NGMS - Earnings call transcript Q2 2021

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Jacques Cornet

Good morning everyone. By now everyone should have access to our second quarter 2021 earnings release, which is available on the NeoGames’ website at www.neogames.com in the Investor Relations section.

Before we begin the formal remarks, we remind everyone that the discussion today includes forward-looking statements. These forward-looking statements, which are usually identified by the use of words such as will, expect, anticipate, should or other similar phrases, are not guarantees of future performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, and therefore, you should exercise caution when interpreting and relying on them. condition. to of SEC impact the operating and back more for our everyone results discussion detailed risks financial refer our filings recent a future We that could filings, We including quarter encourage June when SEC. with XXXX, is XX, review investors our ended the X-K for to Form the filed the it regulatory

on as These can in IFRS Officer evaluating remarks, and or is the They call today's will Officer; Chief call non-IFRS over substitute Hosting discuss in to neogames.com opening Executive useful website. today, During of will With a not financial measures, Raviv considered financial these provide directly will financial be Malul, the in performance. we measures available to to our earnings call, we I'll which should the Chief be Adler, the comparable questions. we NeoGames' A the in most results believe that, and with accordance release for company. company's measures Financial reconciliation the the isolation open we measures our prepared then call of have Moti. Moti IFRS. turn

Moti Malul

Welcome Thank quarter call. second morning, you, everyone. to earnings Jacques. good And our

another to post and of to over pleased we quarter continue markets. existing are We customers in as develop results potential full new the strong our both

most iLottery to constantly services, them to experiences always, game expertise order with the solutions, and markets our enabling provide content range platforms, entertaining across globe. in we complete work development customers the As best to market-leading roll game out lead and platform new and of the a technology

were and industry we as quarter success and customers’ points the honored to highlight update have trends we the award Raviv our the by is to seasonality been achieve and Afterwards, lottery provide to the can market. commitment performance. results a our awards. morning, results second recognized by markets. strength the were proud XXXX quarter, of supplier and iGaming tech best we will and to leading as our solutions despite industry. similar are of this and be call the driving forward performance the of lottery some through on without in about expected verticals will in selected the financials excellence, characterized turn from first are competition platform, and over some EGR games to receive The the jackpots able We quarter key seeing business growth We in to increased continue to innovation, benefit run our recently run and double prestigious This partnership look as in honored the BXB other I I the our underlying that an

the we QX. that jackpot As called and two earnings runs prior reports of primarily impacted a reminder, the

in speaks such results Overall, grow many record the of Bolstered is tricky company. of in trends, our seasonality, much growth Alberta, resiliency we customer year-over-year. to our we results markets, how of prior In the similar of various some quantify, fact business markets. loosening COVID to significantly headwinds, of one outlier terms particularly recently to see last spite by compared effects continue to seasonality launched with could able XXXX these terms as typical anticipated continued of more quarter modest were and to our we that an was the revenues post durability as to that in restrictions spring have from by impacted were We given typical of years.

$XX.X quarter revenues million roughly second last in the second were line quarter with the year. For

compared XXXX. to the $X.X However, was second in for addition, quarter our of in quarter share of the revenues million NPI million $X.X

year-over-year. together, second of XX% growth quarter the of Looking for XXXX, million they representing at to approximately two added equate components $XX.X

adjusted generated of terms X.X% the In EBITDA, of to $X.X same we for million last quarter compared period up about year. EBITDA XXXX, the of second

brand commercial have has results competition is have the outside expand markets, this fairly and to to declined and due case quarter, Moving from have of in the to aggressive introduction with been increased travel wagering to launches. as late we draw-based typical Michigan, early more and benefited seasonality continue a from to get we quarter. the our In against specific that market in of we sports as life and people develop able combined Alberta, highlights, on PlayAlberta.ca through launch sequentially offering games of market. In few marketing or from of spending experienced and in as growth market anticipated, last the the benefit usually dealer iGame been

and While been we we example, expanded one as quarter, that Last revenues. customer approximately are believe towards for But pleased four revenues XX% reduced year, goal total strongest has XX% of and turnkey will this our as Michigan contract Michigan have markets, to base. of progress see be than now more HX. diversifying our XX% remains, contributed that offering we to of revenues our each markets generate we to during to the our than more wider of continue have a grown

for legislation authorized governor the into of still environment in the finished seen continued provide iLottery the their and among the in iLottery discussions progress an year, recently RFP services broader an will gaming the work many, state betting not solution things to is sport in regulatory bulk Connecticut, first In Regarding it as and iLottery and believe legislators example, but developments we expansion. the with future. lottery we all of to adjusting other the near that this signed early, half have while

