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Scientific Games reports Q2 growth and “great progress” with divestitures


Scientific Games reported a revenue of $880m (£664.0m/€748.0m) in its half-year 2021 results, a revenue rise of 63.2% year-on-year, as it plans to divest its lottery and sports betting arms.

Revenue came to $880m (£634.2m/€748.1), a significant increase compared to its revenue of $539m in Q2 2020.

A total of $367m of the revenue came from gaming, while $266m was generated from Scientific Games’ lottery offerings. The remaining $247m was derived from SciPlay, Scientific Games’ digital games developer, and digital play.

The business plans to divest its lottery and sports betting businesses, however. The supplier announced its plans to divest in June, in a move the company described as for the sake of “sustainable growth”.

In particular, gaming revenue shot up, rising by 303.2% compared to the same period in 2020, in which many casinos were closed due to the novel coronavirus (Covid-19). Scientific Games credited this to strong gaming operations and gaming machine sales in the quarter.

Revenue services generated $551m of the total, followed by $174m in instant products and $155m in product sales.

Operating expenses amounted to $717m, a 20.5% rise year-on-year. A total of $205m was spent on selling, general and administrative costs. Cost of services came to $151m, while depreciation amortization and impairment costs totaled at $123m. The remaining expenses comprised of product sales, instant products, research and restructuring costs.

In considering the expenses, the total operating income was left at $163m, an increase of $219m year-on-year.

Other expenses, such as interest expense and income tax expense, left the total Q2 net income at $113m, a substantial rise of $311m.

Scientific Games also released its H1 results, with half-year revenue rising by 27.2% to $1.60bn compared to the $1.26bn in revenue reported in H1 2020.

However, year-on-year operating expenses also rose overall. Selling, general and administrative expenses totaled at $391m, followed in expense by the cost of services at $290m. Depreciation, amortization and impairment expenses came in third at $246m.

In total, operating expenses came to $1.36bn, up by 0.9% from H1 2020. This left the total operating income for the half at $244m, an yearly increase of $332m.

Other expenses, including interest costs and income tax expense, left the total net income at $104m. This was a rise of $475m year-on-year.

“I am very pleased that we continue to make tremendous progress on all of our key strategic pillars while also driving significant growth in the quarter,” said Barry Cottle, president and chief executive officer of Scientific Games.

“We are moving rapidly to transform our company and I have never been more optimistic about our path forward.”

Regarding the results, Michael Ecklund, executive vice president and chief financial officer of Scientific Games, said: “We are taking decisive steps to optimize our portfolio, de-lever our balance sheet and invest to grow.  I am very encouraged by the interest and discussions we are having around our proposed divestitures, and we are making great progress as we move quickly to unlock shareholder value.

“We are proud of the team as they continue to execute during this exciting time, delivering a quarter with strong revenue, profit and cash flow growth.”

In July, Scientific Games announced that senior executive Keith O’Loughlin had stepped down from his position after media reports claimed that he supported motorsports personality Eddie Jordan’s bid to acquire the supplier’s sports betting offerings.