- Earnings call transcript Q3 2022

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Operator

Hello everyone, and thank you for standing by. Welcome to the Everi Holdings 2022 Third Quarter Earnings Conference Call. [Operator Instructions].

As a reminder, this call is being recorded.

Now let me turn the call over to Bill Pfund, Senior Vice President, Investor Relations. sir. ahead, go Please

Bill Pfund

Welcome operator. everyone. you, Thank

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

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

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

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

Randy Taylor

revenue revenues thank This the streams revenues improvement year the consolidated for sales and morning, you carried wide-ranging strength offerings, strong our adjusted by our service of diverse time quarterly top Building both machines. of results joining was as income line EBITDA reflects product even last increased The the highs. third in all adjusted momentum this and driven quarter of both and bottom-line year. and and an the and reached over EBITDA for everyone, us. year, and in on and our Good the the FinTech gaming net hardware in revenues faster recurring to through pickup ongoing prior growth from demand

of million of excellence, strong growth is drives increase we FinTech increase we R&D, of and all-time inclusive in year quarter free third products quarterly generated $XXX successful year. in growth cash investments execution fast our flow on year-to-date, compelling allocation operational in A The our record of most continue power strategies. the capital net as income adjusted With growth in beyond. focus to and which and perhaps generate flow free EBITDA new the compared cash continued games of additional development last on-track next to to the are free track top-line plus to flow is combination XX% evidence and this year and of a cash

our more distribution create Each Class engaging share. cabinet feature about XX% This all of Vue ability a drive for games, extremely of strong our over Class return plan customers acquired cabinet their development of products. This that of received XXXX feedback in video well-positioned quarter from our flow our focus grow acquisitions every we of XX% confidence newly cabinet, new cash new and to the new core free an we FinTech reinforces across with our of as in products to Dynasty overall products, Dynasty is be It's in installment our games our many original, time, second optionality not of sale we new have new acquisition developed benefit a footprint the momentum XXXX. ship to XX latest to the Vue content strive functionality customer one positive this free been at the planned and development Dynasty initiatives differentiated is first own services, lower-profile unique of The in the just look games done. and successful that of the for stated of by businesses, repurchases. has in II, this displayed cabinet we increase a offering. and broad tremendous feel, balance will on their product Family solid goal some cabinets. that sampling cash lineup new central determination many businesses. launch of GXE provides themes next with At contains With our the provide to of launch Our game Dynasty our customers complementary strategic will generation as unveiled At continues III, the launches integration future month, the existing investment growth and differentiated, to for broadest will rich asking sheet, just we share internal racing value through nearly shareholders that launch through we our the last supported The have new an in historical team's be With are the almost launch been flow the our Cabinets. positive, to tools horse the GXE, and and to the our customers portfolio. is our the cabinet leverage expected importantly markets. diversify available cabinet Feedback content capital but for for toward Video and nature number family product. complementary Vue complement four same from arsenal diversity the that and of exciting in at to cabinet the time of are offering of XXXX. We expand our any and a content,

extensive provider iGaming significantly library content Krejcik by an number content & new was performing of protect to business with with proven, both in recognized average Everi's cabinets. existing Our the existing invest new Recently, and products. pipeline innovative the curate providing with game our new best our to and supports by confidence which games and latest expensive Everi the Eilers major competitors. outperforming rapidly provides commitment digital we our robust Digital as growing of also one of We can the their iGaming that land-based development a game games, games investment from pipeline into markets. original supports the customers

for our at portfolio operators in expanding The services Two of emerged trends Turning and segment. mobile continued FinTech major productivity and of to range interest capabilities. the cost efficiencies products GXE. offer and our casino that expanding

Our for digital regional Demand class commercial interest our inbound wallet with alike. and club customers and investors. solutions a remains was from high again point for cashless focal customers tribal,

venues. As established Not mobile are is app our the integrated significant entertainment, payments hospitality steadily current Everi’s is offerings the extension the solutions offering cashless Ties We taking space, access profitably seamless while with extensible away we Everi's product solutions. note in are experience our competition. believe custom drive just our grow as financial from gaming are with of existing and focused well-positioned aligns interests continue to and and them within and to mobile loyalty evolve integrated a our cash perfectly Operators we multiple our pulling Casino time and based on our partnering and a view from services. cash-based their cashless core extension loyalty with and of example of advancement natural the our This guest of of options base the recent of new customer strategy. Boyd wallet XX% California. enhanced It products but with in complimentary market services. floor, addition sports, outside extends We family River portfolio opening purchased Everi we offering wallet, CAS comprehensive provides gold casino recent for customer suite markets but floor, offerings. a of this advantages the did to notable base. FinTech Not Club new with that capital for with to of of customer an A the our the allocation the first the technology-based expands was several, venue gaming Sky opportunities beyond that managed just industry's only for our a garner also our access. of growth the digital casino Venue a created Sacramento, standard beyond property This cash slot addressable allocation an scale ties. display first an acquisition cashless

