Pollard Banknote (PBL) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 sales of CAD 153.3 million (USD 153.2 million), record Adjusted EBITDA of CAD 33.3 million, and net income of CAD 18.2 million, with strong year-over-year growth across all key metrics.

• Major milestones included the first direct iLottery contract in North America using proprietary Catalyst technology and the acquisition of Clarence J. Venne, LLC.

• Strategic focus on repricing instant ticket contracts, digital innovation, and expanding the charitable gaming portfolio continues to drive growth.

• iLottery joint venture generated $14.3 million in combined income before taxes, with strong eInstants sales.

• EPS (basic) increased to $0.67 from $0.29 year-over-year.

Financial highlights

• Q3 2024 sales increased by CAD 24 million (18%) year-over-year; Adjusted EBITDA up by CAD 8.5 million (34%).

• Net income rose to CAD 18.2 million from CAD 7.7 million in Q3 2023, driven by higher gross profits and joint venture income.

• Gross margin reached 20.2% in Q3, up 250 basis points year-over-year.

• For the nine months ended September 30, 2024, sales were $416.8 million, net income was $37.0 million, and Adjusted EBITDA was $89.3 million.

• Income from operations rose to $22.5 million from $14.6 million year-over-year.

Outlook and guidance

• Full impact of repriced instant ticket contracts expected in 2025, with further margin improvement anticipated.

• Continued focus on repricing remaining contracts and leveraging digital and proprietary product innovations for growth.

• Charitable gaming and eGaming expected to drive growth, with new opportunities in North America.

• Ongoing investments in technology and product development to support future expansion.

• iLottery opportunities expanding, with Kansas and West Virginia contracts and ongoing platform rollouts.