Exhibit
|
Description
|
NEOGAMES S.A.
|
|||
By:
|
/s/ Moti Malul
|
||
Name: Moti Malul
|
|||
Title: Chief Executive Officer
|
|||
• |
The total of Revenues and the Company’s share in NPI revenues was $62.0 million during the second quarter of 2023, compared to $31.3 million during the second quarter
of 2022, representing a 98.2% increase from the prior year, reflecting primarily the business combination with Aspire
Global as well as continued growth in each of the Company’s business lines.
|
o |
iLottery revenues were $13.8 million during the second quarter of 2023, compared to $12.8 million during the second quarter of 2022, representing an increase of 7.9%
year-over-year. In addition, the Company’s share in NPI revenues was $14.1 million during the second quarter of 2023, compared to $10.3 million during the second quarter of 2022, representing an increase of 37.9% year-over-year.
|
◾ |
NeoGames’ iLottery revenue plus the Company’s share of NPI revenues during the second quarter of 2023 was $27.9 million, up 21.2% year-over-year.
|
• |
iGaming revenues were $34.2 million for the second quarter of 2023 and reflect accounting for the majority of Aspire
Core revenues on a net basis compared to historical figures which were prepared on a gross basis, prompted by new commercial terms in certain Aspire Core contracts which went into effect on January 1, 2023. If iGaming revenues
had been accounted for on a gross basis for the Aspire Core, total revenue would have been $56.8 million for iGaming, which would have reflected 7.5% year-over-year growth when measured in reporting currency.
|
• |
Net loss was $(7.8) million, or $(0.23) per share, during the second quarter of 2023, compared to a net loss of $(12.9) million, or $(0.49) per share, during the second
quarter of 2022. Net loss during the second quarter of 2023 was mainly due to a $0.23 per share impact from the amortization of intangible assets related to the Aspire Global acquisition.
Additionally, the second quarter net loss was impacted by costs attributed to the Aristocrat transaction.
|
• |
Adjusted net loss1 was $(0.04) million, or $(0.00) per share, during the second quarter of 2023, compared to $(12.5) million, or $(0.48) per share, during the
second quarter of 2022.
|
• |
Adjusted EBITDA1 was $18.0 million during the second quarter of 2023, compared to $10.3 million during the
second quarter of 2022, representing an increase of 74.7% year-over-year.
|
• |
Cash and cash equivalents balance as of the end of second quarter of 2023 was $30.1 million, compared to $41.2 million at the end of the fourth quarter 2022, resulting in
net negative cash of $11.0 million for the second quarter 2023. The difference in cash flows is primarily due to several one-time items which totaled approximately $11.0 million, including a consideration for the acquisition of the
remaining shares of GMS Entertainment Ltd. from the managing director of Pariplay, and the impact from a bank guarantee required to secure the Company’s German license.
|
• |
BtoBet signed an agreement with NeoPollard Interactive to provide Alberta Gaming, Liquor and Cannabis (“AGLC”) with a complete solution for online sports betting platform and managed trading services.
|
• |
Our NeoPollard Interactive JV has expanded its agreement with the Virginia Lottery, pursuant to which Pariplay will provide content aggregation technology and services with the market
leading Fusion platform.
|
• |
Pariplay signed a deal with SunBet, a market leader in South Africa, to provide content and aggregation services.
|
• |
Aspire Global entered its first iGaming deal in the United States with PlayLive! Online Casino in Pennsylvania.
|
• |
Aspire Global received its official iGaming license for slot games in Germany.
|
• |
Aspire Global went live with Metropolitan Gaming, a leading casino operator in the United Kingdom.
|
• |
The Company launched its portfolio of eInstant game content with the Atlantic Lottery Corporation Canada.
|
• |
Signed a four year an agreement with Lotteries Entertainment Innovation Alliance AS (“LEIA”) to provide eInstant game content to five European lotteries, including France, Denmark, Sweden, Norway, and Finland.