that and a offers convergence sports revenue is our we the consumer opportunities. at mobile Everi guest first appealing solution two sports integrate and very of engagement As with betting business new center of enhanced the businesses,

distributed from larger in small markets. are footprint ECASH featured Australia. of our Well, GXE. a CRT just few kiosk business Two products have verticals ECASH self-service received a do Premium gaming Our lot from booth operators highlighted kiosk where charitable also the current and voucher in of many CT attention these kiosks redemption and our at gaming route a presence. not many The

out It's the full a pursuit gaming of the excellence and on at been efforts Everi. innovative industry entire passion and be continued team moment coming have not amazing our their like dedication original thank and to to Everi the accomplished display. without with allowed to team organization and enthusiasm to for the passion take excitement successful. products. GXE this team's their to Our I'd could All relentless were lead here have that their

we our FinTech as with value the at on solidifying core, strategy that forward our capital our to and our allocation evaluate value development our move we on products investment simultaneously and to expand pursue premier industry. we expand strategy to we improve high to will solutions acquisitions of aimed will us provider new is while a teams maximizing a As offerings capital creating jurisdictions. strong enable to balance returning internal allocation new Internally, and acquire liquidity, position look look both and leverage to shareholders. accreted, shareholder sheet into existing games and through gaming continue ample a product opportunities capital scale externally its shareholder and At focused and best-in-class return to up

purchase cash Everi our in strong opportunistically continue shares will Finally, to we invest with flow, share and our through our program. repurchase

provide to operational call our Now, a Mark to bit let over the into successes. turn insight more me

Mark Labay

Randy. noting consolidated On adjusted like financial records quarterly basis, all Thanks strong another by recurring revenues, set total to time that in we overview had we and I'd begin revenues, quarter. a my EBIEDA.

momentum in third volumes. from same first quarter of highly has the with store of well half as financial profitable gaming the the incremental access our as operating machines, placements in continued year Our increases

of each by to and up business were every in XX% revenues revenues million, segments. sales. in total We XXX Our growth non-recurring driven our record generated category recurring

continue Our up sale to machines are well and and businesses core include gaming hardware FinTech recent growth were our from we Non-recurring XX% accretive revenues, acquisitions as which operations. our as benefiting the perform well early-stage year-over-year. primarily of

prior on payments not is we into interest To in on last refinancing summer. As strength flow XXXX the segments. down the compared XX% shifted this year-to-date Randy The the our payments million of in fourth year-to-date amount quarters. quarter With put growth as cash cash things second by generated noted, the included the was A first to notes is strong X% the year flow our XXXX, key the further our our of unsecured of the we cash of quarter our expect up to that both of of XX cash that means the although completed over was perspective, a XXXX. timing our unsecured This recurring third the quarter flow XXXX. compared payment. quarters running amount free third is have I'll revenue free generated third prior result notes, to business semi-annual we while nicely year, surpass contributor similar while in in cash note cash did free consistent and of core ahead and XXXX interest record plus to free flow to of the operations. generation third only

X.X more recurring Third million, units gaming our revenues. to operations, over than historical XXXX, has horse that our our ended quarter up base, install the Further our we're was our base for units, and server. Digital domestic with market. the XX% the Digital quarter quarter contributing We I of of our of XX,XXX every remote recurring game the note revenues our the revenues the third up install quarter in third quarter. operations growth segment, increased which year-over-year and over expansion up the is entrance iGaming grew include XXX racing behind iGaming game is years. over Spark XX% drivers and three growth and sequentially. into would units Through XXXX third XXXX increase the the our Within X% growth

We of have been content. successful our in leveraging the development land-based investments