enter two UNL, revenue which iLottery, deal, to with National content. new the rapidly States, market signed that process of saw progress While instant included games We United we game content driving to in we Lottery, our provide with and agreements with to Europe. legislation have able we with internationally, new were Ukrainian first a in come continues suite the moved Ukraine out regulatory that forward the gaming

as through pleased Italy soon Lottomatica, in live. in servicing are to with Italy go further such lottery we extended agreement both when be we operators an also We

confident the market growing. our technology succeed both is is our was we and content and for that success our Given understanding and in of are emerging the What keep remain iLottery reasons we U.S. Europe, this in of it segment. superiority to the to poised lottery unique main global the seeing takes the what momentum

launched enhancement games, the will M&A keeping In future playing to a across from perspective, consider of position opportunities. evolution a enhancements progressive end and the Hampshire, introduced potential at we the spent that positioning we the have us industry, options to cutting the that and have our edge of feel with features, working We platform geographic customer even target content complement of live positioning have other our broaden of handful subsequent for remain we is domains we resources as offering success few defining lot in functionality time market and a New ourselves our expansion thing is quarter the of and market iLottery be on tirelessly space. an strategies enhance went One linked such enable been further Multi-Game to the and our markets. to leading with innovation exploring jackpot in our long-term accelerate

opportunities. While appropriately, our the M&A grow we including using all nothing tools, announce, disposal are and of to aggressively our have we imminent its but considering to business

the lottery team recently that its and industry Chris introduce welcomed order a our Executive now industry is these goals, of unique Shaban undergoing offering us the dynamics, Raviv. a of into to in to and happy over experience digital NeoGames’ Vice we towards Sales, and Development. I'll to expand help and the Chris understanding the NeoGames profound on Finally, are significant to help as global very is the With existing brings new that, global And in understanding the Customer There and space. to all President team. him better turn Marketing, have transformation vast lottery markets. one to no call we

Raviv Adler

Moti. Thanks,

which in Before venture into through reflected get revenues. results, the North operates Michigan, in as is iLottery top-line discuss business our a NPI, I joint I in out all XX-XX America reminder, our except when our point or we Interactive of NeoPollard that would results,

Our contracts conduct Carolina, business the through our contracts, of Hampshire, NPI. all Except and run for North in province NeoGames. through Virginia, New NPI Alberta we

year. an our second which excludes statement, from revenue owned our we you wholly and of know, and through during the same generate accounting XXXX, share over quarter equity many as interest period the through down in was result, revenues income a on million As of our NPI. last operation earnings standpoint, X.X% NPI the reported Revenues $XX.X of

million the representing NPI over sum of million total was XXXX, was compared an revenues share of numbers second XX% during year. of $X.X during these The year-over-year. million quarter second the last with $X.X two Our of quarter, increase $XX.X of

compared two to factors. X.X% $X.X the margin in that an Sequentially, our our adjusted was million quarter, fluctuation EBITDA main to million, important year. up generally note is For last driven by the $X.X EBITDA it's

The first cycle product is the earlier accounts increased that in time. new life stabilized and costs ramp up, over we that often as new see

Second, differences margins. and mixing verticals, in gaming [indiscernible] product the services,

of of counts one but margins customers. incur product is on be the comfortable when business with type the with full other a our such our to the games the to offerings solution than growth content strategy our Overall, only limited element solution hand wide have matures, costs turnkey an not hand margins will the diversifying verticals, they where example, draw we when and as as provide we're growing, gaming third-party are offering, providing where or wish base, very we average. important where lower For as accounts and only, customer including drive also turnkey

new accounts the our differentiation As margins may contribution due we different have accounts, more product add of mix. to

view service operate greater is long-term to significant clients. only in important be is capacity. position story markets For choose the a them draw low to a strong is however full iLottery to And as business base we of margins. overtime are serve some noted markets will accounts would these to on to example, be investment convert growth in It that tend

cash Turning up equivalents. this worth to We with cash our million balance $XX.X of and about quarter sheet. ended

quarter $XX.X us X%, with million million. a approximately Our position rate outstanding end a debt interest $XX was average at of at cash of net weighted leaving

our raising over be revenue since of the midpoint, that's seasonality guidance we guidance feel $$XX the we anticipate year. and year-over-year half are between impacts were second And in of to quarter, XX%. second and the million Regarding confident represents guidance to the to million. we At plans trends able XXXX feel our growth $XX where the we of overall

launching we've past, does revenue indicated any guidance the include contract. the turnkey new As not in

to results that, As of I to quarter. a remaining on strong We during will in expected of back revenues during mentioned, half remain executing Moti With strong, [indiscernible] Moti. position XXXX. seasonality of our call impact turn and the absence the continue the notwithstanding last back the