|
June 30,
2023
|
December 31,
2022
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
30,142
|
$
|
41,179
|
||||
Restricted deposits
|
487
|
489
|
||||||
Prepaid expenses and other receivables
|
9,049
|
5,789
|
||||||
Due from the Michigan Joint Operation and NPI
|
4,028
|
3,768
|
||||||
Trade receivables
|
40,368
|
38,537
|
||||||
Income tax receivables
|
461
|
536
|
||||||
Total current assets
|
$
|
84,535
|
$
|
90,298
|
||||
NON-CURRENT ASSETS
|
||||||||
Restricted deposits - Joint Venture and other
|
10,259
|
4,247
|
||||||
Property and equipment
|
3,678
|
3,992
|
||||||
Intangible assets
|
345,938
|
347,213
|
||||||
Right-of-use assets
|
8,170
|
7,973
|
||||||
Investment in Associates
|
5,576
|
4,770
|
||||||
Deferred taxes
|
1,784
|
2,451
|
||||||
Total non-current assets
|
375,405
|
370,646
|
||||||
Total assets
|
$
|
459,940
|
$
|
460,944
|
||||
LIABILITIES AND EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Trade and other payables
|
$
|
21,752
|
$
|
16,042
|
||||
Royalty payables
|
10,604
|
10,838
|
||||||
Client liabilities
|
5,748
|
6,927
|
||||||
Income tax payables
|
9,040
|
7,396
|
||||||
Gaming tax payables
|
8,461
|
10,133
|
||||||
Lease liabilities
|
1,708
|
1,150
|
||||||
Contingent consideration on business combination and other
|
11,354
|
17,256
|
||||||
Employees' related payables and accruals
|
9,080
|
7,262
|
||||||
Total current liabilities
|
$
|
77,747
|
$
|
77,004
|
||||
NON-CURRENT LIABILITIES
|
||||||||
Liability with respect to Caesars' IP option
|
3,450
|
3,450
|
||||||
Loans from financial institution, net
|
213,585
|
209,287
|
||||||
Company share of Joint Venture liabilities, net
|
511
|
539
|
||||||
Lease liabilities
|
6,019
|
6,823
|
||||||
Accrued severance pay, net
|
1,118
|
1,033
|
||||||
Deferred taxes
|
16,076
|
17,469
|
||||||
Total non-current liabilities
|
$
|
240,759
|
$
|
238,601
|
||||
EQUITY
|
||||||||
Share capital
|
59
|
59
|
||||||
Reserve with respect to transaction under common control
|
(8,467
|
)
|
(8,467
|
)
|
||||
Reserve with respect to funding transactions with related parties
|
20,072
|
20,072
|
||||||
Accumulated other comprehensive income
|
3,354
|
482
|
||||||
Share premium
|
174,688
|
173,908
|
||||||
Share based payments reserve
|
8,023
|
6,941
|
||||||
Accumulated losses
|
(56,295
|
)
|
(47,656
|
)
|
||||
Total equity
|
141,434
|
145,339
|
||||||
Total liabilities and equity
|
$
|
459,940
|
$
|
460,944
|
Quarter ended June 30,
|
Year to date June 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenues
|
$
|
47,908
|
$
|
21,052
|
$
|
97,441
|
$
|
34,302
|
||||||||
Distribution expenses
|
24,063
|
8,440
|
47,985
|
10,905
|
||||||||||||
Development expenses
|
3,869
|
3,029
|
8,390
|
5,571
|
||||||||||||
Selling and marketing expenses
|
2,241
|
681
|
5,141
|
1,202
|
||||||||||||
General and administrative expenses
|
8,710
|
4,189
|
16,118
|
7,893
|