Our this units XXX high and add ability to Gaming our in proven such margin This in revenue is last consistent take as enhanced also growth to compared we base. more jackpots the machine improve sales has continue X,XXX quickly to units progressive content quarter. sold features or generated XX% year. third as recurring

highest the XX the month unit individually, our units. of have four four for last months, quarters sales any sales. each Over highest X,XXX of we unit XX the last period represents number more quarters than of history. sold our in This represents And

visibility into term, operator Although longer spending remains limited. capital

are into XXXX track year momentum. the of we remainder remains continue sales to the unit our for and orders of on backlog and solid, Our early

game impacted by cost X% increase was in margin and exceeded to changes game in revenue growth associated the our rapid as growth the R&D. the with as adjusted segment, of in investment of well unfavorably game higher percentage in our operations. revenue gaming far The direct sales sales the mix, Within EBITDA an product increased

primarily of freight gross sales basis and XXX equipment margin year-over-year, by components over the on gaming to declined percentage rising points costs. While due

investments, we drive development our Randy future and In existing noted, internal content addition, share. our and laser-focused defend placed the on on emphasis of placements great as original to remain

And is this future in resources of a includes to our Our recent games investment acquired expense. we game growth resources through increased the investment R&D support stepped-up acquisitions. driver primary development initiatives our

phenomenal leading to adjusted quarter, record Our revenues FinTech time a all $XX of with XX% had segment up year-over-year quarterly EBITDA million.

and organic from the up our Excluding floors. XXXX in contribution our business basis, XX% the gains activity of revenues in acquisition high-return third key to increased access contributor recurring was a constant is strength, free XX% funds core revenue with as revenues delivered ecash, share Access significant by drive Financial of $X million, mid this casinos. prior up This same-store million quarter and future Driven on performance single-digits consistent a of provides quarter. cash to the year-over-year to Helping consecutive throughout year-over-year the foundational XX% a the has performance were financial increase Everi's to fuel quarter transactional players Services same-store drive in the over growth. international completed. this business customers more X% it increased flow billion which $XX year and volume on to U.S. high third been than total transactions over return to to recurring, $XX

that, though our than increases, it's and wallet exceedingly receive to cash-based, overall interest customers to deployment continues Services our these in Even its yet volume. cashless we alternatives live the from customers. than Financial at Currently, are growth sites as ongoing cashless quickly Today, significant to to flow periods. existing deployment, with XX further transactional experiences. jurisdictions, And back volume a mobile in we our establish or our Although to Contributing gaming as customer transaction. less in early alternatives new we to seven more deepen not remain success quarter. gaming funding. and of adoption of from fund at had important the XX of industry's each our X% Everi represent as we second With activity cashless of many grow our leader twice expertise base which levels Access the locations we new as in Financial location, is patron smaller end cash expect Access the pre-pandemic same-store and the note to this of transaction is adoption international is

of to other brand loyalty services benefit our the Our subscription-based grew by the and openings. revenues tech year-over-year, casino driven continued one-time sales and new of software success XX% and

this products loyalty our subscription-based recurring key execute on scaling Our acquired improving growth, remain this technology we as a contributor digital into to neighborhood. and

after like other to software revenue revenues. and every customers in corresponding third we a new which recurring software sales future investing in quarter and I'd software, support XX% that, revenues, in recurring tech one-time for have Our see typically large reg generally solutions maintenance a later accompanied component, everyone and as of services and the subscription-based remind solutions. with increase loyalty engage represents these

benefited segment includes revenues, Our to as FinTech adjusted for growth redemption record more than in you EBITDA program, voucher quarter, common benefit on growth million. FinTech shares income in FinTech customers, from due our adjusted as we existing casino to compared quarter our our program operating May, openings kiosks in $XX the increasing higher well XX% our XX for year. to XX%, EBITDA under with quarterly EBITDA third product mix, our d buyback of The Supporting based and top-line purchased in recent for of revenues as r the new from slightly million of X.X the of our revenues almost hardware strong total the expense. revenues Updating in percentage we expense we And now adjusted to sales revenue from share the our with prior coupled development, stock and new over Australia This a the X.X grew million, cost sales of of since percentage shares. increased the change million ECASH. million repurchase higher all-time equipment Organically, inception acquisition while growth. XX% FinTech grew declined just repurchased and X%. third revenue during investment have a R&D FinTech just of FinTech and increased internal

available million share power leaves under existing this XX, us September of our As authorization. XXX approximately repurchase buying with of

has results share opportunistic fourth repurchases. while range, adjusted range. previous the the quarter, expected toward been Moving been tuck guidance to the allocation the Based middle acquisitions, internal capital in upon between the to continue prior this we we balance momentum has morning. the expect year-to-date of pre end narrowed our steady and in and our narrowed forward, Notably, tightened in full-year cash flow EBITDA of attractive high investments, our

also was income we the tax benefit. of As of XXXX deferred quarter, the to by the million that quarter reversal fourth like our remind assets I'd quarterly XX.X evaluation on for net fourth you resulted impacted and entered positively certain tax that allowances

net comparison forward. a questions. carry for operator the XXXX, While income as call minimal CAS QX on turn our net to impact the the reported operating utilize our for to create remained difficulty taxes has this of I'll a extensive ability loss of will back result With that, with

