Gaming development corporation and iGaming provider NetEnt, has announced its interim report for a period of nine months from January to September 2020, which shows strategic growth in USA, Red Tiger and Live Casino.
For the first nine months of the year, which has proven to be a challenging time for the gaming industry, NetEnt reported the following:
- Revenues for the first nine months amounted to 1,611 (1,281) SEKm.
- EBITDA was 838 (594) SEKm, corresponding to a margin of 52.0 (46.4)%.
- EBIT was 517 (368) SEKm, corresponding to a margin of 32.1 (28.7)%.
- Excluding non-recurring costs, EBITDA was 880 (619) SEKm and EBIT was 559 (393) SEKm.
- Earnings after tax amounted to 338 (316) SEKm, earnings per share was SEK 1.38 (1.32) after dilution.
Therese Hillman, NetEnt group CEO made the following statement on revenues for the third quarter, gross gaming revenue from the US, new game releases and the firms operations integration with Red Tiger:
Revenues for the third quarter of the year amounted to SEK 521 (443) million. On a proforma basis, including Red Tiger fully in the previous year’s figures, the Group’s total revenues increased organically by 9% Y/Y in euro compared to the same period in 2019. The return of sports betting and the general easing of lockdowns in key markets resulted in a normalization of revenue growth to pre Covid-19 levels. Our continued focus on costs started to have a notably positive effect on profitability in the quarter.
Gross gaming revenues (GGR) from the US market increased by 313% Y/Y and accounted for more than 10% of total Group GGR in the quarter. We remain very excited about the US opportunity and have continued to expand our footprint by signing important customer deals with operators such as DraftKings, William Hill, Tipico, Wind Creek, BetMGM and The Cordish Companies.
Red Tiger had its best quarter ever with continued strong revenue growth and several great game releases.
Of the 16 new slot titles released during the quarter for the Group, Gonzo’s Quest Megaways stood out as an exceptionally strong game launch. Three months after its release, the game is by far the best performing new game ever launched for the NetEnt Group in terms of gross gaming revenues (GGR). Our second new game collaboration this year, Piggy Riches Megaways, was recently recognized by Slot Catalog Awards as the most popular slot game in the UK so far in 2020.
During the quarter we continued to invest in our strategic growth areas USA, Red Tiger and Live Casino, while driving cost and revenue synergies from the ongoing integration between NetEnt and Red Tiger. A number of important activities in the third quarter are expected to have a positive effect on earnings in Q4 and onwards, including:
- Market entry in West Virginia in October as the first third-party supplier.
- Expected early entry in Michigan when the market opens.
- Launching Red Tiger’s games in Pennsylvania under NetEnt’s license. Go-live is expected in November.
- Red Tiger’s games are now available through NetEnt’s platform at Veikkaus, further expanding Red Tiger’s reach into regulated markets and Tier 1 customers.
- Launch in December of Roulette Max, an innovative high-volatility game version for Live Casino.
- Further expansion of our Live studio in Malta.