- Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day ladies and gentlemen. Thank you for standing by. Welcome to the NeoGames Third Quarter 2022 Earnings Conference Call. All participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. that is note November recorded Please XXXX. XX, Instructions] this being conference today, [Operator like the to Jacques now would I turn ICR. Cornet call with to over

Jacques Cornet

Thank the which is you on the By our hello at quarter section. available you, www.neogames.com website access in third release, have Relations to now, earnings XXXX NeoGames operator, and Investor should everyone.

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

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

Moti Malul

key everyone. will our which Thank morning I Aspire quarter the good since by acquisition. full quarter an and is through you, Global highlighting combined Jacques run night, quarter financial current seeing the and and some the then begin about on will in third results. with points our provide we we our results market. update then trends Last first Raviv initiatives the are released our

our solution internationally and market. milestones deals, the the Global move iGaming number in reached our During towards and conviction the both significant to business new iLottery, an Sportsbetting iLottery global iGaming offer business. gaming integration in of and markets solutions Sportsbetting We quarter, Aspire the benefits continued signed third integrated we implementing of across our the a the end-to-end further increasing lines, to saw and of US has

We iLottery report are the well also revenue as both our results business. as record consolidated quarter, the core for proud basis, for to on

we this step working the right our as quarter are from to accomplish far a fully strong see direction. goals, While in done, we

the which which Global. highlights full quarter a will later. of includes financial basis, grew revenues expand few Aspire revenues of First, million, Raviv share $XX.X upon a NPI a of to consolidated total On plus

of by nearly look saw strength compared multiple the together the development X% of revenues and up growth. to compared the fronts. across and all at up Taking our a U.S. the legislative positive quarter-over-quarter Looking our of from customers iLottery pieces, ever Games on and business. particular also and we were up XX% segment segments highest business, experienced run, basis, iLottery both currency our at in accounts our million, posted quarter. to iGaming our history. of the revenues major year-over-year $XX.X year coming share on constant last the the line result and performance Driven business with top closer revenues were quarterly strong Sports current July June NPI iLottery Jackpot a X%

Year few its impressive account in level. encouraging when began the technology a by it win are right, very the to have is of partnership iLottery a continued growth to these NeoGames even potential market. the in of market-leading we down made part them more US well-deserved our us last the that believe own thesis and the the best available such do outperform honored alongside drilling see that quarters with becomes strong Operator in on can iLottery to and results would them the with Michigan in to Lottery the sequential proud happen what and We growth our impressively their iGaming this seen parallel markets same for suite year, QX of the demonstrating Award in While Global iGaming, strong for those of with which and games Operator XXXX Studio. volumes as that another globally. we based powering EGR so we The anticipated and doing continues lottery have Virginia as from It other grow quarter. win past our support

Hampshire a macro New the the the showed we and sign less the economy, state less very grows clear. US Considering nice this outlook of positive and consider as growth Carolina July of into sequential quarter. Jackpot the the also North leveraging current rest

lottery solution that as environment. to RFP see Virginia having interesting as the QX not Naturally they the opportunity already process. Sportsbetting just taken this Turning place, our front. iLottery following state the on RFI view an progress US. in look with quarter come legislative online We and did the and to needs advantage with the the during a demonstrating forward existing the an flourish in iGaming choose to We elections mid-term anticipated much front authorization state and much West to to market competitive saw grow an

that on XXXX state preparation following states elections may in the we However, various of light in environment authorization pressure do a will that in regain suggest macroeconomic budgets. believe iLottery and momentum of

from our signing by market content the Pariplay with our interesting and platform to providers Wizard Games was business. Pariplay's made to Pennsylvania studio to front, On country. the In both of gaming five additional in coming with and third the in the enter us the out deals to in states content US bolstered and Connecticut. six regulated bring parties our US US the further content progress US, internationally certified both and few offering. demonstrating strength platform of with aggregator We a ones games The in exclusive the we both licensed across aggregation allowing now the US Pariplay players position are particular Pariplay signing strength from significant

gives market-leading base in million ATG of content Games a three operator expanded content Wizard through West the our states signed market-leading BetMGM and the Games Sweden we with we with ATG's as to us further giving will New Sweden's to third-party in Jersey Europe. the of and of access platform end and select Michigan. our of including position while us our Finally, gain a BetMGM agreement in Internationally, launch relationship the deal users of which content live platform. the over Pariplay XXXX. BetMGM between content in content on through Virginia This largest launch platform's is distribution from enhance terms X.X access casino customer Pariplay, aggregation Under to Wizard