Operator

[Operator Our is coming Stifel. today Jeff question Instructions] first from with Stantial

Jeff Stantial

Maybe guide, the just changes midpoint. starting the for Looks at adjusted a to the like QX it down implies at million X and it relative to QX. tightening bit EBITDA step a about

Looking the thinking just is more QX else macro around X I'm seasonality. something gap like about looks historically back like seasonality, there conservatism here? typically That missing to million. When QX or

Randy Taylor

Jeff, thanks the for question.

but let all forget I go think little don't in it deeper, GXE Mark I'll year. QX bit that a this into hit

looking years on split there with period. And have so depending what you're may GXE prior a in at, a been

again, go this more bit our fairly for he if but a is in let seasonably little think wants. business, I'll we So Mark

Mark Labay

Yes.

and some more a that there. of just in Randy, back mentioned, you the like the for the too, year things GXE on streams, see bit some is hit allocations with recurring GXE cost you'll gone There's as in flows to splitting pass have gaming Randy of turn of work kind natural works of other QX normal bit I QX events some couple dollars usually a totally think, the little a years and quarter. of like the this older turn And of holidays costs pure stuff cash and a returning of head step where in access how of the it. in event there million how down with that, because -- and there's little revenue

Jeff Stantial

And then moving R&D. to

think expect kind prepared side. not kind breadth titles So of so leaning of is this of about is you R&D that at kind internal moving gaming that in should we X% on like FinTech both it of seen I reinvestment, my Mark that we think were QX X% expense should GXE, level to remarks, we unfold call, forward? cadence moving vocal huge touch about X.X% depth range FinTech reinvestment back of looks forward? right throughout product drive and the should the this more, the Thanks. on over guess greater the Look, we've revenues surprise. quarter, all things to Or think, more just that baseline of the launches continue a saw and on of display to I a mentioned move that the, going and in question back how we new

Randy Taylor

is year. I'd not look budgets What Jeff. completed for Sure, say next

third really fourth fairly don't quarter. be but going some Mark look with I will get consistent I how going wise to dollar quarter want seen year, to in down we've QX. but that So come a But it be where to revenues for range. said, think probably think so I may higher, what that again, the in were little into consistent of as next it's probably with we bit translate in be It's it'll

Operator

Thank question coming Truist. from your from is Jonas Barry next

Barry Jonas

wanted I color Can side. just on win some start the game give on unit? daily maybe the per you to

Randy Taylor

XX. be a obviously mid-single to and Dean. and through than seeing starting still XX cash little seen in smaller again, quarter I'll to based volumes, win I'll consumer into over on go what third single the area. per our seeing there start more bit unit -- growth kind over much XX There digit growth we're that over again, specifically. year-over-year of it QX, with We're was not I'll growth and that daily in XX turn again, we've But access But behavior, growth.

Dean Ehrlich

Barry. Hey

looking that you and at at think a forget of I have longer about relatively, will tailwinds of year-over-year look of also the say the about were complexion and that the If impact revenues you it through to if pretty talked XXXX. type a but else it's XXXX, straight footprint. an on couple everything whatnot, in per a substantial back, increase we would take calls at look win unit, consistent been I lease And

consistent. you those units If to would been I those, you out, fairly we've take if say add were

Barry Jonas

Supreme then side, just for potential in And may paved Everi? up on how you there and gaming recent follow guess any X the upside upside expanded talk I have for about your Class to Can ruling a Court game Texas. way position the

Randy Taylor

that sure understanding are Barry, I'm just two to speaking this you Texas the in towards? is, make tribes

Barry Jonas

other I space the some upside. about -- in how think just have talked players Yes, curious potential And that

Randy Taylor

we Look, footprint. Class great a have II

a have our customers. relationship We great with travel

And those so we expect operations upside to some there be regard locations. with to our at

Barry Jonas

could it. in. Got I just one speak more If

You curious cashless of X% that mentioned transactions right properties is the actually are with -- now. of are at are funding transactions enabled stat that I'm how cashless?

Randy Taylor

going first little say, terms a was in was foremost, clarity was bit better number. I than just I and Barry, comment just less to X% for actual Darren there of than X%, think got so set. And the has less the it

saying wallet doing our we other are the on You customers? provide actually top where cashless transactions we of have that to options

Barry Jonas

Yes.

