EVRI - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Everi Holdings First Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to our host, Bill Pfund, Senior Vice President, Investor Relations. Thank you.

You may begin.

Bill Pfund

operator. you, Thank Welcome everyone.

reminder call covers and a our harbor with safe of webcast. which begin today's disclaimer, me Let

Our discussion differ other and will and those and posted discussed uncertainties contained contain are our SEC uncertainties forward-looking statements could in earnings not actual filings that include cause in but which results limited These our in to call. materially are those which from risks potential risks, the statements. everi.com. today, involve the which to risks in of and today May as section Because place to to statements, corporate of We obligation made any update intend forward-looking are at website you XX, undue Investors our not assume on XXXX. not no only are forward-looking cautioned of release reliance do

FinTech to the such non-GAAP We GAAP directly website. the cash in our are A is Games section On certain EBITDA, free Officer; cash link measures Leader today on X-K to and and each measure recorded. in webcast Leader. the description This our release Business be of in Ehrlich, non-GAAP and Financial Investors reconciliation adjusted most financial General flow the section replay a Business of Mark call our today's our Randy as net earnings and position. Officer; found and comparable related today Taylor, webcast Chief call can Chief and be our Dean Labay, will measure found to call refer of website. can Darren Lowenhar-Fisher, Counsel; being and A Investors Executive Simmons, Kate

turn Randy to the to pleased Taylor. Now, over I'm call

Randy Taylor

lie joining I views for first as morning, the to with am Good CEO momentum that everyone, of company. ahead my for us. is This my and Bill. call the opportunities you you, excited share and Everi, on and thank Thank you

continue personally. I that, great incredibly to an look is six meet doing and mentor the collaboration as to outstanding we in a leader grow. to his thank for coming our successful continued would Mike CEO. to I like as Before years He forward years

During achieve operating the have years, a built and growth foundation to several success. we last solid steady

to on been so us focus we have we on can successful the execute priorities control. what forward, our continuing Looking expect and for that

expanding and services that gold We standard. of near at portfolio the an or have increasingly products are industry's

Our and growth iGaming portfolio and Digital products, such our business including established, includes our and core cashless profit-driving Wallet. early-stage products technologies CashClub as products

such new and as those new We Gaming on acquisitions development as have even Atlas Intuicode through as layered growth Gaming. METERSXPRESS and holdings well and teams resources exciting XUVI like solutions Systems opportunities and from like accretive ecash software acquired

We to us and culture new people adoption of have deep execute and corporate focused dedicated a innovation industry. casino the in talented to collaboration. a on technology consistently with and This and bench growing drive enables

transition us our Importantly, debt tremendous to to now service success to or our our only enabled leveraged generates highly to for return growth from to that available our free to cash a company substantial flow, business invest shareholders. in further flow using has cash one

growing our increased our recurring XXXX XX% compared and quarter, million revenue a grew and of of period is on proportion roughly by year-ago profile. revenues first continue total and non-recurring even as $XXX In the Our exceeded revenue. revenue or focus this revenues to the development XX% revenues recurring XX%. efforts XXXX, large to base maintaining comprised In of we substantial recurring sales

and momentum FinTech share to both segments. as operating in our our Games grow gain we and significant have revenues We in continue businesses consistently

major is by continue our expansion suppliers highlights few Games iGaming XXXX. to who from operations. our a share increase of and the compared provide that first me revenue one grow, in gaming have base Everi Digital operations and machines let grown observation to gaming an of driven of gaming segment, only two some our perspective. installed operations quarter revenues Now, In

every base end XXXX, that of installed XX% end sequentially the time. having increased then. the is supplier any period This since since highest growth quarter during of Our major up rate is

Our and of gaming from revenues adjusted is EBITDA total installed expanding by the on growing games. focus continuing total footprint operations

While important to which consideration, take business. XXXX, both not and per and overall win taking win into since performance how maximize per primary unit. it grown has daily substantially unit is evaluate an the is our manage on metric by unit We metric longevity we actions

operations I'll quarterly XX% year-over-year driver and revenue gaming An increase units, recognizing in up sequential is sequential was should our base important premium base before a be We recurring is may by on XXXX. potential positive which some QX highlight XXX the earn revenues the capital, total quarterly than generating a based installed of profitability. the committing return. installed our of that basis, on grew cash of and in sustainable a others, opportunities basis. Our primary growth our units from flow evaluate each that units more and driver against all return but by

as our further we expect premium to significant development to XX% have plans XX% grow of premium new we pipeline units have to an all This our to We a and continue estimated launch increase North only year XXXX. of support in a products. we as premium premium units compared expect of more in footprint America, XXXX titles and

both an acquisition represents, were XXXX I believe successfully notably total unit the for than Taking will growth market quarter. trend. in leverage revenue in more our everyone XXXX. through XXX in remind and sales gaming XXXX the incremental add improving to share units content increased by or in machine a our Racing would player-proven library XXXX our We an latest new Everi's opportunities. this were market full supplier the of that first recurring pre-pandemic Horse to content units sales We our replacement record, all-time major XX% Historic into year sales our expect space. the the of and increase only also sell industry an ship in we

