Pollard Banknote (PBL) Q1 2025 earnings summary

Executive summary

• Achieved exceptional Q1 2025 with the fastest iLottery rollout in North America for Kansas, record financial performance, and key milestones in lottery and charitable gaming.

• NeoPollard Interactive joint venture delivered record results, especially in Virginia and North Carolina, with robust e-Instant sales and long-term contracts.

• Completed acquisition of Pacific Gaming post-quarter, expanding presence in the charitable bingo market and broadening the product portfolio.

• Adjusted EBITDA rose 29.1% to CAD 30.6 million; net income increased to CAD 11.7 million from CAD 6.9 million year-over-year.

• Gross profit improved to CAD 25.4 million (17.4% of sales) from CAD 21.7 million (17.3%) year-over-year.

Financial highlights

• Combined sales revenue (including NeoPollard JV share) reached CAD 177.7 million, up from CAD 151.2 million year-over-year; GAAP sales were CAD 146.2 million, up from CAD 125.7 million.

• Instant ticket average selling price drove a CAD 17.1 million sales increase; higher charitable gaming volumes added CAD 4.4 million.

• Adjusted EBITDA margin was 20.9% in Q1 2025 vs. 18.9% in Q1 2024.

• Net income per share (basic/diluted) rose to CAD 0.43 from CAD 0.26/0.25 last year.

• Interest expense increased to CAD 2.8 million due to higher average long-term debt.

Outlook and guidance

• Expect gross margins to return to low 20% range by end of 2025 as Kansas iLottery startup costs subside and digital business grows.

• iLottery and e-Instant segments seen as significant growth drivers, with increasing interest from new and existing jurisdictions.

• Anticipate strong positive cash flow in Q2 as working capital normalizes after a temporary Q1 accounts receivable buildup.

• Ongoing investments in digital platforms, game content, and production efficiencies planned.

• Business structure expected to mitigate impacts from protectionist trade measures and tariffs.