Randy Taylor

base? asking of our total percentage as of you're a properties for a number Or

Barry Jonas

in would you transactions. think just the all say I

Randy Taylor

are that we we particular of X% and out. rollout the sort trending depending between sort what and the on the ways the access say sort with people of timing. have traditional I now, of where right maturity Why of customer XX% So of across sort funds rolled enterprise is, probably over converted averages would

gotten very it's So well.

utilizing see We wallet. opt those continue into more properties to customers at

good and very trend the so is expected. of we as sort And

Operator

Thank you.

Next is from Bain coming B. Riley. David question from

Your line is now live.

David Bain

flat you we for benefits look guidance, it We pretty increase more perspective? as get dollar should saw XQ. of the an a this the we like we are How -- sounds the R&D forward? question. obviously be expect kind Or in year. up next if that but R&D how investment absolute the giving I on R&D you. rolling It guess of flow, significantly know from at it's 'XX, be at that from look year to 'XX? do And we going absolute just like absolute to of could free you R&D any an real Thank Great. not dollar I in maybe the increase and basis sell follow-up and was dollar beads. Is cash the first

Randy Taylor

kind it remember, not think, 'XX had R&D I in And compared really some we way I We are come year to we 'XX are but where the up we 'XX. mean 'XX had don't right? expect to Look, David. giving just Yes, outstanding look, we 'XX, increase off in in guidance, as in I up 'XX. But looking of has reduced how towards not us give catching R&D and in will solid see it, same 'XX that. general are a are hard think to I where going guidance staffing that you of of you in building But you 'XX. increases and in for at then it's to in the be. have that kind of

David Bain

but that's helpful. No,

And Okay. again, And not look they for a what as well. M&A would year asking the look we helpful active data either us to year versus front give at as of guidance, on broad or EBITDA, if next flat? I'm this or Can -- kind group. contribute to year. were you and then year, you we just we second, but points sense EBITDA it at specifically be look to with any do to Was regard to as contributed that the a throughout If this M&A, year? it close at next more contacts

Randy Taylor

talk the look, place you've take I'll know, say, have when for about but you've Mark kind year, that costs, you I got things as first you got other integration of acquire. range this would

lift we, were these from we of should because see when they acquisitions acquired. next So one year, a

then but in ’XX, really -- they in that and will for Mark? what budgets with done again, we will ’XX? will ‘XX, haven't the lift should there be see lined So not be, in but additional be lift

Mark Labay

ECASH And both being venue felt they're more of we in for and push million kind talked than what both XXXX. a generating not of we there assets we've we've quarter. look, of little about studio, the probably will them a like, a not acquired negative revenue net bit what be expect expected, them dollars XXXX, we Yeah, business if the we and a we terms pretty a a code for we least contributing all being from as growth much a as we And units think really out that about QX was at there. acquired pure, would we --- development us Atlas into actually overall. in little better go ties, be within expected, performing generate those of

David Bain

to as well clarify, as EBITDA revenue growth just growth? And

Mark Labay

yes. Yes,

Operator

Next from Katz David question Jefferies. is coming from

David Katz

portion wanted happens of qualitative your visibility XXXX, around just commentary, what to discuss go Are with sort there back and is think tough, world I out right? should us? thought an can what scenarios Mark have gaming points you the you to I have sort more like obviously through business looks any we and what Everi's but of the share you downturn, to -- laid said of able or you're that economic of in

Randy Taylor

I'll I few it. have of then now, a just throw revenue hard David, It's very from fourth revenue. we go because lot that have David, still right would pipeline look, for fairly But really a in recurring a generates solid and a say, quarter. we base good

so place in -- sheet is think ever in it's that we been. best sales the we're some And balance pullback if our there's the

would know what It have So, be. you're what material just just talking about, any we a feel like impact. -- don't pullback that shouldn't you

have else to I you So anything don't, add? do Mark,

Mark Labay

this -- be. yet. No, of are the and we're hit trending creep We cash our And much we think day-to-day that at the don't where head seeing we we volumes impacts on you've if basis. is access in certainly could yet our what or look know I look, a any seen how, haven't on numbers volumes uncertainty that our kind about into one. We process daily we're recurring in

sooner, a lot seem to haven't hit the we other it of certainly getting a while the seen be industries and spaces, yet. little So macro

through for some doing and certainly harder to but going results budgeting talk end that about it's out, and can, process about So for us talk our we we're a the frame year in we probably of XXXX. spot when forecast our sensitivities, better it to

