Playtech has set a new medium-term EBITDA target for its B2B segment, while also emphasising the need for a renewed focus on cash generation.
Topline numbers
Playtech reported a 33% year-on-year increase in revenue to €1.6bn, while adjusted EBITDA climbed 28% to a record of €405.6m.
The strong performance can be attributed to robust demand in Playtech’s B2B business, particularly in regulated markets, where revenue grew 14% year-on-year to €632.4m.
B2B adjusted EBITDA was €160.2m, which Playtech stressed it achieved against the backdrop of the war in Ukraine, where it employs over 700 people.
Additionally, the company’s B2C segment, which includes Italian sports betting and gaming firm Snaitech, experienced a significant 48% surge in revenue to €983.1m.
Adjusted B2C EBITDA was €245.4m.
News nugget
Given the strong performance, Playtech has announced a new medium-term Adjusted EBITDA target for its B2B segment of between €200m and €250m.
Breaking down 2022 B2B performance, Playtech said it recorded 31% growth in Europe, excluding the UK.
Revenue reached €184.6m driven primarily by the Netherlands, with strong contributions from Poland, Spain and Ireland.
In the Americas, Playtech continued to perform well, generating revenue growth of 27% to €144.7m.
Caliente in Mexico remained a key driver of strong revenue growth, while Brazil also performed well in 2022 as the market moves towards regulation.
Asia revenue declined 18% due to competitive pressures and the impact of lockdowns in China and Malaysia throughout the year.
Playtech CFO Chris McGinnis: “The company has been investing for growth in recent years, and as a result, the focus has been on EBITDA within the company. Going forward, I believe we need to balance this and also focus on cash generation.”
In the B2C segment, Snaitech’s online business performed ahead of expectations with year-on-year revenue growth of 2%.
Snaitech’s adjusted EBITDA margin reached 56% in 2022, down 3% on 2021.
German-facing HappyBet, now integrated into Snaitech’s operations, remained loss-making, with negative EBITDA of €10.8m.
However, Playtech said it has implemented “strategic and operational measures”, including upgrading HappyBet’s technology infrastructure.
Elsewhere, Sun Bingo White Label saw 5% year-on-year revenue growth to €65.3m in 2022, while adjusted EBITDA for this segment came in at €2m.
Despite the company’s success, Playtech’s new CFO Chris McGinnis said he had identified areas for improvement, including the need for cash generation.
“The company has been investing for growth in recent years, and as a result, the focus has been on EBITDA within the company. Going forward, I believe we need to balance this and also focus on cash generation,” he said.
McGinnis said this is not a cost-cutting story, although he believes there is scope to improve cash generation, particularly within the B2B segment.
Best quote
During the earnings call, CEO Mor Weizer was asked why Playtech does not simply shut down loss-making B2C brand HappyBet.
“We have reasons to believe that the German and Austrian markets are very, very appealing markets. I think we can turn this business around, although it will be initially a low-scale business and we will grow it to scale.
“Germany is one of the largest betting markets in Europe. This is why we believe that there is a real opportunity in the short- to medium-term around sports betting and hopefully in the coming years around gaming as well.”
Best question
On the company’s new medium-term target for Adjusted EBITDA in B2B, management was asked whether this would be achieved organically or through M&A.
CFO McGinnis said new deals aren’t necessarily a prerequisite for that ambition: “I think we have enough deals in our pipeline, including the Hard Rock deal.”
Moreover, he said Playtech has a very strong pipeline of new SAS customers and should be strong enough based on the growth prospects of current customers to deliver on the targets.
Current trading & outlook
Despite the uncertain macroeconomic outlook due to geopolitical tensions and inflationary pressures, Playtech said it has enjoyed a strong start to 2023.
This success was largely driven by the company’s subsidiaries, Snaitech and Caliente, which it said demonstrated the resilience of a diversified portfolio.
Snaitech’s medium-term adjusted EBITDA guidance has been maintained at €300m to €350m.