GXE cabinet of grow reel quarter. the I as of our of opportunity and an a already new for we game robust themes comfortable have share development October. ever, end, at Signature Similar plan have was game on throughout Classic would second our ship to mechanical is also become new as cabinet, unit a sale games, premium displayed with expect the increasingly for highest pipeline new purchases. operators we XXXX. healthy second capital I execute plan have placements our Player will to set in we additional for and quarterly that to we this new orders We continue to releasing new record a highlight to first quarter our like for which backlog at last This sale installed our

were revenues were we Digital to few suppliers several when to go up division on Our sequential iGaming April Xth. basis. We expect out year Subsequent period on XX% prior XXX% the live end, over the quarter. day, to and market a the live quarter we go were quarterly on increased one very the sites in other by opened sites of this with Ontario, sites featured XX first six and of the

of few segment, by the were to new a from year-over-year a X% represented was which by including billion games million customers' year. and expand delivering transactions, the the about June. sequential a expect in and to which our our total a more or $XXX operators set number will quarterly than basis. more prior CashClub our record QuikTicket than some the the to funding, insight FinTech cashless core of Mark solutions progress Ontario have up available billion casino total we end activities through X% additional into floors. in access provide driven of our financial delivered, is record of on significantly quarterly This almost XX% up Of also $XX in of cashless by minutes. In double business number our funding We $XX those Wallet funds

the We of have kiosks in market terms Australia, of is acquisition largest which the entered voucher that the of after provider to in redemption the market. machines ecash second leading holdings, slot US

laundering in our US AML integrating Australia, products such We our selling more or achieve from distributed available gaming. and software such expect up-selling to while capabilities U.S., into kiosks loyalty smaller growth as as the and their anti-money markets also of into

form acquiring and revenues successful driver was for and core other of record category many it our services maintenance Credit success. complementary our products software the the of major businesses has and our While of track our years, been Central that

ways RegTech resorts formed and software into MGT New category. Everi moved our advantage services loyalty Atrient the and while player

rest powered to products products. than we business. complete loyalty and from our our we and quarter brought of which our we them software XXXX. As in our software-as-a-service double engine analytics marketing XUVI, When $XX powerful we built an portfolio, that adds capabilities. powerful acquiring we to is most generated our build generated for began total the we recurring in with product loyalty a revenue the comprehensive acquired in industry QX first million The recently, we standalone capabilities. loyalty AI these almost element promotions a We integrated gaming include strive more the the onto license the of platform to products Most

and platform digital neighborhood continue added with efficiencies new more our we growth strategic benefits of to cost with products for operators. and As strategy. enhancements across product three-pronged model casino our our general, Applying broadly, injects our in the expect integration

and and portfolio product in Games First, the expand we FinTech. new support our both of will products and internal development enhancements extend that

products, geographically expand presence where the total markets underpenetrated. businesses not continue to into we historical pursue tuck-in grow assets or to we will have add and our new will And, a we and Second, where of third, we currently geographies addressable are had market. that categories product acquisition

over turn me let Now, Mark. to the call

Mark Labay

Thanks, Randy.

gaming January their revenue patron Let our a and Omicron volumes the a concurrent Overall, March the access for income, have off is an April improvement had in We visitation volumes quarter. we per as net slow steadying adjusted we our of set share on with a in through increases the financial On consolidated total recurring all saw a carried overview. and which same-store recurring and basis, me revenue, started with little first exited base. begin consistent February May, and and impacted in of strong recent streams. that customers. revenues quarter earnings quarter revenues, with commentary EBITDA. strength operator in into player records financial

note whereas the while did previously the not to unsecured the XXXX prior interest have payments quarters, quarters. the of quarter fourth our This notes the I on the as cash interest cash result in $XX shifted generated quarter also of the our that refinancing the summer, free of a increase quarter of over our first last on XXXX. included we should that been first first a an payments of paid quarter first in similar notes $XX addition, first third million they was unsecured and XX% timing flow have In completed and year semiannual means million, second payment.

well demonstrate Our perform core attractive opportunities prospects. growth growth businesses continue continue to to our and early-stage

that with and funds manage focus me of last Let one QuikTicket through new casinos, both, million high Wallet the $XXX provide casinos these floor our averaging running funds through stars, cashless at in This than volumes customers cashless the of as cashless to quarter least had In at some months. flow offered our provided funds of on CashClub XX% our the delivered options. casino first rising fully of X% as technology. of over evolution integrated of our XXXX, digital one customers our our our approximately as for XX well total the cashless a from funding the solution self-service as delivered was more includes cash total our year, floors technology. of driving options are success of one to In kiosks