Moti Malul

our of in value for strength Thanks, to generating and thus shareholders. Raviv. model our results summarize, NeoGames To the and our continued demonstrate for our customers significant

we We position growth are in to generating. and are our a growth opportunities both capitalize momentum to the are great executing by on and external strategy we to continue remains excited positioned well on NeoGames internal for continue leader that, expanding morning joining the answer current global iLottery happy the thank for questions. the we With landscape open you market. are line to for as the the Operator, rapidly in please questions. and this

Operator

comes Barry first [Operator with question from Instructions] Truist. Jonas Our

Barry Jonas

How are you? guys. Hey,

Moti Malul

Good morning, Barry.

Barry Jonas

to Good go for North frame or profit international? us you the and America mix the like where between opportunity term maybe longer a morning. see Can you little, non-North guess help I international would American the

Moti Malul

our we looking driven think Depending to time have investing will you content at lot. a play that you're of our that good are of possible in seeds that within and would at, look see consider lotteries the many opinion as result growth those as we plant on Europe, when of primarily in in opportunities well. of content a out in markets iLottery we over a role markets the significant as the And we because international, in Europe content timeline that established inevitable

ability will are Pacific a the in by believe than opportunities the we rates Asia way take look it term to not or Europe, When into faster the say revenues revenues, markets implement seen we on only leverages COVID do but different as faster good a future. beyond and but on, market, we in yet businesses not and America little we delays us we're other a them that and In that in Latin to revenue it Some create turn sometimes have a overall, efforts in reach faster, that so it's regions along I as into markets we longer, there. whether have bit to the time direction. they and to longer a of opening markets. and faster a the bit investment have would over the will see we because putting others that at are position U.S. but solution to to, new in that to the opportunities allows come in reach we America, areas time success the North the bit

see that I So provides we hope going. the good a where future understanding of enough

Barry Jonas

a it? Yes, in that's question, as on you understand follow-up the great. any And us give then process you Ohio, as update can

Moti Malul

no state, Ohio, in that we discussion approve comes others. to the the of are of at in parts approve many Sure. it potentially expansion markets it's the or other a many, different expansion seeing betting of iLottery when as sports than looks trends really to broader part how other of what whether to gaining

and discussed they the when been a legislation on a to in this specific And we discussion if trend legislation, that be We've states anticipate I say looking the to betting. in does in legislators picture. the that front have that looked in cycles. seen we town. the among we require broader There's are a happen has discussions the the haven't that Connecticut, with in gaming be backing committees for expansion time Massachusetts sports been such at discussing in very bill I other broader will is an would back not fruitful advanced the with same we of that recently legislation that now adjourned there's included view, we even picture. be testify of and this to iLottery in that invited it does And where September call that the the a On broader good floor into been summer. various those what lottery many path see we seen passed about at before So see bill at to discussions. has predominantly take would iLottery is

so maybe that and will a in so foreseeable discussions and it's on tandem at forth. So those be some point

back get advanced phases to discussions committees of the expect we with that is legislator Ohio, So customer our to September. the having in

Barry Jonas

one just if ask And clarification. I Great.

I progressive jackpot think, exciting. the Multi-Game is really

potential crossover Just to over time the state is there or that now lines? for

Moti Malul

industry taken all retail course – jackpot I new to First is the progressive in instant nothing basically retail U.S. mean, have the introduced in a number online. And new lottery fast to that games when of the play for game of jackpot say U.S. created the industry for of the – has the in markets. I that version progressive the a are We've we and improved land-based –

word more, a discussing right And across this would definitely at finally, such for of say of our discussions with now think I couple the I that final position, DOJ looking choose we're of does with door a to customers. It states. case. the the and potential open

Barry Jonas

guys. That's great. Thank you much, so

Moti Malul

much. very you Thank

Operator

with Our Stifel. next question Jeff comes Stantial from

Jeff Stantial

Great, on thanks. quarter. Good congrats Thanks for morning, our questions Moti. taking and another successful

Moti Malul

Thank you.

