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NeoGames SA has highlighted the long-term value of its combination with Aspire Global, reporting strong growth across its business throughout 2022 despite a net loss due to heightened costs.
Headline figures in the company’s full year and Q4 2022 trading report saw NeoGames register group-wide revenue growth of 149% from $84.5m to $210.2m, attributed by the solutions provider to the Aspire Global merger, and also including shares in NPI revenue.
Aspire Global itself generated revenue of $207m, a 5.7% growth rate in USD and 19% in constant currency, whilst the group’s iLottery operations recorded growth of 16% to $98.1m ($82.4m), contributing $112.1m to NeoGames group revenues as of June 2022.
Overall, acquisition related-costs and the amortisation of intangible assets from the Aspire Global takeover saw a net loss for the firm of $19m in comparison to net income of $5.7m the year prior.
However, adjusted EBITDA rose 63.2% from $33.4m to $54.5m, and NeoGames remains confident in its prospects as an enlarged business post-M&A, citing enhanced capabilities across sports betting, gaming and iLottery.
Moti Malul, NeoGames CEO, said: “We are proud of the tremendous progress we made during 2022, further solidifying our iLottery leadership position in a continually expanding market.
“A record year in iLottery was punctuated with another record quarter. In addition, we made some truly transformational strides advancing our strategic goals.
“We significantly evolved our business through our acquisition of Aspire Global, expanding beyond our position as a leader in global iLottery solutions, and propelling us to becoming a global leader in providing technology and content solutions across iLottery, online sport betting and iGaming.”
During the fourth quarter, notable developments included an agreement between Aspire’s BtoBet sportsbook division and Mexican online firm PickWin.
This integration was bolstered by PariPlay’s leveraging of its fusion platform, whilst the Aspire igaming brand also found North American success through partnering with Betway.
The final quarter of the year closed with total revenue from group-wide operations and NPI shares standing at $83.2m, an uptick of 291% from $21.3m in 2021, alongside EBITDA growth of 129% to $18.1m (Q4 2021: $7.9m).
Of this, Aspire generated revenue of $54.8m, representing a 12.4% growth rate in USD and 27% growth rate in constant currency. Meanwhile, iLottery income rose by 33% year-on-year and 16% from Q3 to a quarterly record of $28.4m.
Lastly, although still registering a loss during the quarter, NeoGames was able to make progress on returning to profitability, with the negative sum standing at $800,000, up from a loss of $3.6m in Q4 2021.
Malul continued: “Our results underscore the advantage of our ability to serve customers on an integrated basis, whether they need solutions for iLottery, online sports betting, iGaming, or any combination of services.
“We ended the year growing our iLottery revenue by 33% during the fourth quarter, and our iGaming revenue by 27% as measured on a constant currency pro forma basis from the prior year.
“During 2022, we grew revenue across all business lines and we believe that we remain well-positioned to continue to deliver profitable growth into 2023 and beyond.”
Maintaining confidence in its 2023 outlook, NeoGames highlighted post-close developments such as a partnership between UK casino firm Metropolitan Gaming and Aspire as well as a stronger performance for NPI in North America.
NeoGames was able to secure a joint venture operating agreement for the firm in these markets, in addition to a deal with Pollard Banknote Limited, which it states will ‘reinforce NPI’s leadership position in the market’ and enable group-wide pursuit of iLottery opportunities.
Perhaps most significantly, the group secured market entry in Brazil via a partnership with Intralot de Brasil to provide online sports betting for Loteria Mineira, the official lottery of Brazil’s second largest state, Minas Gerais.
Based on the long-term viability of Aspire Global and its sportsbook and igaming units as well as the group’s continued performance in iLottery, NeoGames projects revenue of between $235m-$255m by the end of 2023, including from NPI revenue shares.
Malul remarked: “Each year the global gaming industry tends to expand further into the online channel, and each year the needs of our customers evolve to require a more integrated approach across lottery, gaming and sports betting.
“In our view, we are well positioned as a leader to provide our customers, both regulated state lotteries and private gaming operators, a leading, full suite of solutions to meet all their digital gaming needs.
“This was demonstrated once again in Brazil, where we carried the strong momentum we generated in 2022 into 2023 and launched iLottery and online sports betting with the official lottery of Brazil’s second largest state, Minas Gerais.
“We believe these achievements on top of those accomplished in 2022 will help position us to achieve our objectives of sustainable accretive growth and value for our shareholders.”