Wallet metrics XX,XXX newer our That is the total increase offering, an at which a jurisdictions Because CashClub industry. XX solution, today of volume stage and therefore specifically supports of of received digital as subset are cashless feedback our yet technology. Looking solutions live this number customers our the leader the nature our is small, customer the activity we casinos smaller across cashless with X is Digital the from base, casinos is have position not still constantly processed XX jurisdictions penetration a level cashless positive our These beginning and in and of This though for operation. the utilizing digital combined it wallet, early year. with year-over-year the for pool casinos useful. of the than product relatively of of slot total machines XX gaming X our the wallet of in solution, market entirely analyzing from in at is growing. patrons more Therefore,

XX% over the by However, individuals of XX, of are of individuals let all more share the interesting XX. the held me ups, observations. held are the sign XX% some our unique unique early wallets by cumulative of Of and age of over age total wallets

of who even known typically older had funding When We've transaction users seen As whales, dollars services higher exclude wallet expect, who they cashless an the patrons at disposable their an those we previously from income averages. distort the drive who loaded. handful the use obtain by the would the we look our level have wallet. more data our you in cohorts, nature been to to and to total delivered of can to individual switched increase funds after

would line account in via As well gaming amount with of in satisfying a overall aspect. factor number card, also smaller that The a cashless continue majority transactional the was the as average come is cash but of from size data. to our average expected, which a convenience It's from that appear roughly patrons we debit is the transactions it performed. of to responsible the note transaction XX% for driving transaction, increase transactions

wallet the our they customers new all patrons, utilized strategies these current users has actively varying seeing are While base how customer on added wallets daily. market

average For new operators about wallet wallet to actively sign to users daily on who are casino choose X% X% promote the of wallet ups. not

On marketing XX%. number with January new of XX% day. of to users XXXX, XX% program, operators to a XXst wallet more users the March wallet unique wallet from the of the While approximately basis, increased using Xst same active by location see each

our casino front. new cashless have product evolution that we XXX and at offer still to implement customer XX we the another now early, a across advancements are we XX working relatively While seeing QuikTicket are our locations than casinos, our wallet of is at space more broad Currently, jurisdictions.

these new not customers expect are for the name new to live with liberty just important implementations all wallet currently by we assuming are required approvals. received It these new locations note of We go to the is fall, that regulatory to yet. they that properties at many

we I new While to Games new important FinTech point early the us additional that growth give specifically efforts, in across it's of launch This months. for out planned our and coming products success opportunities address our the both, cashless have businesses. also should

million. the to our guidance adjusted to to million. to outlook. for range raised we Today, of $XXX This $XXX range $XXX million from an on $XXX of a Moving million prior is EBITDA increase

confident ability challenging particularly true in still and the environment, growth we early in This flow. While cash to our a year, macro we free prospects. continuing generate are is remain our to address for

Gaming should half potential the Intuicode add only the of acquisition in opportunity recent Our to the of back year.

expect resulting Hot specific from the year, from the casino of casino in including quarterly openings saw the cash vaccine other arising in As XXXX. net free we look and hardware from White occurring second proliferation to machine income, and the sales results quarter. second quarter, despite exceed EBITDA will be government the second quarterly above-average revenues, year's is last or line last This activity that benefits, financial and record of comparison difficult quarter flow we gaming stimulus, with we adjusted the new

our of to We now the robust believe in me contribute will growth of share base new games operations. opportunities installed shape some our pipeline our that outlook. of challenges and Let gaming ongoing

the of We return visitation with our footprint result casino expect in growth steadying further combined base the that in ongoing revenue to installed growth. in

some expect as continue year. range our well remaining which we normal or reflects full traffic above to seasonal as quarterly rate impact We do casino healthy at year the do, the variability to win unit $XX the As for influences. due the throughout per the on around always daily in

Signature sale increases released of recent the by generate improved sequential newly our our combination growth our capital gaming mechanical customers. launch a by casino cabinet, of and to driven Player in spending share, ship the expect machines, We Classic the of in

global continue managing address as ever through To-date, that's challenges an will efforts have well hardware procurement equipment the to and We throughout by this supplier higher experienced the our landscape. the job in supply other terrific as inventory procurement done chain changing our being engineers absolutely industries. industry

complexity and of remainder these the will expect to continue issues rise year. breadth the chains, supply the we With throughout global of

challenges Our of our navigate exposure also the any believe improve creating on as delivery that their rest than not capabilities. team component We solutions our industry. is our work these is suppliers very through do even us help focused to greater