David Katz

I tied, Are dynamics your questioning, of they it's can how pervasive kind suppose, be apologies And what like within a is us it in? if there really sense respect and, but ties follow they countercyclical? just would could to economically is, do negative respond where for I my and we about of question what just for it up potentially with other so purely are or have venues, venue tuck-ins, been line

Randy Taylor

if will yes, if in sports to the hard there hard how but just verticals we're So think outside really can't. way hospitality it's the early think venues be offset, they'll obviously, some or impacted. a the will growth, the they're and don't I of is but I it's mean, say be both I say. of an I would could that that right to say they're everything type we they'll pullback be and it I it I additive know. -- macro they think direction, of go in go, goes I'm

still of on at like what's look going on is that, the that You in Vegas sports very and things important FX part economy.

it's our So too tell David, get completely. it to we Darren, got be to I think until just around arms add? early anything you to honest,

Darren Simmons

again, for one of think kind engage generally a and your mobile some bit fairly inexpensive channel Look, of any you that's about pullback, business, inexpensive. if of think, is right? fairly that whatnot, and mobile I engagement our there strategy kind if patrons Yes. digital around can loyalty via customers, I is interesting actually the your things is So

So and a hey, simply want better increase I somebody way to look what able and people hit engagement the mobile there opportunity might is that that say at of channel. through would be fairly we say, to lot that to

be certainly think for kind some opportunity to there of that I happens So is pullback. upside there if

Operator

Thank you.

from coming Chad Beynon Macquarie. is question Next from

Chad Beynon

this comments back the the guidance net by you income, guidance, just quarterly XX use obviously is depreciation this think like is I because since second last a in on stepped the that million. we're this quarter, understanding to Is Mark, number to going change think of we forward, around a depreciation positive. of up to accounting or QX? the meaningfully acquisitions looks kind as But then don't and bring past Thanks. flow which good just the very on bank cash free on you're

Mark Labay

going spending but continued step we acquisitions on in that I has uptick. we've not levels pandemic business here. lower little kind just we CapEx is acquisitions of of depressed also the quarter-to-quarter, if zero of in think, I'll reasonable of up from you neighborhood that little and that that fixed adding capital normal it's XXXX those well in we again, say depreciation being Fundamentally, the XXXX. by more a the fixed stuff. kind spins roll right of a is our rate think the CapEx been think there, QX I think, the probably of are I in lower amortization we've off, assets have the and quarters, will, of to We've have you slowly rising are had price probably had rate continues the say be lefted kind we've some the it's as depreciation as run shouldn't have some you're related did probably higher – accounting as out some assets value with is had how And the cost to about a for with value to comparatively

Chad Beynon

this next opportunities Because quarter? couple we this segment. on that. Perfect. journey? about an something in think just growth us think then from base, can is over units guys do unit kind believe And you just share should low markets. pretty success sales, Is selling some of ship HHR the are you Thanks I existing nationwide you the business there that how'd point? Thanks. your obviously in are into in you quarters? Maybe at those I games for started your And this where the nice remind

Mark Labay

Sure, Chad.

forward. the we we going are. I'll opportunity on head, of through top believe is there kind let hit here again, you but And Dean where walk think kind I of you

Dean Ehrlich

positively cabinet particular But of I'd side, will markets say the is those gets on impacted. side content start an expansions even it, there QX Intuit into from as code shipping XXXX. directly every we of that in

encouraged questions in for but just three XXXX. even more mind got step future. taking the talk building So lot because new very about wouldn't We we a I'm a have broadly But R&D, in we about about back out that. heard I cabinets coming

One of year. Vue at of about. talked Dynasty Two that them others end the is Randy the

We HHR, but by are we our and it the same and more international not look side also in year distributed at XXXX. over a are into if gaming store only end XX% the year you themes, of basis to doing getting on

felt, just sure but you HHR, are you asked I'm those of have I other mind as So questions front about obviously, well.

Mark Labay

Yes. I about guess we very just now, we're good right say, feel the are look, future. at pleased and very we

Operator

question is Next Sutton Hallum. George from Craig from today coming

George Sutton

you. Thank

Dean not? as in GXE. positive curious guidance Darren follow-up or potentially, have calls at got and feedback would anything they or referenced You and Has reflected I made center. negative front very saw that that been then. am been for positive We there you since incremental have

Randy Taylor

would make from in I'll from make to that what it there say us. turn are sure, are Dean they or if and over I my we're to how we or our them, we nothing products that they viewing are would to launching and customers continue Darren. for then sure doing standpoint, I'll change what invest

think of customers We out it of the opportunity addition we as in increasing and contacted, his gives theme lot have I products our talked our on [indiscernible] side. a are being Darren coming for bandwidth I

customers heard that there is are with that concern have executing I'm now. that right we have alternative any aware So of how we nothing

