Pollard Banknote Limited

Second-quarter revenue was $154.8 million, up from $142.7 million a year ago. Gross profit was $28.0 million, or 18.1% of sales, versus $23.9 million, or 16.7% of sales in Q2 2025. Adjusted EBITDA increased to $31.1 million from $29.2 million, and net income was $8.7 million versus $8.0 million; diluted EPS was $0.32 versus $0.30. Management did not provide formal quarterly or full-year guidance, but said the positive momentum from Q2 is expected to continue through 2026, with instant-ticket demand still robust and digital revenue recognition building as projects progress.

Doug Pollard said the quarter validated the company’s strategy across retail, charitable gaming, and digital. He emphasized that instant ticket volumes returned to historic levels, California’s transition to primary supplier went extremely well, and the company is seeing stronger ASPs and better manufacturing efficiency. His tone was upbeat but still disciplined, especially around Kansas, where he said Pollard submitted a compelling bid but is not taking the contract for granted.

John Pollard walked through the financial bridge in detail: revenue of $154.8 million, cost of sales of $126.8 million, gross profit of $28.0 million, administration expenses of $19.4 million, adjusted EBITDA of $31.1 million, interest expense of $2.4 million, and net income of $8.7 million. He attributed margin improvement to higher instant-ticket volumes, better ASPs, improved charitable eTab sales, and increased margin on the Belgium contract as work shifted into development. He also noted an $1.8 million consultant transition fee in other expenses, a lower FX loss of $0.7 million versus $3.5 million last year, and said the NCIB for up to approximately 976,000 shares is now underway as part of capital allocation.

Analysts focused on Belgium revenue recognition, instant-ticket margin drivers, California’s impact on margins, Kansas contract risk, and the Virginia RFP. Management explained Belgium is being recognized on a percentage-of-completion basis as deliverables roll out over the next couple of years, so revenue should be relatively smooth rather than lumpy. On Kansas, they said the business is still in build mode and not yet profitable, but they are optimistic about renewal; if they lose the RFP, there is no make-whole, and they would need to redeploy the capabilities elsewhere. On California, they said the contract is positive for margins overall, but the large volume and fixed-cost absorption make the percentage impact on gross margin less material than the absolute gross profit contribution.