Betclic has driven growth for FL Entertainment’s online sports betting and gaming arm to offset declines at Bet-at-home.
Topline numbers
Media and betting company FL Entertainment has reported a 15.7% year-on-year rise in group revenue to €4bn in 2022.
Adjusted EBITDA rose by 10% to €670.2m, resulting in an EBITDA margin of 16.6%.
FL Entertainment was formed last year as part of a special-purpose acquisition company (SPAC) merger, which included Betclic Everest Group and its subsidiary bet-at-home, along with television production company Banijay.
Banijay remained the primary contributor of overall group revenue. Nevertheless, FL Entertainment’s online sports betting and gaming business experienced substantial growth, recording a 13% increase in revenue to €835m for 2022.
This segment also witnessed remarkable growth in Q4 2022 after generating revenue of €244.1m, a substantial surge of 34.2% when compared to the same quarter of the previous year.
News nugget
FL Entertainment’s online sports betting and gaming business has delivered impressive growth, especially considering the challenges faced by Bet-at-home during 2022.
Bet-at-home, which exited the UK market last year, already reported an 85% drop in EBITDA for 2022.
Online revenue increased by 19% in 2022 at constant exchange rates and excluding discontinued Bet-at-home operations.
This growth was primarily driven by a 21% revenue increase of the Betclic entity, which offset a 10% decline at Bet-at-home.
The World Cup in Q4 2022 significantly contributed to Betclic’s performance, with the tournament generating 7.5% of Betclic’s annual sportsbook stakes and 31% in annual new sportsbook Unique Active Players.
Moreover, FL CEO François Riahi praised Betclic’s technology infrastructure, which was put to the test during the World Cup.
The platform processed 6 million odds updates per day and settled 1.5 million bets just 13 seconds after the end of each football match.
By division and including Bet-at-home, revenue in the sportsbook division rose by 13.8% to €670.1m in 2022, with a 25% increase in Unique Active Players.
Online casino revenue rose by 2.7% to €104.8m, driven by greater gamification and the launch of new exclusive games, while online poker revenue increased by 13.1% €49.9m, partially due to cross-selling during the World Cup.
Betclic said its commitment to responsible gaming standards and operating in regulated markets had paid off, with 96.5% of 2022 revenue generated in locally regulated markets.
Best quote
FL Entertainment CEO François Riahi on Betclic’s strong 2022 performance:
“Betclic has been the most downloaded sports betting app in our core markets of France, Poland and Portugal, and the second most downloaded across Europe, thanks to our state-of-the-art technology platform which leads the way in terms of reliability and efficiency.”
Best question
During the earnings call, Riahi was questioned about FL Entertainment’s M&A strategy for the upcoming year.
He replied that the company is strongly considering mergers and acquisitions, particularly in the content production and distribution sector.
However, he also mentioned that it’s challenging to plan for the “truly transformative deals”, and the company must seize opportunities as they arise.
“Nonetheless, we will remain very disciplined as we don’t see any point in acquiring companies at a price where it will be difficult to create value,” he added.
Current trading & outlook
For financial year 2023, FL Entertainment expects mid to-single digit organic revenue growth for its content production & distribution division, but double-digit organic growth for online sports betting and gaming.
The company plans to leverage its increased player numbers generated during the FIFA World Cup and upcoming events like the UEFA Champions League to drive increased betting volumes.
The group has set an adjusted EBITDA target of around €710m for 2023.
Licensed gambling companies in Sweden generated GGR of SEK27.4bn (€2.41bn) during 2022, according to the Swedish Gambling Authority (SGA).
That figure represents an increase of 5.1% compared to the previous year.
The published figures are preliminary and based on data from the Swedish Tax Agency, the SGA noted.
Breaking down the results by market sector, licensees in the commercial online gaming and betting category saw the largest growth, as GGR increased by just over 6% to SEK17.1bn.
Meanwhile, GGR from the state lottery and slot machines remained largely unchanged, generating approximately SEK5.8bn.
The SGA stressed that year-on-year comparisons must be seen against a backdrop of pandemic-related measures in 2021, which affected several licence categories.
