Pollard Banknote (PBL) Q2 2024 earnings summary

Executive summary

• Second quarter revenue reached a record $137.8 million, up $7.0 million from Q2 2023, with combined sales (including NPI JV) at $166.0 million, up 11.2% year-over-year.

• Income from operations rose to $19.9 million from $9.9 million in Q2 2023, and net income increased to $11.9 million from $7.5 million.

• Gross margin improved to 21.0% from 15.9% in Q2 2023, driven by higher instant ticket margins and repriced contracts.

• Adjusted EBITDA reached a record $32.3 million, up 46.2% year-over-year.

• iLottery joint venture generated $16.2 million in combined income before income taxes, reflecting strong organic growth.

Financial highlights

• Q2 2024 sales: $137.8 million; gross profit: $29.0 million (21.0% margin); net income: $11.9 million; EPS (basic): $0.44.

• Six months ended June 30, 2024: sales $263.6 million, gross profit $50.5 million (19.2% margin), net income $18.8 million, EPS (basic): $0.70.

• Adjusted EBITDA for Q2: $32.3 million (up from $22.1 million); for six months: $56.0 million (up from $40.7 million).

• Administration and selling expenses increased due to higher compensation, consulting, and expansion of charitable gaming distribution.

• Interest expense decreased to $2.5 million in Q2 2024, reflecting lower debt and contingent consideration accretion.

Outlook and guidance

• Improved instant ticket margins expected to continue as more repriced contracts take effect through 2024 and 2025.

• Strong demand anticipated for instant tickets, charitable gaming products, and eGaming systems.

• Ongoing investments in iLottery platform and content expected to drive future growth.

• Recent acquisitions, including Clarence J. Venne, expected to contribute positively starting Q3 2024.