||||||||||||
Prospective and Aspire business combinations related expenses
|
4,405
|
14,161
|
4,405
|
16,382
|
||||||||||||
Depreciation and amortization
|
13,734
|
5,051
|
27,333
|
9,005
|
||||||||||||
57,022
|
35,551
|
109,372
|
50,958
|
|||||||||||||
Loss from operations
|
(9,114
|
)
|
(14,499
|
)
|
(11,931
|
)
|
(16,656
|
)
|
||||||||
Interest expenses with respect to funding from related parties
|
-
|
1,227
|
-
|
2,867
|
||||||||||||
Finance expenses
|
5,777
|
1,155
|
11,060
|
1,654
|
||||||||||||
The Company's share in profits of Joint Venture and associated companies
|
8,109
|
4,566
|
16,498
|
8,453
|
||||||||||||
Loss before income tax expense
|
(6,782
|
)
|
(12,315
|
)
|
(6,493
|
)
|
(12,724
|
)
|
||||||||
Income tax expenses
|
(979
|
)
|
(596
|
)
|
(2,146
|
)
|
(1,080
|
)
|
||||||||
Net loss
|
$
|
(7,761
|
)
|
$
|
(12,911
|
)
|
$
|
(8,639
|
)
|
$
|
(13,804
|
)
|
||||
Net loss per common share outstanding, basic
|
$
|
(0.23
|
)
|
$
|
(0.49
|
)
|
$
|
(0.26
|
)
|
$
|
(0.53
|
)
|
||||
Net loss per common share outstanding, diluted
|
$
|
(0.23
|
)
|
$
|
(0.49
|
)
|
$
|
(0.26
|
)
|
$
|
(0.53
|
)
|
||||
Weighted average number of ordinary shares outstanding:
|
||||||||||||||||
Basic
|
33,588,839
|
26,158,125
|
33,555,561
|
25,902,178
|
||||||||||||
Diluted
|
33,588,839
|
26,158,125
|
33,555,561
|
25,902,178
|
||||||||||||
Adjusted EPS2
|
$
|
0.00
|
$
|
(0.48
|
)
|
$
|
(0.20
|
)
|
$
|
(0.52
|
)
|
YTD
June 30, 2023
|
||||
Cash flows from operating activities:
|
||||
Net loss
|
$
|
(8,639
|
)
|
|
Changes in other financial assets and liabilities
|
(2,174
|
)
|
||
Amortization and depreciation
|
27,333
|
|||
Finance expenses
|
11,060
|
|||
Share based compensation
|
1,790
|
|||
Other
|
142
|
|||
Net cash generated from operating activities
|
$
|
29,512
|
||
Net cash used in investing activities
|
$
|
(24,746
|
)
|
|
Net cash used in financing activities
|
$
|
(16,414
|
)
|
|
Net decrease in cash and cash equivalents
|
(11,648
|
)
|
||
Cash and cash equivalents – beginning of period
|
41,179
|
|||
Currency exchange differences on cash and cash equivalents
|
611
|
|||
Cash and cash equivalents – end of period
|
$
|
30,142
|
Quarter ended June 30,
|
Year to date June 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Net loss
|
$
|
(7,761
|
)
|
$
|
(12,911
|
)
|
$
|
(8,639
|
)
|
$
|
(13,804
|
)
|
||||
Income tax expenses
|
979
|
596
|
2,146
|
1,080
|
||||||||||||
Finance expenses
|
5,777
|
2,382
|
11,060
|
4,521
|
||||||||||||
EBIT
|
(1,005
|
)
|
(9,933
|
)
|
4,567
|
(8,203
|
)
|
|||||||||
Depreciation and amortization
|
13,734
|
5,051
|
27,333
|
9,005
|
||||||||||||
EBITDA
|
12,729
|
(4,882
|
)
|
31,900
|
802
|
|||||||||||
Prospective and Aspire business combinations related expenses
|
4,405
|
14,161
|
4,405
|
16,382
|
||||||||||||
Share-based compensation
|
815
|
998
|
1,790
|
1,593
|
||||||||||||
Company share of NPI depreciation and amortization
