Achieved Record Revenue with Growth of 18%
Year-Over-Year Resulting in Strong Cash Flows
Continuing to Outpace the Social Casino
Market
Completed $60 Million(1) of Share Purchase
Authorization Returning Capital to Shareholders; Board Authorizes
New $60 Million Share Repurchase Program
SciPlay Corporation (NASDAQ: SCPL) (“SciPlay” or the “Company”)
today reported results for the first quarter ended March 31,
2023.
SciPlay entered 2023 with strong momentum and continued to
outpace the social casino market and gained share. Revenue grew 18%
year-over-year, achieving another quarterly record primarily due to
increased social casino payer engagement and record high average
monthly paying users, all translating to strong cash flows. The
increases in Net income and AEBITDA(2) outpaced Revenue growth at
31% and 21%, respectively. We also returned $60 million of capital
to shareholders through the repurchase of our shares of Class A
common stock, since the initiation of the program on May 9, 2022
and through May 9, 2023, completing the share purchase program
authorization.
Josh Wilson, Chief Executive Officer of SciPlay,
commented, “SciPlay continued its industry-leading performance in
the first quarter of 2023, outpacing the social casino market for
the fifth consecutive quarter. We continue to benefit from the
investments that we've made in key growth drivers of our business
and into the development of proprietary tools and systems. Our
strong operating platform and industry-best team's innovation are
providing our players with engaging entertainment experiences,
resulting in more payers and increasing monetization per player. We
are off to a great start in the first quarter and look forward to
continuing on our path of sustainable and profitable growth.”
Daniel O'Quinn, Interim Chief Financial Officer of
SciPlay, added, “SciPlay posted strong financial results in the
first quarter of 2023, reflecting progress on our key objectives:
delivering great entertainment experiences to our players,
investing in our game franchises, growing market share in social
casino and prudently allocating capital. We are pleased to report
the completion of our $60 million share repurchase program in about
one year's time. Our Board has approved a new $60 million share
repurchase authorization, which we will implement in a similar
manner as the recently completed program.”
(1) This amount is as of May 9, 2023.
(2) The financial measure "AEBITDA" is a
non-GAAP financial measure defined below under "Non-GAAP Financial
Measures" and is reconciled to the most directly comparable GAAP
measure in the accompanying supplemental tables at the end of this
release.
SUMMARY RESULTS
Three Months Ended
($ in millions)
March 31,
2023
2022
Revenue
$
186.4
$
158.0
Net income
41.8
32.0
Net income margin
22.4
%
20.3
%
Net cash provided by operating
activities
41.7
36.6
Capital expenditures
3.8
2.0
Non-GAAP Financial
Measures (1)
Adjusted EBITDA (“AEBITDA”)
$
53.5
$
44.2
AEBITDA margin
28.7
%
28.0
%
As of March 31,
As of December 31,
Balance Sheet
Measures
2023
2022
Cash and cash equivalents
$
357.5
$
330.1
Available liquidity(2)
507.5
480.1
(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"), Average Monthly Paying Users ("MPUs") and
percentages; KPIs include only in-app purchases)
Three Months Ended
March 31,
Increase /
2023
2022
(Decrease)
Mobile Penetration
91%
90%
1.0pp
Average Monthly Active Users
6.1
6.3
(0.2)
Average Daily Active Users
2.3
2.3
—
ARPDAU
$0.89
$0.74
$0.15
Average MPUs (in thousands)
625
560
65
AMRPPU
$97.43
$92.45
$4.98
Payer Conversion Rate
10.3%
8.9%
1.4pp
pp = percentage points.
First Quarter 2023 Financial
Highlights
- Revenue growth was 18% year-over-year to $186.4 million,
a new quarterly record, primarily due to increased social casino
payer engagement and record high average monthly paying users.
- Net income growth was 31% year-over-year to $41.8
million compared to $32.0 million in the prior year period,
primarily due to the increase in revenue. Net income margin was
22.4% for the quarter, increasing by 2.1 percentage points
year-over-year.
