EVRI - Earnings call transcript Q3 2019

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Operator

Hello everyone, thank you for standing by. And welcome to the Everi Holdings 2019 Third Quarter Earnings Conference Call.

During today's presentation all parties would be in a listen-only mode.

Following the prepared remarks, the call will be opened for a question-and-answer session. This discussion is being recorded today.

to of conference Investor like Pfund, to I'd President Vice Relations. now turn over the Bill And Please go ahead, sir.

William Pfund

Thank you, call the James. And welcome to everyone.

disclaimer webcast. by the that begin everyone this in harbor covers our me filings our and Let call public reminding safe of

will those statements and today call. discussed and during involve assumptions to results forward-looking cause could our that actual contain differ call that risks Our uncertainties materially from

not are limited filings, These in to obligation contained and statements risks but forward-looking and of SEC which uncertainties assume we any in at do Section all Investors are of website everi.com. posted include, the our no corporate not update make. those our to We intend

of cautioned reliance place undue XXXX. not which on are we to November only today, Xth statements, You as forward-looking speak of

non-GAAP financial each most will the as Investor release -- our debt and we a as within and refer such free flow, ratio. as measure non-GAAP leverage earnings non-GAAP of reconciliation well debt certain website. to A to related our total measures GAAP cash addition, description of directly measure measure total net EBITDA, Section adjusted be in the each In X-K, found and net can comparable on

will link call archived webcast is call a the As this on reminder, webcast and to recorded. our is Section our be being replay corporate the a of A of the website. Investors in included website and

our President Investor Mark Rumbolz, FinTech President Financial me our Business and Chief Relations. Joining Harper Darren Officer; Games today and our Labay, of our Officer; Leader; and Ehrlich, Leader; Randy Business Counsel; Vice call Mike are our Finance Ko, Dean on Executive Senior Taylor, Chief the General Simmons

the to Mike. Now let call over me turn

Michael Rumbolz

us. and thank Well, good afternoon, joining everyone, thank you, for you Bill,

to discussing Board Directors. our of Everi's Bali to I'd Atul third like Before first welcome results, quarter

leadership strategic a and track Atul betting As counsel, you next successful issued that an in involvement and businesses global record we insight experience. to and and broad-based FinTech His make the Atul. diverse brings continue level. see addition separate in sports release We of him of wealth the today, Board. press to company we business aboard can entrepreneurial gaming, Welcome our his as to our to ideal take the forward look grow

This reflecting in again priorities adjusted was across of reported and strong year-over-year once afternoon solid both of our execution revenue growth we businesses. the consecutive results, the quarter EBITDA. our XXth This

on Third of quarter share $XXX.X XXX% to million per net XX% a $X.X million. income a or increase rose $X.XX to record revenue diluted

Our adjusted EBITDA million. rose $XX.X XX% record to a

the our both in EBITDA were revenues FinTech in for segments. adjusted performance quarter strong third records the and both Hovering Games and

moments, performance share Now of our Randy more first third in my will quarter. key review the me our a detail perspective few regarding but much during financial some in accomplishments let

the operations. primarily of $XX.X strong grew reflecting Games EBITDA third X% In a to X%, Adjusted million. growth revenue gaming in our increased business, XX% quarter record

per gaming in quarter of increase win unit. of margin progress given operations the revenue is driver this its growth Our base. primary the especially in our recurring nature contribution high third the The highly was and daily noteworthy

stellar daily player foremost last distinctive cabinets. and employees the Games rose made the years. unit that development to high. all-time design create and quarterly we're differentiated game our the just Our several benefits our to win to remind you And from includes studios, we've popular during cumulative and This allowed performance per an investment first more which of $XX.XX, design content the enhancement XX% ever realizing reflects

grow new units Class base of of upgrade III and customer these of the of and overall higher premium entire operators. base, offerings we're contributed our cabinets II seeing on units and floors. both and to Secondly, have our game actions the percentage casino improved with to across performance a and content tribal our installed our a as These including expansion And include commercial base. Class third installed refresh an to yielding

achieved we strong XXth. year-over-year time growth the sequential all and at Additionally, which in quarterly high September installed reached an base,

we for our growth expect in which see this XXXX. strong demand premium as going further year-over-year to as heading profitable installed to turn our our lead we for revenue further in will to in into products, unit. per quarter, well continue Importantly, sequential win daily growth base gain are establish This foundation

a Premium units our installed year-over-year, comprised increased and nearly units or XX% at quarterly units XXXX on by base September basis. Our rose Premium XXX XXXX. XX% of sequential XX,

units installed premium at Now by June XX% of year base just our ago. comprised and one was XXth of XX% comparison, only

In period and outstanding. fact, robust has quarterly placements the demand both unit premium the third quarter ever of remained was and our ongoing highest

important factor our our themes cabinet. strong the of base demand game the the premium is new EXXXX An expansion for in on

the Investor As we by doubled, installed quarter Stuff same grow continue we Smokin' second units of Week the third of the projected of in Shark units. the at more than our quarter Call, time, Hot Wicked placements Wheel number to the while end

