On the day it unveiled its agreement to acquire Score Media and Gaming, Penn National Gaming reported its financial results for the three and six months ending June 30.
According to president and CEO Jay Snowden, Penn National delivered “strong” results during the second quarter, generating $1.55 billion in revenue, which was at the high end of the company’s pre-announced range of $1.45 billion to $1.56 billion.
Adjusted EBITDAR was $586.6m, which exceeded the high end of the $540m to $580m range the company predicted on June 24.
Compared to Q2 2019 pro forma results, revenue increased 13%, adjusted EBITDAR grew 38% and adjusted EBITDAR margins increased 694 basis points, the company said.
During Q2 2021, Penn National’s net income was $198.7m and its net income margin was 12.9%, compared to a net loss of $214.4m and (70.2)%, respectively, in the same quarter last year, and net income of $51.4m and net margin of 3.9% in Q2 2019.
Adjusted EBITDA was $470.1m in Q2 2021, an increase of $549.4m year over year and up $153.6m versus the same quarter in 2019.
Snowden said in a statement the company’s results were driven by “exceptional performance” across its portfolio of core gaming business properties. Contributions from Barstool Sports, the media company, also were positive, he noted, plus the company enjoyed “strong” revenue growth across its Penn Interactive segment, which operated near breakeven for the quarter despite being live in only four states.
“Penn National delivered a strong second quarter that exceeded our pre-announced results from June 24,” Snowden said. “Separately, this morning Penn National announced that we have entered into a definitive agreement to acquire Score Media and Gaming, which is the number one sports app in Canada and the third most popular sports app in North America. When we add theScore’s unique integrated media and betting platform and technology, to the audience of Barstool Sports and its personalities and content, we will be creating a digital sports content, gaming and technology company.”
Snowden said Penn National anticipates the acquisition of theScore will provide adjusted EBITDA accretion by Year 2, an incremental $200m medium term adjusted EBITDA, and $500m of incremental long term adjusted EBITDA upside.
Sportsbook launch schedule revealed
Snowden said the planned rollout of the company’s Barstool Sportsbook is on track. Following its Indiana launch in May, the company anticipates more than doubling its footprint by the start of the 2021 NFL season in early September with upcoming launches in Colorado, New Jersey, Tennessee, Virginia and Arizona.
“By the end of the year, we plan to be operating in at least 10 states,” Snowden predicted. “As we gain scale across the country, we will increase our marketing efforts to further widen the funnel into our omnichannel ecosystem while we remain focused on our measured and profit-driven approach.”The company anticipates Penn Interactive will generate meaningful EBITDA contributions beginning in 2023, inclusive of significant planned investments in marketing, product and additional state launches.
Snowden added Barstool Sports provides Penn National with brand leverage to drive its omnichannel strategy as the Barstool audience converts to its core gaming businesses.
“With this in mind, we plan to open/rebrand five more Barstool Sports retail sportsbooks by the end of the year. In addition, we are making progress on the build out of stand-alone Barstool-branded sports bars, with the initial locations in Philadelphia and Chicago scheduled to open later this year. We also are continuing to bolster our iCasino offerings, including the addition of more third-party content, the introduction of a Barstool-branded live dealer studio in New Jersey, and the launch of our first in-house developed, Barstool-branded online table and slot games by year-end.”