Pollard Banknote (PBL) Q3 2025 earnings summary

Executive summary

• Achieved record quarterly GAAP sales of $156.3M and combined sales of $187.3M, driven by major contract wins in Belgium and California and strong instant ticket volumes.

• Secured a 12-year, CAD 289M contract with the Belgian National Lottery and a 6-year, CAD 375M contract with the California State Lottery, both expected to drive future growth.

• Instant ticket production volumes increased 18% sequentially from Q2 2025 and remained steady year-over-year, with proprietary products like Scratch FX on pace for record sales.

• Expanded digital and iLottery presence, with Kansas iLottery meeting expectations and NeoPollard Interactive JV securing a two-year extension in North Carolina.

• Ongoing investments in technology, ERP systems, and charitable gaming platforms support strategic growth.

Financial highlights

• GAAP sales rose to $156.3M from $153.2M year-over-year; combined sales (including JV) reached $187.3M, up from $180.4M.

• Gross profit for Q3 2025 was $28.1M (18.0% of sales), down from $31.4M (20.5%) in Q3 2024, mainly due to Kansas iLottery startup losses and lower e-tab margins in Minnesota.

• Adjusted EBITDA for Q3 2025 was $32.0M, slightly below $33.3M in Q3 2024, reflecting higher admin and selling expenses, offset by increased JV income.

• Net income for Q3 2025 was $10.3M, down from $18.2M in Q3 2024; EPS (basic/diluted) at $0.38/$0.37 versus $0.67/$0.66 last year.

• For the nine months ended September 30, 2025, sales were $445.3M, up from $416.8M in 2024; adjusted EBITDA for the nine months was $91.8M, up from $89.3M.

Outlook and guidance

• California and Belgium contract wins are expected to boost volumes and financial performance starting in 2026.

• Focus remains on improving instant ticket margins, print efficiencies, and ERP implementation, with ERP costs to persist into 2026 and taper off as the system goes live by late 2026/early 2027.

• Continued investment in charitable gaming and iLottery platforms, with new product launches and market expansion planned.

• Kansas iLottery operation is on track, with profitability expected as the business matures and margins anticipated to improve.

• Strong operating cash flow is funding ongoing investments and debt reduction.