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Delivered Strong Performance with Revenues up 5% Year-Over-Year Marking 2nd Highest Quarterly Revenue Ever
Achieved 6th Consecutive Revenue Record for Gold Fish® Casino and Record for Quick Hit® Slots
Sequential MPU and MAU Growth While Maintaining Record Payer Conversion Rate
Authorized $60 Million Share Repurchase Program
LAS VEGAS–(BUSINESS WIRE)–SciPlay Corporation (NASDAQ: SCPL) (“SciPlay” or the “Company”) today reported results for the first quarter ended March 31, 2022.
Josh Wilson, Chief Executive Officer of SciPlay, said, “We are successfully executing on the plan we had laid out, reporting another exceedingly strong quarter. We are benefiting from our ongoing investments in key areas and enjoying strong momentum across our growing businesses. Alictus’ integration is proceeding very well with the team in Turkey releasing two new games in the first quarter of 2022, with one of them achieving #1 on Google Play and #5 on iOS. Likewise, Project All-Star is driving excellent engagement and monetization results across our largest games. Quick Hit generated a quarterly record while the team at Gold Fish® continues its momentum, posting a sixth consecutive quarterly record revenue. As we plan for the future, we could not be more excited about the opportunity ahead.
“We maintained a record payer conversion ratio of 8.9% and importantly, delivered sequential growth in MPUs and MAUs, the first time in 6 quarters. Our continued investments in our technology, our talent and our players’ experience will allow us to deliver continued growth and shareholder value. In addition, we expect to further enhance shareholder value with our newly authorized two-year share repurchase plan of up to $60 million. This reinforces our commitment to shareholder returns. We are looking forward to seeing our shareholders at our inaugural investor day on May 17th where we will provide an update on our strategy and the path forward.”
Daniel O’Quinn, Interim Chief Financial Officer of SciPlay, added, “This was another excellent quarter with SciPlay generating its second strongest quarterly revenue, only behind the second quarter of 2020, which benefited from COVID related closures. Total revenues increased 5% year over year, growing well ahead of the industry. While Alictus performed well in the quarter, our focus remains on generating sustainable organic growth. Investments in key initiatives are positively impacting engagement and monetization metrics and our business continues to be highly cash generative. Our balance sheet remains very strong with close to $300 million in cash and cash equivalents, even after the purchase of Alictus. We remain focused on driving profitable growth and delivering enhanced value for shareholders.”
SUMMARY RESULTS
|
Three Months Ended |
||||||
($ in millions) |
March 31, |
||||||
|
2022 |
|
2021 |
||||
Revenue |
$ |
158.0 |
|
|
$ |
151.1 |
|
Net income |
|
32.0 |
|
|
|
37.9 |
|
Net income margin |
|
20.3 |
% |
|
|
25.1 |
% |
Net cash provided by operating activities |
|
36.6 |
|
|
|
19.6 |
|
Capital expenditures |
|
2.0 |
|
|
|
2.1 |
|
|
|
|
|
||||
Non-GAAP Financial Measures (1) |
|
|
|
||||
Adjusted EBITDA (“AEBITDA”) |
$ |
44.2 |
|
|
$ |
45.9 |
|
AEBITDA margin |
|
28.0 |
% |
|
|
30.4 |
% |
|
|
|
|
||||
|
As of March 31, |
|
As of December 31, |
||||
Balance Sheet Measures |
2022 |
|
2021 |
||||
Cash and cash equivalents |
$ |
292.0 |
|
|
$ |
364.4 |
|
Available liquidity(2) |
|
442.0 |
|
|
|
514.4 |
|
|
|
|
|
||||
(1) The financial measures “AEBITDA” and “AEBITDA margin” are non-GAAP financial measures defined below under “Non-GAAP Financial Measures” and are reconciled to the most directly comparable GAAP measures in the accompanying supplemental tables at the end of this release. |
|||||||
(2) Available liquidity is calculated as cash and cash equivalents plus the undrawn capacity on our revolver. |
Key Performance Indicators
(in millions, except Average Revenue Per Daily Active Users (“ARPDAU”), Average Monthly Revenue Per Paying User (“AMRPPU”), and percentages; KPIs include only in-app purchases) |
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|
|
|
|
|
|
|
Three Months Ended |
|
|
||
|
March 31, |
|
Increase / |
||
|
2022 |
|
2021 |
|
(Decrease) |
Mobile Penetration |
90% |
|
88% |
|
2.0pp |
Average Monthly Active Users |
6.3 |
|
6.7 |
|
(0.4) |