Restrictions included the introduction of temporary heightened responsible gambling measures, as well as the closure of Casino Cosmopol for parts of the year.
Q4 results
During Q4 2022 specifically, Swedish GGR increased by 3.2% compared to the same period in 2021, reaching SEK7.2bn.
The SGA said the increase in revenue was particularly significant given the temporary responsible gambling measures and the closure of Casino Cosmopol in 2021.
The growth numbers also show the resilience of the gaming industry in Sweden despite the challenging circumstances.
As of the end of 2022, approximately 85,000 people had self-excluded via Spelpaus.se. That is an increase of 5% compared to the figure in 2021.
The gender distribution among self-excluded players remained relatively consistent with the previous year, with 75% being men and 25% being women.
Notably, 70% of those who self-excluded opted for indefinite suspension, while the remaining 30% chose to suspend their accounts for fixed periods ranging from one to six months.
Supervisory challenges
In addition, the SGA revealed in its 2022 annual report that it collected SEK81.7m in penalty fees, up from SEK13.7m in 2021.
Moreover, the regulator said it plans to review its supervisory fees in 2023 so that they are better aligned with the actual costs of supervising the industry.
The SGA added that a significant portion of its supervisory decisions are currently being appealed.
This has resulted in a high number of ongoing court processes, which “usually last for several years and in several instances can take up a significant part of our resource,” it said.
At the same time, the SGA stressed that clarifications in the legal area are important both for the regulator and for operators since the regulations are still relatively new.
However, the regulator warned that its capacity to initiate and carry out new supervision is currently limited as a result.
According to SGA Director General Camilla Rosenberg, there are “great demands” upon the regulator to continuously adapt its working methods in order to best achieve the goals of Sweden’s regulations.
One result of such demands is the planned introduction of a B2B licensing regime in the market, requiring suppliers to the industry, as well as operators, to gain approval from the regulator.
Despite mounting pressures and the stretching of its resources, the SGA has pledged to engage in greater dialogue with the industry in 2023 than before.
Rush Street Interactive expects to achieve positive adjusted EBITDA for the second half of 2023, becoming the latest publicly traded online gaming operator to announce a profitability timeline.
Topline numbers
During its fourth-quarter 2022 earnings report, RSI reported $165m in revenue for the quarter, a 27% increase compared to the fourth quarter of 2021. The company’s Q4 2022 net loss was ($31.1m) an improvement from the ($38.1m) in net losses it saw in Q4 2021.
RSI’s adjusted EBITDA was a loss of ($17.3m) in Q4 2022, improving from ($31.2m) in losses from the same quarter a year earlier.
The company’s adjusted advertising and promotional expenses were $63.2m in Q4 2022, virtually unchanged from Q4 2021.
Rush Street reported a 22% year-over-year increase in real-money monthly active users in the US and Canada between the fourth quarter of 2022 and 2021.
For calendar year 2022, RSI generated $592.2m in revenue, a 21% increase from 2021. Its net loss was ($143.m) in 2022, more than double the ($71.1m) in losses incurred during the year prior.
Adjusted EBITDA losses also increased year-over-year, growing from ($65.1m) in 2021 to ($98.1m) in 2022. Part of this was from an increase in yearly promotional spend, which increased to $218.4m from $186.9m.
News nugget
Rush Street Interactive expects to achieve positive adjusted EBITDA for the second half of 2023, a major milestone for the company and the latest sign US gaming operators are pivoting toward profitability. The company reported 95% annual growth in markets in North America as well as Latin America, where it is a leader in both the Mexican and Colombian markets.
The company joins Caesars, BetMGM and Penn Entertainment among companies that expect to achieve positive adjusted EBITDA returns this year after each company spent hundreds of millions of dollars on marketing, promotions and other free bets in the year prior.
US handle leader FanDuel was the first major US online gaming company to achieve a profitable quarter and expects full-year profitability in 2023. DraftKings, the No. 2 operator, expects to do the same in 2024.
