Online gaming technology provider NeoGames reported a 228.1% increase in 2022 compared to 2021, driven by the acquisition of Aspire Global. NeoGames took over ownership in a SEK 4.3 billion ($412.2 million) deal that concluded in June 2022, with Aspire Global now operating as a subsidiary of the business.
While the acquisition incurred additional expenses for NeoGames, pushing the business to a net loss for the year, the deal had a significant impact on revenue in 2022. Revenue more than tripled year-over-year despite Aspire Global having became part of the business only in the middle of the year.
NeoGames Chief Executive Moti Malul said the acquisition and performance of the broader business in 2022 means the group is well positioned to achieve further revenue growth in 2023.
“We are proud of the tremendous progress we have made during 2022, further solidifying our leadership position in lotteries in an ever-expanding market,” said Malul.
“Furthermore, we’ve made some truly transformational strides advancing our strategic goals.”
“We have significantly evolved our business through the acquisition of Aspire Global, expanding beyond our position as a leader in global lottery solutions and propelling us to become a global leader in providing technology and content solutions in online lottery, online sports betting, -line and iGaming”.
“During 2022, we grew revenue across all lines of business and believe we remain well positioned to continue to deliver profitable growth in 2023 and beyond,” added Malul.
NeoGames Q4 2022
Looking at NeoGames’ performance and starting with the fourth quarter, revenue for the last three months of 2022 totaled $69.2 million, an increase of 462.6% year-over-year. Of that total, the majority ($54.8m) came from Aspire Global, while the remaining amount was generated by NeoGames’ existing lottery business.
However, the addition of Aspire Global to the group meant that operating costs were 305.0% higher year-on-year at $72.9 million. Financial costs came to $5.9 million, but NeoGames also reported $8.1 million in profit from a joint venture.
As a result, the pre-tax loss for the quarter was $1.4 million, an improvement over the $4.9 million loss posted at the same point in 2021. NeoGames also received $595,000 in benefits income tax, which means it ended Q4 with a net loss of $793,000, compared to $3.6 million a year earlier.
Additionally, the group said adjusted EBITDA for the quarter soared 129.1% to $18.1 million.
The total numbers for 2022
Going back to the full year of 2022, revenue jumped 228.1% from $50.5 million in 2021 to $165.7 million. Aspire Global contributed $112.1 million for the period beginning June 16, the date NeoGames officially took ownership of the business. On a solid full-year basis, Aspire Global revenue reached $207.0 million.
Operating expenses jumped 268.4% to $190.1 million, although $15.1 million in finance costs was more than offset by a $22.1 million profit from a joint venture and associated companies.
However, that still left a pre-tax loss of $17.4 million, as opposed to a profit of $5.0 million at the same point in 2021. NeoGames paid $1.5 million in taxes, resulting at a net loss for the year of $19.0 million, compared to a profit of $4.7 million a year earlier.
The group also noted that adjusted EBITDA improved by 63.2% to $54.5 million.
“Each year, the global gaming industry tends to expand further into the online channel, and each year our customers’ needs evolve to require a more integrated approach to lotteries, gaming and sports betting,” said Malul .
“In our opinion, we are well positioned as a leader to provide our customers, both state regulated lotteries and private gaming operators, with a leading and complete suite of solutions to meet all of their digital gaming needs,” added NeoGames CEO .
