NeoGames Announces Second Quarter 2023 Results

– Second Quarter Revenues and Share of NPI Revenues Interest total $62.0 million, up 98.2% year-over-year 

– Expected Timeline for Completion of the Aristocrat Business Combination Remains the First Half of 2024

LUXEMBOURG, Aug. 09, 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 second quarter ended June 30, 2023.

Moti Malul, Chief Executive Officer of NeoGames, said: “We are very pleased with the achievements and partnerships that defined and drove our second quarter results. Our continued commitment to innovation and excellence has paved the way for expansion across various global markets, with progress during the second quarter of 2023 across all of our business lines, including BtoBet, Pariplay, Aspire Core, as well as NeoPollard Interactive. The agreements we signed with our iLottery customers and new notable iGaming entities, such as AGLC, the Virginia Lottery, SunBet, PlayLive! and Metropolitan Gaming demonstrate the trust and confidence our partners place in our cutting-edge solutions. Furthermore, securing our iGaming license for slot games in Germany represented a significant milestone, reaffirming our position as a leader in the European regulated online gaming industry. This commitment to deliver world-class gaming experiences was further demonstrated by our partnership with Lotteries Entertainment Innovation Alliance, to provide content to prominent European lotteries in France, Denmark, Norway, Sweden and Finland.”

“We are excited about the future and the potential it holds for our company’s continued success. We continue taking steps towards completing our merger with Aristocrat Gaming, which we expect to be completed during the first half of fiscal year 2024,” Malul stated. “In the meantime, we remain dedicated to elevating the iGaming landscape, capitalizing on opportunities, and executing on our strategic goals for all stakeholders.”

Second Quarter 2023 Financial Highlights

• The total of Revenues and the Company’s share in NPI revenues was $62.0 million during the second quarter of 2023, compared to $31.3 million during the second quarter of 2022, representing a 98.2% increase from the prior year, reflecting primarily the business combination with Aspire Global as well as continued growth in each of the Company’s business lines.
  • iLottery revenues were $13.8 million during the second quarter of 2023, compared to $12.8 million during the second quarter of 2022, representing an increase of 7.9% year-over-year. In addition, the Company’s share in NPI revenues was $14.1 million during the second quarter of 2023, compared to $10.3 million during the second quarter of 2022, representing an increase of 37.9% year-over-year.
    • NeoGames’ iLottery revenue plus the Company’s share of NPI revenues during the second quarter of 2023 was $27.9 million, up 21.2% year-over-year.
• iGaming revenues were $34.2 million for the second quarter of 2023 and reflect accounting for the majority of Aspire Core revenues on a net basis compared to historical figures which were prepared on a gross basis, prompted by new commercial terms in certain Aspire Core contracts which went into effect on January 1, 2023. If iGaming revenues had been accounted for on a gross basis for the Aspire Core, total revenue would have been $56.8 million for iGaming, which would have reflected 7.5% year-over-year growth when measured in reporting currency.
• Net loss was $(7.8) million, or $(0.23) per share, during the second quarter of 2023, compared to a net loss of $(12.9) million, or $(0.49) per share, during the second quarter of 2022. Net loss during the second quarter of 2023 was mainly due to a $0.23 per share impact from the amortization of intangible assets related to the Aspire Global acquisition. Additionally, the second quarter net loss was impacted by costs attributed to the Aristocrat transaction.
• Adjusted net loss¹ was $(0.04) million, or $(0.00) per share, during the second quarter of 2023, compared to $(12.5) million, or $(0.48) per share, during the second quarter of 2022.
• Adjusted EBITDA¹ was $18.0 million during the second quarter of 2023, compared to $10.3 million during the second quarter of 2022, representing an increase of 74.7% year-over-year.
• Cash and cash equivalents balance as of the end of second quarter of 2023 was $30.1 million, compared to $41.2 million at the end of the fourth quarter 2022, resulting in net negative cash of $11.0 million for the second quarter 2023. The difference in cash flows is primarily due to several one-time items which totaled approximately $11.0 million, including a consideration for the acquisition of the remaining shares of GMS Entertainment Ltd. from the managing director of Pariplay, and the impact from a bank guarantee required to secure the Company’s German license.

Recent Business Highlights

• BtoBet signed an agreement with NeoPollard Interactive to provide Alberta Gaming, Liquor and Cannabis (“AGLC”) with a complete solution for online sports betting platform and managed trading services.
• Our NeoPollard Interactive JV has expanded its agreement with the Virginia Lottery, pursuant to which Pariplay will provide content aggregation technology and services with the market leading Fusion platform.
• Pariplay signed a deal with SunBet, a market leader in South Africa, to provide content and aggregation services.
• Aspire Global entered its first iGaming deal in the United States with PlayLive! Online Casino in Pennsylvania.
• Aspire Global received its official iGaming license for slot games in Germany.
• Aspire Global went live with Metropolitan Gaming, a leading casino operator in the United Kingdom.
• The Company launched its portfolio of eInstant game content with the Atlantic Lottery Corporation Canada.
• Signed a four year an agreement with Lotteries Entertainment Innovation Alliance AS (“LEIA”) to provide eInstant game content to five European lotteries, including France, Denmark, Sweden, Norway, and Finland.

Aristocrat Transaction

On May 15, 2023, the Company entered into a definitive Business Combination Agreement (the “Agreement”) with Aristocrat Leisure Limited (ASX:ALL) (“Aristocrat”) and Anaxi Investments Limited, a Cayman Islands exempted company and wholly owned indirect subsidiary of Aristocrat (“Merger Sub”), pursuant to which the Company is to be acquired by Aristocrat for $29.50 per share in an all-cash transaction. Under the terms of the Agreement, the Company agreed to transfer its statutory seat, registered office and seat of central administration (siège de l’administration centrale) from the Grand Duchy of Luxembourg to the Cayman Islands by way of continuation (the “Continuation”) and as promptly practical, Merger Sub will be merged with and into the Company, which will be the surviving company and become a wholly owned indirect subsidiary of Aristocrat (the “Merger”). On July 18, 2023, NeoGames’ shareholders approved the Agreement and the Continuation, which will become effective subject to certain regulatory approvals. A second NeoGames shareholder vote to approve the Merger will take place immediately following the effectiveness of the Continuation during the first half of fiscal year 2024. NeoGames’ shareholders representing approximately 61% of the Company’s outstanding shares have executed a support agreement with Aristocrat, pursuant to which they have also irrevocably agreed to vote in favor of the Merger. Completion of the transaction is expected to occur during the first half of fiscal year 2024, and is contingent upon customary closing conditions, including the receipt of all required gaming and antitrust approvals. Please refer to the Company’s Current Report on Form 6-K filed on June 21, 2023 for further detail.

Conference Call / Webcast & Guidance

In light of the expected sale of the Company to Aristocrat, NeoGames will not be hosting a conference call, or providing quantitative financial guidance in conjunction with its second quarter 2023 earnings release.

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 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 their 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 profitable programs to their players, generate more revenue, and maximize proceeds to governments and good causes.

Click Here to see the full report.

SOURCE: NeoGames media release.