Penn National Gaming released its report reflecting the company’s performance in the second quarter of the year and announced its new name, PENN Entertainment.
Net Income Sank
PENN reported $1.63 billion in revenue for the three months ended June 30, 2022, to post an increase of 5.2% compared to $1.55 billion in second quarter 2021 revenue. The increase was due to the growth in the company’s database in which high net worth segments registered strong engagement and younger demographics continued to grow.
Announcing the company’s name change to PENN Entertainment, PENN’s chief executive officer and president Jay Snowden laid down the foundations for the transformation.
“Over the past few years, PENN has transformed our business through a highly differentiated strategy focused on organic cross-sell opportunities, which is reinforced by our investments in market-leading retail casinos, sports media assets, owned technology, including a state-of-the-art, fully integrated digital sports and online casino betting platform, and an in-house iCasino content studio,” Snowden said, outlining that the new name “maintains ties to our legacy while better reflecting our evolution into North America’s leading provider of integrated entertainment, sports content and casino gaming experiences.”
Adjusted EBITDA came out at $476.5 million, posting a marginal increase to $470.1 million in Q2 2021 while adjusted EBITDAR was %504.5 million, down 14% from $586.6 million in Q2 2021. Adjusted EBITDAR margin was 31%, a decline of 694 bps year-over-year.
Net income in the reported quarter amounted to $26.1 million, representing just 13% of the $198.7 million PENN reported in the previous comparable period of 2021.
“We are pleased with our second quarter results,” Snowden continued, outlining that the business “delivered consistent performance” despite “economic headwinds.”
Performance by Segments
The bulk of Q2 2022 total revenue, $1.5 billion, was generated by the company’s retail segment where PENN’s mychoice database continued to grow at a steady rate over the last four quarters adding more than 1.2 million of new registrations.
PENN said it would continue to enhance the guest experience at its properties, offering hotel remodels, new restaurant concepts and Barstool-branded sportsbooks while its cashless, cardless and contactless (3C’s) technology is already live in nine properties across three states and is expected to be deployed across another twelve properties by the end of 2022.
PENN’s Interactive segment contributed $154.9 million in revenue and registered adjusted EBITDA of $20.8 million but the most important development was the launch of theScore Bet mobile app in Ontario in April.
Outside of the quarter, theScore Bet mobile app launched its own internal risk and trading platform to enhance its online betting capabilities, mobile product offerings and overall integrated media and betting ecosystem. At the end of the second quarter, PENN had total liquidity of $2.7 billion of which $1.7 billion was in cash and cash equivalents. Net debt at the end of the second quarter was $1 billion.