Penn National Gaming Q3s
The top line
- Revenues of $1.5bn, up $382.1m YoY, net income of $86.1m vs. $141.2m, net income margin 5.7% vs. 12.5% YoY
- Adj. EBITDA up $20.7m to $364.3m YoY. Adjusted EBITDAR up $27.7m to $480.3m YoY. Adj. EBITDAR margins of 31.8% vs. 40.1% YoY caused by Hurricane Ida and Delta variant outbreaks
- Barstool Sportsbook now live in 10 states, ‘Parlay +’ and ‘Shareable betslip” app features increased MAUs by 6x and by 100k weekly bets.
Province rules: Ontario will be the focus of much of Penn National’s attention when the province launches in early 2022, “mid-Q1 being the most likely timeline”, said Penn CEO Jay Snowden. The group will launch with theScore’s app there and will launch “aggressively” with the “leading digital sports media brand in Canada.”
“One of the things that will benefit us is that there are advertising restrictions in Ontario,” added Snowden, “you can advertise your brand but not huge discounts or big promotions, we welcome that as it will cater to our loyal customers.”
Just one bite: Snowden once again emphasized Penn’s marketing strategy that doesn’t see the group carry out huge and costly media campaigns and enables it to enjoy CPAs of “under $100”. He talked up Barstool’s ‘One bite pizza’ social media campaign, “great to build brand and top of funnel” and the Barstool retail sportsbooks that can serve “as (retail) sportsbooks, make for a great digital experience and introduce new people to the brand in high density locations.”
Vertical focus: With Caesars and FanDuel aiming to be profitable by 2023, Snowden said the “acquisition of the Score” will lead to major investments and tech projects that will be resources and finances-heavy in 2022, but the group’s losses next year will not “be into the hundreds of millions” either, he said.
The group has pencilled in $20m losses in Q421 and that will work as rough calculations for 2022 revenues. The figures “will depend on the Ontario launch as we’re expecting major revenue generation there, 2023 will be hockey stick growth. In 2022 we are going for vertical tech stack integration and we’re very happy to do that.”
Additional article available today on Earnings + More:
