Pollard Banknote (PBL) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was $142.7M, up 3.6% year-over-year, with combined sales including joint ventures at $174.8M, up 5.3%.

• Adjusted EBITDA for Q2 2025 was $29.2M, down 9.5% from Q2 2024; net income was $8M, down from $11.9M; EPS (basic/diluted) was $0.30/$0.29, down from $0.44/$0.43.

• Gross margin declined to 16.7% from 21.2% year-over-year, impacted by lower instant ticket volumes and Kansas iLottery startup costs.

• Acquisitions of Pacific Gaming and Venne expanded the charitable gaming portfolio and contributed to higher charitable gaming sales.

• Kansas iLottery completed its first full quarter, meeting expectations but contributing negatively due to startup costs.

Financial highlights

• Six-month revenue was $288.9M, up from $263.6M year-over-year; combined revenue (including JV) was $352.7M.

• Six-month net income was $19.8M, up from $18.8M; net income per share (basic) was $0.73, up from $0.70.

• Adjusted EBITDA for the first six months was $59.8M, up from $56.0M.

• Interest expense increased to $3.1M from $2.5M, mainly due to higher long-term debt from acquisitions.

• Cost of sales increased due to higher iLottery operational costs, Kansas startup, and charitable gaming volumes.

Outlook and guidance

• Q3 2025 instant ticket volumes and average selling prices are expected to be significantly higher due to order timing and product mix.

• Focus remains on higher-margin work and further price increases as contracts come up for renewal.

• Anticipates continued growth in iLottery and eTABs, with new jurisdictions expected in the next 18 months.

• Continued investment in Catalyst iLottery platform and eInstants/eTabs content is planned.

• Strong cash flow is anticipated in Q3 2025, with a reduction in working capital investment.