- AEBITDA, a non-GAAP financial measure defined at the end
of this release, grew 21% to $53.5 million compared to $44.2
million in the prior year period. The increase in AEBITDA was
primarily due to higher revenue. AEBITDA margin, a non-GAAP
financial measure defined at the end of this release, was 28.7% for
the quarter, increasing by 0.7 percentage points
year-over-year.
- Net cash provided by operating activities was $41.7
million, a $5.1 million increase over the prior year period,
primarily due to an increase in revenue, partially offset by an
unfavorable change in working capital due to the timing of payments
from our platform providers.
- Cash and cash equivalents increased by $27.4 million to
$357.5 million from the fourth quarter of 2022. Total available
liquidity, which includes our undrawn revolver, was $507.5
million.
- Returned $60.0 million of capital to shareholders
through the repurchase of approximately 4.1 million shares of Class
A common stock since the initiation of the program on May 9, 2022
and through May 9, 2023, completing the share purchase program
authorization. Our Board has approved a new $60.0 million share
repurchase authorization, which we will implement in a manner
similar to the implementation of the recently completed
program.
First Quarter Key Performance
Highlights
- Jackpot Party Casino® achieved its third consecutive
quarterly record revenue.
- Quick Hit Slots® achieved its fifth consecutive
quarterly record revenue.
- Payer conversion rate increased by 1.4 percentage points
from the prior year period to 10.3% due to consistent payer
interaction with the games by our players as a result of our
continually enhancing player analytics and the introduction of new
content and features into our games.
- Average Monthly Paying Users (MPU) increased to 625
thousand compared to 560 thousand in the prior year period, a new
record.
- Average Monthly Revenue Per Paying User (AMRPPU) was
$97.43, maintaining elevated levels with twelve consecutive
quarters above $90.
- Average Revenue Per Daily Active User (ARPDAU) was up
20% to a record $0.89, compared to $0.74 in the prior year
period.
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®,
Solitaire 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. and its Subsidiaries. For more
information, please visit https://www.SciPlay.com.
You can access our filings with the Securities Exchange
Commission ("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 http://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 LNW Gaming, Inc., and or their
respective affiliates.
© 2023 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:
- the effects of the COVID-19 pandemic and any resulting social,
political, economic and financial complications;
- our ability to attract and retain players;
- expectations of growth in total consumer spending on social
gaming, including social casino gaming;
- our reliance on third-party platforms and our ability to track
data on those platforms;
- our ability to continue to launch and enhance games that
attract and retain a significant number of paying players;
- our ability to expand in international markets;
- our reliance on a small percentage of our players for nearly
all of our revenue;
- our ability to adapt to, and offer games that keep pace with,
changing technology and evolving industry standards;
- competition;
- our dependence on the optional purchases of coins, chips and
bingo cards (collectively referred to as "coins, chips and cards")
to supplement the availability of periodically offered free coins,
chips and cards;
- our ability to access additional financing and restrictions and
covenants in debt agreements, including those that could result in
acceleration of the maturity of our indebtedness;
- the discontinuation or replacement of the London Interbank
Offer Rate, which may adversely affect interest rates;
- fluctuations in our results due to seasonality and other
factors;
- dependence on skilled employees with creative and technical
backgrounds;
- U.S. and international economic and industry conditions,
including increases in benchmark interest rates and the effects of
inflation;
- public perception of our response to environmental, social and
governance issues;
- changes in, or the elimination of, our share repurchase
program;
- our ability to use the intellectual property rights of Light
& Wonder, Inc. ("Light & Wonder", "L&W" and "Parent")
and other third parties, including the third-party intellectual
property rights licensed to Light & Wonder, under our
intellectual property license agreement with our Parent;
- protection of our proprietary information and intellectual
property, inability to license third-party intellectual property
