Q2 2026 Pollard Banknote Ltd Earnings Call Transcript
Key Points
- Revenue increased 8.5% year-over-year to $154.8 million, driven by higher instant ticket volumes and digital sales.
- Gross margin improved to 18.1% from 16.7% in the prior year, reflecting higher volumes, better product mix, and improved manufacturing efficiency.
- The California Lottery transition exceeded expectations, with volumes and average selling prices above initial projections.
- Digital business expanded with the Colorado Lottery contract win and progress on the Belgium omnichannel contract, supporting future revenue growth.
- Charitable gaming, especially ETAB in Minnesota, achieved record revenue and margins, contributing to overall profitability.
- Equity investment income from the iLottery joint venture decreased by $2.7 million due to contract expiry and higher content costs.
- Administration expenses rose by $1.8 million due to higher compensation, professional fees, and ERP implementation costs.
- Other expenses increased by $1.5 million, including a $1.8 million consultant transition fee.
- The Kansas iLottery contract is still in a build-up phase and not yet profitable, with uncertainty around the upcoming RFP.
- The Michigan iLottery contract terminated at the end of Q2, reducing future revenue from that joint venture.
Good morning, everyone, and welcome to the Pollard Banknote Limited second quarter 2026 results conference call.
Listeners are reminded that certain matters discussed in today's conference call or answers that may be given to questions asked could constitute forward-looking statements that are subject to risks and uncertainties related to Pollard's future financial or business performance.
Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. The risk factors that may affect the results are detailed in Pollard's annual information form and other periodic filings and registration statements. And you may access these documents at Cedar Plus's database found at cedarplus.ca. I would like to remind everyone that this conference call is being recorded today, Thursday, August 13, 2026.
And I would now like to introduce Mr. Doug Pollard, Co-Chief Executive Officer of Pollard Banknote Limited. Please go ahead, sir.
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