For in positive through continuing FinTech, and seen same-store we have momentum May, volumes. into April our

we against XXXX. as Even from comp strong growth

other our activity new introduce and positive We of products trend continue financial sales equipment will for provide demand expected products We to pre-pandemic products to for believe stream to growth customers expansion of expect the growth. levels demand our well we as new our new is year-over-year digital to volumes. to historic The software by of enhanced continued this drive coming wins. of steady services, and at continuing rollout contract cashless including growth in the similar as renewals incremental levels wallet primarily quarters, revenue and driven in and our from in contract increasing plan of

operating expenses, remain of We to revenues. exclusive non-cash line with in compensation expect

current So, revenue, a should total remain expenses operating XX% consistent levels with between of as XX%. and of percentage that

year-end. expense We in we focused to for X% with on total internal to year, is the which range in expect guidance spending our of revenues line full R&D new our increased but our range, remains X.X% investment higher of at historical reflects be This of level product provided slightly higher development. the in than

expect expect and we to As regard we the trending In to $XXX capital this between for see million million spend range as the towards progresses. year noted we of year. higher R&D to last quarter, $XXX our expense the end expenditures, full

balance and the recognize next EBITDA the does recently a the repurchase that growing and our Everi's of valuation we value cash new has been not as current up $XXX not generating, XX flow been recurring growing. consistently and income, the does net to and that strength free have will we give believe growing as our our expect appropriately that adjusted share to believe we acquire strong current to months. us our enterprise appropriate We for over as been that highlighting us revenue of continue by Board end approved company multiple I'll program credit enable have that Finally, million we nor shares that

flexibility sheet. $XX expect a in quarters, very position generated the allocating the quarter provides we approximately ended net flow In while also cash will our to continue cash I continue than This will in manner an than million call we free to generating on and we the and quarter. prices support liquidity purchase and shareholder a more operation future back value. With that, free capital operator flow. turn incremental cash have to to questions. more first continue $XXX with us and adequate growth the in strong We million now business the to share investments opportunistic of balance executing build of at for coming We believe incremental the

Operator

Instructions] question Jeff And Stantial our ahead. [Operator first from go Please with comes Stifel.

Jeff Stantial

your guys. for call Randy, morning, the And, here. earnings taking questions. Thanks Good congrats inaugural on

Randy Taylor

Thanks, Jeff.

Jeff Stantial

a sort wanted amidst consumer earning of state consumer season of of thoughts - QX-to-date, your just it, with pretty topic to in publicized are perspective trend, inflation, financial here low-end just as really hot just the curious the that the macro to your business. and list that kind at start well on laundry call of I gas or across any headwinds get this you've prices higher any of this XX,XXX-foot whatsoever point, good softness curious access seeing your there. markets for view you your Are got given

Randy Taylor

still lot numbers in can money Yes, how to-date, as still through say, even FinTech we're see start strong comparison a Because, the And remarks strong pleased it we our are QX - really last we're our vaccines off cash - to side. with given on in you or the I'll with in. Mark least Jeff. Darren the we stimulus and access talked Look, and very as seeing through add numbers even at started how very year, with out, showing side.

that yet indication. So, give that would nothing

Mark Labay

agree I'd strong. Randy Yes. QX with QX, great looks and

Jeff Stantial

Maybe and encouraging. access hanging - helpful a on That's for financial second. business the Perfect.

quarter-on-quarter. That's total think up dollar on I slightly out called a volumes X% higher amount you basis.

reported state data, the at is outpacing call it, casino commercial this trends. look you clearly, if Just GGR

the better bring Is that overall Just that opening that curious of think up, or they new customer really you what properties maybe the to is. penetration budgets of that is wallets driver outperformance casino. like wins, consumer new

see reported that relative all performance what there curious you casino to data. kind e-driver the Just trends the our on state as track like same-store in of we of

Randy Taylor

we Sure. believe think what to I'm that overall. to up going to you does win But, and turn come add help of renewals our growth anything over is Darren. But, again, it continue Darren, good remember, I share to to got a that there? we

Darren Simmons

Yes. got Yes, we I historically. think, renewals look, strong

expansions to do decent that. there. out We There that have continue been are

openings. New

winning our normally So, again, we're share do. we as

we and contributing year. continue expect so, And certainly of volumes through rest openings to that new are I that's think, the the to as expansions some and the there

Operator

Thanks.

next Please comes Our from question ahead. Truist. go Barry with Jonas

Barry Jonas

Thanks taking questions. my for Wanted with to gaming. start

the think potential that talk how whether sub-segment see get you market that'd that's share color Thanks. the helpful. up, As you target, or about maybe you video Any maybe shaping about path mechanical, now really be HHR, there. can XX% on to

Randy Taylor

I'm you. Sure, it and over answer going to Dean, for let him that Barry, one turn

