Amaya Inc., the Canadian gambling technology firm that recently acquired online poker giant PokerStars, reported a net loss of $2.9m in the second quarter but revenue spiked as the company’s other acquisitions began paying off. Revenue for the three months ending June 30 was $42.5m, up 14% from the same period last year. Adjusted earnings were essentially flat at $14.3m and earnings margin fell four points to 34%.
Amaya’s net loss was a significant improvement over the $11.m loss in Q2 2013, although this year’s figure was aided by a deferred income tax recovery. Expenses rose by a third to $61.5m, primarily due to acquisition costs and increased activity at Amaya’s gaming device division.
With the $4.9b Rational Group acquisition having been completed ahead of schedule, Amaya can expect five full months this year of financial contribution from its new toys (Stars, Full Tilt and live tournament properties). As such, Amaya has revised its full-year guidance, with revenue now expected to come in between $669m and $715m, up from $193m and $203m cited back in May. Forecasts for adjusted earnings have also more than tripled to between $265m and $285m.
David Baazov (pictured), Amaya’s CEO and the current epitome of the hot chick at the online gambling bar, called the quarter “a transformative period’ for his company. Baazov said the Rational acquisition was “an enormous opportunity to take advantage of adjacent opportunities in online casino and sportsbook – in jurisdictions where they can be offered – while growing in new geographies.”
But Baazov said Amaya was “strongly committed to Rational Group maintaining its focus” and that these new verticals would only be pursued if they can prove not to cause “any disruption to the core poker offering.” Baazov said he expects to be able to grow poker in 2014 but also expects growth in these new verticals; singling out casino as the one to watch.
As for the Q2 figures, Baazov gave thanks for the busy Cadillac Jack gaming device division and the Diamond Game Enterprises lottery services business. Cadillac Jack installed its first units in Atlantic City and the division got similar regulatory okays in Louisiana and Wisconsin, shipments to which will commence in H2. The quarter started with Cadillac Jack announcing deals totaling 1,100 shipments across the US.
On the software side, Amaya successfully integrated its Casino Gaming System into European-facing sites for Bwin.party and Cherry AB as well as the New Jersey site of Ultimate Gaming. Amaya’s new Full Tilt acquisition has also been integrated and/or assimilated.
Baazov will participate in a conference call on Friday at 9am EST, but it’s unlikely any significant new details will be divulged regarding Amaya’s post-Rational plans. Both companies have done an admirable job of staying on message and letting the world in on their plans according to their own timetable. But serious questions remain about Amaya’s long-term future in grey/black markets that will need to be addressed in due course.