Average Daily Active Users |
2.3 |
|
2.5 |
|
(0.2) |
ARPDAU |
$0.74 |
|
$0.67 |
|
$0.07 |
Average Monthly Paying Users |
0.6 |
|
0.5 |
|
0.1 |
AMRPPU |
$92.45 |
|
$92.80 |
|
($0.35) |
Payer Conversion Rate |
8.9% |
|
8.1% |
|
0.8pp |
pp = percentage points. |
First Quarter 2022 Financial Highlights
First Quarter Key Performance Highlights
About SciPlay
SciPlay Corporation (NASDAQ: SCPL) is a leading developer and publisher of digital games on mobile and web platforms. SciPlay currently offers social casino games Jackpot Party® Casino, Gold Fish® Casino, Quick Hit® Slots, 88 Fortunes® Slots, MONOPOLY Slots, and Hot Shot Casino®, casual games Bingo Showdown®, Solitare Pets™ Adventure, and Backgammon Live and a variety of hyper-casual games such as Rob Master 3D™, Deep Clean Inc.™ and Oh God™. All of SciPlay’s games are offered and played on multiple platforms, including Apple, Google, Facebook, and Amazon. In addition to developing original games, SciPlay has access to a library of more than 1,500 real-world slot and table games provided by Light & Wonder, Inc. (formerly known as Scientific Games Corporation) and its Subsidiaries. For more information, please visit SciPlay.com.
You can access our filings with the SEC through the SEC website at www.sec.gov or through our website, and we strongly encourage you to do so. We routinely post information that may be important to investors on our website at investors.sciplay.com, and we use our website as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC’s Regulation Fair Disclosure (Reg FD). The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this or any other document, and shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended.
All ® and © notices signify marks registered in the United States by SciPlay Games, LLC and/or SG Gaming, Inc., and or their respective affiliates.
© 2022 SciPlay Corporation. All Rights Reserved.
Forward-Looking Statements
Throughout this press release, we make “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results or strategies and can often be identified by the use of terminology such as “may,” “will,” “estimate,” “intend,” “plan,” “continue,” “believe,” “expect,” “anticipate,” “target,” “should,” “could,” “potential,” “opportunity,” “goal,” or similar terminology. These statements are based upon management’s current expectations, assumptions and estimates and are not guarantees of timing, future results or performance. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. Actual results may differ materially from those contemplated in these statements due to a variety of risks and uncertainties and other factors, including, among other things:
Additional information regarding risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated in forward-looking statements is included from time to time in our filings with the SEC, including the Company’s current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K (including under the headings “Forward Looking Statements” and “Risk Factors”). Forward-looking statements speak only as of the date they are made and, except for our ongoing obligations under the U.S. federal securities laws, we undertake no and expressly disclaim any obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
This press release may contain references to industry market data and certain industry forecasts. Industry market data and industry forecasts are obtained from publicly available information and industry publications. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information is not guaranteed. Although we believe industry information to be accurate, it is not independently verified by us and we do not make any representation as to the accuracy of that information. In general, we believe there is less publicly available information concerning international social gaming industries than the same industries in the U.S. Some data is also based on our good faith estimates, which are derived from our review of internal surveys or data, as well as the independent sources referenced above. Assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under “Risk Factors” in Part II, Item 1A of our Quarterly Reports on Form 10-Q and Part I, Item 1A “Risk Factors” in our 2021 Annual Report on Form 10-K. These and other factors could cause future performance to differ materially from our assumptions and estimates.
