NeoGames is confident of its future prospects ahead of the full acquisition by Australian firm Aristocrat Leisure, despite recording a slowdown in Q3 trading.
The Israeli ilottery and igaming supplier recorded including its share in NeoPollard Interactive – another share is held by Pollard Banknote – at $63.3m, a 14% drop on Q3 2023 revenue of $73.3m.
Remaining headline figures saw adjusted net income rise 31.8% from $3m to $4.4m and adjusted EBITDA increase 12.9% from $17.6m to $19.9m, and the group’s net loss was reduced net loss for the quarter fell from $4.4m to $3.6m.
However, cash and cash equivalents stood at $27.1m, down 34% on the 2022 sum of $41.2m and resulting in net negative cash of $14.1m for the nine months ending September 2023.
NeoGames attributed this to conditions relating to the forthcoming takeover by Aristocrat Leisure, due for completion in H1 2024. Looking at the quarter, a segment-by-segment breakdown saw ilottery perform much better than igaming.
Ilottery revenue rose 5.6%% from $13.7m to $14.4m, whilst its share in NPI accounted for $17m, 53.3% more than the year prior ($11.1m). Total group-wide ilottery revenue, therefore, rose 26.5% to $31.4m, largely attributed to US activity.
The segment’s highlights during the quarter saw NPI selected to provide a turn-key solution to NPI whilst its solutions were approved for use by the North Carolina Education Lottery. Lastly, the NeoGames Studio’s offering was taken live with Greek Lottery operator OPAP via Pariplay’s partnership with the firm.
Moti Malu, NeoGames CEO, said: We are pleased with the progress we made during the third quarter advancing our strategic goals while we continue to work towards completing our merger with Aristocrat Leisure.
“Our iLottery business continues to win market share and grow as we have recently announced that our joint venture, NeoPollard Interactive, expanded its footprint in the US, winning a public procurement to provide the West Virginia Lottery with a full iLottery program.
“Furthermore, we are working together with the North Carolina Lottery to prepare for the expansion of their iLottery program as they recently received approval to launch eInstant games.”
On the other hand, igaming revenue stood at $31.9m during Q3, a 34% drop from Q2 2022 figures of $48.51m, with NeoGames reflecting the fact that most of Aspire Core’s revenues were on a net basis and UK and Germany difficulties.
Malul explained: “While Aspire Core results slowed due to regulatory shifts in the United Kingdom and operational changes in Germany as we obtained our licence to operate in that market, we anticipate seeing gradual improvement over the next few quarters.
“We remain focused on achieving sustainable growth. We are also encouraged by the interest and pipeline in the US market for our igaming offering. We plan to continue to invest in delivering the deals we’ve announced and to enhance our product offering to scale and capture future opportunities in the space.”
Highlights for NeoGames sports betting and igaming operations, which the firm acquired in June 2022 via its takeover of Aspire Global, included the launch of the BtoBet sportsbook in North America through a partnership between NPI and Alberta Gaming, Liquor & Cannabis (AGLC).
Further highlights included the aforementioned entry into Germany when the Aspire Global subsidiary secured a Gluecksspiel (GGL) slots licence, whilst Pariplay signed 10 new operators and entered its fifth US state, Pennsylvania.
Lastly, NeoGames’ CEO also provided an update on the progress of the Aristocrat acquisition. The ASX firm first secured terms to acquire NeoGames in May of this year for a total sum of $1.2bn, with shareholders approving the agreement on combination two months later.
The merger is due to take place in H1 2024, depending on customary closing conditions including gaming and antitrust approvals, but 61% or outstanding NeoGames shareholders have approved the deal.
Malul concluded: “We continue to make progress towards completing our merger with Aristocrat Leisure, and during this quarter have received additional regulatory approvals which are required to close. We continue to expect the deal to be completed during the first half of fiscal year 2024.
“In the meantime, we remain dedicated to elevating the igaming landscape, capitalising on opportunities, and diligently executing on our strategic objectives for the benefit of all stakeholders.”