Mark Labay

they customers what say, -- are like would I like see. They encouraged. they definitely So

we and record bring like out sides continue more We and business the are at levels feel want on with to of product. they to they journey along the more continue both us, as

not that we showroom, that only received more amount at you cabinet on based be next new only feedback. the it of being the development but the year new into not well. many of can't the our existing that have the from provided encouraged, the customers the many, extra come still that enough, on, quick couldn't just I office as cabinet a over, cabinets out So the second had a but putting but feedback quarter side, many, get support we on will are are GXE, love that in we They and distributed same appreciate

Randy Taylor

customers, on that with the And customers. mobile of and first think, is the pullback questions side and services. and again, sort efficiency how with We've members space. had the that real and digital of FinTech couple enthusiastic are those very integrated the like side, to -- building, have and GXE enthusiasm made? from And look, extension concept can Yes. operator investments acquisition products mean, comment we been out I around And successful I there's continue And I Dean, And all customers. team the that what quarter, I we've products other a really the we the is together the the obviously, far, have this successful. digital we core building -- services opportunities been now resonating to execute is I on gold from so think we in been be we about self-service We still separating resonates building of thing say, think our of look, a focused of doing, great we've continue if that sort expansion, products. our guess, great super about standard the to of neighborhood our everything a on much around our with we've been ourselves long-term Randy, the on what what a we'll initiatives mobile amount we strategy. around tremendous

also those resonate again, which So, customers. with

great build great So, a we to continue look, to post quarter. on drive great GXE, and it meetings a great and GXE feedback, was still forward look

George Sutton

One the potentially margins of dynamics? freight impacted you or to that and improve in us other question quick to sale about for the cost Mark, any costs those talk can relative your anything of the pricing games, that is on of initiatives front components

Mark Labay

little want but to beyond kind to don't to to mitigate the it helping things acceleration getting us I like terms that certainly components more delivery certainly on supply just see to of we're this, in understand more things out are feels or need woods some from we are chain, that and timely you of do that's I well in delayed. might of the a fashion if better of get here in front, costs to suppliers. commitments stability seem we some determined chain, more broadly question. delivery a say I'll the good and supply say and George, Look,

terms to been soar of possible includes We've the trying cause. the of evaluating all costs components And a views buying us longer underlying are and facing pricing challenges increases, in last and been possible also term. the possibilities about calls and the these of the what that and the on the and levers value on to that inventory of on evaluate includes hand that. more at kind nature, price maybe several look our helping whether that's we so the short-term mean talking more all more look, And little we've inventory cost

we'll talk we're at forward. forecasting We for give our to and that ‘XX Again, margins to look probably going now try talk the right year I right about haven't made end But idea mitigate doing the an exposure we you how any We about on of college. the final more short-term. decisions. think the things

Operator

from next John Davis is question coming James. Raymond Your from

John Davis

Just want going next into how or free to growth flow it start year. cash Mark we on think should about

have a more some the at Let's handle leave things EBITDA aside least a you of second. point. Talk about at on for this probably that better

is good on So, a a of kind it XX%, my either of message way think is this percentage $XX interest we next of about CapEx of maybe kind kind about think of into next good going should How revenue, to the expense year. a incremental year. million

to regards Just ‘XX. in CapEx free about trying specifically to and understand, as we flow think at interest cash expense

Mark Labay

I'll Yeah, Even you're not I about can. year. creative I about as but like though best guidance. it, asking it, next a then little ask qualified you're question to guidance for help pretty you out bit you

several revenue generating thinking been the and your able what ultimately of down. doubling we've kind down But does same we've they're our revenues I'm how turn how debt to us to last that think and to ball have what rates of Fed tried assets. in as And day I terms they're interest rise we rates the years about are. that seems we think you're level CapEx and our the of to of I days thinking one the generate CapEx way that's there. Again, that the and variable are other slowing into neighborhood in the no terms I same manage we it out does. crystal in

CapEx, come obviously been we've kind the and And were covid back. lower significantly so to of XXXX, of starting in periods we

customer getting that for Our equipment's some a have, this larger little in of we more older year. and little we've equipment the spend having footprint a the field been

some we uptick, in as little moving into relative end same bit you discrete probably again, of call for CapEx XXXX. clarity you a projects in we'll and there about forecast year a see better that give CapEx year, on for think be we're the where I could next we solving start the well. then neighborhood there as But as we that are, as maybe our talk