Given confident these The premium prospects the newest at performance and build retain of to Vault in to theme this of our current our base. GXE EXXXX. portion and on upon reaction the customer favorable our Games games We remain

within units. is wide-area of in gaming subset our games progressive another Another the premium operations and contributor significant growth

an progressives quarterly year games, ago a that's from area wide increase premium make sequential wide XXX of progressive units XX% grew a about units XX basis our up on now installs. units of to of and XXX base Our area

the Karate progressive showcased would this GXE, that new Kid Empire game area a launching new third Mask, be this we're included of we At Monsterverse cabinet. cabinet, for on our games wide two the and number titles DCX The

form spring in of future. giving factor the plenty the for of foreseeable We launch this content it to new XXXX expect hardware

presents Renegade large and Joker's our Luck For Your Press platform, we XXXX game Wild themes. showcased Snoop the Dogg

new traditional Horrors, our and Stuff both slots Smokin' Empire MPX in Shop titles Little also video Respins two we've Additionally our Jackpot Hot added license cabinet. of on

and mechanical GXE at games wide to spinning real series new new area number customer progressive of reaction a of these highly including the favorable. was introduced also games, We games, also Zoltar

on New first our Jersey and games commercial linked to the jurisdictions, half wide launch Nevada remain We of area XXXX. in in track major progressive two

result, As confident the continue markets also during and of commercial our are our on in and refresh progressive area into us units in to other premium XXXX. base units. of allow existing grow wide to and games area progressive of we believe to will non-wide base XXXX in ability our our all remainder of incremental a add this markets I premium

while a small growth its be initiative still Our progress to business pleased continue Interactive we with venture continues to this nicely, total of our is part prospects.

year the money real in with was Recently, the in revenue went our third Pennsylvania. double ago Our quarter. amount quarter reported XXXX than platform live customer more the

year this into additional of the pending have operator half and first sites We XXXX. both Pennsylvania for New Jersey in and later

in Our will broad new a online be additional available games content of coming library base that of are includes pipeline that today months. substantial available a the with

continued expect to in We Interactive our business see growth in XXXX.

Turning gaming machines to quarter sales X,XXX average XX,XXX. sales. the our We machine to price in sold a increased and third

large terms that at declined, property While single nominal in to ago. a unit year note a a sales lease I we transaction sale would had

year. XX year, Without compared American increased In units last X%. sold this no markets international shipments unit North international with addition, our sale in shipments conversion, that had lease to we

that selling lower shipments. partially ASP priced reflecting Overall, steady price last was year's held the year would through our average unit international add has lower I the and

even the development our put efforts fruits being sales benefit is year's to to and were our force we continue on our the participation As we a the able of supplier infrastructure, investments to placing reap of greater premium of prior units. in nimble game that focus emphasis

that growing shareholders. believe daily flow and units value installed priority and From unit the of both sustainable our for premium more cash we our a win increasing per standpoint the customers base creates and

and margin experiencing. units gaming of momentum taking we of recurring nature the and advantage high are contribution strong committed the these that we're currently With highly full operations revenues, to the of demand

Now our We most exciting show had GXE ever. turning GXE. to

For two brand those to new game games our the this of who year licensed to increased and you it library not XX XX titles were show and to cabinets. themes demonstrated original we showcase of able make

addition a XXXX that expect for-sale factor discussed, in available the Empire be for completely premium also the Flex cabinet the we game XX-inch and and new with Everi, participation we a with I've products new beginning of In Flex video to form flex is This titles. the to already demonstrated monitor. unique

customers cabinets. discussions element demonstrating significant in depth with the in of our was our our key the of A improvement for each library

we only development of our not Our cabinets just confidence new greater them be also that also believe their our momentum recent success a we strength we've that content are innovative If we're footprint deep in we to casino with market towards new and continue their GXE showing. but our machines. real to they provide spinning floors, that depth on need existing expand our beyond denomination building library to able imaginative exciting products, in efforts our I done will have products, on current all not and content to mechanical support video floor. that have And customers refresh already with to ensuring most and high share sustains that only but with directed

was process. this every variety collaborative a team for Annual bestowed more Stuff from a Gold the honor Wheel many on Technology in Medal Global Business game often games. the many Awards. winning our our winning none our then employees Best congratulate a award. Hot they Gaming I Slot products development our team very of multiple successful Games effort with It's of and accolades Smokin' business in received studios product of creation for Game recently the affirming we is While their for of across have through our for sharing Gaming entire the Wicked efforts the

post gives to as favorable we've next held floor premium, across as our slot the on had Now Krycek taken by our great categories. such board We the [Alex] offerings. the roundtable level at me across discussion customer GXE comments games mechanical listening and comments of video range as multiple well Gaming in show, forums the confidence full operator to that

as and all of and our mechanical Our products. offerings, new well standard loyalty as FinTech video

also goal new primary development FinTech As in products the business the a of of Games business. innovative is

our to to received want Business for efficiencies example this products Vegas Las and members product and also across patrons a our Awards. casino silver which who service efforts for congratulate Gaming the solution, market. Gaming medal our Technology business is develop experience that We continue An on all Ticket innovative Quick Global consumer the enhance from improve casino I our best of in collaborated development gaming FinTech team technology India, to the of and bringing Annual customer.

