Pollard Banknote (PBL) investor relations material

Executive summary

• Achieved strong financial results in Q2 2026, with revenue of $154.8 million, up 8.5% year-over-year, and robust performance across instant tickets, digital, and charitable gaming.

• Combined sales including joint ventures reached $189.1 million, up 8.2% year-over-year.

• Instant ticket production volumes returned to historic 2025 levels, boosted by the new California Lottery contract, which exceeded expectations.

• Digital business expanded, highlighted by the Colorado Lottery digital solutions contract and ongoing Belgium Lottery omnichannel project.

• Charitable gaming revenues and margins surpassed last year, with Minnesota eTab market reaching record levels and new markets being pursued.

Financial highlights

• Revenue for Q2 2026 was $154.8 million, up from $142.7 million in Q2 2025, driven by higher instant ticket sales, increased average selling prices, and digital growth.

• Gross profit rose to $28 million (18.1% of sales) from $23.9 million (16.7%) year-over-year, due to higher instant ticket and eTab margins and Belgium Lottery contract development.

• Adjusted EBITDA increased to $31.1 million from $29.2 million year-over-year and was significantly higher than Q1 2026 ($21.5 million).

• Net income was $8.7 million, up from $8.0 million in Q2 2025; EPS rose to $0.32 from $0.30.

• Interest expense decreased to $2.4 million from $3.1 million year-over-year.

Outlook and guidance

• Scheduled instant ticket volumes remain robust for the rest of 2026, with Q3 margins historically the highest due to holiday season demand.

• Belgium Lottery contract is progressing into the development phase, expected to drive increased revenue.

• Digital and charitable gaming segments expected to maintain strong momentum, with Minnesota eTab sales exceeding 2024 levels and new jurisdictions expressing interest.

• Continued focus on manufacturing efficiencies and cost base improvements, with positive impacts already realized in Q2.

• No explicit quantitative guidance provided, but management expects positive trends to persist.