Stars Group report a strong third quarter

The Stars Group has released its third quarter and nine months results, reporting improved revenues and EBITDA over both metrics and strong growth.

Highlights of the report include:

* Q3 revenues up 21.7 percent year-on-year at US$ 329.44 million;

* Q3 EBITDA up 26.5 percent at $ 155.76 million;

* Nine months ended September revenue up 12.7 percent at $ 952 million;

* EBITDA over first nine months of 2017 up 20.4 prcent at $ 453,3 million;

* Corporate net earnings of $75 million;

* Real-money online poker revenues and real-money online casino and sportsbook combined revenues represented approximately 67.2 percent and 28.9 percent of total revenues for the quarter, respectively, compared to approximately 72.7 percent and 23.7 percent for the prior year period;

* Real-money online poker revenues for the quarter were $ 221.4 million, or an increase of approximately 12.5 percent year-over-year, primarily driven by the implementation of the Stars Rewards loyalty program;

* Online Casino and Sportsbook revenues for the quarter were $ 95.2 million, or an increase of approximately 48.3 percent year-over-year;

* Total long-term debt outstanding at the end of the quarter was $2.45 billion with a weighted average interest rate of 4.7 percent. The Stars Group prepaid without penalty an additional $75 million under its second lien term loan using cash on its balance sheet and cash flow from operations. The principal balance of the second lien term loan is currently $95 million;

* Total Q3 active unique players were approximately 2.1 million, an increase of 2.1 percent year-over-year led by the re-launch of PokerStars in Portugal in late 2016 and the growth and expansion of The Stars Group’s real-money online casino and sportsbook offerings. Approximately 2.0 million of such QAUs played online poker during the quarter, which remained virtually flat year-over-year;

* The Stars Group’s online casino offerings had approximately 553,000 QAUs, an increase of 20.1 percent year-over-year, which The Stars Group continues to estimate is one of the largest casino player bases among its competitors, while its emerging online sportsbook offerings had approximately 273,000 QAUs, a 14.8 percent increase year-over-year;

* Quarterly Net Yield was $150 per player, an increase of 18.8 percent;

* Customer Registrations increased by 2 million during the quarter to approximately 115 million;

* New cross-group Stars Rewards program launched in July 2017 seen as a success, with 85 percent of active customers electing to participate, and nearly $45 million in prizes awarded.  The Stars Group believes the program has positively impacted the overall product ecosystem across verticals and continues to receive positive feedback from most players.

Group CEO Rafi Ashkenazi reported:

“Our operations and management continued to perform in the third quarter, delivering strong year-over-year growth bolstered by the launch of Stars Rewards.

“Not only did we see improvement in our poker business, but our casino continues to grow with a significant active player base and our online sportsbook continues to see meaningful growth in turnover.

“To build upon these achievements, we plan to focus on reinvesting in our core products and increasing our investment in marketing for the remainder of 2017 and into 2018 while continuing to explore further growth opportunities.”

The group issued its final Full Year guidance, reconfirming its 2017 full year financial guidance ranges previously announced on September 15 and continues to expect the following:

Revenues of between $1,285 and $1,315 million;
Adjusted EBITDA of between $590 and $610 million;
Adjusted Net Earnings of between $445 and $469 million; and
Adjusted Net Earnings per Diluted Share of between $2.17 and $2.31.

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