business. our to turning Now FinTech

translated grow, of quarter year-over-year our solutions XXXX the for focus increases gaming preferred XXth third as resulting and That quarter steady transaction in the consistent our volumes consecutive execution continued adjusted both of basis. industry. total the revenue same-store We XXth processed cash to consecutive in a our into being our business, on access provider integrated quarter EBITDA. continued increases and dollars of In

customers, We addition also the the quarter of expansions base this ago. customers, increased a a revenue the customer existing new our in increase as over with XX% year as well led of quarter several same to third with

up X.X both sequential a year-over-year the was loyalty in loyalty was revenue business. generally sales up player the of a sales from inclusive equipment and quarter exclusive quarterly FinTech and player million was, XX%, growth on ASPs. basis of higher which Unit meaningfully

of sales of cycle placements early kiosk and unit customers, our for is stages new the refresh growth due was growth a to While our winning for primarily equipment. new portion a

motivated state-of-the-art cash of for high self replacing the casino access and operators many volume these to units. productivity the transaction service Given has begin need equipment older kiosks,

the products older coming growth replacement grow revenue year base benefit sales we years. will expand and expect FinTech from to this As in to further drive continues and overall that

acquired revenue products. XX%, revenues well the with support revenue Revenue sales from service and and from from including new license X%, player associated information credit $X.X is services revenues, increased comprised our marketing software nearly recurring as Organically software and and maintenance player this business. our and recurring of other million information, loyalty and our loyalty maintenance kiosks as grew compliance

well resonated with growing services as at our us recurring stream products promotional a were compliance with software offering GXE. marketing The of services, things loyalty provide products that one as focused of of and license Our fees. software-based many customers based

At products across positive cross-sell reception XXX was on customer continue Now it's base. time there of spring to our turning we call these its growth pleased that of we prospects. and to to extremely Randy, and products the integration and business, GXE, the locations strategic customer over I were business last Based with in of feedback opportunity the and about like potential. acquisition growth believed before about couldn't within that would loyalty portfolio I its be substantial fit product be our entire the our the more of to add

of to and our loyalty existing space a supporting our technologies upon to company. customers' digital for into, a potential becoming The strengths I while and our expand huge future provide Strategically, products draw a us third to and continuing engine accelerate products. of wide driving yet acceptance opens FinTech our tremendous This them growth. of opportunity grow envision the can resources

call turn over I'll to the that, with Now Randy.

Randy Taylor

you, Thank everyone. afternoon, and good Mike,

increased third $X.X contributed quarter. the business quarter of million in the $XX.X results both quarter quarter the revenues in a total XX% million, player Adjusted of XX%, a rose revenue FinTech increase record increase revenue. in organic in marketing third for FinTech. and third Games increased reflecting X% XXXX a XXXX revenue EBITDA in while basis, reflecting and by to X% and loyalty Revenue XX% The on Games

adjusted In our increased grew EBITDA and Games X%. X% segment revenue

EBITDA unit. the third a mix improvement year XX.X% quarter. mix greater higher increased of expense higher of the shift strong the compared primarily adjusted the in a reflects XX.X% Games offset margin as more of XXXX, to quarter. gaming in in win our impact percentage to The revenue per in quarter The to R&D particular the Our revenue improvement of revenue the prior margin and operations in daily than contribution shift

the to win X% on Lottery million The in quarter. record $XX.X operations New inclusive growth our business. of strong is The revenue the top year-over-year of from Interactive $X.X in York XX% million gaming year $X.X XX% quarterly unit a from and ago daily grew increase per operations million, our

annualized in As we increase entire $X for per incremental have noted revenue. in XX,XXX units would result previously win unit than more daily a million on year $X in

premium These of capital in improvements machines portfolio made performance appropriate strong provide of return. the the last cabinets. are game, we've that will our including pipeline our product incremental and across differentiated coupled the content us gaming of improvements, operating an discipline form the with content of This full in during reflects year our with range deploying additional

financial Premium cash units units across deployed each Based provide per new premium our performance the unit the less is returns. highest than strong of present some on generally payback cabinet XX win daily for average our months.

maintain that future with With over generation costly the several to potential cash refreshes. game years less

a our While our base high unit. installed focused installed XXX year-to-date, on up units and win is base daily growing we per remain maintaining

we prior and fourth in win to as additional Given double-digit focused on to make to increase the in quarter. investments, we continue expect our capital another see quarter, per being installed units, premium the base year daily unit the in compared

Interactive, of daily Regards rate business metrics average being encouraged per of and in are such that paying to add the would by the becoming to Mike's BXC conversion our comments the very advertising key I spend. achieved the revenue performance small, is we players; active although social user efficiency players the as our

our expect be X%. unit X% sales, Regarding to we now unit to full-year up between shipments

a not of fourth that the to sale, unit had everyone enhance we This purposes, prior XXX year's only the that a large to modeling in units major quarter. multi-property units customer year a selling but remind average last growth, also price. sale would your For contributed I ton

