Scientific Games Reveals Q4 and FY 2018 Results
First of all, the company reported a 9.1% increase in revenue for the twelve-month period ending on December 31, 2018, although its gaming revenue recorded a slight drop of 0.7% in gaming revenue ($1.8 billion).
Despite revenue growth, the growing costs for the American gaming giant led to an increase in costs, which went up to $352.4 million.
Social and Digital on the Rise
Social and digital divisions can be more than satisfied with the previous year, with its respective revenue increasing to $415.9 million and 269.6 million. The purchase of NYX Gaming Group, which was completed back in January 2018, had a significant impact on the figures recorded by the company’s digital division. Lottery vertical also recorded growth, albeit a modest one, with its revenue rising by 4.3% to $846.3 million.
Operating costs were also up during 2018. Cost of services climbed to $505.6 million, which is 21.2% more than in 2017. Restructuring costs sky-rocketed from $45.9 million in 2017. to $253.4 million, including $151.5 million paid to Shuffle Tech in December to settle a lawsuit. Additional $27.5 million were spent in earn-out payments for Spicerack Media.
In total, the total operating costs for 2018 reached $3.1 billion, which represents a 15.1% increase over 2017. Consolidated adjusted earnings before interest, tax, depreciation, and amortisation went up by 9% to $1.3 billion.
The report also revealed that operating profit for 2018 recorded a drop of 32.4% to $265.6 million. After finance-related costs and loss on debt financing transactions were included, the total pre-tax loss reached $339.3 million. Net loss for the whole year went up by 45.4% to $352.4 million.
Numbers for Q4 2018
When it comes to the year’s last quarter, Scientific Games generated 7.6% more revenue than in the corresponding period of 2017 – $885.7 million. The acquisition of NYX Gaming Group made an impact here as well, boosted the overall figures to $51.7 million.
Digital revenue improved to $71.5 million, including $33.3m from wagering on sports and platform supply deals. The social division saw its revenue rise by 19.1% to $113.7 million, while lottery revenue increased to $230.7 million.
The company’s core division generated $469.8 million in revenue, 4.7% less than in the same period of 2017. The main reason for this was the new revenue recognition accounting, which went into effect last year. Only 226 machines were sold during the last quarter of 2018.
The operating quarter fell in Q4 to $564.5 million, while quarterly EBITDA improved by 6% to $343.5 million, with higher revenue and continuing operational efficiencies being the main driving force behind this result.
Commenting on the latest figure, Barry Cottle said the company remained focused on developing the best slot games and the most innovative platforms to deliver outstanding gaming experiences wherever and whenever players chose to play.
Cottle added that Scientific Games was building momentum and continuing to grow its business while at the same time operating more efficiently.