NetEnt has today released details and figures for the first half of this year, including an update on its revenue and the takeover deal with Evolution Gaming, which was recommended to shareholders at the end of June 2020.
The game developer, which is a specialist in online slots, has experienced a strong year, particularly in the second quarter, despite the unprecedented times surrounding Covid-19.
Supported by revenues in the United States gambling market, NetEnt has seen an increase in revenue of 15% compared with the same period last year. In addition, with the rise of online gaming in the US, ten-percent of gross gaming revenue was purely from USA.
Near the end of June 2020, the firm announced and unanimously recommended a public offer to shareholders of the company involving the take-over by Evolution Gaming. The deal is believed to be one designed to combine the two corporations and create a best in class business to business provider.
NetEnt was undoubtedly affected by the global Coronavirus outbreak and many firms in the gaming and hospitality industry have been impacted. With that said, there have been changes in consumer behaviour caused by the pandemic that is believed to be speeding up the digitalisation of business sectors, including casino operations.
One significant and notable rise in activity has been within Red Tiger, a rapidly rising slot developer that was acquired by NetEnt. The brand continues to grow at a very fast rate and numerous titles have proven popular with players in major countries, including: Reel Keeper, Bounty Raid and The Wild Hatter.
Therese Hillman of NetEnt shared comments on the interim report update:
“Within Live Casino we continued to strengthen our product and gain traction with operators and players as GGR increased by 230% Y/Y in the quarter.
Soon we will be expanding our offering of physical tables in our Malta studio and we also expect to roll out the Network Branded Casino product to more operators.
Hard work and transformational steps taken in the past year are now starting to create value.
We remain fully committed to continue on this path and with growth engines such as USA, Red Tiger and Live Casino, I feel that we are well positioned to continue delivering profitable growth and strong cash flows for the rest of this year and onwards.
Overall, the second quarter was strong for both NetEnt and Red Tiger, resulting in record revenues, earnings and cash flow for the Group.
On a proforma basis, the Group’s total revenues increased by 15% in euro compared to the same period in 2019. Supported by revenues from the US market, NetEnt (excluding Red Tiger) returned to solid organic growth in the quarter. The US accounted for 10% of total Group gross gaming revenue (GGR), with GGR growth in New Jersey at 148% Y/Y and in Pennsylvania at +100% Q/Q.
The underlying EBITDA margin was 54.6% and important steps were taken to fully integrate Red Tiger and to support profitability going forward.”