John Davis

All enough. right, fair

or about as a maybe that think out trended so thing, month. cash kind good It any some Randy, Mark is we So how just the headlines October's October far of the like floor there seems pretty quarter? in for fourth

think so help in you're curious, growth what well, game Just XQ there. help there's And dip because maybe number XQ but up a us us sales, and to just of kind directionally think went how a third monster GXE GXE. about game there? quarter put you also then XQ usually Obviously trying seeing sales about and of

Mark Labay

Sure.

take it. I'll So

can, anyone they not, if can but in. chime it, got I've think I

floor, So in on the a to all, transactions, dollars the first of John, again access, nice growth right, cash transactions was you're year-over-year. October

load to growth. we're November, probably the to into start of I would that in digit even growth seeing still single digit and So say single that mid-single

it not So week be consistent. It's the might and down it's much, one been back. It next week. comes pretty but as up

So transactions dollars strong. running. of floor we feel I the about still and how very to good mean, date, very feel

to -- really remember to they of capital before a year we some sales little spend stride never had started end. hit XXXX that units before. that standpoint, they had to we've fourth say kind a when sell that of this of and they had And closer from our year was, bit last we quarter needed game So some I'll believe

So pipeline. difficult a year we've we've we compete but good a got against, to like feel got

they're some last pushes for operator of be in of did something's out pushes yet. going don't And There's be a and Some so last new looks don't year. year property still that it did not the match in the But number to we pulls reasons, QX. an it'll quarter. good QX, hit? lot just of what just there what and else still if expansion know pipeline then right? pretty a And ready. Anything it know will We a may being think things, we'll or… or before we for I

Randy Taylor

right I in ballpark. we're the think

Operator

Thank you.

Engel from ROTH coming question Edward for Next is Capital.

Edward Engel

least still kind still tell, to feel of could see stalled do from like recovery is, quarter momentum one, than at or which talk replacement of the kind of year, a tough your where customers, a it more it's next bit be at I XXXX, two is to imply XXXX when industry been you but demand out the to kind you you've past cycle perspective? know left better some XXXX full have of even versus kind a does

Randy Taylor

that I'll what on seeing let with Dean as kind of give some color he's the customers.

Mark Labay

we to This is going right be more what's replacement to 'XX the happening in versus down, shock you XXXX, just to is out see snap were based it's very, very positive. very great don't the cycle. one feel of it's on or there. challenges. But see now, We We less the cycle replacement what it slowing hard in whether if to tell about

Edward Engel

Thanks. gaming. Perfect. I in then And guess more one

anything the seen a bit looks have dip kind of launches in worth was a it kind was On It Is first here? like or the while. or did revenues we calling the sequential timing game sequentially. of this really side, out seasonality it dip digital of

Randy Taylor

Sure.

the get We to major hoping games it digital. bit thing were the that little in and earlier, our jackpot out launching didn't. of was think I a

recover a So we that's quarter. fourth will little pullback bit a think that of the in

game issue launch large RGS than a for I of revenue and more that, the product source server. good it's anything So from that to of related things IP really And grow. and think to will a continue come still look that to iGaming. We else lot

Operator

Thank you.

from from Next Jeff question today is a Stantial Stifel. follow-up

Jeff Stantial

at a for you QX. just quick than the squeezing Can guidance through CapEx, like the implied just Thanks have back looks great. walk of to kind planning there? one are Hey, spend It me delta I you less guidance in. bit follow-up. in

Randy Taylor

of of refreshes last Yes. said you in on. as about I we spending, here kind capital that the sure kind not making we think talked have to and in work and themselves are some needed maximizing we I time letting CapEx did Look, we expenditure the we value the managing are are of

So more we again, bit little be to than else have kind of prudent number anything that yet. that managed just business a

Randy Taylor

QX. lean thing And hard on in look, we refresh same into the QX

because like, So on harder hey, I floors on. their is feel don't of think of your we also QX they a in floor. down little movement to December, get have their going lot They a lock product kind

anything It have when come may we So pretty I about timing feel it's the think year. out, just should had the major. work laid good into been but of don't CapEx

Operator

comments. I'd Thank like turn you. any of We over or for session. Taylor to end reached floor question-and-answer the Mr. the to our back further closing

Randy Taylor

call. quarterly our care. on look forward Thank next We you to the on Take for this an joining morning. call providing us update

Operator

today's conclude webcast. does and That you. Thank teleconference

your this for may disconnect You line your at wonderful a today. have and you thank day. participation time We

Everi (EVRI) 8 Nov 222022 Q3 Earnings call transcript