NeoGames Reports Q3 2023 Financial Outcomes

NeoGames S.A., an iGaming and iLottery solutions provider, has disclosed its financial results for Q3 2023, ending September 30th. The quarter witnessed a revenue combination of US$63.3 million (£51.2 million/€59.3 million), contrasting with $73.3 million in Q3 2022. This includes the reclassification of Aspire Core revenues to a net basis from January 1, 2023, influencing the year-over-year comparison. On a gross basis, the adjusted revenue, including NPI share, would reflect an 11.5% growth at $81.7 million.

The company’s iLottery revenue grew by 5.6% to $14.4 million, while its share in NPI revenues surged by 53.3% to $17.0 million. This aggregates to a 26.9% year-over-year increment in iLottery earnings, buoyed by performance across key accounts and a notable US jackpot.

iGaming revenues stood at $31.9 million due to new accounting terms. Adjusted for gross basis reporting, iGaming revenue would tally $50.5 million, a 4% growth, driven by the Games and Sports sectors, notwithstanding regulatory challenges in the UK and a temporary halt in Germany—now resolved with a new operational license.

A net loss of $3.6 million, equating to $0.10 per share, was recorded for the quarter, an improvement from the $4.4 million loss in Q3 2022. The losses were mainly due to costs associated with the Aristocrat transaction and amortization from the Aspire merger.

The adjusted net income stood at $4.4 million, or $0.13 per share, a rise from $3.0 million in the previous year’s quarter. Adjusted EBITDA increased by 12.9% to $19.9 million.

The company’s cash and cash equivalents totalled $27.1 million at the quarter’s end, down from $41.2 million at 2022’s close, influenced by factors such as the Aristocrat transaction advisory fees, Aspire Core’s performance, acquisitions, and German licensing bank guarantees.

Highlighting recent activities, NeoGames’ venture NPI was chosen by the West Virginia Lottery for a comprehensive iLottery program, marking the fifth state for NPI’s operation and reinforcing market share. Preparations are underway with the North Carolina Education Lottery to launch eInstants, and the company’s studio offerings have extended into OPAP via Pariplay.

Pariplay’s movements include entering Pennsylvania with Rush Street Interactive, signing with 10 new operators, and Aspire Global’s slot licensing in Germany. BtoBet’s alliance with AGLC marks its North American market entry, while NeoGames Studio has debuted eInstant games with the Atlantic Lottery Corporation in Canada.

Moti Malul: Chief Executive Officer at NeoGames, said: “We are pleased with the progress we made during the third quarter advancing our strategic goals while we continue to work towards completing our merger with Aristocrat Leisure. Our iLottery business continues to win market share and grow as we have recently announced that our joint venture, NeoPollard Interactive, expanded its footprint in the U.S., winning a public procurement to provide the West Virginia Lottery with a full iLottery program. Furthermore, we are working together with the North Carolina Lottery to prepare for the expansion of their iLottery program as they recently received approval to launch eInstant games. Pariplay’s extensive aggregation collaborations, including deals with OPAP in Greece to introduce games from NeoGames Studio, and iGaming content with Rush Street Interactive in Pennsylvania, further bolster our market presence. We also signed ten new operators, including leading operators, Hard Rock and Fortuna Entertainment Group. With BtoBet’s online sports betting entry into the North American market through a transformative partnership with AGLC, we believe that we are poised for even greater expansion. While Aspire Core results slowed due to regulatory shifts in the United Kingdom and operational changes in Germany as we obtained our license to operate in that market, we anticipate seeing gradual improvement over the next few quarters. We remain focused on achieving sustainable growth. We are also encouraged by the interest and pipeline in the U.S. market for our iGaming offering. We plan to continue to invest in delivering the deals we’ve announced and to enhance our product offering to scale and capture future opportunities in the space.”

Malul continued: “We are very thankful for the overwhelming support we continue to receive from our customers and business partners given the unfortunate conflict in Israel and the Middle East. As we have previously stated, there has been no impact on the business and the business continues to operate as usual.”

“We continue to make progress towards completing our merger with Aristocrat Leisure, and during this quarter have received additional regulatory approvals which are required to close. We continue to expect the deal to be completed during the first half of fiscal year 2024,” Malul stated. “In the meantime, we remain dedicated to elevating the iGaming landscape, capitalizing on opportunities, and diligently executing on our strategic objectives for the benefit of all stakeholders.”