RSI has significantly less market share than US market leaders such as FanDuel and DraftKings but it also has incurred far fewer financial losses. CEO Richard Schwartz said his company’s “disciplined operating philosophy” will ultimately pay off with projections for its first-ever quarter in the black later this year.
Best quote
Rush Street Interactive CEO Richard Schwartz: “I think we’ll remain flexible on how we invest in marketing but I think we’ve proven that we’ve been modest with our investments and achieved a lot while doing so.”
Best question
Rush Street officials were bullish on the nation’s online casino gaming future – and its role in that ecosystem.
When asked during Wednesday’s Q4 earnings call about any changes to the US regulatory environment, Schwartz said he was encouraged by the work in statehouses across the country. Though only five states have introduced bills to legalize real money online slots or table games, the Rush Street CEO said he could see political interest growing.
“I think you’re starting to really get momentum being built, which of course, is outstanding for us, because of all the companies and industry, we think we may be one of the ones that have a disproportionately large share of casino revenues,” Schwartz said. “And we do particularly well in the casino markets.”
Online casino gaming is essential to US gaming operators’ long-term investments. Major companies have been willing to burn hundreds of millions in player acquisition costs for sports bettors in large part in the hopes they will become players of online casino games, which have significantly higher profit margins.
However, only four states – New Jersey, Pennsylvania, Michigan and West Virginia – have fully competitive online casino gaming markets. Of the five states that have introduced bills, it appears only New Hampshire has a strong chance of passing one this year.
Still, long-term iCasino legalization could be especially promising for RSI, company officials reaffirmed Wednesday.
Two of the states seriously considering iGaming are Illinois and New York. Rush Street is headquartered in Chicago and has long had a strong brick-and-mortar presence in Illinois. The company is also one of only three operators to offer online sportsbooks in New York, Connecticut and New Jersey.
Current trading and outlook
Rush Street expects full year 2023 revenues to be between $630m and $700m, according to the company’s Q4 2022 report. Reaching the midpoint range of $665m in revenue would represent a 12% year-over-year increase.
The company laid out its target based on no new state launches as well as the continued operations of all markets in which it operates currently. States including Texas, Georgia, Minnesota and Missouri are considering sports betting legislation but no jurisdictions have passed a legalization measure so far this year.
Rush Street’s BetRivers sportsbook started taking bets in Ohio in January. It had roughly 0.1% revenue market share in January, which was 13th place of the 16 books taking bets.
RSI stock was down as much as 10% during trading early Thursday. The company’s stock is up more than 11% in the past three months but down more than 60% in the past year.
Spanish online gaming group Codere Online expects to be EBITDA positive in 2024 after Q4 2022 revenue climbed 70% year-on-year to €35.6m.
Topline numbers
Codere Online debuted on the US Nasdaq in December 2021, making 2022 the company’s first full year as a publicly listed business.
The company generated revenue of €35.6m in Q4 2022, 70% higher than the prior corresponding period.
The group’s Mexico revenue hit €14.5m in Q4 2022, more than double that of Q4 2021, amid a rise of 107%.
Meanwhile, Spain revenue rose to €17.8m in Q4 2022, up from €12.6m, marking a 42% increase year-on-year.
In Colombia, meanwhile, net gaming revenue (NGR) increased by 56% year-on-year to reach €2.3m.
For the full year 2022, revenue increased 45% to nearly €116m.
However, the company still reported a net loss of €17.4m in Q4 2022, rising to €45.9m for the entire year.
News nugget
CEO Moshe Edree has stepped down from his position, effective today (1 March), but will continue to be involved in the company as executive vice chairman of the board.
Aviv Sher, who previously served as COO, has taken over the CEO position. Sher boasts more than 15 years of industry experience, having held positions as COO of NeoGames and CEO of Prime Gaming.
“I am very proud of what we have accomplished together in our first year as a public company, and I am grateful for the opportunity to have served as CEO during such a critical phase of expansion and growth,” Edree said.