are in solution licenses complete technology ready Aspire we between a operators, sports Global go Germany gaming ITSP live gaming granted and established agreement partner. our largest of on one to to provide a once turnkey and that the and Additionally, between be the to expanding parties existing partnership Germany's will to

all and licenses eventually While benefit from country in this have regulators than contract worth regulated for PAM, in time, position a approved issuing does Aspire is expected it top which it pointing local At solutions Core the place. the focused when services trends great operators, iGaming on reviewing gaming the in verticals in managed take including the been providing out markets. puts same is in turnkey shift us line slower in to

is In which accounts the quarter-over-quarter this market to and growth in developments certain Europe part, saw these more been with business We content integrated experiencing with iLottery, the equally growth In lottery this account to roll additional live customers. such of collaboration that Studio have while had in also five aggregation opportunities important also BtoBet between over integrated Holland, out Germany iLottery third QX to in key into applicant Aspire and with impact our In This more iGaming content the Fusion ability content Games for Sportsbetting has launching line. to we NeoGames upon cooperation and a extending his the the XX% markets we started in with platform roll and the of momentum to we our growth NeoGames touch and win Pariplay region. markets in we forward. our to integration pace strong plans in our and introducing captured wallet opportunity granting from licenses Raviv been maintained further plans the has currency into impact addition position our we out in regulated customers that In in us. iLottery Brazil the and it dominant in solution. that in operators of platform future. business of extended partnership Africa openings with XX Along in was Pariplay Sportsbetting have year-over-year and NeoGames of are will out come, anticipation Pariplay certain over platforms. in continue successful Wizard strong expect of over to regard a with in our first studio Alberta roll business agreement to conservative strong on titles we results. its for parties share customer BtoBet, units our continues similar in the be XXX% platform of and as quarters significant customer across XXXX, leading integrated by which modest NeoGames the Sportsbetting partnership the and of an years going half of to an This largest demonstrating our Brazil launch also that also to of many have from the in the

to the has an our of Raviv on highlighted turning area in previous want times. economy of the a to the fairly to impact to macroeconomic natural update the over industry in our to been interest these call detail, on overall resilient calls, our we've before Historically, on as base provide changes. investor is through which lottery Finally, walk I business, financials

this seeing We yet iLottery as landscape. economic to are both we across currently and uncertain trend in behaviors degradation the play have iGaming any despite value or player continue, see

monitor will this as going the I'll now that, With However, continues. call forward, trend uncertainty Raviv. we a continue economic is turn to to the over

Raviv Adler

Thanks, Moti.

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

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

a NPI. revenue accounting we As standpoint, and of know, owned only earnings equity our operation you result and many from in through as our through generate an interest

results. the to turning Now

platform well through Our on business, we as grown core fronts, business months Global. Aspire added in as perform over have multiple the to continues inorganically acquisition and businesses both both as well our recent of the organically our we iLottery

iLottery well report quarter, as We as results for are record business. both revenue proud core basis, the a on for the to consolidated

terms value the of perspective. the always of the a have integration, In we believe revenue was Aspire real from combination that we said, as

range As $X the in cost we the we to have identified process, million. progressed of $X million integration have synergies with

synergies Global. cost a first the by basis rate of on these of achieve to expect the anniversary Aspire end run acquisition of We our

of of $XX.X income was the on Aspire attributable business. statement, to million revenues million of as share excludes is NPI During which our third our Global the $XX.X quarter reported, revenue, from XXXX, which revenues, the

contribution, Global results year-over-year $XX.X of XX.X%. of Excluding Aspire growth our million represents

total $XX.X of of last these XX.X% revenue XXXX, $XX.X to million numbers third period NPI was The the the quarter same sum million. up year. share compared Our reached during of

saw $XX.X For adjusted representing XX%. increase million, quarter, adjusted expand and compared $X.X with over EBITDA increase. to XXX% EBITDA million the the considering was period margin we last the $X.X When in same business, to NeoGames our year, million iLottery

to couple balance results. sheet, I of relevant highlight Before want to notes a the reviewing the

revenues Global on Aspire reminder, on NeoGames basis. for a As This revenue, its but Global recognized iLottery while revenues historically lower the basis, gross net margin recognized Aspire higher in business a has a business. results

iLottery contracts with discussed on quarter with to As have business. preliminary Global closely results. we our adjust align partners last been encouraged We're our to the call, working more Aspire by