and the intellectual property rights of others;
- security and integrity of our games and systems;
- security breaches, cyber-attacks or other privacy or data
security incidents, challenges or disruptions;
- reliance on or failures in information technology and other
systems;
- loss of revenue due to unauthorized methods of playing our
games;
- the impact of legal and regulatory restrictions on our
business, including significant opposition in some jurisdictions to
interactive social gaming, including social casino gaming, and how
such opposition could lead these jurisdictions to adopt legislation
or impose a regulatory framework to govern interactive social
gaming or social casino gaming specifically, and how this could
result in a prohibition on interactive social gaming or social
casino gaming altogether, restrict our ability to advertise our
games, or substantially increase our costs to comply with these
regulations;
- laws and government regulations, both foreign and domestic,
including those relating to our Parent and to data privacy and
security, including with respect to the collection, storage, use,
transmission, sharing and protection of personal information and
other consumer data, and those laws and regulations that affect
companies conducting business on the internet, including ours;
- the continuing evolution of the scope of data privacy and
security regulations, and our belief that the adoption of
increasingly restrictive regulations in this area is likely within
the U.S. and other jurisdictions;
- risks related to foreign operations, including the complexity
of foreign laws, regulations and markets; the uncertainty of
enforcement of remedies in foreign jurisdictions; the effect of
currency exchange rate fluctuations; the impact of foreign labor
laws and disputes; the ability to attract and retain key personnel
in foreign jurisdictions; the economic, tax and regulatory policies
of local governments; and compliance with applicable anti-money
laundering, anti-bribery and anti-corruption laws;
- influence of certain stockholders, including decisions that may
conflict with the interests of other stockholders;
- our ability to achieve some or all of the anticipated benefits
of being a standalone public company;
- our dependence on distributions from SciPlay Parent Company,
LLC to pay our taxes and expenses, including substantial payments
we will be required to make under the Tax Receivable Agreement (the
“TRA”);
- failure to establish and maintain adequate internal control
over financial reporting;
- stock price volatility;
- litigation and other liabilities relating to our business,
including litigation and liabilities relating to consumer
protection, gambling-related matters, employee matters, alleged
service and system malfunctions, alleged intellectual property
infringement and claims relating to our contracts, licenses and
strategic investments;
- our ability to complete acquisitions and integrate businesses
successfully;
- our ability to pursue and execute new business
initiatives;
- our expectations of future growth that will place significant
demands on our management and operations;
- natural events and health crises that disrupt our operations or
those of our providers or suppliers;
- changes in tax laws or tax rulings, or the examination of our
tax positions;
- levels of insurance coverage against claims; and
- our dependence on certain key providers.
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 the latest annual
report filed with the SEC on March 1, 2023 ("2022 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 2022 Form 10-K. These and other factors
could cause future performance to differ materially from our
assumptions and estimates.
Due to rounding, certain numbers presented herein may not
precisely recalculate.
SCIPLAY CORPORATION
CONSOLIDATED STATEMENTS OF
INCOME
(Unaudited, in millions,
except per share amounts)
Three Months Ended
March 31,
2023
2022
Revenue
$
186.4
$
158.0
Operating expenses:
Cost of revenue(1)
57.7
48.2
Sales and marketing(1)
46.9
40.0
General and administrative(1)
22.1
16.7
Research and development(1)
12.7
11.5
Depreciation and amortization
5.9
4.7
Restructuring and other
1.4
2.2
Operating income
39.7
34.7
Other income (expense), net
6.0
(0.5
)
Net income before income taxes
45.7
34.2
Income tax expense
3.9
2.2
Net income
41.8
32.0
Less: Net income attributable to the
noncontrolling interest
36.3
27.6
Net income attributable to SciPlay
$
5.5
$
4.4
Basic and diluted net income attributable
to SciPlay per share:
Basic
$
0.25
$
0.18
Diluted
$
0.24
$
0.18
Weighted average number of shares of Class
A common stock used in per share calculation:
Basic shares
22.0
24.6
Diluted shares
23.0
24.8
(1) Excludes depreciation and
amortization.
