Pollard Banknote ((TSE:PBL)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Pollard Banknote’s recent earnings call reflected a mixed sentiment, showcasing a blend of significant achievements and notable challenges. The company reported record revenues and successful integration of acquisitions, alongside strong performance from its joint venture. However, these positives were tempered by a decline in gross profit, instant ticket sales volume, and net income, as well as increased expenses and regulatory hurdles in Minnesota.
Record Revenue Achieved
Pollard Banknote Limited celebrated a milestone with record revenue of $288.9 million for the first half of 2025, and a combined revenue of $352.7 million. This achievement underscores the company’s ability to generate substantial income, despite facing various market challenges.
Strong Performance of NeoPollard Interactive Joint Venture
The NeoPollard Interactive joint venture delivered impressive results in Q2 2025, particularly with significant eInstant sales growth in Virginia and North Carolina. This performance highlights the joint venture’s strategic importance and its contribution to the company’s overall success.
Successful Integration of Acquisitions
Pollard Banknote successfully integrated Pacific Gaming and CJ Venne, which has led to increased revenue synergies and a comprehensive suite of products for the charitable gaming market. This strategic move has strengthened the company’s market position and expanded its product offerings.
Increase in Instant Ticket Selling Price
The company benefited from higher average selling prices of instant tickets, which boosted sales by $4.5 million compared to 2024. This increase was attributed to repriced contracts, reflecting Pollard Banknote’s ability to adapt to market conditions.
Positive Impact from Foreign Exchange
The weakening of the Canadian dollar against the U.S. dollar and euro resulted in an approximate $3.5 million increase in sales. This favorable exchange rate movement provided a financial boost to the company’s revenue figures.
Decrease in Gross Profit
Despite record revenues, Pollard Banknote experienced a decrease in gross profit to $23.9 million (16.7% of sales) in Q2 2025, down from $29.2 million (21.2% of sales) in Q2 2024. This decline was due to lower instant ticket margins, iLottery start-up costs, and decreased eTab sales.
Decline in Instant Ticket Sales Volume
Instant ticket sales volumes saw a reduction of $9.2 million compared to 2024, primarily because customer orders were postponed to later in the year. This delay impacted the company’s immediate revenue generation.
Impact of Regulatory Changes in Minnesota
Regulatory changes in Minnesota led to a decrease in eTab gameplay and gross gaming revenue across the market, affecting Pollard Banknote’s offerings. This regulatory environment poses a challenge to the company’s operations in the region.
Increased Administrative and Selling Expenses
Administrative expenses rose by $1.1 million to $17.6 million in Q2 2025, while selling expenses increased by $0.8 million to $16.5 million. These rising costs have put additional pressure on the company’s profitability.
Net Income Decline
Net income fell to $8 million in Q2 2025 from $11.9 million in Q2 2024, primarily due to decreased gross profit and increased expenses. This decline underscores the financial challenges the company faces despite its revenue growth.
Forward-Looking Guidance
Pollard Banknote anticipates higher third-quarter volumes and is focused on improving instant ticket margins while exploring opportunities in the iLottery and charitable gaming sectors. Despite a challenging environment, the company reported traditional GAAP sales of $142.7 million in Q2 2025, up from $137.8 million in the same period last year. The NeoPollard joint venture also achieved record results, driven by strong eInstant sales in Virginia and North Carolina.
In conclusion, Pollard Banknote’s earnings call revealed a company navigating a complex landscape of achievements and challenges. While record revenues and successful joint ventures highlight its strengths, declining profits and regulatory issues present hurdles. The company’s forward-looking strategies aim to bolster its market position and address these challenges head-on.