Allwyn reported a robust 27% increase in year-on-year net revenue for the second quarter of 2023, primarily driven by its acquisition of a majority stake in the U.S. daily fantasy sports operator PrizePicks this past January.
In the financial results released on Thursday, the company revealed a net revenue of €1.25 billion, which represents a significant rise from the €979 million earned during the same period last year.
Adjusted EBITDA also saw a notable increase of 29%, climbing from €355 million to €458 million, while the EBITDA margin slightly improved from 36.3% to 36.8%.
Excluding the contributions from the PrizePicks acquisition and accounting for higher gaming taxes in Austria, Allwyn’s revenues rose by 5% year-on-year in Q2, with a 9% uptick in adjusted EBITDA despite the amortization of a higher license fee at LottoItalia.
CEO Robert Chvátal attributed this Q2 growth to continuing momentum in core markets, alongside a positive contribution from PrizePicks and overall advancements in their growth strategy. The company has reiterated its projections for fiscal year 2026, expecting net revenue growth between the mid- to high-20% range, discounting approximately €60 million in one-off impacts, and aiming for an adjusted EBITDA margin of around 37%. Chvátal emphasized, "We remain confident in our ability to deliver sustainable growth, strong cash generation and attractive shareholder returns over the long term."
Examining Allwyn’s regional performance, the strong results in Q2 were largely credited to the PrizePicks acquisition combined with a 4% year-on-year increase in continental Europe, leading to a net revenue of €731 million. When excluding the impact of higher gaming taxes in Austria, revenue growth in the region reached 6%. Allwyn noted that this was the last quarter expected to face a year-on-year headwind due to these taxes.
Continental European growth was partially offset by a modest 2% growth in the UK, which saw net revenue rise to €236 million. However, profitability in the UK improved, with adjusted EBITDA rising significantly from €6 million to €23 million, aided by the completion of a technology overhaul in the National Lottery.
Chvátal emphasized ongoing investments in product development, stating, "These included new or enhanced draw-based lottery games in Austria, the Czech Republic, and the United Kingdom, where we are proud to be the first operator outside the U.S. to offer Powerball, one of the world’s largest jackpot games."
In North America, driven by the acquisition of PrizePicks, net revenue surged from €54 million to €294 million, while adjusted EBITDA hit €104 million. Standalone net revenue from PrizePicks grew by 3% year-on-year when measured in constant currency.
Chvátal commented on North America’s developments, saying, "We continue to rapidly develop PrizePicks’ offering, enabling players to combine PlayerPicks with TeamPick within a single lineup, integrating prediction markets alongside DFS and enriching customer engagement."
Allwyn's lottery revenue dipped by 2% to €498 million in Q2, attributed to favorable jackpot cycles during the comparative period. The decline was most noticeable in continental Europe, with lottery revenue down 5% to €262 million, while revenue in the UK rose by 2% to €236 million. Conversely, sports betting and iGaming revenues grew by 12% and 24%, respectively, mainly due to the FIFA World Cup.
The company's stake in Betano, where Allwyn holds a minority position, saw revenue grow by 26% year-on-year in constant currency. However, Allwyn's share of Betano’s net income was 3% lower year-on-year at €61 million due to certain below-EBITDA items affecting the quarter.
Following the end of Q2, Allwyn announced an increase of its interest in Next Lotto, an online reseller for German state lottery games, to 64.53%, which secures controlling interest for the company.
In leadership news, Allwyn UK revealed that CEO Andria Vidler will resign on September 7, with industry veteran Phil Walker set to take the helm on an interim basis. Sources indicate Walker’s experience positions him well to lead as Allwyn UK begins the search for a permanent successor. Walker expressed his enthusiasm by stating, "I am excited and proud to be taking up the baton from Andria and joining such a vital national institution at this important stage of its growth journey."