“Aviv and I have been working together for over a decade, and he has played a critical role in our success. I have full confidence in his leadership and his ability to build on our achievements, and take the company to even greater heights,” he added.
Edree stated the group’s Q4 and 2022 performance was better than expected.
“The World Cup undoubtedly played a significant role in keeping existing customers engaged but also attracting new customers during this quarter in which we had 54% more active players than in the same period of 2021,” he added.
Focus on profitability
In the earnings call, Edree said that in 2022, the company utilised a significant portion of the proceeds raised from the public listing to focus primarily on revenue growth through a significant increase in marketing investment.
However, in 2023, the company will gradually shift its focus towards profitability.
This transition is driven by current investor preference for cash-flow generating businesses or high-growth businesses with lower spend.
Therefore, in 2023, Codere Online plans to reduce its marketing investment and prioritise certain geographies.
Argentina remains firmly on the business’ agenda. The group expects to begin operations in the Province of Córdoba this year and will also continue pursuing licences in both the Provinces of Buenos Aires and Mendoza.
From a business mix perspective, Codere Online’s full-year revenue was evenly split between sports betting and casino games in comparison to a higher 56% contribution from sports betting in 2021.
In 2023, the company plans to leverage opportunities to cross-sell its casino product to sports betting customers.
Best quote
Codere Online CFO Oscar Iglesias: “We continue to be very excited about the future and the opportunities that lie ahead, particularly in Argentina, where we are making significant progress towards starting operations in several new regions this year.”
Best question
Michael Kupinski, director of research at Noble Financial Capital Markets, enquired about the company’s plan for Brazil.
Edree responded that for the time being, the company’s focus remains on its core markets, which are Spain, Mexico, and Argentina.
However, as a Latin American brand, the company is carefully considering the Brazilian market, but legislative issues are a concern, as is the fact the current big brands in Brazil operate under a dot com licence.
Stressing that it’s not on the agenda at the moment, a possibility would be for Codere Online to enter the market in partnership with a local marketing agency to accelerate its efforts.
Current trading & outlook
In 2023, the operator has set its sights on generating NGR of between €140m and €150m. NGR for 2022 came in at €122.9m.
It simultaneously intends to cut its Adjusted EBITDA losses by half, which is still projected to be negative at somewhere between €20m and €30m.
The group expects to be EBITDA positive in 2024.
Catena Media revenue grew 15% to €27.4m in Q4 2022, while the sale of its AskGamblers business to GiG has freed up resources for future acquisitions.
Topline numbers
In Q4 2022, revenue from continuing operations was €27.4m, which represents a 15% year-on-year increase.
North America accounted for 78% of total revenue as the region grew by 31% year-on-year to €21.5m.
Adjusted EBITDA from the group’s continuing operations increased by 14% to €12.3m, up from €10.8m in Q4 2021.
That corresponds to an adjusted EBITDA margin of 45%.
For full-year 2022, revenue from continuing operations was €110.1m, an increase of 7% compared to 2021.
In contrast, adjusted EBITDA from continuing operations decreased by 16% to €50.1m, at a margin of 46%.
News nugget
Catena Media confirmed its commitment to regulated market growth and shared some more insights into its strategic priorities for 2023.
CEO Michael Daly said the sale of its AskGamblers brand to GiG had freed up resources for M&A and organic investment without taking on excessive levels of debt.
Daly said: “AskGamblers is a solid business with healthy margins. However, the accelerating trend towards market regulation led us to conclude that the brand, which partly addresses non-regulated grey markets, would enjoy better development prospects under new ownership.”
Catena Media added that following the completion of a strategic review first announced in May 2022, the business “will positively evaluate M&A investments to further strengthen its position in strategic markets.”
The firm also revealed in its report that it had divested its Financial Trading segment via a management buyout at the end of January 2023.
Daly explained that “shifts in the global sports betting industry and in various trading markets led Financial Trading to become an under-appreciated part of the Catena Media portfolio”.
He added: “Over time, we ceased to have the bandwidth or parameters to maximise the business’ potential under our ownership.”