Our average for be of quarter excess selling fourth XXXX XX,XXX. of in the price should

Adjusted Turning to XXXX quarter the player our and EBITDA organic increased an XX% to a marketing XX% basis, business. million. FinTech XX% record increased $XX.X loyalty segment, million. $XX.X a to on record excluding Revenue revenue third grew

a gross and as check and sales, third primarily adjusted in SG&A revenues profit XX.X%, an R&D provide mix a for to a higher towards incremental increase contribution, decrease quarter in costs. third more EBITDA the XXXX. in Our equipment The revenues the warranty which lower expense XXXX of shift XX.X% FinTech was compared quarter percentage of reflects

experienced marketing of check which expect have customers. the in of our done we as The was SG&A for in us fully increase our warrant increases, couple customers the gaining improve other year. result FinTech this new costs our low. customers during the acquired to just with the loyalty includes was where with expense increase primarily expense, our overall R&D cost and our was quarters of this reduce next past warranty level business, with allowing experience level March it We player patrons to and The associated as the in new

focus world avenues two in casinos. have testing we travel and addition, innovation our growth wallet, efforts which In provide for digital in the believe increased investing This on such that we club at is real significant our as demonstrated we development will future product at GXE. cash

FinTech expectations individual business, remainder the of on commented already the our the but on of I Mike the information, focus year. won't rather lines for Since repeat

quarter revenue We business. growth fourth double-digit the our in expect to report to FinTech in continue

growth steady continue driven our new for overall should and sales which the expect primarily We the benefit will from equipment be information by growth of from access customer kiosks macro services, services, to wins with additional loyalty marketing and Faster cash our casino and inclusion revenue pipeline to other in and sales along net operations. openings. economy, equipment due strong

on to comments products discussions, revenue To in based expect loyalty and significant on services from business and loyalty into echo QX continued growth in our we Mike's XXXX. customer growth see

We the related XXXX, low to loyalty acquired expect SG&A in reflecting and player costs. full-year higher double-digits, adjusted operations, to as as FinTech costs the from inclusive grow well and integrated of the R&D contributions EBITDA compared

year-to-date $XX.X the the and reduce third generated on billion for commitment $X our amounts XXth the and to Moving flow outstanding to we the have down reflecting term on $XX.X million to loan end we down credit free September of we million. the of the our paid cash million ended We sheet in flow, revolving declined balance quarter XXXX, paid nine under our leverage, months principal at long-term no on had debt outstanding quarter. and cash our $X.XX facility

loyalty our the to business. of initial payment million the on $XX utilized also acquisition products make We

our ratio a the quarter compared As ago result repayments improvement in end, with leverage our adjusted at EBITDA adjusted September at net declined debt one to of debt XXXX EBITDA and year times times X.X September total XXXX. five

short-term net is believe this under XX trailing is achievable X months. XX for We Our getting total leverage the debt times adjusted EBITDA. it target next during to

toward goal we The and times to adjusted at to that use use longer-term grow maintain total alternative our basis, To leverage approximately times complementary debt is free debt potential are EBITDA such flow accretive envision currently EBITDA. to accretive the target the free only tuck-in net , Our we acquisitions of cash business compelling flow adjusted continue a and X.X X primarily achieve repayment. -- future will leverage cash achieve with we accelerating be would a would for might on such highly delivering loyalty acquisition. products as trailing

with In the final CapEx FinTech Games million This $X.X largest was and we third fee June made Player were our quarter, effectively CapEx under installed million. Agreement $XX.X in was placement quarter the about locks million Station XX% of the totaled our fees XXXX. capital placement and segment customer the $XX.X in payment total segment expenditures $X.X until Oklahoma. footprint million. In third

For be to expected just we and over expect going placement forward. are million $XX XXXX, fee placement the fees full-year payments minimal only

and games added footprint the to high-performing, to estimate premium XX,XXX This $XX million to games units. fees. year-end in between CapEx CapEx while $XX $XX our the units $XX placement is XXXX total afternoon, achieved gaming of expect CapEx, expectation being $XX our the with is to to between the range million Games reflects installed and $XXX high-margin CapEx million. of being increase momentum inclusive million, raised higher due units. million now majority and now expected to of The our premium reach $XXX XX,XXX total FinTech the success we our million We with for a million

for reiterated adjusted we million outlook be $XXX a range our $XXX to of in to afternoon, EBITDA million. This XXXX

aligned While remains in levels and making XXXX our sustainable as and growth level reinvesting activities tight in ensure also outlook strong, are as into competitive with incentives and our well development this are we compensation sure to growth we on this revenue our maintain focused labor internal market. growth beyond, that a

including well the R&D revenue as includes guidance and headwinds mix and from as operating foreseeable opportunities, any impact shifts our full-year and Our higher vision, costs.