Dean Ehrlich

think, all I above. of it's the

how - that. an what with significantly XXXX, look but you there us is of many share efforts how pipeline, and Obviously, above very, it's significantly a have our this Player we're out I a themes in year coming give in we've In what up. we and our feel there this development increasing I'm we of we're built to a if Classic also and our video kind help track to in that category really going cabinet that data is ramped entered just up. direction throw XX%. that not good output literally But gain you right very haven't to our to - putting the product we robust Signature get to we about latter we're markets more to to terms the continue it's going product at long-term themes, to continue allow exact lineup attain yet and particular it introduction goal, point will pre-pandemic percentage. just new up are

Barry Jonas

I great. drives there? in Okay, And then, just that? this, Maybe what exactly QX flowing this Is beat through missed end? Intuicode apologies what guidance the drives at specifically raise the the but is high if

Randy Taylor

Yes.

think, the off while and QX, been little full coming individual into strength for in a addition have seen - might raising us I in our and some year helps of quarters, some strength the Intuicode, us get the end cadence analyst as the saw of core the QX certainly business. of beat numbers confidence we reflected top a The little out QX we've coming in year-end which of more really to was helps well. give our that not range also confidence the

So it's of combination led a top both to factors the that raise. end kind of

Barry Jonas

Okay.

are beat and the Intuicode driver. So

you much, Thank so perfect. Okay, guys.

Randy Taylor

Barry. Thanks,

Operator

comes Our state Please question next question. Beynon Macquarie. your from with Chad

Chad Beynon

the 'XX? market, of on opportunities. year focus for Thanks mentioned of of I obviously the back us a side Randy, just recurring just the bit little the not lot guys boon us taking have you half past grow to in for HHR and one anything wondering on talked white question. you've that's about yield, Thanks. to there is - footprint goals team expand could in was for more I'm else a just important. that into for-sale the for could for be you There growing - my and space if, still out well of were is not guys a guessing terms just of you you someone I but the the a on to that. know the is

Randy Taylor

mean, don't anything know that 'XX to think, 'XX. and say I could there's I I I out. that

little markets that believe level. universe. QX, continue we're the an into target only We as that's our of But a get We in base, were we the to about out. said grow gaming, some whole we've going installed XX% our of other comments, we right - got that base looking in I to installed of distributed are but farther to believe

revenue core even our we can of grow that performance and we the units, with and units that believe continue our that installed So, to grow base premium stream.

Chad Beynon

you then, in tuck-ins. Okay, said great. And interested a of in number still you're

it a standpoint revenue believe loyalty just You could neighborhood the pieces really and ecash that just you is kind other as from EBITDA of recurring offer big of becomes with partners kind talked just have Are presence. what in to like a there standpoint. maybe about some you a is you into bolt-on you of of such Australia, how did a where markets still to don't really geographic-specific more your increase major contributor or getting you and Thanks.

Randy Taylor

I mean, Chad.

out I FinTech us But, I think We Right? of again, it's is Australia the XUVI and it price, stream. on through a AI whether other that look provide that get analytics or right them those. revenue to can to don't we there's mean US here some And can allow through our if pieces. ability piece at bolt some can think pieces are us even And we to I we that there. think bring products the take of there then, maybe our products to we and add RegTech regions. through we both, loyalty, products - to other again, - believe are mean, really think of and we'll talk outside. there example - think at it's it. gives continue nice their an debt ecash and about don't and I times to we - other we

which shown and you team can not we're the it, ones, So, on executing not - finding do, is yet. I just we're his don't Darren right think really definitely It's and but out done there.

Operator

Thank you.

James. go next Please with Davis question ahead. from John Our Raymond comes

John Davis

XX% some understand Mark, I highest Is down they're gave, rolling it, think X% adoption stats the just customer aggressively. at marketing that on a I drill it more, the to adoption. versus think of Wanted the what's better more of you average. driving cashless that kind out thatI level has of just want

to there Just be of understand, multiyear like trying should Any adoption over think like helpful. a how we that period. what would would about of cashless pace kind look color the

Randy Taylor

our Darren, give there. let a drive operators as a little I so on better particular there's Yes. framed factors, It's a it trying their he to is are one mean, focused color, customer more have on a promoting you on little keenly cashless and will a of then that in since of acceptance I'll volume. in patrons certainly, I'll focused little and start depth this the lot out right. to combination rate more more

that helps things little So, bit adoption add rate. along more let and him drive Darren, some to color really a I'll

Darren Simmons

customers with Yes. in Certainly, profiles got we've of different of number terms locations. jurisdictions and

variances efforts. as sort their see then ramp but and they new into to the new would I up move of approach, jurisdictions, jurisdictions of marketing going you're So, commercial say,

see continue of and to pipeline got You'll the year. a the number casinos grow other launching that in be rest the it through of we'll we've

