Everi Holdings Inc. (EVRI) is a leading provider of gaming technology, financial technology, and loyalty solutions for the casino and hospitality industries. With a rich history spanning over two decades, Everi has established itself as a key player in the rapidly evolving landscape of gaming and financial services.
Business Overview Everi was formed in 2015 through the merger of Global Cash Access and Multimedia Games, combining their respective strengths in financial access services and gaming technology. The company's origins can be traced back to 1998, when it was founded as Global Cash Access, primarily focused on providing financial access services to casino operators. In 2014, the company expanded its reach by acquiring Multimedia Games, a leading provider of gaming machines and systems.
Today, Everi operates through two distinct business segments: Games and FinTech. The Games segment offers a diverse portfolio of gaming machines, including Class II, Class III, and Historic Horse Racing (HHR) slot machines, as well as providing and maintaining central determinant systems for video lottery terminals (VLTs) in New York and certain tribal jurisdictions. The FinTech segment provides a suite of financial access and related services, including digital, cashless, and physical cash options, as well as loyalty and compliance solutions for casino operators.
Everi has grown to serve over 2,800 casinos and gaming properties primarily in the United States, Canada, and Australia, with additional customers in international markets. The company has faced several challenges over the years, including increasing competition in the financial access services market in the early 2010s, which put pressure on pricing and margins. In response, Everi diversified its product portfolio and invested in new technology.
Another significant challenge for Everi has been adapting to regulatory changes in the gaming industry. As jurisdictions implemented new rules and requirements around financial transactions, anti-money laundering, and responsible gaming, Everi made substantial investments in its compliance and regulatory technology solutions to meet these evolving standards.
Financial Performance Over the past few years, Everi has demonstrated strong financial performance, despite the challenges posed by the COVID-19 pandemic. In 2024, the company reported total revenues of $757.90 million, a slight decrease from the previous year's $807.82 million. However, the company's net income for 2024 was $15.02 million, down from $84.00 million in 2023.
Financials Everi's financial position remains solid, with a current ratio of 1.08 and a debt-to-equity ratio of 3.74 as of December 31, 2024. The company's operating cash flow for 2024 was $318.41 million, and its free cash flow was $161.98 million. These figures highlight Everi's ability to generate strong cash flows, which can be used to fund its growth initiatives and maintain a healthy balance sheet.
In the most recent quarter (Q4 2024), Everi reported revenue of $189.52 million, a 9% decrease compared to the prior year quarter. This decline was primarily due to lower daily win per unit and a decline in the average number of units in the installed base. Net income for Q4 2024 was $3.86 million, a 91% decrease from the previous year, largely due to higher operating expenses related to the Proposed Transaction.
Liquidity Everi's liquidity position remains strong, as evidenced by its ability to generate substantial cash flows from operations. The company's current ratio of 1.08 and quick ratio of 0.98 indicate that it has sufficient short-term assets to cover its short-term liabilities. Additionally, the strong operating cash flow of $318.41 million in 2024 provides Everi with the financial flexibility to invest in growth opportunities and manage its debt obligations.
As of the most recent reporting period, Everi had $400.68 million in cash and cash equivalents. The company also has access to a $125 million credit line under its Revolver, further bolstering its liquidity position.
Segmental Performance Everi's Games segment generated $378.92 million in revenue in 2024, a decrease from the previous year's $429.15 million. The decrease was primarily due to a decline in the daily win per unit and a lower average number of units in the installed base. However, the segment's operating income was $11.19 million, reflecting the company's efforts to manage costs and maintain profitability.
Within the Games segment, gaming operations accounted for $277.46 million in revenue, while gaming equipment and systems contributed $101.46 million. The total cost of revenues for the Games segment was $101.18 million.
The FinTech segment, on the other hand, reported relatively stable performance, with revenues of $378.98 million in 2024, compared to $378.67 million in 2023. The segment's operating income was $100.38 million, demonstrating the strength of Everi's financial technology offerings and the continued demand for its services.
Breaking down the FinTech segment further, financial access services generated $228.70 million in revenue, software and other services contributed $104.12 million, and hardware sales accounted for $46.16 million. The total cost of revenues for the FinTech segment was $56.65 million.
Strategic Initiatives and Growth Opportunities Everi has been proactive in pursuing growth opportunities and adapting to the changing dynamics of the gaming and financial technology industries. The company has invested heavily in research and development to enhance its product offerings and deliver innovative solutions to its customers.
In the Games segment, Everi has focused on developing new gaming content, hardware, and systems to meet the evolving preferences of casino patrons. The company's focus on premium game content and the expansion of its installed base in new markets have been key drivers of growth.
In the FinTech segment, Everi has been at the forefront of the digital transformation in the gaming industry. The company's CashClub Wallet and other cashless solutions have gained traction, as casino operators seek to provide seamless and secure financial access to their patrons. Additionally, Everi's compliance and loyalty solutions have been instrumental in helping its customers navigate the complex regulatory landscape and enhance their customer engagement.
Acquisitions and Partnerships Everi has also been active in pursuing strategic acquisitions and partnerships to strengthen its market position and expand its capabilities. In 2023, the company acquired certain strategic assets of VKGS LLC (Video King), a provider of integrated electronic bingo gaming tablets, video gaming content, instant win games, and systems. This acquisition has allowed Everi to enhance its bingo solutions offerings and further diversify its gaming portfolio.
Additionally, Everi has leveraged partnerships to broaden its reach and deliver integrated solutions to its customers. In 2024, the company announced a partnership with the Vegas Golden Knights, becoming the official mobile application partner of the NHL team. This partnership allows Everi to showcase its Venuetize mobile technology platform and enhance fan engagement for the Golden Knights.
Risks and Challenges While Everi has demonstrated resilience and adaptability, the company faces several risks and challenges that could impact its future performance. The highly regulated nature of the gaming and financial services industries requires Everi to navigate a complex regulatory landscape, which can lead to increased compliance costs and operational complexities.
The company also faces competition from larger gaming equipment manufacturers and financial technology providers, which can put pressure on pricing and margins. Additionally, Everi's dependence on the performance of the casino and hospitality industries exposes it to macroeconomic factors, such as fluctuations in consumer spending and tourism.
Following the announcement of the Proposed Transaction, three purported stockholders filed complaints alleging that the proxy statement omitted or misstated material information. Thirteen other stockholders sent demand letters making similar allegations. These legal challenges could potentially impact the company's operations and financial performance in the short term.
Industry Trends The gaming industry is highly competitive and evolving, with opportunities in digital transformation but also challenges in regulatory compliance. The industry has seen moderate compound annual growth rate (CAGR) over the past three years. Everi's focus on digital solutions and compliance tools positions the company well to capitalize on these trends and navigate the evolving regulatory landscape.
Geographic Performance Everi is predominantly a domestic company, with no significant concentration in any specific regional markets within the United States. This geographic diversity helps to mitigate risks associated with regional economic fluctuations or regulatory changes.
Conclusion Everi Holdings has established itself as a prominent player in the gaming and financial technology sectors, leveraging its diverse product portfolio and innovative solutions to serve the needs of its customers. Despite the challenges posed by the pandemic and the competitive landscape, the company has demonstrated its ability to adapt and navigate the evolving industry dynamics.
With a focus on research and development, strategic acquisitions, and strategic partnerships, Everi is well-positioned to capitalize on the growing demand for gaming entertainment and financial technology solutions in the casino and hospitality industries. As the company continues to execute its growth strategy, investors will be closely watching Everi's ability to maintain its financial strength, expand its market share, and deliver sustainable long-term value.