Daly said the company now has “the ability to invest flexibly into newly regulated markets in different regions”.
“At present, those opportunities are concentrated in North America and it is our firm belief that the US and Canada offer the best investment case for the company and its shareholders in current conditions,” he said.
Best quote
Catena Media CEO Michael Daly: “Some 90% of revenue from continuing operations now comes from regulated markets. We are nevertheless not averse to investing in markets that offer stable and predictable operating conditions, even if they are not yet regulated. One example is Japan, which operates a tolerant approach to online casino and where we are committed to expanding our already-significant market presence.”
Best question
Analyst Oscar Rönnkvist from AGB Sundal pointed to Catena Media’s recent trading update that projected adjusted EBITDA from continuing operations of €10.8m. However, the company actually reported adjusted EBITDA of €12.3m.
Rönnkvist asked about the cost reductions made to achieve this result.
In response, CFO Peter Messner said that Catena Media was not focused on faster cost-cutting measures, but was following the plan previously announced as part of its European restructuring and streamlining measures.
Messner further explained there were several elements to consider when comparing Q4 of the previous year to Q4 of 2022.
One element is that certain European grey market assets were divested at the end of Q3 2022, which distorts the year-over-year comparison. The divested Financial Trading segment also had a negative contribution that further deteriorated during the quarter.
Current trading & outlook
Despite a 19% increase in North American revenue in January 2023, group revenue from continuing operations decreased by 4%.
This outcome was not unexpected, Catena Media said, as the previous year saw record-breaking market launches that resulted in a 65% increase in North American revenue compared to January 2021.
In other news, the affiliate announced last month that third parties had expressed interest in acquiring the entire company. Today, Daly stated that he would not provide further details on the process but expected the company’s strategic review to be concluded in 2023.
Meanwhile, the affiliate has initiated the process of hiring a new CFO as Messner prepares to leave his current position.
DraftKings expects to generate positive adjusted EBITDA by 2024 as the company improves its financial bottom line following years of significant losses.
DraftKings made its strongest projection yet toward improved EBITDA flow in Thursday’s earnings release, announcing the company expects to generate positive contributions in 2024 after losing roughly $4bn overall since 2019.
DraftKings attributed the improvements in part due to “a meaningful slowdown” in the growth rate of its fixed costs, according to the company’s Q4 2022 earnings release.
“I am very pleased with how we concluded 2022, with continued top-line growth and strong focus on expense management,” DraftKings CEO Jason Robins said in a statement.
The company stock spiked more than 6% in after-hours trading Thursday following the earnings announcement.
Topline numbers
DraftKings improved its fiscal year 2023 AEBITDA outlook to losses of between ($350m) and ($450m) compared to its prior fiscal year 2023 Adjusted EBITDA guidance of between ($475m) and ($575m) it announced during its Q3 2022 earnings call. This would reflect the company’s most profitable fiscal year since the company became publicly traded in 2019.
The company is raising its fiscal year 2023 revenue guidance to a range of $2.85bn to $3.05bn from a range of $2.8bn to $3bn it announced during its previous earnings call. The updated 2023 revenue guidance range equates to year-over-year growth of 27% to 36%.
DraftKings announced $855 in Q4 2022 revenue, an 81% year-over-year increase from Q4 2021. The company improved Q4 AEBITDA losses from nearly ($128m) in Q4 2021 to around ($50m) in Q4 2022.
This includes expenses accompanying online sports betting launches in Maryland in November 2022 as well as Ohio in January of this year. DraftKings will launch its online sportsbook in its home state of Massachusetts in March and then Puerto Rico later this calendar year.
Overall, the company’s total AEBITDA losses grew from ($676) in calendar year 2021 to ($722m) in calendar year 2022.
Officials attributed the recent success to better player retention as well as improved monetization as promotional intensity declines in mature markets.
News nugget
DraftKings has given investors a long-awaited timeline for positive contributions. The company has spent even more aggressively in marketing, free bets, advertising and other promos than other leading operators in an all-encompassing player acquisition mission that Robins and other DraftKings officials have said will lead to long-term profitability.