revenue included third business revenue when currency release. X% a is in Aspire to the the presentation constant performance British of currency growth moves business on To when growth by the the foreign the quarter This the basis provide wanted basis. currency of reflects currency Aspire strength in rate caused have the earnings business. Global a revenue recent much rates. flag by impact on transparency impact or million FX of fluctuation better revenues of independent of however, growth we dollars. a for dominated stated $XX.X moves, It rates of offset on Additionally, US to our the measured constant growth, again With the muted the decrease of XX.X% exchange exchange euros on the pounds, business, we've of converted

quarter $XX.X million or exchanged cash basis at weighted our million of outstanding. debt outstanding euro average million, on $XXX.X and At was a Turning interest sheet. approximately with with X.XX% equivalents. We of to our cash $XXX.X quarter this of million rate end, XX.X ended a balance shares

an we balance Additionally, label have of combination. on the short-term million deferred liability for $XX.X payment business outstanding

as cash to a this the are that netted and Aspire noted to -- the respect to paid former tightened in analytical for purposes the by shareholders and transaction represents provide this balance we and guidance, be of consideration midpoint. be With business trends us part revised As quarter, should last cash. the this increases allows range includes encouraged against to

full the XXXX be million. of to of we $XXX of result, range range from a million moving NPI for million, revenues our to revenues $XXX in and the the year As million of previous share and expect $XXX $XXX

starting the Moti. the will to that, year. tender these remainder on the XXXX, reminder, back Global a date June As the values turn closed, of XXth through With contribution offer Aspire include of from call the I

Moti Malul

Raviv. Thanks

results and We this are very financial quarter. the developments of pleased with past

proving our the As it lines and integrate We viewed as following to in hear us you joining fully quarter updates goal. look line behind continue, in about saw momentum this first Global, we operator, our to that, And this We across we acquisition that expect future. we in thank progress please the believe crucial and to progress. for this business significant transaction the progress full businesses. for forward open as of the With providing questions. made all Aspire thesis the accomplishing

Operator

Please first We will now begin Lee Cassandra question ahead. the question-and-answer session. go [Operator comes from Instructions] Jefferies. with The

Cassandra Lee

to Hi. Good next XXXX and channels? should afternoon. across how the revenue we good new new Raviv little think too morning, or if contracts, Moti or without Maybe were year but different guidance, a bit thinking about about growth just early about rate and to we start jurisdictions think

Moti Malul

Hi Cassandra. Good morning. Yeah.

Number revenues are are we be expecting there's I of two, grow that not number we make business in to at present expected see that. nicely. guidance the point Brazil. we've to maturity we're segments three, into generally last at relative even to yet if reached comments we them grow our the three few impressive from would them You're they are of that some did XXXX. accounts feel to added one, are for to the and Number we still right, quarter haven't to new will providing year. growth modest next and continue And our beginning to that the start expecting a

we are the from that baked right you beyond -- revenues on on in even iLottery haven't So to segment, XXXX. Brazil say deals in

case segments achieve your that are significant not on that course, -- of the from question? deals. that these revenues Is Of is our but not we hopeful necessarily answer other does new But business. to the

Cassandra Lee

for level thinking helpful. transaction. of you some from I to laying synergies Yes. bit out hard if a it's one follow-up. if synergies. high And But may, more or kind have Thank Aspire were cost about the That opportunities revenue you I is know quantify and

capabilities win think we your this capabilities you wondering you iGaming how generally kind on help the front? But how understand contract. having of we're iLottery I iGaming iLottery help win today

Moti Malul

would us think most areas top three is The win side. where and live significant and markets. Excellent on be us among of of you. I the systems deployment couple example sure one market business I operating certified iGaming obvious a iLottery question, helps systems U.S. Thank where there's regulated the business obvious number the for say Yes. our our allows to the BXB operators or in in with deployment

We that market are provider is one, of which properly, Ohio U.S. any which I in business the live Caesars our if iGaming on other Aspire Pariplay running landscape And side that XX of that market, in then in brought before you counted boost get the markets XXth today games business to of states, the that's platform or we live that example. I greater market. far believe is point Global if top would U.S. is represents combination the typical and our have five because take of our opinion gaming And in the our I support entry lottery in than of a an or believe BXB year that are and layer in we certified can the the content immediate them. required side, they the into is regulatory the to to just one them market two

progress. running deploying particular time is local but world, a to the part live The a they line regulated in in in of and course business that to again, places on brand PAM serves regulation win iGaming position expected iGaming in time betting live in will great other little markets example little in effect of The will the customer according bit market. a are be other a would our regulation, the will solution bit where in take Sports when that that are is first-ever side maybe is around with next unclear iGaming Brazil us that regulation. for year to we fact The and the follow. areas betting Sports which are HX with in in betting put additional iGaming The part be serving deployed or later. our Sports the deal that comes go now we same

in to way zoom how invest regions. allowing being progresses and the to faster be if first they and of cost more our come time So opens segments those for and than when other in the geography, door I and because others into and infrastructure out the by of one in every regulation follow efficient others runs the to to technology market certification regulation

Cassandra Lee

Great. for Thank my question. taking you

Operator

next The Barry question go comes from Securities. Please with Truist Jonas ahead.

