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
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)
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 revenue was $158.0 million, up 5% from the
prior year period, as a result of an increase in average monthly
paying users due to a higher payer conversion rate during the
period.
- Net income was $32.0 million compared to $37.9 million
in the prior year period due to an increase in operating expenses,
primarily driven by a $4.6 million increase in user acquisition
spend, a $3.5 million increase in salaries, benefits and
stock-based compensation, and a $1.3 million increase in
depreciation and amortization, partially offset by a 5% increase in
revenue.
- AEBITDA, a non-GAAP financial measure defined below, was
$44.2 million compared to $45.9 million in the prior year period,
primarily due to higher operating expenses. AEBITDA margin, a
non-GAAP financial measure defined below, was 28.0% for the
quarter.
- Net cash provided by operating activities was $36.6
million, a $17.0 million increase over the prior year period,
driven by a favorable change in working capital primarily due to
the timing of payments from our platform providers.
- Cash and cash equivalents decreased by $72.4 million to
$292.0 million from the fourth quarter of 2021 due to the Alictus
acquisition, partially offset by $36.6 million cash flow from
operations during the first quarter.
First Quarter Key Performance
Highlights
- Alictus Studio integration and performance is going
well, launched two new games in the quarter, with one achieving #1
on Google Play and #5 on iOS.
- Payer conversion rate remained at record 8.9% validating
our continued payer focus and live-ops strategy to drive increased
monetization.
- Average Monthly Paying Users (MPU) and Average Monthly
Active Users (MAU) both increased 7% sequentially.
- Average Revenue Per Daily Active User (ARPDAU) up 10.4%
to $0.74 compared to $0.67 in the prior year period.
- Mobile penetration increased 2 percentage points from
the prior year period to 90%.
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:
- the continuing impact of the COVID-19 pandemic and any
resulting social, political, economic and financial
complications;
- Light & Wonder, Inc.’s (“Light & Wonder” and "Parent")
announced decision to withdraw its offer to acquire our public
shares not already owned by Light & Wonder may subject us to
risks and uncertainties;
- 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
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 LIBOR, 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;
- our ability to use the intellectual property rights of our
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;
- our dependence on certain key providers; and
- U.S. and international economic and industry conditions.
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, 2022
December 31, 2021
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220510005203/en/
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
SciPlay (NASDAQ:SCPL)
Historical Stock Chart
From Jun 2024 to Jul 2024
SciPlay (NASDAQ:SCPL)
Historical Stock Chart
From Jul 2023 to Jul 2024