EVERI HOLDINGS INC. ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 2024
Everi Holdings Inc. (EVRI) reported its fiscal year 2024 annual report, which ended on December 31, 2024. The company’s revenue increased by 12% to $1.34 billion, driven by growth in its gaming and digital segments. Net income rose to $143.4 million, or $1.65 per diluted share, compared to $114.1 million, or $1.33 per diluted share, in the prior year. The company’s cash and cash equivalents increased to $243.8 million, and its debt decreased to $1.15 billion. Everi also reported a 14% increase in its gaming segment revenue, driven by strong performance in its slot machines and table games businesses. The company’s digital segment revenue grew by 21%, driven by increased adoption of its digital gaming solutions.
Overview of the Company’s Financial Performance
Everi Holdings Inc. is a leading provider of games and financial technology solutions for the gaming industry. In fiscal year 2024, the company reported total revenues of $757.9 million, a 6% decrease from the prior year. This decline was primarily driven by lower revenues in the Games segment, which offset relatively flat revenues in the FinTech segment.
The Games segment, which includes gaming operations and gaming equipment and systems, saw revenues decrease by 12% to $378.9 million. This was mainly due to a reduction in the daily win per unit and a decline in the average number of gaming machines in the installed base. The FinTech segment, which includes financial access services, software and other, and hardware, reported relatively flat revenues of $379.0 million.
Despite the revenue decline, Everi remained profitable, generating net income of $15.0 million in fiscal year 2024. However, this represented an 82% decrease from the prior year’s net income of $84.0 million. The primary drivers of the lower profitability were increased operating expenses, including transaction costs related to the company’s pending acquisition, and higher inventory reserves and firm purchase commitment charges in the Games segment.
Revenue and Profit Trends
Everi’s Games segment has experienced mixed results in recent years. Gaming operations revenues, which are derived from the installed base of leased machines, decreased by 9% in fiscal year 2024 due to a lower daily win per unit and a decline in the average number of units installed. Gaming equipment and systems revenues, which come from the sale of gaming machines, also declined by 19% due to fewer units sold, partially offset by a higher average selling price.
In contrast, the FinTech segment has shown more consistent performance. Financial access services revenues, which are based on the total value and number of transactions processed, increased by 2% in fiscal year 2024. Software and other revenues, which include support services for kiosks, loyalty, and compliance solutions, grew by 5%. However, hardware revenues, primarily from kiosk and loyalty unit sales, declined by 15%.
The company’s profitability has been impacted by several one-time charges and increased operating expenses. In fiscal year 2024, Everi recorded $34.9 million in transaction and related costs associated with the pending acquisition of the company. The company also incurred a $3.8 million charge related to a decline in the expected utility of certain firm purchase commitments in the Games segment.
Additionally, the company experienced rising payroll, software licensing, and hardware maintenance costs, which contributed to a 7% increase in operating expenses. These factors, combined with the revenue declines in the Games segment, led to a 50% decrease in operating income and an 82% decrease in net income compared to the prior year.
Strengths and Weaknesses
One of Everi’s key strengths is its diversified business model, with both a Games segment and a FinTech segment. The FinTech segment has provided more stable and consistent revenue and profitability, helping to offset the volatility in the Games segment. The company’s financial access services, software and other offerings, and hardware solutions have all contributed to the FinTech segment’s performance.
Another strength is Everi’s focus on innovation and new product development. The company continues to invest in research and development to introduce new gaming cabinets, game themes, and financial technology solutions. This helps the company maintain its competitive position and meet the evolving needs of its casino operator customers.
However, Everi faces several weaknesses and challenges. The decline in the Games segment’s performance, particularly the reduction in the daily win per unit and the installed base of gaming machines, is a concern. The company’s reliance on the gaming industry, which is sensitive to economic conditions, also exposes it to macroeconomic volatility and uncertainty.
Additionally, the company faces ongoing pricing pressure from competitors in both the gaming equipment and financial access services markets. This can impact the company’s profit margins and make it more difficult to maintain its market share.
Outlook and Future Prospects
The pending acquisition of Everi by a private equity firm, along with the simultaneous acquisition of IGT’s Gaming & Digital business, is a significant development for the company. Once the transaction is completed, Everi will become a privately-owned company, and its common stock will be delisted from the New York Stock Exchange.
The acquisition is expected to provide Everi with additional resources and financial flexibility to invest in its business and pursue growth opportunities. However, the transition to private ownership may also bring new challenges, such as increased debt levels and a different strategic focus.
Looking ahead, Everi will need to navigate several industry trends that could impact its business. These include continued macroeconomic volatility, global instability, inflationary pressures, and interest rate movements, all of which can affect casino gaming demand and operator capital budgets. The company will also need to address ongoing supply chain disruptions that may impact the anticipated increase in sales of gaming equipment.
Additionally, Everi faces competition from larger gaming equipment manufacturers and systems providers, as well as continued pricing pressure in the financial access services market. The company’s ability to remain competitive will depend on its ability to successfully launch new gaming cabinets, game themes, and financial technology solutions that resonate with casino operators and their patrons.
Overall, Everi’s financial performance in fiscal year 2024 was mixed, with the Games segment experiencing declines while the FinTech segment remained relatively stable. The pending acquisition and the company’s ability to navigate industry challenges will be critical factors in determining Everi’s future success as a privately-held entity.