|
52
|
28
|
101
|
57
|
||||||||||||
Adjusted EBITDA
|
$
|
18,001
|
$
|
10,305
|
$
|
38,196
|
$
|
18,834
|
Quarter ended June 30,
|
Year to date June 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Royalties from turnkey contracts
|
$
|
7,207
|
$
|
7,226
|
$
|
15,222
|
$
|
14,186
|
||||||||
Royalties from games contracts
|
468
|
358
|
859
|
894
|
||||||||||||
Use of IP rights
|
4,721
|
2,916
|
9,250
|
6,236
|
||||||||||||
Development and other services - Aspire
|
-
|
421
|
-
|
847
|
||||||||||||
Development and other services - NPI
|
972
|
1,405
|
2,187
|
3,081
|
||||||||||||
Development and other services - Michigan Joint Operation
|
385
|
426
|
644
|
758
|
||||||||||||
Revenues
|
$
|
13,753
|
$
|
12,752
|
$
|
28,162
|
$
|
26,002
|
||||||||
NeoGames' NPI revenues interest
|
$
|
14,138
|
$
|
10,256
|
$
|
28,889
|
$
|
19,426
|
||||||||
NeoGames revenues plus NPI revenues interest
|
$
|
27,891
|
$
|
23,008
|
$
|
57,051
|
$
|
45,428
|
||||||||
iGaming revenues
|
34,155
|
8,300
|
$
|
69,279
|
$
|
8,300
|
||||||||||
Revenues plus NeoGames NPI revenues interest
|
$
|
62,046
|
$
|
31,308
|
$
|
126,330
|
$
|
53,728
|
Quarter ended June 30,
|
Year to date June 30,
|
|||||||||||||||
2023
|
2022
|
2022
|
2023
|
|||||||||||||
Net loss
|
$
|
(7,761
|
)
|
$
|
(12,911
|
)
|
$
|
(8,639
|
)
|
$
|
(13,804
|
)
|
||||
Amortization attributable to business combination, net of tax
|
7,719
|
416
|
15,440
|
416
|
||||||||||||
Adjusted net income (loss)
|
$
|
(42
|
)
|
$
|
(12,495
|
)
|
$
|
(6,801
|
)
|
$
|
(13,388
|
)
|
||||
Adjusted net income (loss) per common share outstanding
|
$
|
0.00
|
$
|
(0.48
|
)
|
$
|
0.20
|
$
|
(0.52
|
)
|
Quarter ended June 30,
|
$ Change
|
% Change
|
||||||||||||||||||||||||||
2023
|
2022
|
As reported
|
Foreign exchange impact
|
In constant currency
|
As reported
|
In constant currency
|
||||||||||||||||||||||
Aspire Core3
|
$
|
15,694
|
$
|
37,457
|
$
|
15,694
|
$
|
(525
|
)
|
$
|
15,169
|
(58.1
|
)%
|
(59.5
|
)%
|
|||||||||||||
Games
|
9,956
|
8,704
|
9,956
|
(331
|
)
|
9,625
|
14.4
|
%
|
10.6
|
%
|
||||||||||||||||||
Sports
|
8,505
|
5,285
|
8,505
|
(274
|
)
|
8,231
|
60.9
|
%
|
55.8
|
%
|
||||||||||||||||||
Net Revenues, as reported
|
$
|
34,155
|
$
|
51,446
|
$
|
34,155
|
$
|
(1,130
|
)
|
$
|
33,025
|
Year to date June 30,
|
$ Change
|
% Change
|
||||||||||||||||||||||||||
2023
|
2022
|
As reported
|
Foreign exchange impact
|
In constant currency
|
As reported
|
In constant currency
|
||||||||||||||||||||||
Aspire Core4
|
$
|
32,784
|
$
|
75,565
|
$
|
32,784
|
$
|
174
|
$
|
32,958
|
(56.6
|
)%
|
(56.4
|
)%
|
||||||||||||||
Games
|
20,382
|
17,704
|
20,382
|
113
|
20,495
|
15.1
|
%
|
15.8
|
%
|
|||||||||||||||||||
Sports
|
16,113
|
10,150
|
16,113
|
60
|
16,173
|
58.7
|
%
|
59.3
|
%
|
|||||||||||||||||||
Net Revenues, as reported
|
$
|
69,279
|
$
|
103,419
|
$
|
69,279
|
$
|
347
|
$
|
69,626
|