SCIPLAY CORPORATION |
||||||||
CONSOLIDATED STATEMENTS OF INCOME |
||||||||
(Unaudited, in millions, except per share amounts) |
||||||||
|
|
|
|
|
||||
|
|
Three Months Ended |
||||||
|
|
March 31, |
||||||
|
|
2022 |
|
2021 |
||||
Revenue |
|
$ |
158.0 |
|
|
$ |
151.1 |
|
Operating expenses: |
|
|
|
|
||||
Cost of revenue(1) |
|
|
48.2 |
|
|
|
47.1 |
|
Sales and marketing(1) |
|
|
40.0 |
|
|
|
34.7 |
|
General and administrative(1) |
|
|
16.7 |
|
|
|
15.7 |
|
Research and development(1) |
|
|
11.5 |
|
|
|
9.5 |
|
Depreciation and amortization |
|
|
4.7 |
|
|
|
3.4 |
|
Restructuring and other |
|
|
2.2 |
|
|
|
0.3 |
|
Operating income |
|
|
34.7 |
|
|
|
40.4 |
|
Other expense, net |
|
|
(0.5 |
) |
|
|
(0.4 |
) |
Net income before income taxes |
|
|
34.2 |
|
|
|
40.0 |
|
Income tax expense |
|
|
2.2 |
|
|
|
2.1 |
|
Net income |
|
|
32.0 |
|
|
|
37.9 |
|
Less: Net income attributable to the noncontrolling interest |
|
|
27.6 |
|
|
|
32.6 |
|
Net income attributable to SciPlay |
|
$ |
4.4 |
|
|
$ |
5.3 |
|
|
|
|
|
|
||||
Basic and diluted net income attributable to SciPlay per share: |
|
|
|
|
||||
Basic |
|
$ |
0.18 |
|
|
$ |
0.23 |
|
Diluted |
|
$ |
0.18 |
|
|
$ |
0.21 |
|
|
|
|
|
|
||||
Weighted average number of shares of Class A common stock used in per share calculation: |
|
|
|
|
||||
Basic shares |
|
|
24.6 |
|
|
|
23.2 |
|
Diluted shares |
|
|
24.8 |
|
|
|
25.1 |
|
|
|
|
|
|
||||
(1) Excludes depreciation and amortization. |
SCIPLAY CORPORATION |
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(Unaudited, in millions, except par value) |
||||||
|
As of |
|||||
|
March 31, |
|
December 31, |
|||
ASSETS |
|
|
|
|||
Current assets: |
|
|
|
|||
Cash and cash equivalents |
$ |
292.0 |
|
$ |
364.4 |
|
Accounts receivable, net |
|
42.8 |
|
|
39.6 |
|
Prepaid expenses and other current assets |
|
16.5 |
|
|
6.4 |
|
Total current assets |
|
351.3 |
|
|
410.4 |
|
Property and equipment, net |
|
3.3 |
|
|
3.5 |
|
Operating lease right-of-use assets |
|
6.2 |
|
|
6.8 |
|
Goodwill |
|
222.6 |
|
|
131.1 |
|
Intangible assets and software, net |
|
80.9 |
|
|
49.6 |
|
Deferred income taxes |
|
76.3 |
|
|
78.5 |
|
Other assets |
|
1.8 |
|
|
1.7 |
|
Total assets |
$ |
742.4 |
|
$ |
681.6 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|||
Current liabilities: |
|
|
|
|||
Accounts payable |
$ |
20.6 |
|
$ |
20.0 |
|
Accrued liabilities |
|
53.0 |
|
|
50.2 |
|
Due to affiliate |
|
2.4 |
|
|
1.6 |
|
Total current liabilities |
|
76.0 |
|
|
71.8 |
|
Operating lease liabilities |
|
4.8 |
|
|
5.4 |
|
Liabilities under TRA |
|
64.7 |
|
|
64.7 |
|
Other long-term liabilities |
|
39.9 |
|
|
14.7 |
|
Total stockholders’ equity(1) |
|
557.0 |
|
|
525.0 |
|
Total liabilities and stockholders’ equity |
$ |
742.4 |
|
$ |
681.6 |
|
|
|
|
|
|||
(1) Includes $453.9 million and $426.4 million in noncontrolling interest as of March 31, 2022 and December 31, 2021, respectively. |
SCIPLAY CORPORATION |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited, in millions) |
||||||||
|
Three Months Ended |
|||||||
|
March 31, |
|||||||
|
2022 |
|
2021 |
|||||
Net cash provided by operating activities |
$ |
36.6 |
|
|
$ |
19.6 |
|
|
Net cash used in investing activities |
|
(108.2 |
) |
|
|
(2.1 |
) |
|
Net cash used in financing activities |
|
(0.7 |
) |
|
|
(14.2 |
) |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(0.1 |
) |
|
|
(0.2 |
) |
|
(Decrease) increase in cash, cash equivalents and restricted cash |
|
(72.4 |
) |
|
|
3.1 |
|
|
Cash, cash equivalents and restricted cash, beginning of period |
|
364.4 |
|
|
|
268.9 |
|
|
Cash, cash equivalents and restricted cash, end of period |
$ |
292.0 |
|
|
$ |
272.0 |
|
|
|
|
|
|
|||||
Supplemental cash flow information: |
|
|
|
|||||
Cash paid for income taxes |
$ |
0.5 |
|
|
$ |
3.8 |
|
|
|
|
|
|
|||||
Supplemental non-cash transactions: |
|
|
|
|||||
Non-cash additions to intangible assets related to license agreements |
$ |
— |
|
|
$ |
16.1 |
|
SCIPLAY CORPORATION |
||||||||
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO SCIPLAY TO AEBITDA |
||||||||
(Unaudited, in millions) |
||||||||
|
Three Months Ended |
