Half Year 2026 Playtech PLC Earnings Call Transcript
Key Points
- Adjusted EBITDA increased 77% year-on-year to EUR163 million, with free cash flow reaching EUR101 million, a step change from around EUR30 million for the full year of 2025.
- Regulated B2B revenue grew 21% on an underlying basis, driven by strong momentum in the Americas, particularly the US and Canada where revenue increased 176%.
- The US business achieved profitability sooner than expected, supported by the successful partnership with Hard Rock Digital and growth across live casino and PAM+ verticals.
- Significant operating leverage was achieved, with B2B adjusted EBITDA margin improving to 32.4% and B2B costs declining 3% year-on-year due to cost optimization measures.
- The balance sheet remains strong with net cash of EUR39 million and an undrawn EUR225 million revolving credit facility, providing flexibility for growth investments and shareholder returns.
- The investment portfolio, including stakes in Caliente Interactive and Hard Rock Digital, contributed EUR34 million in adjusted EBITDA from investment income, with the Hard Rock Digital stake more than tripling in value to around EUR250 million.
- Live vertical delivered 12% growth in regulated markets with improved margins, and the launch of innovative products like the AI live virtual host and Parx motor racing games positions Playtech for future growth.
- The company is ahead of schedule in delivering its medium-term targets of EUR300 million adjusted EBITDA and EUR100 million free cash flow, with rapid progress made in H1 2026.
- The UK market was impacted by customer-specific changes and increased remote gaming duty, leading to lower performance in the region.
- The contribution from Hard Rock Digital is expected to trend toward a lower but more sustainable level in H2 2026 as they introduce other third-party suppliers in Florida.
- Adjusted EBITDA in H2 2026 is expected to be lower than H1, and there will be a normalization in EBITDA margin, indicating a temporary rebasing of financial performance.
- The company faces regulatory uncertainties, including potential changes to gaming machine taxes in the UK and political sensitivities in Brazil that have delayed the conclusion of an agreement.
- Exceptionals remain high, with a significant portion related to the Snaitech sale, and some remaining amounts will impact H1 2027, affecting the clarity of underlying performance.
- The live vertical's growth in non-US regulated markets was not as strong as expected, with only 12% growth overall, and management expressed dissatisfaction with the current pace.
- The Caliente stake is not revalued upwards regularly and is subject to mechanical accounting, which may not reflect its true market value, potentially limiting balance sheet upside.
- Consolidation among operators could pose short-term challenges, although it is generally seen as an opportunity in the medium to long term, depending on the parties involved.
Good morning, everyone, and thank you for joining us for our 2026 interim results. As always, I will begin with a brief overview before handing over to Chris, who will take you through the financials and the outlook. I will then update you on our progress against our strategic priorities.
H1 2026 has been a landmark period for Playtech. The strategic transformation of our business has delivered an inflection point, both in terms of profitability and cash generation. These results reflect the culmination of many years of hard work and disciplined execution across the group. Adjusted EBITDA increased 77% year-on-year to EUR163 million and free cash flow reached EUR101 million.
This was underpinned by continued momentum across our regulated B2B business, where underlying revenue grew 21% along a strong contribution from our investments. Importantly, this growth translated into meaningful operating leverage with adjusted EBITDA margin from operations increasing materially. The US and Canada remained a key engine of
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