Pollard Banknote ((TSE:PBL)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Pollard Banknote’s recent earnings call presented a mixed sentiment, showcasing significant strategic achievements alongside current financial hurdles. The company celebrated major contract wins in Belgium and California and reported record sales figures. However, these successes were tempered by decreases in gross profit and net income, attributed to start-up costs and regulatory impacts. The overall sentiment suggests a positive strategic direction but acknowledges existing financial challenges.
Belgium Lottery Contract Win
Pollard Banknote secured a substantial 12-year contract valued at CAD 289 million with the Belgium National Lottery. This win is particularly noteworthy as it replaces a long-standing incumbent provider, marking a significant strategic victory for the company.
California State Lottery Contract
In another major achievement, Pollard Banknote was named the primary contractor for the California State Lottery’s instant ticket products. This 12-year contract is valued at CAD 375 million, further solidifying the company’s position in the lottery market.
Record Sales
The company achieved record GAAP sales of $156.3 million and combined sales of $187.3 million in Q3 2025. These figures represent an increase from $153.2 million and $180.4 million, respectively, in Q3 2024, highlighting strong sales performance.
NeoPollard Joint Venture Growth
Pollard Banknote’s NeoPollard joint venture reported an income increase to $15.3 million, up from $13.6 million the previous year. This growth was driven by robust e-instant sales in North Carolina and Virginia, demonstrating the joint venture’s expanding market presence.
Gross Profit Decrease
Despite record sales, gross profit decreased to $28.1 million, or 18.0% of sales, down from $31.4 million, or 20.5% of sales, in Q3 2024. This decline was primarily due to start-up losses from the Kansas iLottery and lower eTAB sales margins.
Net Income Decline
Net income fell to $10.3 million from $18.2 million in Q3 2024. This decrease was influenced by reduced gross profit, increased administrative expenses, and higher operational costs.
Regulatory Changes in Minnesota
The company faced challenges in the Minnesota market, where regulatory changes led to a $1.1 million decrease in charitable eTab revenue, impacting overall sales.
Forward-Looking Guidance
Pollard Banknote’s forward-looking guidance emphasizes continued strategic investments and contract wins as key drivers of future growth. The company remains focused on expanding its market presence through innovative gaming solutions, despite the current financial challenges. The recent contract wins in Belgium and California are expected to contribute positively to future financial performance.
In summary, Pollard Banknote’s earnings call reflected a blend of strategic successes and financial challenges. While the company celebrated significant contract wins and record sales, it also faced decreases in gross profit and net income due to start-up and regulatory expenses. The overall sentiment is one of cautious optimism, with a focus on leveraging strategic wins for future growth.