NeoGames, an online gaming technology provider, reported a 228.1% increase in its revenue year 2022 due to its acquisition of Aspire Global.
NeoGames took ownership of Aspire Global in an SEK4.3bn (PS341.7m/EUR385.8m/$412.2m) deal that completed in June 2022, with Aspire Global now operating as a subsidiary of the business.
Although NeoGames was forced to incur additional expenses due to the acquisition, which led the company to a net loss for 2018, the deal had a significant effect on revenue in 2022. Despite Aspire Global only being a part of the business half way through the year, revenue more than tripled year-on year.
Moti Malul, chief executive of NeoGames (pictured), said that the group’s 2022 acquisition and performance in the wider business means it is well-positioned for further revenue growth in 2023.
Malul stated that “we are proud of the remarkable progress we made in 2022, further strengthening our ilottery leader position in an ever-expanding market.” “We also made significant strides in advancing our strategic goals.”
“We acquired Aspire Global to significantly grow our business, expanding our leadership in global ilottery solutions and propelling our company to become a global leader providing technology and content solutions across online sport betting, ilottery and igaming.”
“During 2022 we increased revenue across all business lines and we believe we are well-positioned for profitable growth into 2023.
NeoGames’ performance was analysed and the revenue for the last three months of 2022, starting with the fourth quarter, reached $69.2m. This is an increase of 462.6% over the previous year.
The majority of this amount ($54.8m), came from Aspire Global. NeoGames generated the rest through its existing ilottery business.
Aspire Global’s addition to the group resulted in operating costs being 305.0% more expensive year-over-year at $72.9 million. NeoGames made $8.1m profit from a joint venture, but financial costs were $5.9 million.
Pre-tax loss for the quarter was $1.4m. This is an improvement over the $4.9m loss in the same period 2021. NeoGames also received $595,000 income tax benefits. This means that it ended Q4 with $793,000 less than $3.6m.
The group also reported that adjusted EBTIDA rose by 129.1%, to $18.1m for the quarter.
Looking at the entire year, revenue increased 228.1% from $50.5m 2021 to $165.7m.
Aspire Global contributed $112.1m to the period ending 16 June, when NeoGames took over the business. Aspire Global’s full-year pro forma revenue was $207.0m.
Operating expenses rose 268.4% from $190.1m to $190.1m. However, $15.1m in financial cost was more than offset with a $22.1m profit made by a joint venture and related companies.
This still left NeoGames with a $17.4m pre-tax loss, compared to a $5.0m profit in the same period in 2021. NeoGames paid $1.5m tax which resulted in a net loss of $19.0m for the year, as compared to a $4.7m profit the previous year.
Additionally, the group noted that adjusted EBITDA rose by 63.2% and now stands at $54.5m
Malul stated that the “global gaming industry tends towards expanding into the online channel every year, and each year our customers’ needs evolve to require an integrated approach across gaming, lottery, and sports betting.”
“We believe we are well-positioned to offer our customers, both regulated gaming operators and private gaming operators, a full range of digital gaming solutions.”
NeoPollard Interactive venture
NeoGames, a lottery solutions specialist Pollard Banknote, announced shortly after the year’s end that it had entered into an joint venture operation agreement regarding NeoPollard Interactive.
NeoGames and Pollard Banknote had been operating NPI jointly as an online lottery solution provider joint venture for many years. However, the new deal and subsequent amendments to the Michigan Joint Venture Agreement will formalize this arrangement.
These agreements are intended to strengthen the long-term approach that NPI has taken to ensure its continued success and those of its customers in a variety of markets and jurisdictions.
Both parties agreed that the new agreement would give both companies the opportunity to explore future opportunities in the North American lottery market, either as a partner, part of the joint venture or independently.
NPI’s operations would continue to be run as before. The NPI team will continue to provide support for player operations, account management, and professional services.