expect an expense total $X amortization be expect between million million $XXX tax expect to depreciation million benefit and XXXX We $X and We of be and to now in to $XXX approximately cash million. tax income we to record less payments million. than $X

of outstanding exercising diluted experience and modeling the equity For awards. recent given to related shares employee

the to XX We count slightly approximately XXXX. fourth share expect increase for the diluted million of quarter to shares

in Finally, XXXX the with to range free return as We now high a of to expect million in our million flow of XXXX, $XX installed XXXX. to second in grow to premium result of cash units. our million $XX continue higher -- grow compared investment from half base to CapEx $XX

double While nearly we cash likely flow we have not in XXXX. that completed our believe or budgeting process double free to is

final on With grow Of in amount in maintain new unit, from further dependent win growing funding and our long-term installed CapEx EBITDA growth. base cash flow our again and the free which our of course, turn revenue, success fueling will for continued adjusted per growth business. our be amount will on foundation gaming will the the focus operations we games, daily

will I now to the for that, call back the operator questions. turn With

Operator

we'll from Thank take with And Davis Raymond you. [Operator James. our first John question Instructions] today

John Davis

guys. afternoon good Hey,

want Just to…

Michael Rumbolz

John. Hey,

John Davis

units given further in the the what the here in about improvement on it wanted guess, midpoint so installed Can those up uplift out placements, think think, coming that or from the, quarter-over-quarter. about a momentum implies obviously XXX premium expected fourth base you Just or the there, I touch of percentage break I higher. were to I is X,XXX at quarter,

day? just of premium or about -- how of coming the is think we that growth per placements, support do incremental higher from then double-digit most So win which kind would in

Dean Ehrlich

answer say To units. Dean. come the is primarily growth premium that will this from John, Hey,

John Davis

yet, the -- again are still Wheel you're Shark Vault that? kind are but is what premium starting available Week of The sell Any or Wicked driving it Okay. to units

Dean Ehrlich

been this of Those the but give be both -- to being that should are We The of the out, would at mind bit primary little deployed three Thanksgiving. bit as initial a Week mechanical have of install released as last Hot Vault those that year. well, little coming say in I well. since the prior end a Shark our Wicked that's drivers boost also are us in we keep are Smokin' a Wheel point, the will still help

John Davis

looked the Okay, a How margins lower of by acquisition Then on is there we you the made puts for versus maybe in a if kind do and here kind just hit second? the payments year-over-year takes much you quarter into just what thanks. Randy and on of us a investments the want those of margin potentially at basis, remind organic business. to as on decline the head margin driven was fourth

Randy Taylor

I the John, a revenue. still of would acquisition, lot on say, recurring got that it's look

fact sold that So it's than have we the been in really sales the more past. equipment we've

with their we've and got revenue It's lower stream. enrollment a kiosks. sales with So even a though promo and nice the recurring kiosks margin

equipment it's strong. So think that into will hard look we the sales we look to quarter, think, still be fourth as we say, I --

impact be business, recurring to got actually but well dramatically think overall in margin, And our bit what they're more -- think very probably here, nice it's source, a it's a it's little been you've the better we on have to going will smaller, as them. it's from because as kiosk. and margin margin revenue So don't complementary changed it I our I seen

John Davis

of is sequentially similar kind of I change that you're then, if And you still last adjusted than Is -- holds XQ in comment forward? think that that call, and you Okay. the previous made looking think years. towards guidance going EBITDA that be what on that expect to or a the Any range? more and quarter the end high I would XQ

Randy Taylor

seen probably it be we've that I back what So, the go normal traditionally fourth been, much believe I and it's I not same, be would will as but than we notes, will don't be think say think quarter would the I is but the in don't decline to quarter. down, that much check your better I I fourth have as know as think John

year. going you have remember, the of So, GXE to yes, that and are all costs you some fourth this hits like could quarter hit in

little but that So there hit a that are down some I pull might cost, other quarter will the SG&A in think bit.

John Davis

Okay and me. one last for

to at look should next free my so, prior the EBITDA. the expect just out. to by or is you kind $XX you we CapEx think low double million said kind revenue to would in the right, flow million I million I math of dollars $X we the out dollar incremental you cash guys kind of year, million of As almost through How about to target, you be which guys win increase had think, $XXX end of think and laid day per said $X

should offset guide? XXXX So how think, fair obviously change think should year, EBITDA we you're raised that cash the be this to incremental any incremental should the But about think real guidance the you flow CapEx? upside free there So CapEx no what CapEx, investments. I getting I is it to think

Randy Taylor

Look, will on based on, done as present it's perform, they've great. they it's know, and all John, stay all, -- there you out

stay our to indication I now right perform out from won't is So there well. that standpoint an don't think that and these continue

we use the may more stands demand if flip to demand, the side, we strong. CapEx XXXX, in On continue get the if

you promise my right over not as stance now. So normal going look, I'm to know, is,

I think I'm right, not done deeper So not we you're should it they with there, if so yet, really will, stand because that just to more which thinking into about those go we're that. things forecasting our again but than it prepared drive just expect out revenue,

John Davis

thanks guys. Okay. right, All

Michael Rumbolz

John. Thanks,

Operator

with Boyer Brad from hear we'll Stifel. Next

Brad Boyer

congrats quarter. solid guys, on taking for thanks questions and the a Yes,

the First just is close around to quarter-over-quarter, installed in participation was question pretty base, increase the premium impressive. a that X,XXX units,

just broke out? base, the that there non-tribal sort across tribal, the be size and to out sense of operator of sort if there assume I units would helpful skew mean, were well I that those curious, spread was any us Just could that there give given a how pretty of but you

Michael Rumbolz

it's particular would the skewed not area, one I or say to across way board, one another.

