Amaya (AYA) Prelim. Q3 Revenue Light of Views; FY16 Guidance Mixed to Consensus
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Amaya Inc. (Nasdaq: AYA) announced certain preliminary results for the third quarter ended September 30, 2016 and provided full year financial guidance for 2016. Unless otherwise noted, all dollar ($) amounts are in U.S. dollars.
"We anticipate our third quarter performance will continue to demonstrate the improving strength of PokerStars' core poker business, as well as continued growth in our new verticals of online casino and sports betting," said Rafi Ashkenazi, Chief Executive Officer of Amaya. "Since earlier this year, our four strategic priorities remain the same: (1) grow our leadership position in online poker, (2) become a leader in online casino, (3) build a competitive online sportsbook, and (4) achieve operational excellence by improving efficiency and effectiveness throughout the organization."
Mr. Ashkenazi further commented, "We are focused on applying our industry leading technology platform to best serve our customers and deliver high-quality customer service and a superior gaming and entertainment experience, while continuing to deliver on our overall strategy and corporate objectives for the benefit of our shareholders."
Preliminary Third Quarter Results
Amaya currently expects to report the following:
- Revenues - Total revenues of between $268 to $273 million, as compared to approximately $247 million of total revenues for the third quarter ended September 30, 2015. (The Street was looking for $286.5 million.) Real-money online poker revenues and real-money online casino and sportsbook combined revenues are expected to represent approximately 73% and 24% of expected total revenues for the quarter, respectively, as compared to 81% and 15% for the prior year period.
- Quarterly Real-Money Active Uniques (QAUs) – Total combined QAUs of 2.4 million, which would represent an increase of approximately 5% year-over-year. Approximately 2.3 million of such QAUs played online poker during the quarter, which would represent an increase of approximately 3% year-over-year, while Amaya's online casino offerings had approximately 490,000 QAUs and its emerging online sportsbook offerings had approximately 230,000 QAUs.
- Quarterly Net Yield (QNY) – Total QNY of $110 to $111, which would represent an increase of 4% to 5% year-over-year. QNY is a non-IFRS measure.
These views on anticipated results are based on management's initial review of its operations and performance for the third quarter ended September 30, 2016, do not include all results expected to be reported, and are subject to the completion of Amaya's customary quarterly closing and review procedures.
Amaya expects to release its full financial results for the third quarter ended September 30, 2016 on Monday, November 14, 2016, and will provide timing and conference call and webcast details in the near future.
2016 Full Year Guidance
For the full financial year 2016, Amaya currently expects the following:
- Revenues of $1,127 to $1,157 million. (The Street is at $1.18 billion.);
- Adjusted EBITDA of $490 to $510 million;
- Adjusted Net Earnings of $332 to $352 million; and
- Adjusted Net Earnings per Diluted Share of $1.71 to $1.82. (The Street sees $1.63.)
Amaya's current guidance ranges assume no (i) material adverse regulatory events or (ii) material foreign currency exchange rate fluctuations that could negatively impact customer purchasing power as it relates to Amaya's U.S. dollar denominated product offerings.
As previously reported, the purchase price for Amaya's acquisition of the Rational Group in August 2014 included a $400 million deferred payment payable on February 1, 2017. In addition to Amaya's required monthly excess cash flow deposits, which were approximately $144 million as of September 30, 2016, and approximately $99 million of unrestricted cash on Amaya's balance sheet as of the same date, Amaya is pursuing various non-dilutive options to pay the balance of such deferred payment and expects to announce the same by the end of the current fiscal year.
Adjusted EBITDA, Adjusted Net Earnings and Adjusted Net Earnings per Diluted Share are non-IFRS measures. For important information on Amaya's non-IFRS measures, see below under "Non-IFRS and Non-U.S. GAAP Measures" and, with respect to expected QNY for the third quarter ended September 30, 2016, the table under "Reconciliation of Non-IFRS Measures to Nearest IFRS Measures". As a result of Amaya's change in presentation currency from Canadian dollars to U.S. dollars during the first quarter of 2016, the comparative and historical figures disclosed herein have been retrospectively adjusted to reflect such change as if the U.S. dollar had been used as the presentation currency for all prior periods presented.
Reconciliation of Non-IFRS Measures to Nearest IFRS Measures
The table below presents a reconciliation of the numerator of QNY (i.e., real-money online poker revenue and real-money online casino and sportsbook combined revenue) to the nearest IFRS measure (i.e., total revenue):
Three Months Ended September 30,
268,241 - 273,241
Other business-to-consumer revenue
(8,632) - (10,632)
Real-money online poker revenue and real-money online casino and sportsbook combined revenue
259,609 - 262,609
Amaya has not provided a reconciliation of the non-IFRS measures to the nearest IFRS measures included in its full year 2016 financial guidance provided in this release, including Adjusted EBITDA, Adjusted Net Earnings and Adjusted Net Earnings per Diluted Share, because certain reconciling items necessary to accurately project such IFRS measures, particularly net income (loss), cannot be reasonably projected due to a number of factors, including variability from potential foreign exchange fluctuations impacting financial expenses, and the nature of other non-recurring or one-time costs (which, for example, are excluded from non-IFRS measures but included in net income(loss)).
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