Preparation yielded prosperity, SciPlay Corp. executives said during Monday’s fourth-quarter earnings conference call. Late-2019 technology investments bloomed when the pandemic turned many Americans into sudden shut-ins searching for games as diversions, while 2020 allowed for improvements of existing games and a surge in cash flow and 2021 will bring a new in-house game studio.
The company’s fourth-quarter results mostly fit with the positive vibes. Revenue rose 30.3 percent from a year earlier and topped Wall Street forecasts, but the net per-share income missed forecasts.
In a statement, SciPlay, a Las Vegas maker of casino video games for mobile and web platforms that was spun off from Scientific Games Corp. in May 2019, said its net income was $31 million, or 18 cents per diluted share, for the three months ended Dec. 31, up from net income of $28.6 million, or 19 cents per diluted share, a year earlier.
Analysts surveyed by Seeking Alpha had, on average, forecast 26 cents per share in fourth-quarter earnings.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash flow measure that excludes one-time costs, rose 40.6% to 45 million from $32.1 million.
Revenue rose 30.3% to $147.1 million from $112.9 million. Seeking Alpha-polled analysts had, on average, expected $146.11 in revenue.
“The ongoing efforts to keep improving these games are the foundation of our organic game pipeline strategy,” Chief Executive Officer Josh Wilson told analysts and journalists on the conference call, adding that revenue for the company’s Jackpot Party game rose 33% in 2020. “While we are pleased with this year’s results, we see additional opportunity to continue growing our core business, while making a firm commitment to diversify our revenue base.”
Wilson said new games are coming: a new version of Quick Hit Slots and the beta launch of Solitaire Pets Adventure is on track for its promised second-quarter 2021 release.
Wilson said the company will start a new game studio focused on delivering a new casual game, so far dubbed Project X, in 2022’s second half.
SciPlay Chief Financial Officer Mike Cody said the company expected to exceed social-casino market growth of 4.5% from Eilers & Krejcik estimates, but warned about the year-to-year comparison in the second quarter, given the 2020 lift from the COVID-19 stay-at-home dynamic.
Scrutiny of SciPlay and other game makers intensified in recent weeks after Electronic Games agreed to buy Glue Mobile for $2.1 billion on Feb. 1.
SciPlay shares rose 14.8 percent on Feb. 2 amid speculation that it, too, might be an acquisition target. As Investor’s Business Daily pointed out, SciPlay shares hit record high of $21.74 on Feb. 19, before the recent tech-stock sell-off pushed the price down.
Investor’s Business Daily ranks SciPlay 22nd on its IBD 50 list of top-performing growth stocks and first in its computer-software gaming-industry group.
However, Bank of America downgraded SciPlay to “underperform” from “buy” Feb. 17. Bank of America analyst Ryan Gee told Seeking Alpha that he was “relatively less optimistic” on SciPlay as a content aggregator versus its peers and was cautious on the sustainability of SciPlay’s growth from new titles and user acquisition.
For the full year ended Dec. 31, SciPlay had net income of $146 million, or 86 cents per diluted share, up from net income of $93.5 million, or 53 cents per diluted share.
Twelve-month adjusted EBITDA rose 54.3% to $188.7 million from $122.3 million. Twelve-month revenue rose 25% to $582.2 million from $465.8 million.
SciPlay shares fell in both regular and after-hours trading Tuesday. The shares dipped $1.24, or 6.44% to close at $18.02 on the Nasdaq and shed an additional 8 cents, or -0.44% to close at $17.94 at 5 p.m. PST.