Randy Taylor

Yes, Brad, it was…

Michael Rumbolz

it's to of Yes, -- the we can commercial I far in mean, we're and markets. get out is it's as trying allocate three, tribal, and terms as two throughout

Brad Boyer

this the business solid. about for of talked there, consecutive in but of ahead little sales I a the we pretty then And with the quarter was product for element came here, helpful. was looking FinTech second Okay, John bit what

for a You little cycle you're kind FinTech? ahead, about Atrient in you tail you have a this look think combined with seen you guys expectations we do some think of of kind of do the of accelerated out revenue of kiosk obviously tail, What had we bit cycle? conversations at coming sort growth for product replacement replacement around this type of there. we've I what talked Atrient's your segment GXE say guess, in should in as sales kiosk

Randy Taylor

would strong continues I very Atrient and it It's had at GXE. to buzz great look, be say

think well lining us. up very I for So it's

so are this far kiosks. I still into I be replacement kiosk year. hard loyalty to next Atrient and is cycle? Well, fourth drive going older But much how going what seeing It growth is the I forward. think quarter. replacing their And we're in expect to the customers with driver going to to it's determine a grow you it how in -- know it's And

Darren Simmons

regular Loyalty that XXXX. well, into new really to the think And Yes, Randy cycle Darren, contributed just had and I front, as is just again I replacement kiosk it's early Brad we think for expect would sales that the in on growth. that's there to performing continue then kiosks. that I still add business indicated, we've we're

in QX of expect and and QX as are those you're what that seeing things as So what combined XXXX. I into really happened in to what far think happen all would

Brad Boyer

of, that's your mean, commentary the your sale had growth slightly the international from is full-year around XQ it, the at you expectations. some that for at last I I at some product some going you provided units, some sales, some growth one-time, if looking conversion at be headwinds we're then from then, factored sort of me the look of just projections of you And one last Day the around the into lease time 'XX. below metrics that you obviously based Analyst had And the year. obviously for on to but to accelerating there comp and throughout Okay.

plus sales product today, or Thanks. needs way be from be know, going still I you where we adjustment there the as about kind of you And kind how in me. of view forward? growth, guys of, should think some that's sort we teens are do think And guess, I about you mean, number given it realistic that? to do thinking we

Michael Rumbolz

to think we're and of for come growth ways Brad. expectation that in that have recurring premium that I the is full-year, interested machine the four, and out going years more side. at of I terms I'm machine the unit amount putting and it out personally to on sales much to unit of be it opposed I'll look our that the ways one one is look would five stay of probably do particular selling the at But in in, that still in Sure, as Well, mid-single revenue I from three, digit a participation make profit someone. our

had we of quite going robust part as originally sales in may be they our part are important units of that Now put an and we hit premium be of are of because can some the -- still out future. in as on the partly installed not our still placements. base important in us the planned, They to

need bring purposes, So means that a also for to it but little, may to want base installed profitability. down modeling up you your you bring

Brad Boyer

Perfect. Thanks, Mike.

Operator

from Jefferies Next Katz David we'll Group. with hear

David Katz

being Good of go to flow doubling It free on one I afternoon, evening, risk everyone. this are. ago repetitive, was quarters depending points. cash the that about want you a we of back the earlier Good first talking bit where of to a everyone number started year. At

be two last may edged which the is $XX, And one, for good bit? in CapEx have forward year? -- performance reasons; at would we potential becoming sit of and so have that bit How the up I How $XX would a can and secondarily, you in just us just bit that; budget went a have -- with little million variables two think that a variables little $XX about those we direct. today this you year more here context

Randy Taylor

$XX.X, -- so $XX try in So XX, always factor that get I it was that... to we could we so say was would answer

David Katz

absolutely. precise, Being

Randy Taylor

that could an gotten like we we -- we up, free $X right, this $X what's extra happened going to year felt to more if of probably than next is going call would probably have $XX We David into year. That's CapEx me $XX pulling we're this million that have to… pulled say, are you're I closer into we some and could to really as to to pushed year

Michael Rumbolz

But have have placing Could was to have expect now we're Randy exceeded out to CapEx easily very importantly, exceeded. as -- allocated that more could years. saying we and that producing high for products

Randy Taylor

really year, next us sets David. think well just up it we And

the that gotten on could was CapEx the could it but think based we mean, I the we have really open were And so, there, and I seeing, demand have, we gates. that backlog really we

Dean Ehrlich

to this Dean. just that. David really David And to add

even Our at. -- backlog what the as still was is we started same still QX

never an backlog, challenging down. So do look the on this extensive extra case out, that that XXX of backlog you most lead really That decision units, we at to seriously would either times When out want had, place you quarter-over-quarter real go think not right? fulfill not or which extend the you premium in your in flush you this did situation. would

David Katz

way? Right, we're that dollar increase that taking CapEx point double some There year-over-year. along to of some the of flow being operating out offset been of and okay. has a not cash the for dollar free improvement My

Michael Rumbolz

Yes, absolutely.

Randy Taylor

definitely, most Most Yes David. definitely.

David Katz

think way, flow. were about terms? part the of could have And it a numbers qualitative specific in pretty of As but notionally million again these any the talked to getting free that in that reasonable us obviously we I I a increase you I to had way question, still there while. think having a hope stay Is think cash of substantial guided $XXX you into we that rolling not north that and second about think XXXX, being,

Randy Taylor

goal I'm to think David, going to still think year. I Look, I $XXX we as that's know, next believe our out you a million. double can we with, get come to

don't a the think to to will always perform there. I you units, unit we with, we it's on they other hopefully stay If are? we're know, but with out these refresh I If that I the $XXX, there can realm to where them up that is way. to my I different the depending don't if to of if have and they is end think at think number outside top and do, It's possibilities. end $XXX $XX going you're titles I get don't out and continue $XX do year, we I they perform don't reach and a want would exceed that why we or that's feel we'll the that's comfortable we you're $XX, say, number think same still a them continue look, will this So way put have, they things to different story, to

David Katz

refinancing about may. last When me, together I there pursuing see at were Last rating was if the some agencies discussion about we question GXE maybe from to opportunities.

have Forgive going me, a lot this and calls a couple on of we evening.

it, if I there is So there? any but you commented apologize, on update

Randy Taylor

David, they most put know, very coming know Well in -- in It's there is of that it, is one, we're to until are our But not believe will on do I other a update in been receptive I and have they out cases, best rating to to necessary. leverage change, you know, an some our them why of you out are going a go meet driven front on our we to a point. we're guarantee and but says, they rating formulas level they get to we improvement slight case these can't out, I going anything as formula that yes, didn't at improvement this very and update, likely they to improving. calculation, we than any to there Bill and you and three with have don't comment we're as to they've discussions trying going we're is all be just, really will but have we December agencies. understand -- --

David Katz

coming you're they coming you're for? and why know know They

Randy Taylor

That's exactly, right.

Michael Rumbolz

Exactly.

Randy Taylor

Exactly, right.

David Katz

thank very Okay, much. you

Randy Taylor

Thanks, David.

Operator

Now Beynon we'll Macquarie. with Chad Instructions] [Operator hear from

Chad Beynon

operations Hi, we've from some the good day. relatively for expected gaming growth the than taking results domestic better the benign questions. after Thanks afternoon. of Certainly Wanted particularly about most on to showed my ask slot who I per operators, win side. seen some think

is a premium the new units are clearly bridging games better up they or So, just doing either year-over-year legacy with on of shift there. the than the kind your difference basis were

So, specific was kind too quarter about or driving is over just But not increase, really a you're because wise percentage year-over-year talk here. was up sure basis day I either on get and $X what notionally this believe $X. willing the you win if it to can under last of per

the better legacy just of just a really lot that are the this life there's the or of a the factor if still how a them knocking floor of games absolutely and to means on get is premium it to sense park? Thanks. units stay out for doing, left if trying of Just new

Michael Rumbolz

Yes. Not a problem, Chad.

content portion win on is are question But going better, being as our all, in are you it's our are is it's as result a First well, premium my day. they've their larger really, both mentioned a games those base. non-premium the unit our XXX of also extremely prepared our and become standard also there I they up larger and remarks, doing per per and the are games doing of just a in had the units as see better installed player no machines, received we quarter, becoming obviously by

dollar both, I combination mean, say it clearly I think So as them, it, is a I them. a skews put percentage completely probably of earning a hard on towards premiums to they're it more, but I are basis but skews percentage the a it it's to mean, on wouldn't basis,

Chad Beynon

Okay. renewed Can if CapEx standpoint. you. what Thanks, and your are remind a expectations Thank process, this us roughly would York from Mike. then on renewal. contract in New Central And you that system the just mean where we determinant

Randy Taylor

it's a this ends and before, really it the huge a we the I were it's I there so contract just now, to so it's amount through good it's to about as but things, takes this And these want current just -- not if think year. some, significant the of you don't be standpoint, -- issue have a for -- for that contract but ending going year. selected, I don't to that's feel signed, be involved So finalized. it's it's we would answer We where I we we're expect agency bureaucratic do effectively went from we've We end until for is and CapEx I But end that York, we a and our signed, of we're an we the CapEx before at say know, signed, we to of but just state see at. us. this would get at. it's time once do New continue update people to at be some have questions upgrade where a not had to -- don't

Michael Rumbolz

standards on would that some our that understanding had there to that up be should the we spend money of bring anticipate to you to included today. things bid And

Chad Beynon

Okay, thank you very much. Best of luck.

Michael Rumbolz

Chad. Thank,

Operator

from hear we'll with Sutton George Next Craig-Hallum.