Ramin Sobhany

you guys. is Lottery our any Georgia Sobhany color visibility have Ramin question. on And on any Congrats the of provider? the for you contract are the This opportunity, there do you Hi of contract. on provide similar size platform see there? on ramp opportunities well the for the Barry. any behalf that where as you Can signing Thanks taking additional the on expectations

Moti Malul

you Yes. Thank the It's one. good question. for definitely a

you really the leading full up said turnkey market our our As serving NeoGames from kept in games until accounts. only on US we Studio that recently,

for that one done signed turnkey have turnkey those also by we've that done Canada such with do a the US for which demand deal already not last the the a year so first we've US, a not performers is customer us. and which Lottery We in games, that deal the customers announced we And seen the we've in have us. Atlantic be way across solution always are from in iLottery known to great have --

customer with iLottery have the We to completely yet with on QX, chance Georgia be we of expect our which depending wallet are bigger bigger necessarily business. And think parts there the into capture really is control. year again in I that to to games, their interesting time our go lottery good Along QX, its and next not growing projects, live share.

then iLottery of DC the course look If running smaller are is exist and is, opportunities at of of lotteries and the one market the the Pennsylvania for Kentucky US program. currently other in with also you with that opportunities there similar where bigger for example, as the well those example live opportunities

intent generally into to looking from hopefully get into next which have with I year do in speaking yet operating those not continue say is market, but programs would yes. us. the to iLottery So our content customers It contracts are

Ramin Sobhany

And follow-up Got Thanks that as guess just -- quick on I your it, great. a on for jackpot a color. different comments.

just just QX quantifying upside about color it Maybe really how you be seeing would previous there? run we think the additional ended, to relate that Given how in we're nice run the can the helpful? Any there should went.

Moti Malul

careful I two QX, providing things. into would be guidance but

this yes, the specific also especially of always there's all, has of general trend size, expect of There's in our happens the remain when say rates pickup jackpot you been the in to time to whole into quarter, a the customers allows not month than explanations at jackpot when beginning I'll July. as its try while First a months. that the what jackpot in numbers it this. number the where through only a and I a jackpot that could market it later have but to follow run, happened pushes into here potential the fantastic as that in were definitely would seen again players following of

jackpots is the numbers for cluster were to of until color the could bad known and sure, simply the only are a that reached significant time I point that pick for little is public impressive a momentum. up very is did that never others. plow but them significant to That's elections not it's Numbers But of helpful. allow it it through media the media of hope coverage US give jackpot business. the of for I this took and One longer at our bit fact. something

Ramin Sobhany

Thank our talking Yes, questions. you. Thank I you. appreciate very very, it’s you helpful.

Moti Malul

Thank you.

Operator

question The ahead. go Please Stifel. comes with Jeff Stantial from next

Jeff Stantial

some to help, was Powerball than morning. later prior could from which Raviv, of you like should a guidance? our Starting thanks normally that one a through just jackpot I the it Good question. end maybe off follow-up you for hoping maybe guidance, do in On and thanks. questions. raising taking but walk Moti, expect. takes have tailwind Great, on the low of you the on the sounds the QX, puts hand

hand anything continues USD end? low the should strong relative prior Thanks. the for contemplating other raise else thinking we the the the business. Is be Aspire On through there to guide, to to impact

Raviv Adler

thanks. Good Jeff. Yes, morning and

touched majority FX positive be two basically against the Aspire and be That lower quarterly off on certainly segment were would trend the factors a our in this You've on the to both reasons revenues jackpot other results the headwinds would month of extent that factors and vast Powerball The set the some the main points. our are in quarter. reported end our Core of for guidance. us increasing to

Jeff Stantial

Pariplay helpful. That's to in then Understood. Okay. impressive on Thank the to my And really talked assets, you you. new opportunities. market some execute acquired for BtoBet results follow-up, continuing

The forward? run revenues core growth it X% see were talk contraction piece a of you business, and in like of bit that constant looks moving currency. about that Can platform kind rate third you about business just Thanks. down how what's year-on-year the driving more

Raviv Adler

Yes.

