The entire gaming industry continues to expand with the opening of more and more regulated markets. This has set the stage for the dramatic growth of gaming software developers as well as online gaming operators. On the development side of the equation, Scientific Games Interactive has become a dominating force in the marketplace.
In a recent post on the Scientific Games Interactive website, Sbcamericas.com, SG’s 2018 financial highlights were covered in detail. A strong fourth quarter was the driving factor behind some overall positive results. Other than a $151 million hit due to a settled legal battle with Shuffle Tech, the final numbers show the company moving in the right direction.
How Is Scientific Games Interactive Financial Performance Over 2018?
The company’s digital business increased revenue to $71.5 million with $51.7 million from NYX alone. The overall fourth-quarter revenue increased eight percent to $885.7 million due partly to NYX. Another strong performer was SG’s lottery and social gaming business. Net income for the fourth quarter was $206.8 million compared to a net loss of $43.1 million in 4Q 2017. This had more to do with the accounting procedures for the mentioned Shuffle Tech legal issue.
For 2018 as a whole, revenue increased nine percent ($279.6 million) to reach $3.6 billion. The net loss in profit was $352.4 million as compared to a net loss of $242.3 million the previous year. Included in the accounting procedures was $253.4 million in restructuring costs and other charges that were also related to settling the Shuffle Tech issue. Other costs included $27.5 million related to the higher-than-expected acquisition of Spicerack in 2017.
Scientific Games Interactive Discusses Their Stock Performance
Indeed, Barry Cottle is the CEO and President for Scientific Games Interactive. Furthermore, his response to the results are as follows.
“This is a very exciting time for Scientific Games. We’re focused on developing the best games and the most innovative platform to deliver outstanding gaming experiences wherever and whenever players choose to play. We are building momentum and continuing to grow our business while at the same time operating more efficiently. The entire organization is enthused about 2019 and focused on helping our customers win, which will drive our free cash flow and create meaningful value for our shareholders.”
Also quoted in the report is Michael Quartieri as Chief Financial Officer. He stated:
“We continue to grow our top line driven by the strength of our products. We believe there are opportunities for further growth in 2019. Both on a top line and bottom line basis. We are firmly committed to maximize free cash flow and deliver our balance sheet.”
When it comes to gaming revenue, SG reports a loss of $22.7 million. This attributes a negative $6.8 million impact on gaming operations due to a new accounting procedure implemented in 2018. Gaming operations revenue did decline in the fourth quarter by $1.7 million. This can also be traced to the new revenue recognition accounting procedures.
While gaming machine sales dropped $23.1 million for the year, gaming system revenue posted an $8.1 million gain to $91.6 million due to system expansion in Canada. Table product revenue also increased $10.1 million with strong global demand for shufflers and other table products.
• Source: Scientific Games publishes Q4 and full-year financials From Sbcamericas.co On February 21, 2019.