George Sutton

could at loyalty you end item. your it Mike like you meant by the separate envision growth a becoming what item you of would prepared that your a third exactly almost be line driving I'm said comments that? curious

Michael Rumbolz

mean an and can extremely the with we including forward. other world, don't said because that having do view were say become for digital is going will us separate coming as with as Randy Well, reporting, could important is things the uptake kill But digital clearly products business thing attaching one otherwise driver requires that, what it that out the about I that it space. I segment the growth that talked to a and should, loyalty FinTech that in the I because me, it separate in I we've previously

But it into As still just it's we is, digital it I a can in in growth think it bigger. take driver, becomes today. even spaces great if realm, the the

George Sutton

on getting the what actually for me, way there spend of incrementally you a for are last spend an think understand. is that or Okay, that pulled from CapEx to you And spend? ROI forward, us that incremental

Randy Taylor

Vault it, our within the years should That's strong may coming less to than have behind get that's -- we got we they to way where XX to that. a why Dean lay out to units, if back cost, exactly have is units out is. we on those it we Dragon the expect and premium George, way another out that three game little have -- try and the it and with refresh we we're cash the behind i.e., knows these stay pipeline very is theme best why we two months expectation perform there them

And unit up in they're -- cost they win daily more. the Mike daily percentage how so a making talked about per per as kind it's that works, of But, unit. win little bit of higher percentage a that

just be them challenge development think on is out we fine, side investment good you in the it. the going it's team it's very keeping just and keep So the theme doing a cabinet can, is and as they're to is what Dean's to long and because there as the

George Sutton

Thanks guys. Understand.

Michael Rumbolz

George. Thanks,

Operator

our SunTrust next question. with Jonas has Barry

Barry Jonas

Hey, thanks.

like I to quarter a competitor Oklahoma with company So wanted start with last specific in sounded cited issues market. that

Thanks. Just the curious maybe if their outlook installed issues or your current base had any your for market? on impact

Michael Rumbolz

they're we're experiencing Not at that. what on not comment I but all, can't experiencing,

Randy Taylor

both a to by and are very premium and market And be to well continue still content we the our looks, doing it Mike be strong new and improved continue for our out our standard there. as about talked Barry put us

Oklahoma in very are still favorable we So the market.

Darren Simmons

commented Mike And is, it's earlier, had as would I it's just sorry, add would across Class not only entire I base. and Oklahoma, that. add to just to that, in which I'm II III our Class

Barry Jonas

in cost or customer change follow-up product and Understood. cuts on from been And I less customers? Or placements, tone a factor want net-net, any sales sales. environment on guess a shifting this for some clear I then relative your the noticable is consolidation has be just there just to maybe to to really that budgets? is weighed

Dean Ehrlich

say see don't hasn't slow every been What be markets in the buyers inevitably the new to to GXE GXE the anybody is though towards the that extent happens will change I year until marketplace. quarter tone. and in in expect casino products not to and that know of coming the out up come people was in to managers it's role are are I data in lead at quickly a what they indicate the that a end to to those going is tend GXE third slot really noticable there and what about the happen. position No, to or whether that would And is how

I don't it was don't consolidating point. -- back or was it anything to it operators at I attribute with think -- do wouldn't think cutting So I this to

Michael Rumbolz

got Barry to it. want very, we with Can product And in -- happen? tone Barry XXXX going because predict customer to what's going the I original bearish things side, all the lot from very us a play it, a with that from GXE it take lands. on cabinet itself of either to introduction standpoint, Having are excited sales, No. we're and I out there our we we of on and our our we lay see introducing content brand-new extremely but don't original noise have we're a want for about little to that bit Flex of of content about kind XXXX later, where excited a all

Barry Jonas

Great.

pushing a positioning the stands competitive on that hopefully one, competitors quick quick some wallet, a products, on where every FinTech a Just one product? maybe talk about just mobile, side your at GXE of from were

Darren Simmons

their going platform with set our Darren. ourselves for as with strategic deliver be we right good use then of where of And with very Yes, customers view large gaming consume technology we're one Barry it. they're and spot on lot loyalty and looking our able player A it's acceptance up we're and we're key one the are that in way at as large how entry Yes, I a floors. is couple expect we us we've there they customers tribal right our to be to this. a that customers into to are production shortly, got into to is prepared mean, the there,

Barry Jonas

guys. Great, much thanks so

Michael Rumbolz

Barry. Thanks,

Operator

Our final Bank. Chichizola question Deutsche will with come Ricardo from

Ricardo Chichizola

questions have my been guys. asked and you. has -- answered. Hey, All been Thank

Michael Rumbolz

thank Well, you.

Randy Taylor

you. Thank

Operator

for over I remarks. you turn your closing to Mr. like for Taylor would the to conference questions. Thank

Randy Taylor

joining afternoon. for in full-year results us. discussing quarter forward you you our on fourth Thank this call us the early to with XXXX joining for We and Thanks look March.

Operator

today's may conference your conclude participation, Thank does you This disconnect. call. for you now

Everi (EVRI) 5 Nov 192019 Q3 Earnings call transcript