Those two you're are both example, which some delaying go the regulation of markets not yet in market and issuing launch contracts signed is operators Aspire, in been factors such Germany of having and the side, some something, And the I the licenses the granted live. the it's you nature seen Same so yet -- extent are didn't core transitioning for licenses. to call into some think that to this who's comparable reason is goes timing comparable the it the on markets the core. regulated Aspire, we that drop slowdown extent as pace to where new the core, of the been revenue of see period touching. the on mainly issue the has region you've X% on regulated periods, of the the to why on business Netherlands a on for

Jeff Stantial

That’s Thank Raviv. you, Great. helpful.

Operator

with The Chad Please next ahead. Beynon question comes go Macquarie. from

Chad Beynon

kind pressure morning. the question. Raviv. so Obviously Aspire, with Good is you how on quarter the how Thanks taking with start are the of of, term? in full the expenses? reporting. or learning half distribution But highlight we're Thanks. the expenses. recognize margins guys Thanks, my to focusing with terms distribution of back XXXX, should to flow in synergies near specifically change Hi. in through about this And margins, regarding I Wanted margins Moti, costs first of for any inflationary the anything you currently just how think until we guess in maybe the in terms tech

Raviv Adler

morning. good Chad,

quarter the a that especially of the move for the majorities, on you net. process on of touched and line the the both trends in revenues to Aspire potential as the vast see And commentary being by the distribution P&L and the our the on the the item we've basically is P&L. So way are on of reason year has Aspire partners try running would expanding last method that next we're quarter the -- with into margins, business. presentation That cause on the presented

so haven't far and but -- are we yet completed haven't encouraging. -- process been the results, We that

relative seen margin, to that expenses. presentation the haven't macroeconomic gross revenues. is again, And due impacted of reason have they been distribution trends any the other the the to environment We impacting

Chad Beynon

Thanks. Perfect.

Okay.

that of kind employee not just of seeing you're side? on So any inflationary in? flowing as kind expected really This pressure is

Raviv Adler

Exactly.

Chad Beynon

of this sheet, I and want you about big are right where lot know into on. run fold But balance the how there's a for to now that this opportunities early when on Thank if kind then And there offerings? a are from acquisitions your very net more how you. could things focused of tuck-in Thanks. it's Okay. you standpoint? And thinking you're company and leverage

Raviv Adler

acquisition. during by clear hopefully we down our tuck-in perspective, And which let net leverage that suggests three strict the guidance Board, run or the the and XXXX. have leverage quite a from I'll net around touch and Moti of net leverage So the would business

Moti Malul

to in making still it and significantly, go do leverage we that certain interest acquisitions beyond we to well US, that as Obviously, to the rates are and would we now. to Yes. going areas tuck-in where net we couple from leverage but is be necessarily haven't of a not we shared they to its an expected wish mindful connected with tied is could where areas the grow tied such strategically Plus reduce acquisitions, are Europe, where maybe have in that mind is of where the we is that benefit we do profile. from in our to where reached net into as tuck-in sure are need ability especially business would debt environment

Chad Beynon

you. Appreciate of Thank Great. Best it. luck.

Moti Malul

Thank always. as you, Chad,

Operator

our conference session. like I closing would to concludes the over Malul for remarks. question-and-answer turn This Moti any to back

Moti Malul

not were it's of and were and Thank that very we believe impressive a from Then example business of happened they all times when period transitioned of this perspective, morning how we many now revenue on market. I very to segment, that increase our natural, controlled fully the for have and you you it them additional would to four that when zoom the which us, pillars allows Denmark want in hopefully, when only made encouraged them. or transition not is line four, think uncertainty, showed take of into it that your and to have that And joining if and markets. not you. four comments in give perspective, that pace. comes grow them, transitioned happened management the it's growth about, those the for verticals the material Thank something that is one again. And when other provided would Aspire level significant have are But three always a segments timing I from regulated that grow in to experienced most the that's have into at we in business why is into all the past with I actually I business of this Core performance. same out out fact we a that timing same always And business long perspective by certain asked asked experiencing they're of but questions that beyond on good where four of they we guys the of they four in UK, transitioned when we us regulators. opening by they is our say would the

our good to on are you meet expectations. And always, appreciative and are call. to you, taking additional interest our want only everyone we continue company provide the So I Thank in to and extremely as that's everyone that we'll morning. our best do for your the to perspective,

Operator

The now conference concluded. Thank attending has for presentation. today's you

now disconnect. may You

NeoGames (NGMS) 11 Nov 222022 Q3 Earnings call transcript