6 million in Q3 2023.
Net income sees a marginal decline to $26.6 million, or $0.29 per diluted share, compared to $29.4 million, or $0.30 per diluted share in Q3 2022.
Adjusted EBITDA remains stable at $96.2 million, with Free Cash Flow impacted by discrete capital expenditures and higher net cash interest payments.
The company repurchased 2.4 million shares for $33.9 million under its current share repurchase authorization.
Everi Holdings Inc (NYSE:EVRI) released its earnings report for the third quarter ended September 30, 2023, on November 8, 2023. The company reported a modest revenue increase to $206.6 million, up 1% from $204.3 million in the same quarter of the previous year. This growth was primarily driven by a 4% increase in FinTech segment revenues, which rose to $95.1 million, and a 7% increase in recurring revenues, which accounted for 75% of total revenues. However, the Games segment experienced a slight decline of 1% in revenues to $111.5 million.
Financial Performance Highlights
The company's net income decreased slightly to $26.6 million, or $0.29 per diluted share, compared to $29.4 million, or $0.30 per diluted share, in the third quarter of 2022. Adjusted EPS remained flat at $0.44 per diluted share. Adjusted EBITDA was nearly unchanged at $96.2 million compared to $96.6 million in the prior-year quarter.
Free Cash Flow was affected by discrete capital expenditures of approximately $6.0 million related to the build-out of a new consolidated production facility and certain technology investments, as well as higher net cash interest payments of $4.7 million, resulting in Free Cash Flow of $34.3 million compared to $44.9 million in the same period last year.
Operational and Strategic Developments
Randy Taylor, Chief Executive Officer of Everi, commented on the company's strategic progress, stating,
We continue to execute on our operational and product roadmap to drive long-term profitable growth in both our Games and Fintech businesses."
Taylor highlighted the introduction of new gaming cabinets and content, as well as the strengthening of the FinTech product and service offerings.
Everi is also making strides in integrating recent acquisitions and establishing new growth avenues in various gaming and FinTech market categories. The company anticipates entering new markets, including the VLT category and the UK mobile gaming market in early 2024, with further international expansion in late 2024 and 2025.
Balance Sheet and Liquidity
As of September 30, 2023, Everi had $209.4 million in cash and cash equivalents, with a net cash position of $38.0 million. Total debt decreased slightly to $986.5 million from $992.5 million as of December 31, 2022. The company also continued its share repurchase program, buying back 2.4 million shares for $33.9 million during the quarter.
Outlook
Everi updated its full-year 2023 outlook, expecting Adjusted EBITDA to be in line with the prior year. Net income, EPS, Free Cash Flow, and Adjusted EPS are projected to be at the lower end of the guidance ranges provided earlier due to lower operating income being offset by lower net interest expense, lower taxes, and lower full-year capital expenditures.
For a detailed financial analysis and reconciliations of GAAP to non-GAAP measures, readers are encouraged to review the full earnings release and financial statements provided by Everi Holdings Inc (NYSE:EVRI).
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Explore the complete 8-K earnings release (here) from Everi Holdings Inc for further details.
This article first appeared on GuruFocus.