DraftKings has the No. 2 spot in the nation’s combined online sports betting and iGaming handle but has recorded steeper losses than its closest competitors due to its massive spending.
The updated profitability timeline comes as DraftKings biggest rivals are nearing or have already reached the red. FanDuel, DraftKings’ fellow daily fantasy sports pioneer-turned-sportsbook and iGaming giant had a positive quarter last calendar year and expects a profitable calendar year 2022.
BetMGM, the nation’s No. 1 iCasino platform by handle, expects a positive quarter in 2023. Smaller competitors including Caesars and Barstool also expect to reach profitability this year.
Best quote
CEO Jason Robins: “Moving into 2023, we will continue to drive revenue growth and focus on expense management to accelerate our adjusted EBITDA growth. We have already taken several actions that resulted in an increase to our revenue guidance and significant improvement in our adjusted EBITDA guidance.”
Best question
DraftKings previously announced it would separate quarterly earnings call from its formal results announcement, a move rarely taken by gaming companies. DraftKings officials are set to take questions Friday morning.
It was unclear why DraftKings split the earnings call and announcement into separate days.
Current trading and outlook
Stock for DraftKings finished roughly even during regular trading Thursday but touched gains of more than 7% during after-hours trading as investors responded positively to the company’s improved financial outlook.
DraftKings stock is up around 17% in the past week and 35% in the past month. The company stock is still down significantly from its all-time peak nearly two years ago.
LeoVegas has reported a 68% year-on-year decline in adjusted EBITDA for Q4 2022 to €3.7m.
This corresponds to an EBITDA margin of 3.8%, down from 11.8% last year.
Meanwhile, revenue in Q4 totalled €99.5m, corresponding to an increase of 1% compared with the preceding year.
The operator, now owned by MGM Resorts, cited transaction-related costs as well as a management incentive programme as contributing factors for the EBITDA decline.
Specifically, personnel costs rose during the quarter, totalling €17.6m, up from €13.9m in Q4 2021.
The company also experienced an uptick in other operating expenses, which climbed to €16.5m from €10.6m.
LeoVegas said a “major proportion of the increase was the result of provisions for player claims in two markets”. However, the company provided no further details.
LeoVegas’ reporting obligations have changed after the company’s shares were delisted from Nasdaq Stockholm as a result of the sale to MGM Resorts.
However, LeoVegas AB still has bonds listed on the Nasdaq Stockholm, and its Q4 report therefore reflects those reporting requirements.
Regional performance
In terms of regional performance, LeoVegas said NGR in Nordic countries increased by 9% year-on-year, with Sweden achieving a strong quarter due to new records set by betting brand Expekt.
Meanwhile, in the Rest of Europe, NGR rose by 4% year-on-year, with the UK and Spain reporting healthy growth during the period.
NGR growth in the region was negatively impacted by Germany, however.
In the Rest of the World segment, NGR decreased by 15% year-on-year. The company’s decision to exit some smaller markets earlier in the year had an adverse impact on growth in the short term, it said.
For the full year 2022, LeoVegas reported revenue of €394.7m, a slight increase on 2021 when it generated €391.2m.
Adjusted EBITDA came in at €34m in 2022, down nearly 24% year-on-year.
B2B iGaming technology supplier EveryMatrix has recorded its best financial year in its 15-year history.
The Malta-headquartered company recorded growth across all of its business segments, including casino, sports, and platform, surpassing expectations with its gross profit increasing by 26% year-on-year in 2022 to reach €65m.
Revenue was up 47% year-on-year to €127m.
Annual EBITDA increased by 23% year-on-year to €23.3m in 2022, which resulted in an EBITDA margin of 36%.
Q4 performance
In Q4 2022, gross profit rose by 39% year-on-year to €19.4m, with a three-year compound annual growth rate of 40%.
Revenue increased by 66% to €39.5m, while quarterly EBITDA rose by 81% year-on-year to €6.9m.
