Amaya Revenue Forecast Has Good News, Bad News for Shareholders, US Dollar Will Impact Profits

November 12th, 2015 | by Kaycee James

Some positive news for Amaya, as its Q3 report shows increased profits and more planned innovations for 2016. But stronger American currency has forced the company to downgrade its 2015 overall earnings projections. Shown here: CEO David Baazov with Daniel Negreanu. (Image: Nicolas Godin)

While Canadian poker operator Amaya will definitely feel the impact of the strengthening US dollar, the company’s Q3 report has resulted in at least some positive news for its shareholders, after it reported an 8 percent year-on-year revenue increase.

The last three months of operation have seen Amaya’s revenue peak at $241 million (all dollars are American unless otherwise indicated), a figure that represents an eight percent increase over the same period in 2014.

Additionally, when adjusted for EBITDA (earnings before interest, taxes, depreciation, and amortization), this Q3 figure results in earnings of $105 million, also an eight percent improvement on 2014’s takings.

On the Up and Down

In broader terms, the last nine months of operation in 2015 have seen Amaya bank $740 million compared to $697 million in 2014. Moreover, Amaya’s B2C poker revenue, made up of takings from Full Tilt and PokerStars, increased by 12 percent in Q3 between 2014 and 2015.

However, despite the recent upswing in fortunes for Amaya, the company was still forced to downgrade its annual revenue projection by 13 percent. Citing the strong US dollar as the reason for player’s decreased spending power, Amaya adjusted its 2015 target to $1.2 billion – $1.3 billion.

As well as reducing its revenue prediction, Amaya also reduced its profit projection on a share price basis from $1.76 to $2 to $1.66 to $1.75.

In addition to the bullish US dollar, Amaya has also had to contend with regulatory changes in 30 jurisdictions. Although the prospect of a reentry into the US market has kept Amaya’s overall share price strong, legal shifts in countries such as Greece have dampened the online gaming operator’s earning power.

Regardless of the legal hurdles and global economic shifts, Amaya CEO David Baazov is positive about his company’s fate in 2016.

“We believe we are well positioned to increase our cash flow and continue to grow our customer base in 2016 through a number of initiatives,” Baazov said in a statement accompanying Amaya’s Q3 results.

PokerStars to Target Video Gamers

Along with a pending venture into the US market in New Jersey, Amaya and PokerStars are also poised to release a slew of innovations in 2016.

According to the company’s latest “roadmap,” PokerStars will be beta launching a new poker variant aimed at mobile users in the coming months. It will also be releasing features designed to bring video game players into the poker ecosystem.

How these innovations will look in reality remains unclear, but what is definite is that PokerStars will continue to diversify its portfolio of offerings in 2016 as it attempts to cement its position as the largest gaming platform in the world.