NeoGames completed its purchase of the B2B igaming technology solutions provider in June, taking full ownership of the business in a SEK4.3bn (£350.1m/€415.0m/$426.9m) deal.
The provider is still in the process of integrating Aspire Global into its operations, but the acquisition has already had a significant impact on its operating results, contributing $8.3m in revenue since the deal went through on 16 June.
NeoGames chief executive Moti Malul described the acquisition as a “truly transformative transaction”, saying it positions the business as a leading global provider in technology and content across ilottery, online sports betting and igaming.
“Strategically, we are already realising benefits from the combination,” Malul said. “Leading up to the combination we had strong standalone second quarter results across both the NeoGames and Aspire Global portfolios.
“At Aspire standalone, we are also encouraged by 17.0% growth in Euro-denominated revenue for the entire quarter compared to the same quarter last year.”
Overall revenue at NeoGames in the three months to 30 June was $21.1m, up from $12.9m in the corresponding period last year. The provider also noted that its share in revenue from its NeoPollard Interactive joint venture with Pollard Banknote jumped 21.2% to $10.3m.
While the Aspire Global acquisition was the core reason behind this growth, NeoGames also noted a number of other achievements in Q2 including signing its first lottery and sports betting deal via Aspire Global’s BtoBet brand with Intralot do Brasil, the operator for Loteria Mineira in Brazil.
The developer’s Pariplay brand also struck a deal with Atlantic Lottery in Canada, while 12 new partnerships were agreed across the US through Pariplay with major operators such as BetMGM and DraftKings.
Turning to operating expenses and spending was up 220.7% at $35.6m, mainly due to $14.2m in prospective acquisition costs, though spend was higher across all areas.
A further $2.4m was noted in financial costs and while this was more than offset by $4.6m worth of profit from the NeoPollard Interactive joint venture, the provider still posted a pre-tax loss of $12.3m, compared to a $3.2m profit in 2021.
NeoGames paid $596,000 in income tax during the period, meaning it ended the quarter with a net loss of $12.9m, in contrast to a $2.8m net profit last year. However, the provider did note that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was up 24.0% year-on-year to $10.3m.
Turning to the first half and revenue for the six months to 30 June was 30.9% up to $34.4m.
Costs more than doubled from $22.3m to $51.0m, but $4.5m worth of financial expenses were offset by $8.5m in profit from the NeoPollard Interactive joint venture. However, this still left a pre-tax loss of $12.7m. compared to a $7.8m profit in the previous year.
The developer paid $1.1m in income tax, leaving a net loss of $13.8m, in contrast to a $6.8m net profit in 2021.
Looking ahead to the full year, NeoGames said taking into account the impact of the Aspire Global acquisition, it expects its revenue and share of NeoPollard Interactive revenue to be in the range of $194.0m and $208.0m for the year ending 31 December 2022.
“We are thrilled to work toward achieving our full potential as we continue to fully integrate our two platforms and execute our strategic goals,” Malul added.
Original article: https://igamingbusiness.com/finance/quarterly-results/aspire-global-acquisition-drives-revenue-up-63-6-at-neogames-in-q2/
