Pollard Banknote (PBL) Q3 2026 earnings summary

Executive summary

• Q3 revenue rose 1.7% YoY to CAD 158.9 million; combined sales, including the 50% share of NPi sales, increased 3.4% to CAD 193.7 million.

• Adjusted EBITDA fell to CAD 28.3 million from CAD 32.3 million and net income to CAD 8.1 million from CAD 10.3 million; manufacturing inefficiencies, lower instant ticket margins and Michigan iLottery expiry weighed on results.

• New lottery contracts and extensions, strong charitable demand and expanding digital work support a positive Q4 and 2027 outlook.

Financial highlights

• Q3 cost of sales rose to CAD 134.6 million from CAD 128.2 million; gross profit fell to CAD 24.3 million from CAD 28.1 million.

• Q3 operating income was CAD 14.9 million, down 16.3% YoY; excluding the CAD 2.1 million Michigan iLottery contribution in Q3 2025, the decline was 5.1%.

• 9M revenue increased to CAD 455.4 million from CAD 445.3 million, while Adjusted EBITDA fell to CAD 80.9 million from CAD 92.2 million and net income to CAD 20.2 million from CAD 30.0 million.

• Q3 basic and diluted EPS was CAD 0.30 versus CAD 0.38; 9M EPS was CAD 0.75 versus CAD 1.11.

Outlook and guidance

• Q4 and 2027 outlook is positive, with a robust instant ticket schedule, strong charitable demand and expected digital revenue from Oklahoma, Colorado, Kansas, North Carolina and Belgium contracts.

• Q4 instant ticket volumes are expected to avoid the usual seasonal decline, supported by strong demand and Q3 carryover orders; customer and product mix is expected to normalize in Q4 and 2027.

• Colorado digital revenue is expected to begin in the later part of 2027; Belgium revenue is expected to rise over coming quarters, while Kansas growth depends on expanding its player base.

• Manufacturing improvements were noted early in Q4; initiatives target throughput, waste, rework, production speed, turnaround times and costs over the next two to three years.

• Kansas iLottery profitability is improving, though the move to profitability may extend into early 2027.