So, as want up again, but of their they combination the going in - as how their supporting their to a they to want quickly we're how efforts get terms market to speed, it's certainly with of speed customers up the and product. possible

supporting lot but So, different of them. approaches, we're

continue with I are very happy the And every as results grow happy Customers more would increases and it's so just results. to the to very day. say, far, with going adoption

John Davis

then for And quick helpful. that's Okay, Mark. follow-up

to kind implies similar for guidance you this the best those call a is particularly just quarters, there or any your the of through full kind or that would Just outs either XX-ish result margins the the out expect of mix. the first cadence number point, really guess year. Is quarter. - margins stable I And call at anything how think, from ramp for margins, of the drive

Mark Labay

that's percentage know, a terms Again, number EBITDA us. go actually in of is I'm we I've hopeful The big percentage, with a little again, additive all have, of on margin You the more some downward drops. focused we bit equipment in for not of might has call pressure but The margin driver where EBITDA. that that a on total it's mix sales what terms what margin.

and to So, continuing number sales pretty as along. comes that when would year see strong means progress the throughout down, I expecting equipment said hoping we're that strength be to we have

cause margin it But additive. could will be that again that to drop. So, all percentage

believe spend we sales. than all the couple is see because lines nature But deferred to years. over going growth of to as our of well faster capital bit the a recurring think of grow just I customers expect little recurring We equipment in of revenue of the last as the equipment those

John Davis

bigger I caller most picture market, the the Okay, that's really of sense. soften valuation helpful. in then, with allocation doesn't question. those Obviously Randy, capital makes broader stock think And agree the

into from how a couple more done but to does perspective. be really your that material small So, play on a of dollar nothing you the acquisitions, decision have buyback, whether guys aggressive

than our at this So, look better There the great and - like is where situation it's stock a own. company say is you opportunity. no

buybacks priority, takes stock how much whether play on how that aggressive so you of you it's M&A the and be million. $XXX And or think would price like, do

Randy Taylor

I would cash are of focused products. on look, mean I we Great develop say, to our question, it's. still John, Yes. use internal first

and there. acquisitions are Second, out there things

the on a our given really we we're cash to of how that say how going say XX-month be the definitely to authorize of acquisitions. part it's stock only invest be So, to flip our a order significant But I your revenues. period going say, how going part to the it's allocations for going we're authorization. hey, expected is half we're just price that given look John, which look still the is after going a we're But undervalued right then hard had capital for at we be And hard feel going in there's Board a-- kind It's when to aggressive, we've flow. go nature now, to that seeing we just switch of to amount. that's free me of how and pull, to of it's we repurchases. this and about to Like grown the and for but why the that point, now the me we're lever recurring internally,

at a major to be we going the it. on it's of we're allocate So look at daily basis what how to points going of on one

Mark Labay

business. at look And, our I wasn't would off John, of box it this are M&A flow when mean meets us M&A, well for perspective, growing at us that business we I those today. I that checks to looking say would that nice if accretive in all ourselves, look our cash companies free are just add, of an amount we throw from can at

shares buying now, So right they're those to compelling that very us is it for levels at be acquisition a the at.

John Davis

the flow It's Okay. times comfort maybe times any not cash exclusive, X take leverage but to Randy mutually to or going Obviously, free X alluded generation, leverage to given the just and back potentially this. we change like X over times.

any to deal change or you your moved both. that would there If can there? If obviously plus needle, go you back do times X.X to was you're just buy a aggressively the going stock

Randy Taylor

looking - stock. to buy early John leverage there, say It's up not Yes. to back move to I'm

got look, know along plenty just that I to flow able want and that, free cash do do. may be we what acquisitions to type we've come to of think of I don't

change I'm not aggressively that we like out free but borrow times, look to cash think value to find that at John, is So, anything, going go than using we and going got that time, looking we're three as look free We lower we're I significant we something don't, our out two where to go this I at our would and look us Mark doing feel price And say see are now. can't a it. of would I flow right great would for in go and I and out amount to we're cash us say I flow. use going to times at. and said, a but at

Mark Labay

the free ourselves that flow to we go generated fund interest cash acquisition plus and we the as payments anything that adequate million March cash invest position requirement cash impacts million. hand, plus net to generate again, adequate in not to in to And, we cash leave timing continue forward, to of $XXX have first business flow that for in borrow and at believe flow target. these be cash buying fill from $XX the with over sitting number the we of if well we're quarter, that we'll able John, of million be XXst $XXX could free business on the liquidity

a So we be spot great and we progress feel accretive will only forward. we're as in