|||||||
|
March 31, |
|||||||
|
2022 |
|
2021 |
|||||
Net income attributable to SciPlay |
$ |
4.4 |
|
|
$ |
5.3 |
|
|
Net income attributable to noncontrolling interest |
|
27.6 |
|
|
|
32.6 |
|
|
Net income |
|
32.0 |
|
|
|
37.9 |
|
|
Restructuring and other(1) |
|
2.2 |
|
|
|
0.3 |
|
|
Depreciation and amortization |
|
4.7 |
|
|
|
3.4 |
|
|
Income tax expense |
|
2.2 |
|
|
|
2.1 |
|
|
Stock-based compensation |
|
2.6 |
|
|
|
1.8 |
|
|
Other expense, net |
|
0.5 |
|
|
|
0.4 |
|
|
AEBITDA |
$ |
44.2 |
|
|
$ |
45.9 |
|
|
Revenue |
$ |
158.0 |
|
|
$ |
151.1 |
|
|
Net income margin (Net income/Revenue) |
|
20.3 |
% |
|
|
25.1 |
% |
|
AEBITDA margin (AEBITDA/Revenue) |
|
28.0 |
% |
|
|
30.4 |
% |
|
|
|
|
|
|||||
(1) Refer to AEBITDA definition for a description of items included in restructuring and other. |
|
|
|
RECONCILIATION OF NET INCOME MARGIN |
||||||
TO AEBITDA MARGIN |
||||||
|
|
Three Months Ended |
||||
|
|
March 31, |
||||
|
|
2022 |
|
2021 |
||
Net income margin (Net income/Revenue) |
|
20.3 |
% |
|
25.1 |
% |
Restructuring and other |
|
1.4 |
% |
|
0.2 |
% |
Depreciation and amortization |
|
3.0 |
% |
|
2.3 |
% |
Income tax expense |
|
1.4 |
% |
|
1.4 |
% |
Stock-based compensation |
|
1.6 |
% |
|
1.2 |
% |
Other expense, net |
|
0.3 |
% |
|
0.2 |
% |
AEBITDA margin (AEBITDA/Revenue) |
|
28.0 |
% |
|
30.4 |
% |
Non-GAAP Financial Measures
Adjusted EBITDA, or AEBITDA, as used herein, is a non-GAAP financial measure that is presented as supplemental disclosure and is reconciled to net income attributable to SciPlay as the most directly comparable GAAP measure as set forth in the below table. We define AEBITDA to include net income attributable to SciPlay before: (1) net income attributable to noncontrolling interest; (2) interest expense; (3) income tax expense; (4) depreciation and amortization; (5) restructuring and other, which includes charges or expenses attributable to: (a) employee severance; (b) management changes; (c) restructuring and integration; (d) M&A and other, which includes: (i) M&A transaction costs; (ii) purchase accounting adjustments; (iii) unusual items (including certain legal settlements) and (iv) other non-cash items; (e) contingent acquisition consideration and (f) cost-savings initiatives; (6) stock-based compensation; (7) loss (gain) on debt financing transactions; and (8) other expense (income) including foreign currency (gains) and losses. We also use AEBITDA margin, a non-GAAP measure, which we calculate as AEBITDA as a percentage of revenue.
Our management uses AEBITDA and AEBITDA margin to, among other things: (i) monitor and evaluate the performance of our business operations; (ii) facilitate our management’s internal comparisons of our historical operating performance and (iii) analyze and evaluate financial and strategic planning decisions regarding future operating investments and operating budgets. In addition, our management uses AEBITDA and AEBITDA margin to facilitate management’s external comparisons of our results to the historical operating performance of other companies that may have different capital structures and debt levels. Our management believes that AEBITDA and AEBITDA margin are useful as they provide investors with information regarding our financial condition and operating performance that is an integral part of our management’s reporting and planning processes. In particular, our management believes that AEBITDA is helpful because this non-GAAP financial measure eliminates the effects of restructuring, transaction, integration or other items that management believes have less bearing on our ongoing underlying operating performance. Management believes AEBITDA margin is useful as it provides investors with information regarding the underlying operating performance and margin generated by our business operations.
Contacts
Media Relations
Christina Karas +1 702-532-7986
Vice President, Corporate Communications
media@lnw.com
Investor Relations
Jim Bombassei +1 702-532-7643
Senior Vice President, Investor Relations
IR@lnw.com
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