Gross profit in casino was up 43% to €8.9m, while sport gross profit was up 18% to just over €5m.
Gross profit for EveryMatrix’ platform segment increased 63% year-on-year to around €5m.
The supplier attributed the financial performance to its strategic diversification and broad client base of over 200 global customers, which has helped to mitigate the “impact German regulation had on gross profit in the casino segment”.
Excluding Germany, group gross profit for the Rest of the World saw an increase of 43% year-on-year and 113% between Q4 2020 and Q4 2022.
Best sales year
The company also achieved its best sales year, signing 149 new deals worth more than €25m per year, including 14 turnkey, 18 tier-1, and 7 US contracts.
Net cash grew from €21.1m at the end of Q3 2022 to €24.1m in Q4 2022, allowing the company to reinvest positive cash flow into future growth while remaining debt-free.
EveryMatrix Group CEO Ebbe Groes commented: “It has been a phenomenal year on so many levels with records broken in every area of the business and every business unit contributing to our best 12 months yet.
The final quarter of 2022 was of particular significance as the supplier won 28 new clients across all products, including the tender to supply Hungary’s National Lottery operator Szerencsejáték with sports betting software solutions and services for its online brand TippmixPro.
Aristocrat has reported double-digit revenue and EBITDA growth for 2022 amid a warning that next year’s results might be impacted by lower profit from Pixel United and further investment in real-money gaming brand Anaxi.
Aristocrat’s share price fell by more than 5% on Wednesday (16 November).
For the financial year ended 30 September 2022, Aristocrat posted an EBITDA increase of nearly 20% to A$1.85bn and a 13.9% rise in net profit after tax to A$1.05bn.
The results were underpinned by a 17.7% increase in group revenue to A$5.6bn, with the company pointing to an “exceptional performance” in its North American gaming operations and in outright global sales in spite of “supply chain issues and mixed operating conditions across its key markets”.
Aristocrat Gaming contributed 54%, or nearly A$3bn, to the total revenue, while social gaming platform Pixel United generated 46%.
However, Pixel United, which reports in US dollars, saw revenue decline marginally by 0.6% to $1.8bn (A$2.67bn) in 2022 compared to 2021.
Aristocrat Gaming’s Americas revenue accounted for $1.7bn (A$2.52bn), a nearly 25% increase on 2021. Revenue in Australia and New Zealand increased by 15.5% to A$461.7m.
In 2022, Aristocrat moved to cease operating its mobile games in Russia after it invaded Ukraine. This market had historically contributed about 3% of Pixel United bookings.
As a result, normalised profit after tax increased 27% year-on-year to A$1.1bn.
Aristocrat CEO Trevor Croker: “While we are focusing first on the North American iGaming vertical, we ultimately aim to be the leading gaming platform within the global online RMG industry. We will continue to invest behind this key adjacent growth opportunity as we build Anaxi over the medium-term.”
Aristocrat CEO and managing director Trevor Croker said: “Aristocrat’s performance underlines the ongoing implementation of our growth strategy. Throughout the year, we continued to invest in competitive product portfolios to drive further share growth across key segments, greater operational diversification and deeper business capability.”
“Strong performance in Aristocrat Gaming more than offset headwinds in the Pixel United business, again highlighting the increasing diversification and resilience of our Group,” he added.
Croker further highlighted that the company made further progress in its ‘build and buy’ strategy to scale in online real money gaming (RMG), with the launch of its new business, Anaxi.
“While we are focusing first on the North American iGaming vertical, we ultimately aim to be the leading gaming platform within the global online RMG industry. We will continue to invest behind this key adjacent growth opportunity as we build Anaxi over the medium-term,” Croker said.
Looking ahead, the company said it expects the Aristocrat Gaming business to continue performing strongly. Aristocrat also said it planned further investments in Anaxi.
However, the company warned the Pixel United business is expected to deliver lower growth in bookings and profit in 2023 compared to previous years, which could have affected investor confidence and sent the stock down 5%.