Operator

you. Thank

Jefferies. Katz ahead. next question Please go Our from comes David with

David Katz

Thanks stuff and find partnership gaming Racing and general are where probably than am that the not side the taking the Historical momentum invested are about it thanks the competitive you what other side, same for do the late. seeing each wanted continues, in my I machine the you've and Do while for more the right today some or competitive we now? making I of expect are just a amount know was sure all discuss there landscape and of detail paranoid less and what you out I to expecting where from expect? XX you what months just of you you and question. Randy,

Randy Taylor

I want understanding to question sure your completely, David. make I'm

market internal? in in saying overall competitive slots Just you the are

David Katz

going more more Yes. you me the intent category. let can that gearing there take players How for of our be on? keep stay comfortable whether of larger Well, in some comfortable participation open their about the look, premium try or an to right, the sort that and you momentum whether are up, in specific, or share do and that's sale right, get

Randy Taylor

we we're US. the a all Okay. Got heavily in out, we've Australia we've up in our content, have own expand starting gone studios you. pick like clearly, to Look, invested studio right? in feel - to here and it's I And,

grow so, it's that you other I and - it's suppliers how the thing maintain content, We know that's your position know are. it. I look, we same doing And think we're how you the that's

Dean he done So, and I think over several I'm very has years. what the last comfortable with

studios, really I for for the he's and new content, like a roadmap think, sale. he's he the wants and premium got both, for beefed to bring feel I up out

David. well, me, know you So,

I let would which we've think a is, few he throw So, in, great got point is to I things also great I here as and some can a I'll think Dean's on. bullish his working Dean look, that am as got he hardware be teams because I of roadmap and

Dean Ehrlich

David. Hi,

that content Sodefinitely domestically position new be It's as and It's grow. continue to That answer a But to we is through hardware a with those to share It's as that us the we're going remember. the to not in that the of be other back great think as these then simple we feel able very been that the continue plus will if grow, far the to we That invest we we're your to their be get Randy and grow and to continue to drive king. cadence is that would in allow business, get to our part. talked that been there. playing verticals mistake competitive we amount confident tuck-ins, of content to able as but right that. question have but up, other there have, be simple. best some in is the plain ship on will feel as about competitive lineup continue in we to that not can better, there. going and to landscape, for continue I go dollars as change, is only if it's not giant And be will it's as now quarter-after-quarter, not these

to So, about forward very going excited it. we're foot our and and feel put it best we're for ready

Operator

George with ahead. from go comes Hallum. question next Sutton Our Please

George Sutton

you like spend and I've know well and for you I known money. Randy, I time to a long So, know you don't

was out, comment that thought fact program So that's came question. not I the the share a But a repurchase compelling. quite

in So metrics question have they street the with we're B I'm Question A mix increase in has a across wallet, to different to things the just-- these your user. leave sort wallet Are if be opinion? pipeline example side. on we Darren, that dynamics the for that operators to competitive customer in that getting wallet as getting the that that XX% walk transactions their for casino point wallet it's are you're a in where with average some go that in experience. casino can your the happy market doesn't the do very of very in getting point can and and they for a starting in I'm of wondering realize to

Randy Taylor

actually create one sort a to they have their At little say to early of floor for an experience. that drive of that able those having the to day, their wallet experience going - what those probably it's an that. really one just product that think, day, of end a a one at having the the operator Yes. it's on It's the mean, has to player. it's a of - is end is be I that I their of are tool And wallet tools. people, look, operator customer

opportunities to One those But, certainly create loyalty for them an of that this engagement quiver some you're help experience. arrows points obviously, again, that that will data in an because transactions any is for facilitate certainly an loyalty with early data to the time the increasing and opportunity points using right, play components operator to of their of terms associated the it's at it. devices is be this. part on how would going got important how And that and in app look

George Sutton

for Clarity question you. Got Mark.

what of you - were You levels. to momentum into said there? referring where appreciate cash to levels you to terms I the you you you continued mentioned then floor to pre-pandemic rates similar But dynamics, in May. expect sure I the say trying wasn't if growth exactly

Mark Labay

fully and were growth Yes. not we digits not double in pre-pandemic as year-over-year of That's we've environment. periods exactly how should highlight start strong patrons start about those we to I and kind the back that talking last calls in it. the several come lapping in the mirroring been as comping were rates that back wanted to slow

Operator

Thank you.

