Playtech has stated that it is “on course to deliver” its FY 2024 adjusted EBITDA slightly ahead of expectations, as B2B operations during the first half of the year drove growth for the business.
Reflecting on the financials, CEO Mor Weizer noted that the company is “well placed” for growth with plans in the US and Canada “already delivering”, while Snaitech – with an agreement in place to be sold to Flutter Entertainment – had a solid performance despite customer-friendly sporting results.
In addition, Weizer highlighted that Playtech has begun the second part of the year well and that the group is “very confident” in its future prospects thanks to its strategy and balance sheet.
B2B drives H1 results
Publishing its H1 figures, Playtech reported revenue growth of 5% in comparison to the previous year to €906.8m (H1 2023: €859.6m), with B2B operations performing well and B2C operations remaining flat.
B2B revenue was up by 14% year-over-year to €382.2m (2023: €334.5m), with growth across the Americas as revenue increased by 42% to €141.6m (2023: €99.7m).
Caliplay remains a “key driver of growth” with increasing contributions from Wplay in Colombia, NorthStar in Canada and Parx in the US, as Brazil continues to move towards regulating.
B2B adjusted EBITDA rose by 38% to €112.3m (2023: €81.3m) following high operating leverage and a cost control focus.
Weizer commented: “This set of results is further proof of the excellent progress we’ve made this year. We’ve executed our strategy to grow and improve the B2B business, delivering broad-based growth with strong contributions across our key markets, high operating leverage and tight cost control.
“We’re also delighted to have agreed a revised strategic agreement with Caliplay, our partner in Mexico, which ensures we are well placed to capture significant growth in the coming years.”
In the US and Canada, revenue was up by over 200% YoY as partnerships with Rush Street and BetMGM were expanded, launches occurred in DraftKings in multiple states and Ocean Casino Resorts was migrated onto the company’s platform.
The fair value of Playtech’s equity investment in Hard Rock Digital increased to €118.5m (2023: €77m) following the performance of the business being supported by Florida operations relaunching.
“We’ve executed our strategy to grow and improve the B2B business, delivering broad-based growth with strong contributions across our key markets, high operating leverage and tight cost control.”
Playtech CEO Mor Weizer
Live revenue from regulated markets grew by 17% YoY, with a new strategic partnership in place as well with MGM Resorts to produce content directly from the gaming floor of its two Las Vegas Strip casinos.
Weizer noted: “Our plan to accelerate our presence in the US and Canada is already delivering, with revenues trebling in the period. We see a huge opportunity in this market and are pleased to have supported multiple customers with their own growth plans, while also delivering the first major milestone in our partnership with Hard Rock Digital.
“With US customers now able to experience Playtech-powered games in multiple states, soon our customers outside the US will get the opportunity to play games streamed direct from Las Vegas as part of our new agreement with MGM Resorts.”
Elsewhere, Playtech reported “further progress diversifying revenue and customer base through the SaaS business model” as revenues grew by 44% YoY to €33m, putting it on track to be within the €60m to €80m medium-term revenue target.
The company also noted an impairment loss of €112.3m, reflecting the impact on sports revenue due to the terms of the revised Caliplay strategic agreement.
Snaitech sale to Flutter
For B2C operations, revenue remained flat in H1 at €532.4m (2023: €532.1m) and adjusted EBITDA fell by 6% in comparison to the previous year to €130.7m (2023: €138.6m).
Snaitech revenue dropped by 1% YoY to €483.6m (2023: €488.4m) as wagers growth was offset by customer-friendly sporting results at the beginning of the year. Retail revenue fell by 2% to €351m (2023: €357m) while online revenue rose by 1% to €132.6m (2023: €131.4m).
Playtech also recently agreed to the sale of the Snaitech brand to Flutter Entertainment for €2.3bn, a transaction which is expected to close by Q2 2025.
Weizer said: “A couple of weeks ago, we announced the sale of Snaitech to Flutter for €2.3bn and our plan to return €1.7bn to €1.8bn to shareholders. Snaitech has been a key part of Playtech’s growth in recent years and the team delivered another solid performance in the first half, despite the impact of customer-friendly sporting results.
“We are excited about what the future holds for the remaining Playtech business and we see plenty of opportunities ahead of us.”
HAPPYBET reported a €6.6m adjusted EBITDA loss, but its Austrian business will be closed in H2 2024.
Revenue for Sun Bingo and other B2C operations grew by 17% YoY to €39.9m (2023: €34.1m) mainly due to the launch of a new brand in H2 2023, while adjusted EBITDA fell to €2.3m due to higher marketing spend (2023: €2.8m).
Outlook
Overall, Playtech’s EBITDA rose by 13% YoY to €233.6m (2023: €207.3m), while adjusted EBITDA grew by 11% to €243m (2023: €219.9m).
Post-tax profit for the company increased to €10m in H1 2024 (2023: €3.1m) “due to the prior period including an overall reduction in the fair value of the derivative financial assets recognised in the income statement, and the derecognition of brought forward deferred tax assets”.
H1 also included “an impairment related to sports, offset by an increase in fair values of equity investments and derivative financial assets”.
As of 30 June, net debt was €225.5m (2023: €248.2m), resulting in leverage of 0.5x. On a proforma basis adjusting for cash received from Caliplay post-period end, leverage reduces to 0.2x.
Looking ahead, Playtech noted that it has recorded a “solid start” to H2. FY 2024 adjusted EBITDA is on track to be delivered “slightly ahead of expectations”, while the B2B adjusted EBITDA medium-term target range €200m to €250m is on track too.
With its balance sheet improved following strong cash generation and the cash received from Caliplay, Playtech’s board is confident that multiple growth opportunities across key markets can be performed.
Weizer concluded: “We have started the second half of the year well and are on track to be within our B2B Adjusted EBITDA medium-term target range in FY 2024, earlier than expected.
“With a clear strategy, a strong balance sheet and a great team behind us, we remain very confident in Playtech’s future prospects.”
