NeoGames Announces First Quarter 2023 Results

First Quarter Revenues and Share of NPI Revenues Interest total $64.3 million, up 187% year-over-year

LUXEMBOURG, May 10, 2023 (GLOBE NEWSWIRE) — NeoGames S.A. (Nasdaq: NGMS) (“NeoGames” or the “Company”), a technology-driven provider of end-to-end iLottery and iGaming solutions, announced today financial results for the first quarter ended March 31, 2023.

Moti Malul, Chief Executive Of cer of NeoGames, said: “We are pleased to have carried the momentum we exited 2022 with, into the start of 2023 as we took steps to further solidify our position as the global leader in iLottery, sports betting and iGaming solutions. Toward this end, we were proud to be recognized by EGR North America as the lottery supplier of the year, as well as with the Gold distinction for ‘Best New Game’, beating other pure gaming companies with our title, Desert Fantasy. In iLottery, our proprietary games from NeoGames Studio continued to perform strongly across all of our key accounts, and together with the Jackpot runs early in the quarter, have contributed to strong performance in the US. We are also proud to note that our customer, the Virginia Lottery, recently became the rst US lottery to operate a completely cloud-based iLottery program. On the sports betting front, BtoBet processed approximately one billion bets during the month of March, an all-time high. In iGaming, Pariplay also had a very active quarter, going live with twelve operators, including DraftKings in the US, and signing another nine, including Betsson.

“Equally exciting as the developments across all of our business units, is the impact they had on our financial results. Our revenue grew 187% year-over-year and we were able to maintain EBITDA margins above 30% across the Company’s operating segments. We look forward to building off this strong first quarter throughout the balance of the year and beyond.”

First Quarter 2023 Financial Highlights

The total of Revenues and the Company’s share in NPI revenues was $64.3 million during the first quarter of 2023 compared to $22.4 million during the first quarter of 2022, representing a 187% increase from the prior year, reflecting primarily the business combination with Aspire Global.

iLottery revenues were $14.4 million during the first quarter of 2023, compared to $13.3 million during the first quarter of 2022, representing an increase of 8.7% year-over-year. In addition, the Company’s share in NPI revenues was $14.8 million during the first quarter of 2023, compared to $9.2 million during the first quarter of 2022, representing an increase of 60.9% year-over-year.

NeoGames’ iLottery revenue plus the Company’s share of NPI revenues during the quarter was $29.2 million, up 30.1% year-over-year.

iGaming revenues were $35.1 million for the first quarter of 2023 and re ect new commercial terms effective January 1, 2023, to account for the majority of Aspire Core revenues on a net basis compared to historical figures which are prepared on a gross basis. If iGaming revenues had been accounted for on a gross basis for the Aspire Core segment total revenue would have been $55.8 million for iGaming, which would have reflected 20.5% year-over-year growth when measured in reporting currency.

Net loss was $(0.9) million, or $(0.03) per share, during the first quarter of 2023, compared to a net loss of $(0.9) million, or $(0.03) per share, during the first quarter of 2022. The net loss during the first quarter of 2023 was mainly due to a $0.17 per share impact from the amortization of intangible assets related to the Aspire Global acquisition. Additionally, the first quarter of 2023 reflects the impact of interest expense related to the transaction that was not incurred during the first quarter of 2022.

Adjusted net income¹ was $6.8 million, or $0.20 per share, during the first quarter of 2023, compared to a net loss of $(0.9) million, or $(0.03) per share, during the first quarter of 2022. Adjusted EBITDA¹ was $20.2 million during the first quarter of 2023, compared to $8.5 million during the rst quarter of 2022, representing an increase of 136.8% year-over-year.

Cash and cash equivalents balance as of the end of the first quarter of 2023 was $44.4 million, compared to $41.2 million at the end of the fourth quarter of 2022, resulting in a net positive cash position of $3.2 million for the first quarter 2023. Beginning in the first quarter of 2023, the Company is presenting the quarterly condensed statement of cash flows based on feedback from investors, which can be found in the tables herein.

Recent Business Highlights

Virginia became the first US lottery to operate a completely cloud-based iLottery program, including our NeoDraw central draw games system, our NeoSphere PAM as well as all instant games, allowing the lottery to more easily scale with increased volumes.

Continued the rollout of LotoMinas iLottery and online sports betting in Minas Gerais, Brazil, the country’s second-largest state.

Subsequent to quarter end, won EGR North America’s 2023 Gold award for Best New Game (Desert Fantasy), and was distinguished as the Lottery Supplier of the Year.

Amended and extended for three years the agreement with Caesars to provide the NeoSphere Platform at a guaranteed net pro t level for the term of the agreement.

BtoBet processed approximately one billion bets during March, an all-time record for a single month.

Pariplay went live with 12 operators during the quarter including DraftKings, Betwarrior and Boylesports and signed 9 additional operators including Betsson, Betway US and Netbet.

Aspire introduced a “for you” feature which uses predictive modelling to recommend games to individual players.

Held first Capital Markets Day in New York where leaders from across business lines were able to present to over one hundred in-person and virtual investors and analysts.

Guidance

As stated in the fourth quarter 2022 earnings release published on March 6, 2023, the Company is reaffirming its fiscal year 2023 Revenue and Share of NPI Revenues Interest Guidance.

The 2023 revenue guidance reflects a change related to certain customer contracts within the Aspire Core business. Prior to 2023, the legal terms were structured such that revenues were presented on a gross basis. The majority of Aspire Core’s contracts have been modified to re ect new commercial terms which need to be accounted for on a net revenue basis.

Reacting to the foregoing, the Company expects 2023 Revenue and its Share of NPI Revenues Interest to be between $235 million and $255 million. Assuming a like-for-like basis to the prior year whereby the modi ed contracts were presented on a gross basis, our 2023 guidance would re ect a 10.4% increase year-over-year at the midpoint when compared to pro forma results for the year ended December 31, 2022.

About NeoGames

NeoGames is a technology-driven innovator and a global leader of iLottery and iGaming solutions and services for regulated lotteries and gaming operators. The Company offers its customers a full-service suite of solutions, including proprietary technology platforms, two dedicated game studios with an extensive portfolio of engaging games – one in the lottery and one in casino games, and a range of value-added services. The recent strategic acquisition of Aspire Global Group enables NeoGames to offer the most comprehensive portfolio across iLottery, an innovative sports betting platform from BtoBet, an advanced content aggregation solution from Pariplay, and a complete set of B2B Gaming tech and Managed Services. NeoGames remains an instrumental partner to its customers worldwide, as it works to maximize its revenue potential through various offerings, including regulation and compliance, payment processing, risk management, player relationship management, and player value optimization. NeoGames strives to be the long-term partner of choice for its customers, empowering them to deliver enjoyable and pro table programs to their players, generate more revenue, and maximize proceeds to governments and good causes.

SOURCE: NeoGames.