The newly renamed PENN Entertainment reported its second-quarter 2022 results on Thursday, with total revenue increasing and net income falling. But the iGaming sector – led by Barstool Sportsbook and theScore Bet – continues to grow.
Penn National Gaming Inc. reported its second-quarter results on Thursday as the company saw mixed financial news, with legal sports betting revenue rising but profits falling.
Perhaps the bigger news, however, is that the company also announced that it has officially changed its name to PENN Entertainment.
“Today is an exciting day for us as we become PENN Entertainment, Inc.,” Jay Snowden, CEO and President, said via press release. “Our new name maintains ties to our heritage while better reflecting our evolution into a leading provider of integrated entertainment, sports content and casino games in North America.”
The company, which operates Barstool Sportsbook and theScore Bet, announced that total revenue in the second quarter increased 5.2% year-over-year ($1.63 billion to $1.55 billion), with adjusted EBITDA of $476.5 million ( up 1.4% from Q2 2021), but net income for the second quarter a year ago was $198.7 million, and this year it was only $26.1 million (an 87% decrease).
PENN also reported earnings of 15 cents per share, well below analysts’ estimates of 50 cents per share. It follows a first quarter when analysts expected earnings of $0.45 per share (and actually generated earnings of $0.29) — and marks four consecutive quarters of missing EPS estimates.
News of the company’s second-quarter results sent shares plunging to $34.82 a share on Thursday before settling at $35.14 at the close, losing $1.45, or 3.96%. In after-hours trading, it fell a further 0.58% to $34.94.
Shares were at $50.82 on March 1, but hit a 52-week low of $26.46 on June 16. They have since recovered, but are nowhere near their 52-week high of $86.40.
Bar stool, theScore Bet goes strong
However, iCasino’s operations and sports betting performed quite well in the second quarter, bringing in revenue of $154.9 million, up 99% from the same period last year (excluding the impact of third-party partner gaming tax refunds countries).
PENN also achieved a major milestone with the implementation of a “proprietary risk and trading platform” for the Score Bet app and aims to migrate Barstool Sportsbook to an in-house technology stack by the third quarter of 2023.
They did not release specific financials for theScore Bet, which operates solely in Ontario, Canada, but said 76% of bettors use theScore mobile news app, taking advantage of an already established following and customer base.
“Our interactive segment further expanded its reach with the launch of theScore Bet mobile app in Ontario on April 4,” said Snowden. “In July, we successfully implemented our own in-house risk and trading platform in Ontario, which significantly enhances theScore Bet’s online betting capabilities, mobile product offering and overall integrated media and betting ecosystem.”
As for Barstool, which has 24 retail sportsbooks in 10 states, it earned $179.3 million (up 19% from the $162 million figure for the second quarter of 2021). The company also aims to add Barstool Sportsbook integration to the Score app for users based outside the US, and expects to launch online sports betting in four new markets over the next 12 months: Kansas, Ohio, Maryland and Massachusetts.
PENN currently owns a 36% stake in Barstool Sportsbook, but plans to reach 50% by the third quarter of 2023 with an option to acquire full ownership.
Snowden sees hope for the future
Was not everything bad for PENN Entertainment though. As mentioned above, the company’s revenue increased 5.2% year-over-year, with the company still forecasting 2022 revenue between $6.15 billion and $6.55 billion, with adjusted EBITDAR in the range of $1.875 billion to $2 billion.
Snowden was also still upbeat about the company’s financials on Thursday’s call, despite mixed second-quarter numbers.
“We are pleased with our results for the second quarter,” he said. “Despite economic difficulties, we delivered consistent results across our retail portfolio in the quarter and in July. Our strong operating performance and balance sheet allowed us to opportunistically repurchase $167 million of shares during the quarter under our $750 million share repurchase authorization.”