SCIPLAY CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited, in millions,
except par value)
As of
March 31, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
357.5
$
330.1
Accounts receivable, net
64.2
51.0
Prepaid expenses and other current
assets
7.3
8.0
Total current assets
429.0
389.1
Property and equipment, net
3.6
3.0
Operating lease right-of-use assets
4.2
4.8
Goodwill
216.1
217.6
Intangible assets and software, net
79.6
74.8
Deferred income taxes
72.3
74.5
Other assets
1.7
1.9
Total assets
$
806.5
$
765.7
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
20.7
$
18.4
Accrued liabilities
37.9
35.2
Due to affiliate
4.0
3.8
Total current liabilities
62.6
57.4
Operating lease liabilities
2.4
3.1
Liabilities under TRA
60.2
60.2
Other long-term liabilities
26.0
29.4
Total stockholders’ equity(1)
655.3
615.6
Total liabilities and stockholders’
equity
$
806.5
$
765.7
(1) Includes $540.6 million and $506.4
million in noncontrolling interest as of March 31, 2023 and
December 31, 2022, respectively.
SCIPLAY CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited, in
millions)
Three Months Ended
March 31,
2023
2022
Net cash provided by operating
activities
$
41.7
$
36.6
Net cash used in investing activities
(3.8
)
(108.2
)
Net cash used in financing activities
(10.2
)
(0.7
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(0.3
)
(0.1
)
Increase (decrease) in cash, cash
equivalents and restricted cash
27.4
(72.4
)
Cash, cash equivalents and restricted
cash, beginning of period
330.1
364.4
Cash, cash equivalents and restricted
cash, end of period
$
357.5
$
292.0
Supplemental cash flow information:
Cash paid for income taxes
$
0.4
$
0.5
Supplemental non-cash transactions:
Non-cash additions to intangible assets
related to license agreements
$
7.1
$
—
SCIPLAY CORPORATION
RECONCILIATION OF NET INCOME
ATTRIBUTABLE TO SCIPLAY TO AEBITDA
(Unaudited, in
millions)
Three Months Ended
March 31,
2023
2022
Net income attributable to SciPlay
$
5.5
$
4.4
Net income attributable to noncontrolling
interest
36.3
27.6
Net income
41.8
32.0
Restructuring and other(1)
1.4
2.2
Depreciation and amortization
5.9
4.7
Income tax expense
3.9
2.2
Stock-based compensation
6.5
2.6
Other (income) expense, net
(6.0
)
0.5
AEBITDA
$
53.5
$
44.2
Revenue
$
186.4
$
158.0
Net income margin (Net income/Revenue)
22.4
%
20.3
%
AEBITDA margin (AEBITDA/Revenue)
28.7
%
28.0
%
(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,
2023
2022
Net income margin (Net income/Revenue)
22.4
%
20.3
%
Restructuring and other
0.7
%
1.4
%
Depreciation and amortization
3.2
%
3.0
%
Income tax expense
2.1
%
1.4
%
Stock-based compensation
3.5
%
1.6
%
Other (income) expense, net
(3.2
)%
0.3
%
AEBITDA margin (AEBITDA/Revenue)
28.7
%
28.0
%
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 above 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 (including contingent acquisition
consideration); (iii) unusual items (including legal settlements
related to major litigation) and (iv) other non-cash items; and (e)
cost-savings initiatives; (6) stock-based compensation; (7) loss or
gain on debt financing transactions; and (8) other expense or
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509005775/en/
Media Relations Andrea Schneider +1 917-769-6060
Director, Global Communications SciPlayPress@sciplay.com
Investor Relations Robert Weiner +1 904-495-8227 Vice
President, Investor Relations SciPlayIR@sciplay.com
SciPlay (NASDAQ:SCPL)
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