Please next Engel go Capital. ahead. comes with ROTH Edward from Our question

Edward Engel

the market able it question. you take are Thank how or to HHR, question time pretty with your of some for that on conversion some to to games start of quickly Everi to you my legacy Quick going is going Is in taking repurpose segment seamless? content. kind

Randy Taylor

but, turn Yes, acquired quickly, real just it. I we Dean look, to over I'll think it

a of give there. there, time bit depth I'll going more a little be let Dean to I bit but there's So think little

Dean Ehrlich

with working cabinet been while in we've our on Exacta place Intuicode a and for HHR a now. in So, out

point HHR the see more of and I work what some out our cabinets back year, cabinet from onto would in Everi will then Intuicode call an Everi in installed start forward. smooth base but some additional HHR, port half you'll into be So, that, platform that's will the also Everi and we APIs of year their with end there, a that distributing we'll place by the believe their our plus content we runway the in that so of than to even

expect lot traction more towards of a the year. end So, the sustainability come and

Edward Engel

gross every peers the parts for sales your of just certain your within inputs inflation for then this recently know call, on update one but impacting on And color. or Thanks margins incremental talked EGM just any about inflation the cost that segment, seeing question I Great. getting you're the you're there?

Randy Taylor

well, of Yes, supply if none components, - general, at the delivery it look, of I us. to around think In you cost the look that chain. is new

several the Now talking for it about calls. we've last been

do this to we quarters Our competitors in all you it. been pipeline tell and front several and last terms talking would navigate our have have and strong continue been the we deliveries. over a trying I of about it, of for we've staying in we've products managing well through to this very been expect of process,

want customers our product. Our

has manage having unit come our material numbers sales seeing pipeline some already and change really us, for pressure those, coming with a and but materially the certainly component there good there. through are deal we that's but is more continue through nothing not that thing but we to nothing So, changing prices

Mark Labay

I done would how just with our to excited team has this. add. really manage but I'm Look, pleased

job on and tremendous trying that. So, the of to I think a think I this do on They've business. both - on continue work they'll both sides done to

So, can there. but I add all

Operator

you. Thank

Ricardo Chinchilla next Deutsche state from with Bank. Please question question. your comes Our

Ricardo Chinchilla

on please your rating I Thanks the how agencies over for if I evolved could since taking years was upgrade. wondering believe have my last the with your discussions last comment question. you threshold. of well criteria that upgrade guidance below to - even leverage one our on based X your you're the was consensus for keep for that and and further expectations, turns them below

helpful. any there color be would very So,

Mark Labay

of our where for continue leverage I'll agencies to our do going I pay out growth next the is. record It's they when that earnings ability certain debt drive down say Certainly, hard company proven significantly. to is a for consider ultimately hard speak pointed there, believe they breakpoint to rating working and measures to and to down decide and our you do. are the have to as me what

senior total grow than is and of - only continue will numbers, which And covenant think, down. leverage, not that quarter. in end secured, as I is come March the our at seeing less growth the times number X.X our to we the

going story direction So, to I us talk and them about where story the them continually try evaluate position we we look our feel get and company and our with just the dream agencies are. to excited tell the with as like and we're rating and in to how of as great about is would debt respect a the work

Randy Taylor

by team Bill but think with rating I Yes. rules, Mark's job benefit but that over strong a their these say, performance the quarters, working have done and would nothing, look, Mark. to the us I last shown point, we But run IR own great they do in And has the hopefully, arena. agencies. will that

Ricardo Chinchilla

Thank Great. you.

a guys of I consider the think, structure or variable with switch your in I environment and deal are may mix the you have to cap current given debt follow-up, guys do rate mix? you tenant current the fixed

Mark Labay

million as had is even interest. limited structure us rise, low, help know obviously we limited were we whole pay in earnings and certain only variable could rise, overall the You we in very down than that less year, viewpoint much at rates rate when interest every really last of basis we knowing rates interest of the redid structure exposure rates the the looked And pieces it, resulted debt cost. annual are capital very our of as XXX $X when certainly points

are and always we're mix and do like it I variable secured type if the other of of change, get of fixed it's that the the in viewpoint can comfortable composition terms So, at of flexibility right the it debt And provides without now. pretty that debt with the changing where where we rate debt. we variable around our things fixed the us.

Randy Taylor

XXX% would between Mark, Yes, it. just support did is, behind that I would-- I we which look,

where can at that, we a have don't probably do think like we we're now. change lot to to I We a I right there's paid think time if coming other but that up and which just-- we're it of to get the I'm mix. you things period we've in where we we even are mix like couldn't

Operator

management There are to further closing at turn for remarks. I'll no you. this floor questions time. Thank back the

Randy Taylor

interest despite can and services would achieve focused operators - the it I casino that providing value. and you. that your believe in developing loyalty macro on in control, providing you like long-term this sustainable current look call. casino that offer cost-efficient for and how remain near-term, Thank what operators - update We great the And you our and build productivity and other an we Thank to games, to environment help products FinTech next shareholder will forward solutions growth Everi. reiterate expenses. flows on We managing we us and and evolves the cash

Operator

Thank you. day. call. today's disconnect. Have good a may This concludes All parties

Everi (EVRI) 10 May 222022 Q1 Earnings call transcript