Jeff Stantial

be down to I just or changes on a per year, point, change a step of so if even you wanted the was running and implies, from guidance, mid it start of at like bit to half looks million quarter, the wondering $XX provide maybe helpful? could more second it the I reopening about the around first a first bit one half conservatism anything in guys frame, elevated you that would half half, more there little seasonality some color you first cadence development thinking the is are could largely how work help to provide, that time the headwinds

Moti Malul

mentioned have differently few a wish us, into in experience where that Sure. right. believe try And in baked results. tricky pretty to the to future We have it our were do able we year will very to of call. due we point get to Happy and September see actually usually we the know upturn within start August July earlier that's and is the We we the to September why we the regularly. factors where numbers it's well to markets – to for where QX declined from an anticipate the than in all behave

happen the suggested provided. guidance to want in Year the New why the wait the develop anticipate further that's that towards which will and we And have can at happen we provided the that fall that the range the will just of parts that into actually will confidence we see then has of did. we it what what that even we So, later so beginning continue to fall,

Jeff Stantial

that really that share any That's second the next to the metrics were jackpot to stuck app Switching experience any the you about helpful. that thereafter. helpful. as you jackpot’s folks the Do indeed phenomenon QX, start you Perfect. that quarter? have that last from and around folks time to playing during to how via find gears that the talked Just did app meaningful introduced instance tailwinds think stick a here, upside to we customer playing of of quarter, and will you in acquisition a Did around general then double could a to were thoughts around trend, keep percentage instance? this bit around introduced be round the

Moti Malul

we're I QX stabilization of we have so and head, seasonality, definitely don’t difficult that, peak with multiple the out during same that any top reasons, we and rates, performed of retention of are happy those including think on, metrics where we because one retention are have the in post-COVID, of the seen to because rates obviously reasons the my and revenues suggesting was think, that of the it's revenues quantify, customer and but we're I of that summer. I the of the opinion as our but well,

Jeff Stantial

color. encouraging. helpful Very on. I I’ll all pass appreciate it the Thanks. and Perfect.

Moti Malul

you. for joining Thanks Thank

Operator

Our Instructions] from comes Chad question Macquarie. next [Operator with Beynon

Chad Beynon

other your you pipeline of what respect journey you in might games to could customers, With be shift your can this and to about content towards for Hi, type going that where are good morning. new you content mix question. in-house have, versus you forward Thanks. for offering talk help that Thanks business? that my third-party taking game more

Moti Malul

Yes, of course.

I the to our remind third-party content main is space. offering a that in where Alberta not in that complete iGaming all, of would within contract provide need First we we use which is

complete that's into the provide we games. why is lottery that that And So, accounts the see the part of growth. also mix for a of connectivity course, the draw good we part tremendous suggesting that and of instance

the for providers, of casino the any it content customers – when majority and develop in-house dealers, beyond America I within supplement share vast the to of see When comes cases, truly verticals. in and North our those it come which are to have parties. we by revenue content. intention cases comes the to say the However, in majority even And or vast decide we the cases lottery market, they have we both And welcome even as that to the our deal. would using games that live they third others, they other in the way, that add of above where a don't

games So, many hope others from across question. lottery in the tap the least while vast expense turnkey I customers, accounts they we at having into our revshare each month, industry, what keep a of they the in introducing with do to of the choose us. in not two content the to on that market pace customers of answers come when the our the in majority the great of cases

Chad Beynon

a states next them products? disclose to I you'll couple with new about you to William perfect if services helping here William in months then you're do rollout if Hill sports is Moti. cost-plus the that others be PAM able talk iGaming. you know and in that's the Can and the respect betting with for Thanks. And that lot those Caesars work, side, launching Yes, the on Hill development of

Moti Malul

are Caesars customer, a as they're way, brands significant helping Happy opportunities. support which also into opportunities. within, with are, with that and we we Again, Caesars fast the play and teams, the busy indeed them to William by eight are expansion shareholder expanding we Hill know, fantastic And you William the of Liberty have ambitious markets in role migrations We're seen live Hill. Solution, now with our a expansion to. and them significant

definitely role to shareholder in take market. in I the prime we that helping So, taking and are a of great customer see their ambition was bigger this share

Chad Beynon

it. appreciate the congrats Great. Thanks on Moti. quarter. I And

Moti Malul

Thank Chad. you,

Operator

remarks. call question-and-answer to today's session. concludes closing That I'd turn management to like back the for

Moti Malul

any company we still continue Thank really a our shown a to And of it have but is consider work have and third market. to to lot to the that, we you, And – operator. don't newcomers and take interest we this our is lot I for mean, respect be thanks good that everyone. and of ourselves granted employees. our quarter, we for in

you thank the everyone So, for and time attention.

NeoGames (NGMS) 12 Aug 212021 Q2 Earnings call transcript