Everi (EVRI) Q3 2024 earnings summary

Executive summary

• Total revenues for Q3 2024 decreased 9% year-over-year to $187.9 million, driven by an 18% decline in Games segment revenues, partially offset by a 1% increase in FinTech revenues.

• Net loss for Q3 2024 was $2.6 million, compared to net income of $26.6 million in Q3 2023, reflecting lower operating income and higher operating expenses.

• Operating income dropped 78% year-over-year to $11.4 million, with operating margin falling to 6% from 25% in the prior year quarter.

• The company entered into a definitive agreement to be acquired in an all-cash transaction, with shareholders to receive $14.25 per share, pending regulatory and shareholder approvals.

• Transaction and retention costs related to the proposed acquisition totaled $10 million in Q3 2024.

Financial highlights

• Q3 2024 Games revenues fell 18% year-over-year to $91.5 million, mainly due to lower unit sales and a reduced installed base.

• FinTech revenues rose 1% to $96.3 million, driven by higher software and financial access services, offset by lower hardware sales.

• Total costs and expenses increased 14% to $176.4 million, with operating expenses up 19% and depreciation up 42% due to asset write-downs.

• Adjusted for one-time charges, operating income was significantly impacted by $6.4 million in accelerated depreciation and $3.8 million in purchase commitment charges.

• For the nine months ended September 30, 2024, net income was $11.2 million, down from $82.1 million in the prior year period.

Outlook and guidance

• The company expects the proposed acquisition to close following regulatory and shareholder approvals, after which Everi will be privately held and delisted.

• Management anticipates continued transaction-related costs and business disruption until the deal closes.

• No material changes to risk factors or critical accounting estimates were noted, aside from those related to the pending transaction.